Organisational Behaviour Book Updated V2

HRMC002
ORGANISATIONAL BEHAVIOUR
VISION
Imparting continuum of management education through distance mode to learners across the globe.
MISSION
Be an academic community leveraging technology as a bridge to innovation and life-long learning.
To continuously evolve management competencies for enhanced employability and entrepreneurship.
To serve society through excellence and leadership in management education research and consultancy.
EXPERT COMMITTEE
Prof. (Dr.) S. R. Musanna Dr. Amitabh D. Kodwani
IMT CDL, Ghaziabad IIM, Indore
Prof. (Dr.) Ravindra Kumar Dr. Rajib Lochan Dhar

IMT CDL, Ghaziabad IIT, Roorkee
Prof. (Dr.) Subhajit Bhattacharya Mr. Bhagwat Kharat

IMT, Ghaziabad Unichem Labs, Mumbai
Prof. (Dr.) A. H. Kalro (Retd.) Prof. (Dr.) Asif Zameer

IIM, Kozhikode IMT CDL, Ghaziabad
Prof.(Dr.) P.K Jain IIT,Delhi
Prof. (Dr.) B. B. Chakraborti (Retd.) IIM, Kolkata
SLM PREPARATION TEAM

Dr. Nidhi Mathur Dr. Rashmi Agarwal
IMT CDL, Ghaziabad Corporate Trainer
Dr. Prachi Bhatt Dr. Zeenat Hasnain

FORE School of Management, New Delhi Visiting Faculty, IMT CDL
Dr. R M Saxena
Gp. Cpt. (Retd.), Visiting Faculty, IMT CDL
COURSE COORDINATOR EXPERT REVIEW

Dr. Nidhi Mathur Prof. Mohan Lal Agarwal
IMT CDL, Ghaziabad President, Indo Gulf Management
Association and Management
Consultant, Dubai
PUBLISHER & PRINTER

Cover Concept by: Ms. Ramneek Majithia, Communication Design Product Management Consultant
Published by: Institute of Management Technology, Centre for Distance Learning, Ghaziabad
Publisher Address: A-16, Site 3, UPSIDC Industrial Area, Meerut Road, Ghaziabad
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Edition First (2021)
© Institute of Management Technology, Centre for Distance Learning, Ghaziabad
ISBN: 978-81-951960-3-6
All rights reserved. No part of this work may be reproduced in any form, by mimeography or any other means, without
permission in writing from The Institute of Management Technology Centre for Distance Learning.
Further information on the Institute of Management Technology Centre for Distance Learning may be obtained
from the Institute Head Office at Ghaziabad or www.imtcdl.ac.in
ACKNOWLEDGEMENT
We acknowledge, with gratitude, the assistance taken, in preparing the study

material of the present course, from the texts, websites, and a/v sources cited at
different places within the Units. We, thankfully, also acknowledge the
assistance taken by us from the content generated by individual authors,
publishing houses, educational institutes, research agencies, consultancies,
government bodies and public sources of commercial organizations etc. (cited
within the Units). Special thanks to our PGDM-Executive student Ms. Ramneek
Majithia for helping us in cover concept & design.
COURSE INTRODUCTION
Organisational Behaviour (OB) is the academic study of inter-group interface (how people interact
within groups) and the application of its derivative principles to improve, streamline and organize
business operations effectively. The behaviour of human beings in their workplace/s and/or corporate
setting/s defines OB neatly. The academic boundaries of OB as a subject or discipline are defined by the
intersecting segment of anthropology, sociology, and psychology. The behavioural knowledge of
individual and group work within the organization can help in explaining and predicting behaviour to
improve workplace performances and effectiveness. The logic of OB study lies in the need to
understand the reason why people behave in a certain way and why one team is more effective than the
other; also, to demarcate the process for optimum utilization of resources. This course is made up of
fourteen Units described in the context of their contents briefly below.
The first Unit is named, and obviously so, as Introduction to Organisational Behaviour. It takes up the
study of the constitutive components of Organisation (workplace) and OB's multidisciplinary nature. It
also discusses the role performed by the 'Manager', more so in the swiftly changing business context of
organisations.
This is followed by Attitude & Job Satisfaction. This unit discusses components of attitude, working
conditions, process of impression management strategies, and coping with individual differences.
The third unit is Self-Awareness, Personality and Values, the focus is at individual level self- awareness,
issues concerning personality and values and the knowledge of your strengths, weaknesses,
shortcomings and strong points. 'Big Five' traits- agreeableness, emotional stability, extraversion,
conscientiousness and openness to experience have been especially discussed.
Fourth unit is Emotions and Moods, since emotions have been the building blocks of our abilities to act,
interact and sense of morality, it is important to understand emotions and moods and their implications
in the Management. This unit also helps you differentiate between emotions and moods, understand felt
and displayed emotions and examine the nature of Emotional Intelligence.
The following unit (Unit 5) is entitled Perception and Attribution, it provides a basic understanding of
Perception and Attribution Theory. This unit enables you to define perception, identify and explain the
factors influencing Perception of an Individual, understand the factors determining an Individual's
Attribution, and the common errors that creep in decision making. It emphasises that better
understanding of attributes can improve our ability to effectively deal with people and situations.
Unit 6 Motivation takes up the characteristics and importance of motivation as the principal area of
study. In addition, the theories of motivation have also been examined.
The following Unit (Unit 7) is about DECISION MAKING. It discusses the concept of decision making and
the important factors associated with it.
The next Unit is UNIT 8: Group and Group Dynamics. The main areas of focus here are types of groups,
stages of group development, the models of group development and group processes and functions.
UNIT 9 is about Interpersonal Conflict which classifies conflict and sources of conflict. It helps you
understand why conflict takes place and how to handle interpersonal conflict. The next Unit is (Unit 10)
Power and Politics. It is important to appreciate that power and politics are among the most
important, yet incomprehensible, concepts in organizational behaviour. This unit helps you to know the
sources of power and how to navigate power to manage organisational politics.
The next two Units that is Unit 11 is about Foundations of Organisational Structure. It helps you
understand the different components of organizational structure and the inter-relationship among its
mission, goals and strategy.
Unit 12 is entitled Organisational Culture and Change. The focus of this Unit is on organisational culture
and its functions and characteristics. It helps you develop an understanding of different types of
organizational cultures and the forces that bring change in the culture.
The thirteenth Unit is about Leadership: Contemporary Theories and Techniques. It enables you to
understand leadership in a business environment. The emphasis is on Leadership styles and Classical
leadership theories.
The final Unit deals with the methods and techniques of Managing Stress. It discusses the nature of
stress and the potential sources of stress. The Unit is replete with examples to analyse and comprehend
stress. It also discusses the techniques to manage stress.
We hope you will put this Course to the best possible use in dealing with the ground situations. We
wish you pleasant and stressless reading.
INDEX
UNIT 1
Introduction to Organisational Behaviour 1
UNIT 2
Attitude 18
UNIT 3
Self Awareness, Personality and Value Structure 41
UNIT 4
Emotions and Moods 63
UNIT 5
Perception and Attribution 82
UNIT 6
Motivation 96
UNIT 7
Decision Making 121
UNIT 8
Group and Group Dynamics 138
UNIT 9
Interpersonal Conflict 152
UNIT 10
Power and Politics 168
UNIT 11
Foundations of Organisational Structure 185
UNIT 12
Organisational Culture and Change 206
UNIT 13
Leadership: Contemporary Theories and Techniques 222
UNIT 14
Managing Stress 246
HRMC002
Organisational Behaviour
UNIT 1 NOTES
INTRODUCTION TO
ORGANISATIONAL BEHAVIOUR
STRUCTURE
1.0 Objectives
1.1 Introduction
1.2 Nature of Organisational Behaviour (OB)
1.3 Significance of Organisational Behaviour (OB)
1.4 What Managers do at the Workplace?
1.5 Dynamic Environment and Changing Workplaces
1.6 Emerging Challenges and Opportunities & Application of Organisational Behaviour
(OB)
1.7 Practical Implications
1.8 Let Us Sum Up
1.9 Key Words
1.10 Unit End Questions
1.11 Unit End Answers
1.12 Check Your Progress - Answers
1.13 References And Suggested Additional Readings
1.0 OBJECTIVES
After studying this unit, you shall be able to:
• Understand what Organisational Behaviour (OB) is
• Recognise the changing context of organisations
• Identify the emerging Challenges and Opportunities and managerial implications
• Realise what constitutes an Organisation (workplace) and OB’s multi disciplinary
nature
• Realise significance of Organisational Behaviour (OB)
• Appreciate how the knowledge of Organisational Behaviour (OB) can add value to
individuals and Organisations
• Understand the Managers’ roles
• Realise the application of Organisational Behaviour (OB) concepts in addressing
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Introduction to
organizational challenges
NOTES
1.1 INTRODUCTION
Have you ever worked for a team in your college for a fest or worked for a tournament being
organised by your school? If you can recall and reflect back on any such type of event, it
would be much easier for you to relate with Organisational Behaviour.
Now think and answer the following questions regarding the event you recalled above?
• What was the goal of the event?
• Who all were involved, including you, in making that event successful?
• What was the budget allotted for it?
• Were you part of or responsible for all or few things?
• Did you finish the allotted tasks alone or in groups?
• Who were the decision makers? Did you have to make decisions about something as
well? If yes, how did you do that?
• Did you lead your team?
• While you were working on the tasks did you- provide information to people working
around and with around; monitored the developments; handled crisis situation, etc.
… so, basically, how was your experience?
Well, these are some of the questions, if reflected upon, can guide you to better
understand the different behaviours that you engage in. It will also help you understand
about others’ behaviours in that situation. Here, in the event that you were part of can be
considered as a small workplace or organisation set up for achieving desired goal or
objective with the help of various resources, processes and other people. In achieving the
goals, the people involved are engaged in various behaviours, individually or in groups,
such as communication, emotions, decision making, delegating the tasks to others, leading,
managing the teams, etc.
Imagine the magnitude of the above-mentioned resources, processes and behaviours in an
organisation such as Google, Tata Consulting Services, HDFC bank, Deloitte, etc. However,
every organisation big or small would have its own dynamics which can be understood in
the form of a study called Organisational Behaviour (OB).
What do you mean Organisational Behaviour (OB)?

Organisational Behaviour (OB) is a field of study encompassing Individual and group
dynamics in an Organisation, i.e., human behaviour at the workplace. OB can be defined in
many ways:
According to Stephen P. Robbins, “OB is a field of study that investigates the impact that
individuals, groups and structures have on behaviour within organisations for the purpose
of applying such knowledge towards improving an organisation’s effectiveness.”
According to L. M. Prasad, “Organisational behaviour can be defined as the study and
application of knowledge about human behaviour related to other elements of an
organisation such as structure, technology and social systems.”
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NOTES
Organisational Behaviour (OB) deals with people at work- their perceptions, thoughts,
feelings, about their skills and abilities and their behaviours in the given internal and external
environment.
According to Fred Luthans, “Behaviour is directly concerned with the understanding,
prediction and control of human behaviour in organisations.”
Luthan’s definition also highlights another aspect of OB i.e., managerial implications of
Organisational Behaviour (OB). The knowledge of Organisational Behaviour (OB) helps
managers to be able to better understand people behaviour, predict their behaviour and
influence their behaviour in a well-directed manner in order to achieve organisational
effectiveness by addressing both individual and organisational goals.
Organisational Behaviour (OB) is a study that has evolved over a period of time.
Organisational Behaviour (OB) is the multi disciplinary study of the employee interactions
and the organisational processes that seek to create more efficient and cohesive
organisations.
What is an Organisation?
Here, you can find what is an organisation and its important components of an organisation.
Fig. 1: Open Systems View of Organisation (In reference with Harold Leavitt’s approach)
The above (Figure 1) open systems view (Harold Leavitt’s approach) of an organisation also
highlights what largely an organisation is constituted of. Using it as a reference, the
understanding of Organisational Behaviour (OB) can also be realised.
• Task: This component mainly deals with the aim of an organisation’s existence. It can
be seen in the form of an organisation’s mission and vision on an organization, its
purpose, and its goals.
• Structure: This component can be understood as the framework within which an
organisation works. It would encompass aspects such as authority and responsibility
relationships, systems that aid in workflow, communication system, etc.
• People: This component is about the people i.e., the human resources at work.
People as a resource i.e., their knowledge, skills and abilities and the associated
behaviours to accomplish goals.
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Introduction to
• Technology: It deals with the tools, techniques, technologies, procedures, etc. that
NOTES help in the utilisation of resources to generate desired outputs.
Also, note that Environment plays a very crucial role in effectiveness of an organisation.
It sets the context to the four components of an organisation and it greatly influences
these components, as mentioned above. Environment reflects the external and internal
environment of an organisation.
In the changing context of organisations in which people work, immensely impact all the
components of the organisation. Consequently, it further impacts the different kinds of
behaviour that people engage in so as to manage these components. Managers at workplace
are involved in various functions and activities such as making plans, collecting and
organising resources implement the plans to fulfil the desired goals. Further, engaging in
different activities like decision making, identifying right people for jobs and assigning
responsibilities, rectifying deviations in processes to be followed, measuring performance,
ensuring people at work are motivated to continuously perform for their teams and for the
overall organisation effectiveness.
All such activities and related individual and group behaviours involve in one way or the
other with the above mentioned components of an organisation. These activities present
challenges that need to be managed. There are a multitude of factors which impact the
activities performed by managers at work greatly increasing the complexity of managing
them. But at the same time, these challenges also present opportunities to improve and
explore creative ways to ensure organisational effectiveness. Here, the knowledge and
understanding of organisation behaviour comes in handy for managers in addressing the
challenges of the present and the future.
CHECK YOUR PROGRESS-I

Q.1 Briefly try to explain what do you understand by organisation behaviour?
Q.2 Communication systems and reporting relationships are part of
component of an Organisation.
Q.3 Both external and internal environment of an organisation has a strong impact on
organisation functioning. True/ False
1.2 NATURE OF OB
What we see as OB today, is a result of evolution taken place over the decades. The present
form, still evolving, is a systematic study of people and their behaviour at work. With the
emergence of OB as a systematic field of investigation around 1940s, the importance of
‘people’ at work also progressed. Approach towards ‘people’ at work, i.e., evolved from
‘a mere cog in a machine’ to ‘one of the most important assets’ of an organisation.
This evolution reflects the strengthened relevance of people management at work.
Organisational Behaviour (OB) is multi disciplinary in nature. With the evolution of
organisational behaviour science both in research and practice, it was realised that human
behaviour at workplace requires inputs from quite a few other different disciplines influence
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the very being of an individual– as part of groups, societies, and culture. The study of OB
NOTES
synthesizes knowledge from different fields of study to describe behaviour of people at
work. Being multi-disciplinary provides it more wholeness in its conceptualisation and
applications.
So, first you will try to find out what makes Organisational Behaviour (OB) a multi disciplinary
approach. Some of the key contributory disciplines that contribute in shaping Organisation
Behaviour (OB) concepts and development of theories are:
Psychology: Psychology explores various attributes of an individual; why an individual
behaves in particular manner. This discipline offers insights about aspects related to an
individual’s personality, perception, attitude, motivation, emotions, etc. Organisational
Behaviour (OB) draws heavily from Psychology in explaining individual behaviour and change
in behaviour.
Question here could be-why or what causes an individual to behave in the manner that he or
she is?
Sociology: It deals with an individual’s social behaviour, relationships with others, other
dynamics between social groups, and societies. It mainly deals with social system and
phenomenon associated with it. This discipline offers to Organisational Behaviour (OB) the
insights about an individual in a ‘social’ context which help in understanding and
appreciating the functioning of individuals in group or team in a workplace situation.
Question here could be-How do groups behave?
Socio-psychology: It blends the inputs from the areas of sociology and psychology. It deals
with study of understanding the behaviour of individuals in social contexts, and the
influence of social context on individuals’ behaviour. It explores behavioural patterns of
individual in a social setting, factors influencing it.
Question here could be- How or what factors of group impact an individual to engage in
participative behaviour in groups?
Anthropology: It deals with the study of humanity and the related human behaviours and
their activities. It focuses mainly on the study of cultures, beliefs, values, and
environments. It offers to the understanding of the differences between societies, cultures,
countries which is very useful as organizations are working globally, dealing with diverse set
of employees and cultures and markets.
Question here could be-How culture of a nation is influencing an individual approach to
work?
Also, a few other disciplines such as management, economics, political sciences also
directly or indirectly have shaped the concepts of Organisational Behaviour (OB) such as
perception, intentions, interpersonal relationships, motivation, leadership, conflicts, and
productivity, etc.
OB can be understood and applicable at largely three levels. Organisational Behaviour
(OB) researchers systematically study people at work at three levels of analysis- the
individual, team, and organisational levels.
5
UNIT 1
Introduction to
• Individual Level: Deals with aspects related to an individual such as personality,

NOTES attitude, values, etc. impacting the individual behaviour and their performance at
work.
• Team Level: The team level aspects of Organisational Behaviour (OB) deal with an
individual interacting with other people for various purposes. Decision making,
conflicts and conflict management, team performance etc. are a few examples of team
level aspects of Organisational Behaviour (OB).
• Organisational Level: This is a macro view of understanding the concepts of
Organisational Behaviour (OB). It deals with aspects such as organisational structures,
systems, organisational designs and change.
Fig. 2: Multidisciplinary Approach of Organisational Behaviour (OB)
The above mentioned multi-disciplinary nature of Organisational Behaviour (OB) finds its
application at all the three levels of OB. In the further chapters of this book, you would be
able to uncover the concepts of OB across all these three levels in form of different topics
such as personality, perception, team, leadership, organizational structure, etc.
It is important to note that Organisational Behaviour (OB) is both Art and Science.
Organisational Behaviour (OB) can be said to be an Art as there are no specifics in
Organisational Behaviour (OB). There are no absolutes in Organisational Behaviour (OB).
Organisational Behaviour (OB) is that it is situation based approach or contingency based
approach. Not every situation is same and not a situation can only be handled in one way.
Organisational Behaviour (OB) is about exploring possibilities for effective management of
people at work to attain both individual and org. goals. But at the same time Organisational
Behaviour (OB) is also considered to be Science, as it a systematic approach of managing
behaviour. Also, Organisational Behaviour (OB) is about its evidence-based approaches
developed over decades of ongoing research and its evidence related to various
Organisational Behaviour (OB) aspects of how individuals and groups behave. As both art
and science, Organisational Behaviour (OB) continues to contribute to the managers’
understanding about people and their behaviour at workplace.
1.3 SIGNIFICANCE OF ORGANISATIONAL BEHAVIOUR (OB)

You might also ask a question that how the knowledge of Organisational Behaviour (OB)
proved to be significant? What is the need to understand human behaviour? To answer
these questions, you may want to revisit the above sections 1.1. and 1.2 again before we
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try to connect these dots together.

NOTES
Let’s try to connect the points mentioned in the above sections with the help of the following
situation:
Let’s assume that you are in the top-management of a technology-based organisation
dealing in providing services in India and at a global level. So, this firm must have specific
goals (Task), defined functional areas (such as Finance, Marketing, HR, etc.), roles and
responsibilities of people (Structure), proper systems, procedures, and policies (Technology)
and human resource (People).
Given the changing environment, if your top management realises the need to bring about
additional changes in the way you operate, for example, Artificial Intelligence (AI) based
operations in Marketing function. What do you think who is going to be the mobilizer of
this change and all their resources of your firm?
Could you identify some points…?! Well, let us do this together.
To start with, you would have to rely on the skills and abilities to develop a plan of action
to bring about this change. Following which you would look for hiring people who possess
the knowledge and skill to work on AI, also might have to up skill a few your existing
employees for the same. People would be applying their skills to adopt the new technology,
to achieve the predefined tasks and goals. Simultaneously, management of people’s
performance, interpersonal relationships, conflicts, motivation, job satisfaction of new and
existing employees is part of the management of this new change brought about in the firm.
This is just a very brief description of how people and people management are an integral
part of the organization.
And, if you notice carefully, people are the mobiliser of the all the other resources i.e., task,
structure, and technology. Hence, the knowledge of employee behaviour- their causes,
effects, and ways to influence is important for the managers in an organisation. Also, when
we say ‘people’ and their management, people adopt various roles and identities in a firm.
Thus, Organisational Behaviour (OB) knowledge also forms the base for managing
different stakeholders other than employees such as consumers, investors, and society at
large.
Simply put, Organisational Behaviour (OB) knowledge offers perspectives on people
management. It helps both employees and managers in getting right things done
(and in a right manner) and manage at work in a more informed and systematic
manner than otherwise. Organisational Behaviour (OB) knowledge provides the necessary
tools that can effectively be put to use in order to work with people-individuals and groups.
While moving forward to the next section, it would be a good idea to try to relate what we
discussed above. In the next section here, you would be able to realise what and how
managers manage in a workplace setting.
1.4 WHAT MANAGERS DO AT WORKPLACE?

Just to have some better perspective on the Organisational Behaviour (OB) applications
require us to have a look, however briefly, at what managers do and how managers manage
in a workplace setting. This section describes the context in which managers work and 7
UNIT 1
Introduction to
associated activities in this realm.

NOTES
A manager’s job entails various activities such as working with and through others to achieve
pre-defined goals. Just like general management functions i.e., planning, organising,
controlling, directing or leading, a manager also applies these functions to the optimally
utilise the resources of an organizations i.e., human resources, finances, techniques,
information, etc.
Here are key managerial roles (Figure 3), derived from Henry Mintzberg, also called
Mintzberg’s Managerial Roles. Ten different roles that a manager plays have been clustered
under three major roles by Mintzberg:
Fig. 3: Mintzberg’s Roles of Manager
Interpersonal Roles of a manager are mainly about the social aspect of a manager’s job i.e.,
behavioural process related to other people for work. This involves playing roles as a
Figurehead (1) i.e., head of a unit such as a team or department or an office; role as a Leader
(2), directing a team towards achievement of desired goals; and Liaison (3) role of connecting
link with the world external to an organisation.
Informational Roles of a manager are about dealing with the work-related information and
information processing. This entails roles such as Monitoring (4) of a varied type of
information- external (e.g., about change in the Government regulations) and internal
(e.g., progress of work) to an organisation. Role of a Disseminator (5) is about the
transmitting information (e.g., expectations of management with the employees) to other
members within the organisation. As a Spokesperson (6), a manager plays the role of
transmitting information, such as results, policies, as need be with the outside world.
Decisional Roles of a manager deals with the decisions managers make. Managers play
Entrepreneurial (7) role of taking risks and initiatives to challenge the status quo for the better.
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As Disturbance handler (8), a manager addresses the crisis, problems, delays, and any
NOTES
unexpected disturbances at the workplace. As Resource allocator (9), the manager is
involved in deciding and allocating different types of resources to the working units. The
Negotiator (10) role of a manager, as the name suggests, is related to negotiation-
representing the organisation in negotiations with internal and external stakeholders of an
organisation.
Another aspect related to what managers do is the managerial skills required to fulfil roles
and responsibilities as a manager. It can be understood that following are three general
categorisation of managerial skills (Katz, 1974) supporting managers to be successful:
Technical Skills deals with the ability of managers to apply the skills necessary to
accomplish specific tasks within the organisation. These skills demand specialised
knowledge from the managers, for e.g., managers’ working understanding of a machinery or
equipment, knowledge of a programming language, etc.
Interpersonal Skills or Human Skills are important for a manager as they mostly invest their
time interacting with other people and in getting things done through people. It deals with
the abilities such as to connect and communicate, understand, motivate individuals and
groups.
Conceptual Skills deal with manager’s ability to think and diagnose situations or context
in the abstract, for e.g., assessing the changing organisation’s external environment and
being able to formulate concepts, generate ideas, predicting the future in an
organisational setting. In simple words, managers’ ability to be able to see the ‘big’ picture.
Fig. 4: Managerial Skills across Management Levels
All the functions of management require the above mentioned broad range of skill sets
in order to be effective. Also, please note that the degree of the distribution of these skills
may generally vary with the job’s demands and management levels (Figure 4). For e.g.
for leadership position managers, conceptual skills are extremely crucial as compared to
technical. But, front-line managers tend to depend on and use mostly technical skills as
their jobs generally do not demand high application of conceptual skills.
It is worth your reflection and question- are human skills only for middle level managers?
Well, human skills are the skills of a manager that are considered very helpful to the same
degree across all the management levels. Hence, it is considered one of the very important
skills of a successful manager. Although the job of a contemporary manager has evolved to
a great extent, the above mentioned roles and skills of a manager forms the bedrock of
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Introduction to
the management principles to be used by a manager.

NOTES
CHECK YOUR PROGRESS-II
Q.1 Human skills are majorly meant for Human Resource manager in an organisation?
True/False
Q.2 Levels at which Organisational Behaviour (OB) Deals with:
a. Individual level;
b. Team level;
c. Both Team and Individual levels;
d. Team; Individual, and Organizational levels;
e. Organizational Level
Q.3 Which is a role of a manager?
a. Planning of resources;
b. Design jobs
c. Decisions about budget;
d. Managing interpersonal relationships with teams;
e. All of them
1.5 DYNAMIC ENVIRONMENT AND CHANGING WORKPLACES
In the above sections you have covered an overall understanding of Organisational
Behaviour (OB) and its conceptualisations. A very important aspect that hugely impacts the
effectiveness of Organisational Behaviour (OB) applications is the environment. The
environment of an organisation influences the way it functions. Further, the changing
environment in which an organization exists has a great bearing on what and how of the
management. Organisations are prone to changes in both internal and external
environments. And a successful organisation is one that is able to respond to the changing
environment.
‘Change is the only constant’. Changing workplaces are the results of dynamic external
environment and change. In the light of the above statement, can you attempt to assess the
kind and extent of changes that an organisation undergoes?
Well, to help you further, refer back to section 1.1 where we discussed the open system
approach of an organisation with help of an example of ‘technological upgradation’. As we
already discussed, the components of an organisation are- Task, Structure, Technology, and
People. Now, analyse how tech upgradation in Management Information system is
impacting the organisation in terms of the following components, for e.g.:
• Task: the specific kind of technology is going to impact part of employees’ existing jobs
and goals.
• Structure: It is possible that a job is redesigned, or new ones are created, having
implications on reporting relationships and responsibilities, for the fulfilment of the
related goal.
• Technology: change in this element can be in the form of IT platform, or method or
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mode of implementing the change brought about in an organisation.

NOTES
• People: This may incorporate change in terms of hiring employees with specific skill,
training of employees, etc.
This very briefly describes the kind and extent of change and its implications for
organizations and its managers.
Continuously changing external environment deeply affects organisation and its operations.
Responding to the dramatic changes in the environment requires an organisation to
maintain a good fit with the external environment. Also, competitive advantage goes to the
ones who are agile and respond appropriately and timely to the changes. In this context,
employees, especially leaders are expected to be visionary and responsive to the ongoing
changes in order to adjust to the new realities and turn challenges into opportunities.
The next section presents some major challenges that organizations are facing.
1.6 EMERGING CHALLENGES AND OPPORTUNITIES & APPLICATION OF OB
Organisations are facing the challenges associated with the emerging and dramatically
changing environment. These challenges are in a way opportunities for the managers to
explore beyond the existing paradigm of management of people during uncertain times.
• Competing at a Global Level
Today, organisations are no longer confined in their national boundaries, instead they are
dealing on a global platform. Globalisation over a period of time has connected people,
businesses, societies, cultures with different parts of the world. Globalisation of business
and its management has grown complex. Complexity is due to different management
activities such as managing global teams, foreign markets, cultural differences,
application of laws and legal matters, coordination and decision-making challenges, etc. are
being managed at a global level. Managers are faced with handling such new challenges
requiring them and employees of organisation to continuously update and upgrade
themselves in terms of knowledge, skills, to appreciate the global business world. Success
is when these challenges are turned into opportunities. Global
companies such as Tata Consulting Services, Tata Motors, Coca Cola are a few examples
who have thrived on this challenge posed by the environment. Some implications of
globalisation are as below:
- Companies have their employees rotated between assignments across different
countries around the globe for more exposure and global learning.
- Changes in the systems and structures of organisations are taking place to
incorporate global dimensions. For e.g., foreign assignments, rise in the expatriate
managers in functions, etc.
- Managers are required to develop know-how about businesses that operate in other
parts of the world having implications on managing cultural differences, legal
implications, market research and strategies.
• Dealing with Diversity Workforce
Another critical challenge for the organisations is dealing with highly diverse workforce.
Workplaces are growing more and more heterogeneous. People at work belong to
11
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Introduction to
different age-groups, educational backgrounds, gender, ethnicity, cultural backgrounds,

NOTES
linguistic abilities, etc., leading to a highly diverse workplace. It has its advantages as well.
But, with the growing importance and sensitivity towards differences at workplace and
teams, have grown the need to sensitively manage the diversity. Managing diversity has
emerged to be a global concern. Diversity has posed both challenge and opportunity for
organisations forcing then to change the way they operate:
- Changes in the notable employment and labour laws (as applicable) taking place
globally, keeping in mind the sensitivity issues associated with matters such as gender,
age, physical and psychological abilities of people at work.
- Companies are sensitising their employees across the globe about the differences due
to sexual orientations. Hindustan Unilever includes in charter inclusion of LGBTQ and
persons with disabilities.
- Organisations have created positions of managers handling the diversity and Inclusion
(D&I) of an organization. For e.g., in Hindustan Unilever, Google.
• Keeping up with Technology Sophistication
Technology and the continuous change in technological applications at work has become
the new normal. Today adapting to new technology is emerging to be the core competency
of an organization. and is a contributing to the success of an organisation. Indian IT /ITES
industry is a great example of this. Technology upgradation has become a regular feature
of organizations today, not just limited to IT operations, but also in terms of technology
enabled customer services, banking services, and other management functions. New
trends of emerging technologies such as block-chain, artificial intelligence, machine
learning, etc. are changing the way traditional management functions are
operationalised. Firms such as Cognizant and Tech Mahindra are exploring AI, Natural
Language Processing for hiring function. Some implications are:
- Making technology based management functions more reliable for effective use.
- Emerging constant need to train people for the skills in trend.
- Companies are thinking about exploring the use of AI in hiring, tourism, etc.
- Technology driven teams are functioning virtually across the globe connected
via technology mediated applications and programs.
• Responding to changing Customer needs
This also has always been a challenge for businesses. The competitive advantage of a
business highly depend on the way business are living up to the expectations and needs of
changing consumers. Businesses are competing for not only market- share but also, on
the grounds of reliability of product and services, innovative ideas to cater to the
customers, agility to reach customers quickly, etc. This covers a lot of ground for managers to
develop capable and creative employees who can serve the customers and simultaneously
develop a customer centric practice ensuring the same. Some of the implications are:
- Organisations and managers are constantly feeling the need to explore new ways to
improve the customer responsive culture.
- Change in the product and services of a firm has a direct link with the skills, abilities of
employees who deal with the customers. Hence, demand regular and varied training
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and development initiatives.

NOTES
- To deliver to customers across globe, demands managers to explore markets and assess
customers with the background of cultural differences.
- Creating an entrepreneurial environment supporting creativity in handling customers.
• Emerging Employment Relationships
The growing global competition has forced changes in the employment relationships in
organisations. New employment arrangements have emerged. Also, jobs have grown to
be more and more demanding in terms of time and effort required from employees.
- Work has become demanding and working hours are not fixed. It is no longer a fixed hour
job scenario. Manager’s job of identifying and managing employee contribution for
the employees have increasingly becoming complex.
- New working relationships have emerged such as hiring free-lancers, retired
employees, temporary jobs, part-timers, etc. Such different types of employment
arrangements have led to the formulation of different policies and practices of
management related to measuring efforts, outputs, absenteeism, performance
evaluation, etc.
- Ensuring and enhancing the well-being of people at the workplace has gained
attention of managers. Work-life balance and virtual work arrangements have found
support in organizations today.
• Abrupt Crises Situations: For e.g., Global Pandemic Covid-19:
The pandemic of Covid-19 recently has brought about change in the way we used to live and
work. Work from home (WFH) surfaced as the new normal globally. It compelled changes
in workplace settings immensely. It challenges the concept of ‘workplace’. Organisation.
straightaway started exploring solutions to work virtually. Managers’ concerns were also
about performance goals and the method of achieving those goals, employment
relationships between employer and employee, employee well-being, etc.
- Managers are still trying to figure out ways to effectively operationalise in the virtual
environment
- Ensuring smooth team operations, performance targets, reward
management, etc.
- Management of digital working relationships have emerged to be a challenge in itself.
- Employee well-being has become the priority.
1.7 PRACTICAL IMPLICATIONS
As OB is extensively applied in managerial activities, it presents implications for people at
work, working across the management levels in an organisation. OB presents extensive
applications for managers. These implication as mentioned below are only indicative:
• Organisational Behaviour (OB) knowledge calls for a manager’s mind-set to apply the
OB concepts at three levels - individual, team, and organisation.
• As managers deal with a great degree of uncertainty and varied situations,
understanding of Organisational Behaviour (OB) can help managers being open
minded and having contingency based approach, which is highly desirable, for not
every situation is same.
13
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Introduction to
• Organisation Behavioural (OB) knowledge emphasises managers to assess each

NOTES situation in a more systematic manner rather than relying on generalised feeling
while dealing with people, tasks, and procedures, etc. and respond to them
appropriately. Also important is to consider role of environmental factors- internal and
external and not considering organization as a silo.
• The knowledge of Organisation Behavioural (OB) facilitates managers in taking better
and informed management decisions and related activities.
• Managers need to realise the importance of the set of specific skills, as discussed, for
effective management. Managers must attempt to develop their skills, interpersonal
skills being one of the critical ones among others.
• Organisational Behaviour (OB) improves managers’ ability to realise the need to be

responsive to change and challenges in order to achieve effectiveness at both
individual and organizational levels.
CHECK YOUR PROGRESS-III
Q.1 Diverse workforce due to experience of team members would help in better idea
generation among teams. True/ False
Q.2 Try to explain Globalization in your own words.
Q.3 Change in the environment due to the covid-19 pandemic is influencing:
a. The working practices
b. Need of re-skilling or training
c. Change in attitude of employees towards work
d. Way people work in teams
e. All of the above
1.8 LET US SUM UP
Organisational Behaviour (OB) is a multi disciplinary, systematic study of people at the
workplace with three levels of analysis i.e., individual, team, and organisation. The
knowledge of Organisational Behaviour (OB) explores and emphasises the ways to improve
people’s behaviour as people are the asset for an organisation.
Organisational Behaviour (OB) knowledge the has always been relevant. The approaches
and skills associated with Organisational Behaviour (OB) are fundamental to the people at
work and It is applicable across different functions and hierarchy of an organisation. It plays
a significant role in successful achievement of both individual and organisational goals.
The changing environmental conditions dramatically poses different challenges and
implications for the organisations and for the people at work.
A manager’s knowledge about Organisational Behaviour (OB) is instrumental in taking
successful initiatives for improvement in the productivity, well-being of people, job
satisfaction, and reducing behaviours that do not really support effective functioning of firms
such as absenteeism, turnover, etc.
1.9 KEY WORDS

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Organisational Behaviour (OB): is the multidisciplinary study of employee interactions

NOTES
and the organisational processes that seek to create more efficient and cohesive
organisations.
Task: This component mainly deals with the aim of an organisation's existence.
Structure: This component can be understood as the framework within which an
organisation works.
Socio-psychology: It blends the inputs from the areas of sociology and psychology.
Interpersonal Roles of a manager are mainly about the social aspect of a manager's job.
Informational Roles of a manager are about dealing with the work-related information and
information processing.
Decisional Roles of a manager deals with the decisions managers make.
1.10 UNIT END QUESTIONS
Q.1 Organisational Behaviour (OB) operates at which of the three levels?
Q.2 Organisational Behaviour (OB) is situation based approach.
True/ False
Q.3 A challenge faced by an organisation would have implications for managers to work
towards it at only individual level? True/ False
Q.4 Identify two important roles of a manager: ________& __________
Q.5 While dealing with conflict with a customer would require Organisational Behaviour
(OB) knowledge really. Yes/Not
1.11 UNIT END ANSWERS

Q.1 Three levels: Individual, Group, and Organisational levels
Q.2 True
Q.3 False
Q.4 Spokesperson & Interpersonal (refer to other roles in section 1.4)
Q.5 Yes
1.12 CHECK YOUR PROGRESS-POSSIBLE ANSWERS

CHECK YOUR PROGRESS ANSWERS-I
Q.1 Organisational Behaviour (OB) is the study of behaviour of people while they work in
an organisation as individuals or in teams
Q.2 Structure
Q.3 True
CHECK YOUR PROGRESS ANSWERS-II

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Introduction to
Q.1 True
NOTES
Q.2 d
Q.3 e
CHECK YOUR PROGRESS ANSWERS-III
Q.1 True
Q.2 Globalisation is a phenomenon which provides a common platform to people around
the world to connect for business, social, and cultural-exchanges.
Q.3 e
1.13 REFERENCE AND SUGGESTED ADDITIONAL READINGS

Youssef, Carolyn M. and Luthans, Fred, "Positive Organisational Behavior in the Workplace:
The Impact of Hope, Optimism, and Resilience" (2007). Management Department Faculty
Publications. 36, available at: https://digitalcommons.unl.edu/managementfacpub/36
Marcus Buckingham (2005) What Great Managers Do, HBR
13 Challenges Facing Business Development Leaders Today, Forbes Business Development
Council, (Mar 23, 2020) available at:
https://www.forbes.com/sites/forbesbusinessdevelopmentcouncil/2020/03/23/13-
challenges-facing-business-development-leaders-today/?sh=4b4c5b3f6650
Pandemic Accentuates Two Problems With Change Management: One Is Change, The Other
Is Management by Grant Freeland (Jun 29, 2020), available at:
https://www.forbes.com/sites/grantfreeland/2020/06/29/pandemic-accentuates-two-
problems-with-change-management-one-is-change-the-other-is-
management/?sh=1a0c357f6969
References
Aswathappa K. (2005). Organisational Behaviour. Himalaya Publishing House,
Robbins S. P, Timothy, J.A. & Sanghi,S. (2009). Organisational Behaviour. Pearson Prentice
Hall.
Luthans, F. (2011). Organisational behavior: an evidence-based approach, 12th Ed, New
York: McGraw-Hill Irwin.
Leavitt, H. J. (1964). Applied Organisation Change in Industry: Structural, Technical, and
Human approaches. In: W.W. Cooper, H. J. Leavitt, and M. W. Shelly II, eds., New Perspectives
in Organisations Research. New York: John Wiley & Sons, Inc.
Mintzberg, H. (1971). Managerial Work: Analysis from Observation. Management Science,
18(2), B97-B110. Retrieved June 7, 2021, from http://www.jstor.org/stable/2629532
Katz, R. (1974). Skills of an Effective Administrator. Harvard Business Review, 52, 90-
102.https://doi.org/10.2307/41164516
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UNIT 2 NOTES
ATTITUDE
STRUCTURE
2.0 Objectives
2.1 Introduction
2.2 Characteristics of Attitude
2.3 Components of Attitude
2.4 Attitude Formation & Change
2.5 Work Related Attitude
2.6 Job Satisfaction
2.7 Organizational Commitment & Involvement
2.8 Attitude And Organisational Behaviour
2.9 Let Us Sum Up
2.10 Key Words
2.12 Self-Assessment Questions
2.13 Check Your Progress-Possible Answers
2.14 Answers to Self-Assessment Questions
2.0 OBJECTIVES
• Discuss what is an Attitude
• Describe characteristics & components of an Attitude
• Explain Attitude formation and change
• Describe work related Attitude and Behaviour: cognitive dissonance theory
• Describe Job Satisfaction
• Explain Employee Commitment & Involvement; organisation citizenship
behaviour and work place deviant behaviour
• Describe importance of Attitude in OB
2.1 INTRODUCTION
Attitudes are evaluative statements. People express an evaluation of an object, people or
events by indicating their liking/disliking, favourable or unfavourable feelings. Attitudes
are these feelings. They indicate how one feels about something. If one says, “I like my
job,”. It shows one’s attitude towards work. Anything that arouses evaluative feelings 17
UNIT 2
Attitude
leads to formation of attitude. When we describe attitude by evaluations, then we are trying
NOTES
to separate it from belief and opinions. Beliefs and opinions generally evolve over a period
of time, but they may be true or false. However, beliefs and opinions do contribute to
attitude as beliefs and opinions subconsciously affect our evaluations.
In simple words, an "attitude" is a psychological tendency to evaluate a particular thing with
an individual point of view. To be more precise, an "attitude" is the mentality of a person,
which makes him/ her to act or react in a particular pre-determined fashion.
Attitude as defined by Fishbein & Ajzen, is a “predisposition to respond favorably or
unfavorably toward some attitude object.”
Attitudes are learned and are not innate. They are precursors of behavior as they precede or
predict behavior. Attitude guides our behaviour, dictates our choices and preferences.
Hence, it influences all our decisions in life whether at work or at home. Attitude is an integral
part of our personality. At times we react in a positive way to a situation or a thing,
sometimes we are neutral and at times we are downright negative. Hence, attitudes have
• an evaluative dimension
• direction
• degree or intensity
2.2 CHARACTERISTICS OF ATTITUDE
Characteristics of Attitudes are:
• Attitudes are the complex combination of things like personality, values,
background, motivation, behaviour, feelings & beliefs.
• Everyone, irrespective of age, gender, cast, creed, clan, status and intelligence has an
attitude.
• Attitude may lie anywhere along a continuum from highly favourable to highly
unfavourable.
• Attitude have a tendency to persist unless something is done to change it.
• An attitude may be a positive, negative or mixed evaluation of an object
expressed at some level of intensity
• Attitudes can vary with respect to the need they serve. For example, playing golf may
serve a person’s entertainment or relaxation need but his attitude towards his job
arises out of security and recognition needs.

Q.1 State true or False
A person is born with a particular attitude
Q.2 Attitude could be:
a. Positive
b. Negative
c. Neutral
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d. All of these
NOTES
2.3 COMPONENTS OF ATTITUDE
Component of attitude are, viz:
Affective-How one feels about the situation? Cognitive-Why one feels that way?
Intentional-What one intends to do about the situation?
The affective component of is about the feelings that an individual has towards a situation.
The cognitive component comes from 'cognition' or what one thinks about a situation.
Lastly, the intentional component of conveys how one would behave in that situation. For
example, if you had tea in college canteen and you did not like it, the different components
of an attitude you may have towards the tea are:
• "I don't like that tea"______ Affective component. _______ How I feel towards the
situation?
• "This is the worst tea I have ever had” _______cognitive component _______Why I
feel that way?
• "I will never have tea in this canteen again"' _______Intentional component.
_______What I
intend to do?
Another way of looking at the components of attitude is through, what is called the ABC
model of an attitude.
’Affect’ is the emotional part of the attitude representing feeling of oneself towards
something or someone. This component is concerned with emotions which are generally
expressed as like or dislike, good or bad, pleasing or annoying. All emotions like love, hate,
warmth and anger fall under affective component. It is the affective feature that is most
commonly associated with the idea of attitude.
The second part is intention to ‘Behave’ in a particular way. The third
part is Cognition or thought which exhibits a person’s beliefs or perception.
Cognitive responses are in evaluative terms. A statement like “Doctors have poor
handwriting,” shows the cognitive component of an attitude. This is the belief or opinion
segment of an attitude. The ABC model tells us that in order to assess an attitude one must
take into account all three components. Attitudes are usually measured by the attitude
scale, which measures only cognitive component.
It is human tendency to keep consistency among the three components of their attitudes
under any circumstances. However, trying circumstances they may be. When individuals
experience conflict between their attitude and behaviour, it gives rise to ‘cognitive
dissonance’ in their mind. This dissonance forces them to change either their attitude or
behaviour, otherwise it will give rise to mental tension. A simple example of cognitive
dissonance is your boss telling you to do something which is either unethical or illegal. For
example, if a shop owner tells his salesman not to talk about minor defect in the laptop that
he is trying to sell. It may cause cognitive dissonance in salesman, if he thinks that the
customer must be told about the defect. Differing values of boss and employee is prime
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example of cognitive dissonance. As manager, one must try to comprehend cognitive

NOTES
dissonance to understand employee behaviour because a sudden shift in employee’s
behaviour indicates the attempt an employee is making to reduce dissonance. If not resolved
quickly then that employee may have no choice but to leave that particular organisation.
Table 2: ABC Model of an Attitude
Table form of ABC Model
Component Measured by Example
A Affect Emotion Physiological parameters I do not like this tea

like blood pressure
B Behavioural Intentions Observed Behaviour I will never have tea here
C Cognition Evaluation Attitude Scales/Oral This is the worst tea I ever had
Statements
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NOTES
Cognitive Dissonance can bring people to cross roads.

Q.1 State True or False
Not everyone has an attitude.
Q.2 What are the three components of ABC model of attitude
2.4 ATTITUDE FORMATION AND CHANGE

There are several factors which cause formation of attitude and subsequent changes, if any.
21
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Attitude
NOTES
Individual attitudes are a result of repeated occurrences of various situations and events
over a period of time. This is direct experience, which is situationally specific and learned.
The other is social learning, which is a result of interaction among friends, peers, relatives,
and educational, economic and cultural background of the person.
An attitude is not necessarily permanent. It may change in light of some new input. Like,
a manager may form negative attitude about a new employee because of his lack of
experience. After working with him, a manager may realise that a new employee is quite
talented, which might alter his opinion and may later force him to change his attitude toward
him for better (positive).
Attitude in an individual is a result of several factors which are:
• Family
• Friends and Peers
• Mass media
• Personal experiences
• Learnings from others
2.5 WORK-RELATED ATTITUDES
Pay, perks, promotion, peers, superiors etc. are some of the factors which govern the
attitudes of employees in a firm. Other contributing attitudes are job satisfaction or lack of it,
organizational commitment and job involvement. Employee attitudes are clearly
important to firms because when attitudes are negative, they are the symptoms of
underlying problems and precursor to difficult times ahead. These might cause
slowdowns, strikes, poor quality and productivity etc. On the other hand, positive
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attitudes are welcomed by firms as these bring in job satisfaction and higher productivity
NOTES
and turnover. A big challenge for managers is to meet the expectation of employees
because some of them show an attitude of entitlement to rewards. Effective behaviourial
management that provides supportive human culture & climate can help employees
develop favourable attitude.
2.6 JOB SATISFACTION

An employee gets job satisfaction when he feels that he is adequately compensated for the
work he puts in his job. Job satisfaction is an attitude that determines the level to which an
individual is happy and satisfied in his job. Various studies on job satisfaction reveal that a mix
of personal factors such as one's needs and aspirations along with organizational factors
such as cooperation and relations with peers and supervisors, work ambience, rules and
regulations and compensation determine employee’s attitude.
They say, a happy worker is a hard worker. Naturally, a satisfied employee will not be absent
without compelling reason. Hence, he /she will make a more positive contribution than a
dissatisfied employee who may be often absent causing stress among co-workers and may
be always hunting for another job. A firm will have low employee turnover & reduce
absenteeism when its employees are happy and satisfied with their job. The converse is also
true.
What affects Job Satisfaction?

Determinants of job satisfaction are many but, the major five factors are discussed below:
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NOTES
2.6.1 THE JOB ITSELF

What is the content of the work that itself is a major contributor to satisfaction. Job design
and autonomy are two of the major job-related motivational factors. It is observed that if the
job requires creativity, then employees get a sense of achievement when the task is
completed and then they tend to be satisfied. Other aspects include job variety, interesting
and challenging work, career planning, and promotion, which are equally important to
employees. Additionally, job satisfaction is associated with impartiality, fairness, equal
opportunities, friendly work environment and cordial supervision. In this regard, wages and
salaries are significant but complex factors. Money is a big source of satisfaction as it
provides basic needs, but it is not the only source. Money is also helpful in satisfying some
upper- level needs but it cannot buy love, affection and recognition. Pay and perks are
viewed by employees as compensation for their contribution to the firm. Perks in kind are
undervalued by many employees as they do not know the worth of these benefits.
Therefore, it is better that an employee is allowed some flexibility in choosing the fixed and
variable or cash or kind parts in CTC. This way, the employee will realise benefit satisfaction
as well as higher job satisfaction.
2.6.2 SCOPE FOR GROWTH

Promotional avenues have a telling effect on job satisfaction. The reason being that
promotions may come in different forms and different satisfaction levels. For example,
someone who is promoted on the basis of seniority may not get that level of job satisfaction
as the one who is promoted because of his work. Another example is annual increment,
an increment of 10 percent salary is generally considered as average increment, so unless
increment comes to 15-20 percent of salary, it is neither satisfying nor morale
boosting. Hence, executive promotions which come with these kinds of increments are
more satisfying than promotions at lower strata of the firm. These days, organizational
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structures are generally flat hence the old and traditional sense of climbing the hierarchical
NOTES
corporate ladder does not exist anymore. Today’s corporate work force knows only too
well the worth of positive work culture and scope to grow intellectually and enhance their
skill set, is far more important than mere promotions.
2.6.3 SUPERVISION: LESS OR MORE?

Yet another important source of job satisfaction is supervision, it has a direct impact on
employees. The problem with supervision is to know how much is enough? So, two
approaches can be tried, one is employee-centric which requires a supervisor to take
personal interest and care about the employee. It means supervisor checking to see how
the employee is doing, providing help and guidance, if required. Also, he should interact
with employees on not only official matters but on a personal level as well. However,
supervisors should be aware that there is very thin line between irritation and sufficient
supervision. It has been noted that one of the main reasons for employee turnover is that
their supervisor does not care about them. The other reason for the high turnover is lack
of participation in decision making. Hence, a participative approach ensures that
employees are involved in decisions. It also takes care of supervision as employees feel free
to clarify doubts in participative style of functioning which has a substantial effect on
workers’ satisfaction.
2.6.4 WORK GROUP: MY TEAM?

The task assigned to any work group or team will definitely have an impact on job
satisfaction. Success or failure of team depends on how well the team members bond with
each other. They should enjoy each other’s success. There can be healthy competition but
there is no scope for jealousy. This will foster satisfaction and group will become a “close-
knit” team, that will provide support, comfort, advice, and assistance to the team members.
An effective team with complementary skills makes the job easier & enjoyable. However,
it may or may not ensure job satisfaction but, if the opposite happens i.e., if the people
are having difficulty in getting along then this factor will decrease job satisfaction.
Employees working in teams have better job satisfaction than those working on their own.
2.6.5 WORKING CONDITIONS

Working conditions do have some effect on job satisfaction. Nice and clean working
conditions with pleasing surroundings, make the task easier for employees. If the working
conditions are messy, noisy and congested then employees find it difficult to get going.
Therefore, working conditions are like composition of the work group i.e., if good, job
satisfaction is not a problem but if things are not so nice, then job satisfaction might take
a hit. Generally, firms do not pay much attention to working conditions until they reach
unacceptable levels. At times, issues about working conditions, are about something else,
like if a supervisor complains that washrooms have not been properly cleaned, then his
frustration is in fact might be due to his inability to meet the deadline for which he was pulled
up by his boss few minutes ago. However, in present times, buildings, offices of modern firms
have taken huge step towards modernisation and ambience in the offices is quite good
hence working condition as a factor for job satisfaction has gone out of the window. Now the
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Attitude
question arises whether there is a direct relationship between job satisfaction and
NOTES
performance of employees and productivity. Really, there are no simple answers, as there
are many possible variables, most notably the rewards. If rewarded people feel their work
has been recognized, then they are satisfied and happy which may push them towards
greater performance.
Studies have shown that between satisfaction and turnover there is some kind of inverse
relationship. Low turnover cannot be ensured by high job satisfaction alone, but it helps.
However, if job dissatisfaction is high, then high employee turnover may be its fall out. Which
means there are some other variables in an employee’s decision to leave besides job
satisfaction, like employee’s age, length of tenure, commitment to the organisation and
variety in job which might become deciding factors.

High job satisfaction leads to low employee turnover.
Q.2 Which of the following is not a dimension of job satisfaction?
a. Promotion
b. Pay
c. Supervision
d. Working conditions
2.7 ORGANISATIONAL COMMITMENT AND INVOLVEMENT
Among work-related attitudes, organisational commitment and involvement find a
prominent place. Organisational commitment develops in an individual when he/she
develops a feeling of identification and a sense of belongingness in an organisation. Similarly,
an individual is said to be involved when a person becomes a willing member of the team and
starts putting in hard yards well above the usual standards of the job. Employees interested
in extrinsic motivational factors exhibit low levels of involvement. On the other hand, strong
involvement is motivated by intrinsic motivational factors in employees.
Commitment and involvement, in employees cannot be pinned down to few factors which
tend to increase with length of service and age, job security and role in decision-making.If
the treatment meted out by organisation to its employees is impartial and fair and a
reasonable rewards and job security system is in place then employees would be satisfied
and committed. Participative decision making or inviting employees in decision-making
process surely enhances commitment.
Therefore, while designing jobs, interesting and stimulating work, providing variety in job,
broadening employee’s skill set should be ensured which is sure to enhance job involvement.
One of the most researched topics has been job satisfaction among work-related attitudes.
Though lately, organisational commitment has become topic of discussion in organisational
behavior studies. The basic difference in job satisfaction and commitment is the level of
focus. Job satisfaction focuses on employee’s attitude towards the job but commitment is
at organisational level. No doubt that there seems to be some relationship between job
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satisfaction and organisational commitment. Still, it so happens that there are many
NOTES
instances of satisfied employees who do not like red-tapism and the bureaucratic approach
prevalent in their organisation. Likewise, an investment banker may not be very happy with
his status in the bank but could be very highly committed due to vision, promotional avenues
and high-tech mode of operations in the bank.
Job satisfaction and commitment remain different work attitudes. In view of new world
order where external environment is volatile, uncertain and complex, the internal
environment also gets affected and measures like work from home, turning around or
closing units, takeovers and retrenchment have been resorted to. In times like this,
organisational commitment has resurfaced as a very important aspect of employee
retention. Today because of Covid pandemic and its adverse effect on global economy
employees are worried about their jobs, meagre resources and use of latest technology. This
is the time managers must boost morale of employees by creating a caring and supportive
work environment that will rekindle trust and commitment of employees.
Organisational commitment has following attitudinal aspects:
• An intense willingness to continue in the organisation
• A strong desire to put in his best effort in organisational work
• The values and goals of the organisation must be imbibed by the employee
Commitment as an attitude is like loyalty to the organisation and it shall continue till the
employee remains in the firm. The commitment of employees can be gauged by personal
factors like age, tenure in the organisation, career adaptability, and dispositions such as
positivity or negativity effect on others, locus of control and organisational factors such the
variety in job ethics, impartiality and the style of leadership. Some non organisational
factors, such as alternative careers options can affect subsequent commitment. Due to
multifaceted nature of organisational commitment, a three-component model has evolved
whose dimensions are:
• Affective commitment is employee’s intention to remain in the organisation. It
encompasses loyalty, beliefs and values of the organisation.
• Continuance commitment means commitment based on the switching costs that the
employee associates with leaving the organisation in terms of losing out on seniority
for promotion or benefits so he or she cannot afford to leave because he will start afresh
in the new firm.
• Normative commitment means employee feels obliged to stay with the organisation
because organisation had supported them over a period of time so it is the right thing
to do.
This three-dimension concept of organisational commitment is well accepted. It also valid
across countries. Studies have revealed organisational commitment influences
performance, employee turnover and absenteeism which tend to move these factors in
favourable direction. If commitment remains high, it promotes a happy and healthy feeling
in organisation and employees become part of a team wherein members are always willing
to help to each other.
In order to enhance organisational commitment:
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Attitude
• Develop ‘people-first’ culture. Put it in black and white and ensure

NOTES implementation.
• Clarify and communicate your mission. Employees should know why and what they
are doing.
• Have a ‘open-door’ policy to ensure grievances are addressed and organisational justice
is not denied.
• Promote get togethers, cross-utilization, and teamwork, it will instill a feeling of
belongingness.
• Encourage employee development, provide challenges, enrich and empower,
establish succession planning, promote internally, ensure employee security.
2.7.1 ORGANISATIONAL CITIZENSHIP BEHAVIOR (OCB)
What is OCB?
The concept of Organisational Citizenship Behavior (OCB) was developed sometime in
1980s, and it score construct remains intact even now. Any act of any employee which is not
within the purview of his/her laid down charter of duties falls under OCB. Simply put, it is
discretionary behaviour beyond one’s call of duty. It may or may not always be formally
recognised or rewarded by the organisation. However, such acts do not go unnoticed and
somehow get reflected in appraisals or promotion. More importantly, it makes organisation
more effective.
Nowadays, OCB is interchangeably used for contextual performance, defined as
“Performance that supports social and psychological environment in which task
performance takes place”. This shows role of employees is flexible in the modern workplace,
and highlights the importance of engaging in OCB.
Organisational Citizenship Behaviour (OCB) is an all-inclusive concept. It includes every
positive and constructive act of employees which is done on their accord to help co-workers
and benefits the organisation. Generally, these are not star performers who indulge in such
behaviours, but the ones who 'go the extra mile' or 'go above and beyond' call of duty. OCB
is a set of desirable behaviors that promotes organisational effectiveness.
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Job satisfaction promotes OCB i.e., behaviour which is well beyond the call of duty. Satisfied
NOTES
workers are more likely to indulge in it. It may be defined as “individual behavior that is
discretionary, not directly or explicitly recognised by the formal reward system, and that in
the totality promotes the effective functioning of the organisation”.
OCB is seen in employees who are cooperative, helpful, caring, and conscientious.
Fundamental research suggests that employees engage in OCBs to ‘give back’ to their
organisations. Motivational dimensions, job satisfaction, and organisational commitment
clearly relate to OCBs. However, the bottom line is that employees must be treated fairly and
impartially. Apparently, it is procedural justice that employees perceive as organisational
support, which makes them to reciprocate with OCBs, going beyond the call of duty.
OCBs can take many forms, but the major ones could be summarized as:
• altruism - extending a helping hand to unwell colleague,
• conscientiousness - working late hours to meet deadlines,
• civic virtue - volunteering for social welfare to build firm’s image,
• sportsmanship- sympathising with team members in failures even after his/her advise
was ignored
• courtesy –trying to be cool, calm and empathetic even when under pressure.
2.7.2 WORKPLACE DEVIANCE BEHAVIOUR (WDB):
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Attitude
On the other hand, dissatisfied employees may indulge in, what is termed as work place
NOTES
deviant behaviour. It is voluntary, intentional behaviour which is counterproductive to
organisational norms and goals. Workers with negative attitude may engage in such
behaviours, which may be triggered by lay-offs, downsizing, job security or perceived
injustice. Unduly harsh or unfair treatment at workplace is often the source of such
behaviours which may include acts of sabotage, theft and retaliation.
CHECK YOUR PROGRESS-IV

Organizational commitment is the individual's feeling of not wanting to quit an
organisation.
Q.2 Continuance commitment means
a. Continuing for long time
b. Will continue for long time
c. Continue due to lack of options
d. Signing a bond to continue
2.8 ATTITUDE AND ORGANISATIONAL BEHAVIOUR
Attitudes of workers and management are directly related with mutually dependent
relationship. In order to win cooperation of employees, managers must understand
employees’ attitude that is what they feel and act the way they do. So, that the firm can run
efficiently and effectively. It is important to understand attitude of employees because it
provides clues about employee’s behaviour pattern. Positive attitude leads to constructive
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behaviour, whereas negative behaviour promotes unacceptable behaviour. Employee

NOTES
attitude can affect organization in following manner:
• Employee performance
• Employee turnover
• Absence and tardiness
• Theft and leaks
• Violence and sabotage
2.9 LET US SUM UP
Attitude is something which we are not born with. It develops in an individual depending
upon family background, friends, peer, status, personal and others’ experiences. Attitudes
are complex combination of personality, values, opinions and beliefs. Every one of us has an
attitude. It could be positive, negative or neutral. Attitude has three components, which are
best described by ABC model i.e., Affective, Behavioral and Cognitive components.
Job satisfaction is the extent to which an employee feels gratified or satisfied by the his/her
work. Job satisfaction depends on factors like work itself, promotion, supervision, working
group and working conditions. Job satisfaction influences employee’s work-related attitude.
Work attitude depends on perception or ability of a person to see true nature of things.
Managers should avoid getting affected by selective perception, stereotyping and halo
effect.
An organisation’s success depends upon organizational commitment and involvement of its
employee. Employees with high degree of commitment and involvement often go well
above and beyond call of duty which defines Organisational Citizenship behaviour. On the
other hand, dissatisfied employees indulge in Workplace Deviant Behaviour which are
voluntary acts against the norms of the organization.
Social perception is all about how one person perceives other people. On the other hand,
impression management is a conscious or sub-conscious effort by which people attempt to
manage the perceptions that others have about them. Employees in the organisation try
various strategies for impression management like damage control or promotion
enhancement.
2.10 KEY WORDS

Attitude is, "a learned pre-disposition to respond in a consistently favourable or unfavorable
manner with respect to a given object". It is learned not innate. It is precursor of behaviour.
Cognitive Dissonance arises in individuals when they experience conflict in their attitude
and behaviour. This dissonance motivates people to change either their attitude or
behaviour, otherwise it will give rise to mental tension.
Job Satisfaction is an attitude that reflects the extent to which an individual is gratified or
satisfied by his or her work.
Organisational Commitment is the extent to which an individual identifies and attaches to
an organization.
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Affective Commitment is employee’s intention to remain in the organisation. It

NOTES
encompasses loyalty, beliefs & values for organisation.
Continuance Commitment means commitment is based on the fact that he or she cannot
afford to leave.
Normative Commitment comes from employees’ sense of obligation to stay with the
organisation.
Organisational Citizenship Behavior behaviour which is well above and beyond the call of
duty. Workplace Deviance Behaviour It is voluntary, intentional behaviour which is
counterproductive to organisational norms and goal
2.11 REFERENCES & SUGGESTED ADDITIONAL READINGS

Fred Luthans, Organisational Behaviour,12th edition, Tata McGraw-Hill Education Private
Limited, 2013, New Delhi
Stephen P. Robbins, Organisation Behaviour,7thedition,Inc,1996,San Deigo
John. W. Newstrom, Organisational Behaviour12th edition, Tata McGraw-Hill Education
Private Limited, 2007, New Delhi
2.12 SELF-ASSESSMENT QUESTIONS

Q.1 Definition of attitude is “a learned predisposition to respond in a consistently
______ with respect to a given object.”
a. favourable or unfavourable manner
b. neutral manner
c. unfavourable manner
d. favourable and unfavourable manner
Q.2 Degree if success of a firm depends upon the_________ of employees
a. behaviour
b. number
c. attitude
d. performance
Q.3 Work related attitudes do not include
a. Organisational involvement
b. Job Involvement
c. Job Performance
d. Organisational Commitment.
Q.4 Work related attitudes have direct relationship with _________
a. Performance
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b. Promotion
NOTES
c. Satisfaction
d. Commitment
Q.5 The foundation or base of the components of Work-related attitudes is
a. Job satisfaction
b. Employee Attitude
c. Job Performance
d. Employee Behaviour
Q.6 Which one among the following is not a result of positive attitude of employee
a. Increased production
b. Efficiency of Organisation
c. Better performance
d. Favourable response
Q.7 The two types of attitudes in a work place can be termed as
a. Favourable and unfavourable
b. Optimistic and Pessimistic
c. Individual and group
d. Positive and negative
Q.8 Beliefs, opinion, knowledge, or information is a part of which element of attitude
a. Cognitive
b. Behavioural
c. Observation
d. Affective
Q.9 The Attitude is the main predictor of the
a. Behaviour
b. Perception
c. Observation
d. Performance
Q.10 Which of the following is not a way to change the attitude of employees
a. Giving Feedback
b. Positive working condition
c. Cognitive Dissonance
d. Use of fear
2.13 CHECK YOUR PROGRESS - POSSIBLE ANSWERS CHECK YOUR PROGRESS-I
Q.1 False
Q.2 d
CHECK YOUR PROGRESS-II 33
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Attitude
Q.1 False
NOTES
Q.2 Affective, Behavioral, Cognitive
Q.1 True
Q.2 b
Q.1 False
Q.2 c
CHECK YOUR PROGRESS-V
Q.1 False
Q.2 d
Q.3 a
2.14 ANSWERS TO SELF-ASSESSMENT QUESTIONS

Q.1. a
Q.2 d
Q.3 d
Q.4 a
Q.5 b
Q.6 d
Q.7 b
Q.8 a
Q.9 a
Q.10 c
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UNIT 3 NOTES
SELF AWARENESS, PERSONALITY

AND VALUE STRUCTURE
STRUCTURE
3.0 Objectives
3.1 Introduction
3.2 Self-Awareness
3.3 Self- Analysis
3.4 Self-Esteem
3.5 Personality
3.6 Trait theory of personality
3.7 Personality formation
3.8 Work ethic orientation
3.9 Myers Briggs Type Indicator
3.10 Personality and National culture
3.11 Personality for effective managers
3.12 Values
3.13 Importance of work-related values
3.14 Indian Work values
3.15 Let Us Sum Up
3.16 Key Words
3.0 OBJECTIVES
• Understand the concept of Self-awareness
• Explain types of self-awareness,self-analysis and self-esteem
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Self Awareness, Personality
and Value Structure
• Discuss concept of personality and big five factors

NOTES
• Discuss various factors of personality affecting organizational behavior
• Describe work-ethic orientation
• Discuss Myers Briggs Type Indicator
• Discuss Personality and national culture
• Describe personality requirements for effective managers
• Define values and its types
• Explain the importance of work values
• Describe Indian work values
3.1 INTRODUCTION
As you know, Organisational Behaviour (OB) can be studied from three levels, that is
individual, group and organisational perspectives. In this unit, we will be focusing on
individual level, where focus will be on self-awareness, personality and values. Self-
awareness, as the name suggests is about knowing yourself, that is knowing your strengths,
weaknesses, shortcomings and your strong points.
Personality, on the other hand is a stable set of characteristics which defines one’s behaviour
and attitude, which runs through the life of an individual. Personality, basically can be
determined by ‘Big Five’ traits which are agreeableness, emotional stability, extraversion,
conscientiousness and openness to experience. The determinants of personality are
important factors for managers to be effective.
Values are enduring beliefs that a specific state of existence is preferable through acceptable
behaviour and conduct. Values are mainly two types that is instrumental and terminal.
Instrumental values are means like honesty and ambition through one can reach desired
goals like happiness or wisdom called terminal values. Instrumental values are means to
attain ends or terminal values.
3.2 SELF AWARENESS

When you hear the word self-awareness, you may feel it means knowing one’s own self.
However, one may wonder whether it includes, attitudes, opinions, feelings, emotions,
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motives, purpose, desires, needs, strengths and weaknesses or it is accurate self-

assessment. NOTES
In simple words, self-awareness means being aware of different aspects of the self-that is,
being aware of your characteristics, traits, behaviour, and feelings. Basically, it is a mental
state wherein one, him /herself, becomes the focus of attention.
Self-awareness has following components:
• Emotions
• Psychological desires
• Personality traits
• Individual values
• Habits
While self-awareness is knowing oneself, that is, who you are. It is not something that you are
thinking all the time, everywhere. Instead, self-awareness becomes your sub consciousness
which surfaces at various occasions depending on the circumstances and one’s
personality. Nobody is born fully self-awareness, but it appears from various studies that
infants have some sense of self-awareness. Studies have revealed that even new-born are
able to distinguish others’ touch from their own. Actually, sense of awareness of self,
starts to evolve between 10-12 months after birth and by one and half to two years of
age it is well developed.
3.2.1 TYPES OF SELF-AWARENESS

Self-awareness is generally divided in two different types, that is, public and private.
3.2.1.2 PUBLIC SELF-AWARENESS
This type of self-awareness emerges when individuals start knowing as to how they appear
to others. On the other hand, public self-awareness often surfaces on occasions when
people are at the centre of attention, like when performing on stage be it a lecture, a
presentation or a performance. Public self-awareness usually forces people to stick to
societal norms. When you are aware that you are being watched and judged, you will behave
in a way which is within the norms of society.
Public self-awareness may lead to ‘Stage -freight’. You may have seen that people become
very conscious, stressed, anxious, or worried about their performance in front of large
gatherings. Often their confidence is shaken, so, some people will overcome it, some may
not.
3.2.1.3 PRIVATE SELF-AWARENESS

Private self-awareness emerges, when individuals become aware of some traits and habits
of themselves, but privately. Like, looking in the mirror from different angles is a kind of
private self-awareness. When you suddenly remember something important like a crucial
meeting, your stomach may lurch. Similarly, your heart beats faster when you see someone
you love.
Self-awareness means being aware of your stress, thoughts, emotions, and beliefs. It is vital
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and Value Structure
in influencing personal development. Otherwise, life can get out-of-control fast. One must
NOTES
be aware of how and under what circumstances one’s emotional nature is triggered in.
Otherwise, events like sports fans suffering heart attacks when their team loses a crucial
match may take place.
How do we create self-awareness? It can be increased by:
• Taking feedback from friends, peers, relatives and acquaintances.
• Looking back at your attitude and behaviour.
• Taking self-scoring tests
Thus, self-awareness requires self-examination. However, an honest, non-judgmental and
unbiased self-analysis is easier said than done. One tends to rate low for one’s failings or
overate when one does well. To objectively assess ourselves, we need to have a calm mind
and an open heart. One need not be too harsh on one’s failings and need not get too elated
when one tastes success. Success and failure should be taken as part of life and should be
taken in our stride.
Introspection helps self-awareness about wrong attitudes or unacceptable behaviours. This
will provide peace of mind and inner strength to deal with ambiguous situations. If we know
our limitations and handicaps, then we can rectify these with concerted efforts. However,
first we must introspect to see what lies within, which is not easy to acknowledge and
understand, let alone comprehend.
3.3 SELF-ANALYSIS
It involves questioning ourselves like:
• Are you happy about what have you become and where have you reached?
• Has this thought crossed your mind that you could have had better life ?
• Have you achieved what you set out for?
• Are you in good mind space?
Self-analysis can be done by knowing your strengths, weaknesses, limitations, likes and
dislikes, knowing your areas of interests, hobbies, favorite pastime. Finally, who are the
people you like to meet, so self-analysis means evaluation of one’s thoughts and
behaviours.
3.4 SELF-ESTEEM
People appraise differently what they like or dislike about themselves. It is our sense about
self-concept. It is our estimate about ourselves as intrinsically positive or negative person.
Like, someone may be an extrovert and may feel happy about it. Self-esteem is based on our
attitudes and values as a person. It includes our opinion about our jobs, achievements, status
and our purpose in life. So, we have people with high self-esteem and people with low self-
esteem. Generally, people with high self-esteem are worthy of themselves, happy, good
natured, confident, determined, courageous, result oriented and strive for excellence. On
the other hand, people with low self-esteem have a feeling of helplessness and lack
motivation. They are timid, introverted, depressed and unsure of themselves.
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NOTES
Q.1 State True or false
Self-awareness cannot be enhanced.
Q.2 Two types of self-awareness are
a. Self-esteem and self-respect
b. Self-esteem and self-analysis
c. Public and private
d. Self-awareness and self-concept
3.5 PERSONALTY
There are various kinds of people in this world. The very fact that each one of us is different
from each other in one way or other is well accepted. If you look at people you will find some
are happy, loud, active and busy, while others may be sad, quiet and inactive. Individual
differences creep in ways each of us perceives, thinks, judges and take decisions. Values,
motives and desires etc. are other reasons for differences among people.
So, what kind of people you will choose for certain jobs. Well, there are no simple answers,
because each one of us has different personality. That brings us to,
Personality is not easy to comprehend. It is a complex, multi-dimensional concept and

hence it is not simple to define personality. One popular definition is, “A stable set of
characteristics and tendencies that determine those commonalities and differences in the
psychological behavior of people".
Therefore, we should consider personality as entire gamut of ways in which a person reacts
and interacts with other individuals and situations. Personality means the psychological
characteristics that provide a consistency in an individual’s thought process, so that one
behaves in different ways to deal with various situations arising at different times.
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and Value Structure
Personality is a dynamic, ever evolving process, formed by individual needs, physical and
NOTES
mental abilities which are stressed by societal pressure. It is something which continuously
runs through one’s life.
Personality has both internal and external factors. Internal elements are feelings and values
and genetic characteristics that may be inferred from one’s behaviour. The external factors
are that can be seen in observed behaviour and gives an idea about one’s personality. In
general, the factors which shape the personality of a person are:
• Heredity
• Brain
• Physique
• Emotional quotient
• Motivation
• Family
• Societal causes
• Situational context
3.6 TRAIT THEORY OF PERSONALITY
A personality trait may be defined as” an enduring attribute of a person that appears
constantly in a variety of situations.” The trait theory assumes that:
• Traits distinguish one personality from another.
• Individuals can be described by a set of traits like anxiety, aggression and
affiliation.
• Traits are measurable
• Traits are fairly stable in a person and amount of these traits vary from person to
person.
In 1973, Cattel identified 16 Primary Traits. These traits were found to be generally steady
and constant sources of behaviour. But there was found to be no scientific relevance.
Sixteen Source Traits
1) Reserved - Outgoing
2) Less intelligent - More intelligent
3) Affected by feelings - Emotionally stable
4) Submissive - Dominant
5) Serious - Happy go Lucky
6) Expedient - Conscientious
7) Timid - Venturesome
8) Tough minded - Sensitive
9) Trusting - Suspicious
10) Practical - Imaginative
11) Forthright - Shrewd
12) Self-Assured - Apprehensive
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13) Conservative - Experimenting

NOTES
14) Group-dependent - Self-sufficient
15) Uncontrolled – Controlled
16) Relaxed – Tense
3.6.1 THE BIG FIVE FACTORS
• Openness to Experience
Openness to experience generally includes people who appreciate emotions, drama,
experimentation, research, art, new ideas, out of box thinking. Openness basically means
an individual’s propensity towards intellectual activity, curiosity and to experience
something new rather than routine. It is a trait which can be used to describe individuals who
prefer freedom of thought and investigation. Naturally, people who love to experiment,
like novel ideas, score high on this trait while people who like routine work and life score
low in this trait.
• Conscientiousness
This trait is usually seen in people who are duty bound, disciplined, achievement oriented,
considerate and competent. Conscientiousness does not mean “having a conscience”; but
refers to deliberate thought process which comes into play towards a certain type of
behavior by a person. These individuals exhibit behavior which is planned rather than
spontaneous. Such people are hardworking, dependable and organised. Various studies
indicate that people high on this trait often succeed in academic field.
• Extraversion
Extraversion is associated with individuals who are generally have positive attitude,
aggressive, have high energy, gregarious and are glib talkers. On the other hand, there
are individuals who enjoy smaller groups or solitude, prefer going solo and enjoy quiet
surroundings and be on their own. Usually, people who score high in both openness to
experience and extra version are the ones who have tendency to take more risks and may
go for adventures trips to explore excitement in natural surroundings.
• Agreeableness
Agreeableness as a trait indicates an individual’s sense of cooperation and empathy for
others rather than having feelings of hate and suspicion towards others. It also determines
whether an individual is helping, kind, trustworthy and even-tempered or not.
Uncooperative and rude, or people with callous attitude score much lower on this trait.
• Emotional stability
Emotional stability refers to the coping mechanism of a person experiencing emotions
either unpleasant or pleasant. People with low scores on this trait usually exhibit
depression, rudeness, anger or anxiety. They tend to be hostile in nature, emotionally
unstable and impulsive in their behaviour. People who score high in this trait are generally
cool, calm and collected in their behaviour and are usually even-tempered.
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and Value Structure
3.6.2 SHORTCOMINGS OF THE FIVE FACTOR MODEL

NOTES
This theory does not include all the personality traits which are seen in different human
beings and hence it is difficult to predict a personality an individual will have based on one’s
traits. Also, it has been pointed out that some aspects of personality like manipulation,
domination, fanaticism, Machiavellianism, wit, humour, frugality and honesty do not
figure in the list of traits.
This theory also invites criticism on lack of solid foundation but merely rests on empirical
findings and labels which are clubbed together. Some critics also opine that variables like
situation and circumstances have more influence for determining behaviour than traits.
Some feel that it is the combination of traits and circumstances which govern behaviour.
Another pitfall of this perspective is the requirement of self- observation and self-reporting
to measure these traits. Both these requirements are difficult to fulfil as reports require
that the individual should have a comprehensive understanding of his behaviour and should
have the ability to record his responses to different situations correctly. As both recording
and reporting responses are highly subjective in nature there is lot of scope for inaccurate
measurement and misinterpretation. This theory also suffers criticism for its inability to
explain “why” that is to say why these traits develop in a person in certain circumstances.
3.6.3 ADVANTAGES OF THE TRAIT PERSPECTIVES

The main strength of the trait theory is that behaviours can be observed and categorized
easily. Research has provided evidence that by observing the behaviour of different people
for some time in various situations categorization as personality traits can be done. Another
positive aspect about this trait theory is that various trait theorists while developing their
traits independently often come to the same conclusion that is the reached same set of
traits.
3.7 PERSONALITY FORMATION

An individual’s personality starts developing right from the time of birth and continues
throughout one’s life. Three factors play major part in development and formation. These
factors are:
Determinants
Three universally accepted determinants of personality are biological, social and cultural.
People are born with certain genes and with some hereditary physical features. Next comes
social environment consisting of family, friends, peers and acquaintances. It is followed by
cultural background like religion, ethics and values. We can say heredity, environment and
situation are three determinants of personality. These three factors interact with each other
to shape up the personality of a person. Once people reach adulthood, their personalities
become well defined and are usually stable.
Stages: According to Freud model of human personality, it evolves through four stages which
are as follows:
• dependent
• compulsive
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• oedipal
NOTES
• mature.
Freud’s concept of stages of growth adds a new dimension to organizational behavior. Senior
managers are now well aware that their employees may be going through these stages.
It provides them better understanding of behaviour of their employees.
CHECK YOU PROGRESS-II

Q.1 State true or false
We are born with a personality, which remains stable and does not change with age.
Q.2 The three determinants of personality are:
a. Family, brain and physique
b. Brain, genes and physique
c. heredity, brain and genes
d. Biological, social and cultural
3.7.1 PERSONALITY FACTORS AFFECTING ORGANISATIONAL BEHAVIOUR
Following personality factors will determine what kind of behaviors can be expected from
employees at work:
3.7.2 NEED PATTERN

In 1976, Steers and Braun stein developed a scale to measure four needs of personality with
reference to work settings. These needs are as follows:
• Achievement need: people with a high achievement need to be occupied in their
work, in order to achieve their goal.
• Affiliation need: people who want some recognition and affection are likely to be
cooperative with peers.
• Autonomy need: people who want some independence while working do not like to
be closely supervised or monitored.
• Dominance need: people who are aggressive and dominating become very
effective when they are able to exercise their legitimate authority.
3.7.3 LOCUS OF CONTROL
Locus of control simply means whether you belong to that category of people who think that
their success or failure is result of their efforts or lack of it. These are people who have
internal locus of control. The other class of people believe that luck or chance decides their
destiny. It is a result of fate, circumstances, luck or God’s wish, rather than the lack of effort
and zeal on their part. These people are believed to have an external locus of control.
Actually, an organisation needs people with internal control as well as with external control.
Like, people who have an internal locus of control, are very keen to participate in the
management of their organisations and need freedom to do their jobs. Hence, they prefer
a decentralized company where they have a say in decision-making and work with a
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and Value Structure
leader who gives them freedom and autonomy. This type of employees like a reward
NOTES
system that recognizes outstanding individual performance and contributions.
On the contrary, centralized firm is preferred by people with external locus control, where
they need not take any decisions. This type of employees go for well-structured jobs where
standard operating procedures a relied on. Such employees want a leader who makes most
of the decisions and like a reward system that considers seniority over merit.
3.7.4 INTROVERSION AND EXTROVERSION

These terms are usually used with reference to people’s propensity to be sociable and inter-
person exchange. Introversion is the tendency of individuals, who are inward looking and
keep their feelings, thoughts and ideas to themselves. Extroversion, on the other extreme,
indicates a tendency in individuals, who are outgoing, talkative and keen to interact with
others. We all have some amount of introversion as well as extroversion in us. Someone can
be dominant, irrespective of the fact that whether he/she is an extrovert or introvert.
Extrovert people are loud, outgoing, lively and gregarious. Such individuals are likely to be
successful while working in human resource management, sales, public relations etc. On the
contrary, introverts are meek, timid, thinking, self-analysing, and studious people who like
to interact with a close group of people. These people are likely to be more successful in
fields of abstract thinking like R&D and prefer working in a relatively quiet atmosphere.
Managers interact with people from within and out of the organization. They need to
impress them about organisation’s success; hence extrovert managers are better placed to
be more successful.
3.7.5 DECISION UNDER UNCERTAINTY

This attribute refers to level of ambiguity that people can sustain while working normally
without undue stress. Many a times, leaders and managers have to take decision when they
neither have the data or sufficient information, especially when things are fast moving, and
firm's external environment is volatile. Managers with high degree of tolerance for
ambiguity deal with these conditions quite easily. On the other extreme, managers who have
a low level of tolerance for ambiguity may be effective in only well-defined working
conditions or where standard operating procedure are applicable. Thus, decision making
under uncertainty or tolerance for ambiguity is a personality attribute which is a pre-
requisite for managerial success.
3.7.6 SELF- CONCEPT AND SELF- ESTEEM

Self-concept shows people feel about themselves as to who they are, giving them a sense
of identity. Self-esteem is the extent to which people consider themselves worthy of
respect, because of their own ability, capability and successful past. Self-esteem is a crucial
personality trait that indicates how managers see themselves and their role in the
organisation. People with high self-esteem tend to take initiative and volunteer to take
challenging task to achieve organizational success. People with low esteem regularly need
encouragement from peers or superiors, hence, they lack in confidence to take decisions.
They would be happy if someone else decides what is to be done and how it is to be done.
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High self-esteem provides people with a high sense of self-concept, which, in turn, reinforces
NOTES
high self-esteem. Thus, these two are mutually reinforcing. The higher the self-concept and
self- esteem, greater will be their role in attainment of the organisational goals, especially
when the firm rewards them for their efforts.
CHECK YOU PROGRESS-III

Locus of control means control over one’s emotions and feelings.
Q.2 The four needs of personality are:
a. Need for achievement, autonomy, affiliation and dominance,
b. Need for autonomy, affiliation, dominance and esteem
c. Need for achievement, independence, autonomy and affiliation
d. Need for achievement, dominance, autonomy and affection
3.7.7 AUTHORITATIVE OR DOGMATIC APPROACH?
Authoritarianism is the principle of blindly following orders of superiors or blind
submission to authority. It is the extent to which an employee believes in hierarchical
systems of command in organizations. Like, an employee who believes in authoritative
approach may obey orders from his superior without expressing any doubts. On the other
hand, an employee who does not believe in authoritative approach may not like to take
orders from his boss. He/she may
ask questions, clarify doubts and may even refuse to obey orders if he/she finds them
unreasonable and objectionable.
Dogmatism, on the other hand is the inflexible attitude of a person regarding his beliefs and
refusal to accept other’s viewpoints. Often the term 'close-minded’ is used for people who
are rigid and dogmatic in their beliefs. Like, a dogmatic manager who does not listen to any
idea or suggestion which is given by his subordinates. On the contrary, a manager who is
always willing to hear and try new ideas from his employees is considered as ‘open-minded’.
In present times dogmatism can have an adverse effect on firms. Considering the pace of
change in the nature of organisations and business environments, individuals with
dogmatic attitudes and approach are not welcome in organisations.
3.7.8 RISK TAKING ABILITY

It is a personal attribute of an individual indicating one’s willingness to take chances even
when the stakes are high. High and top-level managers with a high-risk propensity are
expected to experiment with new ideas and charter a new course for the organisation.
However, top managers with low-risk taking attitude may drive a firm where it makes little
or no progress due to their conservative approach. People with high-risk propensity
generally take decisions quickly even when sufficient information is not available but
managers with low-risk propensity require a lot of information and time to take decisions.
However, there is no guarantee that either of the types will always be correct. Hence, a mix
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and Value Structure
of managers with high and low propensity for risk is better suited for organisational
NOTES
success.
3.7.9 MACHIAVELLIANISM
Machiavellianism named after famous dictator Machiavelli, is an individual attribute
referring to one’s propensity to do anything in order to get one’s own way to one’s goal. In
other words, manipulating or maneuvering other people in such a way so as to achieve one's
goal. People are termed to be a High-Machs, if they prefer to be feared than loved. They are
willing to twist and turn facts in order to control people, event or situations by manipulating
the system to his/her liking. He/she believes that ends justify the means. These High-Mach
people are not swayed by emotions like trust, friendship and loyalty. They are generally very
confident and successful. On the opposite end are people with Low-Machs, who value
loyalty, relationships and commitment. They do not like to hurt people’s sentiments and may
not be as successful as their counterparts High-Machs.
3.7.10 TYPE A AND B PERSONALITY PATTERNS

Type A personality pattern is also called ‘coronary-prone’ pattern.
Type A persons are always in hurry and usually short of time. They are dominant, hostile,
highly competitive, result oriented, and show impatience when things are not going as
planned. On the other side of the scale are people with Type B personality, these people are
laid back and are easy-going individuals. They take life as it comes and do not feel the need
to be competitive.
Largely, because of their aggressive and hostile attitude, people with Type A personality are
more likely to suffer heart attacks than Type B people. It is quite likely that Type A people
may take the firm well ahead of their competitors in short span of time but they may also
have health problems because of their style of work. This might lead to their long absence
from work which may prove counterproductive in the long run. Organisations can also be
classified as Type A or Type B. If, an individual is a Type A but he/she works in Type B
organisation, the that person can come under stress due to mismatch between his/her
personality type and the style of functioning of the organization.
CHECK YOU PROGRESS-IV

Type A personality people are prone to having heart attacks.
Q.2 Managers with propensity take decisions which are
a. time consuming
b. quick
c. data based
d. information based
3.8 WORK-ETHICS
Different people have different work ethics, depending upon their own moral code. Some
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people believe that work is worship and diligence has a moral benefit. It is an inherent virtue
NOTES
of an individual. Some people work very hard and there are some others try to do as little
as work that would keep their job intact. High work-oriented persons get involved in the
job. Employees with extreme sense of work ethics may suffer from "workaholism"
wherein people consider that work is the only motive for living. For a workaholic person,
work can be a way of avoid in got her than work-related issues. Firms always welcome a high
level of work ethic orientation from its employees. However, excess of "workaholism",
may lead to physical and mental fatigue and result in health issues. That would be
detrimental for both employees as well as the organization.
Listed above are various personality predispositions which are crucial for organisational
success.
3.9 MYERS-BRIGGS TYPE INDICATOR

The Myers-Briggs Type Indicator (MBTI) is a well-known personality framework. It is quite
common to use it to measure psychological preferences of people. It provides an insight into
how people look at the world and make decisions. These preferences were drawn from
various theories which originated around that time, like the one by Carl Jung. However, it
pioneers of the personality functions were Katharine Cook Briggs and her daughter, Isabel
Briggs Myers. They developed MBTI around the world wars. They thought that knowledge of
personality preferences would assist women who were about to become part of the
industrial labour. They thought that this indicator would help women take better decisions
regarding what kind of jobs they would be at ease and effective. These preferences and
what they represent are shown in the table below:
The MBTI highlights the importance of natural variations of preferences among people in
a normal distribution of population. MBTI is a basically personality test comprising two sets
of questions to find from people about how they feel or react in any given situation. It is
like figuring out whether one is born right or left-handed. Likewise, some people have in-
born ideas while some develop their own ideas about how to think and act. The indicator
constructs16 possible psychological types by dividing some of these psychological
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differences into two extremes resulting into four opposite pairs. It does definitely does not
NOTES
mean that any one of these types is better or worse than the other. Myers and Briggs were
of the opinion that people naturally prefer one combination of type differences like
bowling with the left hand is very difficult for a right-handed batter. That is the reason that
there are not many ambidextrous people like Ravi Shastri because people tend to avoid
using their opposite psychological preferences, though it might become better with
practice. The 16 combinations are usually designated by an acronym of four letters, the
initial letters of each of their four type preferences except in the case of INTUITION, where
N is used to distinguish it from Introversion. e.g.:
ISTJ - Introversion, Sensing, Thinking, Judging ENFP - Extra version, INTUITION, Feeling,
Perceiving This results in16 possible type combinations.
The four opposite pairs are:
• Thinking- Feeling
• Judging-Perceiving
• Extra version- Introversion
• Sensing-Intuition
It is to be noted that the terms used for four opposite pair have specifically used to provide
technical meanings with reference to the MBTI and are different from common usage. Like,
people who prefer to judge rather than perceive others does not mean these people are
more judgmental or less perceptive. Similarly, the MBTI cannot measure aptitude; it only
points towards a preference of one over another. Anyone, scoring higher on extraversion
over introversion does not necessarily mean that he/she is more extroverted, it only means
that he/she has a clear preference to be an extrovert rather an introvert.
3.10 PERSONALITY AND NATIONAL CULTURE

Nationality of a person provides a cultural base. Though, it cannot be assumed that each
country produces a particular personality type of people. However, the cultural values
fostered by a particular nationality leads to development of certain traits in its citizens. Thus,
native values have definite impact on personality characteristics of a person. Studies have
revealed that people in developed countries like U.S. and Canada concentrate on
achievement and materialistic success. These countries have majority of people as Type
A personalities with external locus of control. They devote their time to efficiency, time
management and quality of life. Their emphasis on is on wealth acquisition and buying
expensive goods.
On the other hand, in developing countries people are introvert, easy going, God fearing,
and they love people rather than money. Hence, the majority of people in these
developing counties are Type B personality with internal locus of control.
3.11 PERSONALITY CHARACTERISTICS FOR EFFECTIVE MANAGERS

To be a successful manager, one has to have the desired skill set. Usually, there are some
personality attributes, which are needed for a manager to be effective and be successful in
running the firm. Besides having the requisite skill set, managers must have the ability to
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cope with uncertainty. Things are changing very fast in today’s world and so is case with the
NOTES
internal and the external environment of a firm. In global business, several variables are
there to make it a complex situation. Hence, managers should have the ability to tackle
unknown situations as and when they come, without getting stressed. Therefore, a high
tolerance for uncertainty is a pre-requisite for a manager. Managers with a successful track
record are likely to succeed, most of the time because of the confidence they have gained
with their past successes. After all nothing succeeds like success. This is likely because
they will have the necessary experience to deal with crisis, as and when it arises. Usually,
extrovert managers perform better in departments which have people-oriented roles, like
public relations, sales and HR. Similarly, introvert managers are more suited in
departments like R&D, where they will work in isolation and be an efficient intellectual
and a thinking employee rather than competing in a group. Successful managers generally
exhibit good work ethic values and tend to get involved in their tasks to turn things around
for better. Type A personalities make better managers in jobs which are challenging and ave
deadlines, but they are coronary prone and therefore, need to relax at the right time and
regularly monitor and ensure their stress levels remain under control.
Personality is a relatively stable aspect of one’s life. However, one’ predispositions can
be altered if one becomes conscious of them. For instance, ability to tolerate
uncertainty and stress can be significantly increased through simulated exercises.
Similarly, whether one has
internal or external locus of control can also be changed. Additionally, one’s ability to take
risk and decision-making under uncertainty can be enhanced by undergoing training
designed for these purposes. A conscious effort to inculcate and comprehend the required
changes for managerial success is a step in the right direction, change and success will follow.

People with High-Machs do not mind running roughshod over people.
Q.2 A misfit occurs when
a. Type A person works in Type A organisation
b. Type B person works in Type A organisation
c. Type B person works in Type B organisation
d. None of the above
3.12 VALUES
What are values? Is corporal punishment in schools right or wrong? A CEO has likes to use his
power, is that good or bad? Answers will be decided by the values upheld by the person
answering to these questions.
Is it a belief, a mission, a philosophy that is meaningful? Values are all-inclusive concepts.
Values form the basis of personality. They guide, and dictate behaviour.
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3.12.1 DEFINITION
NOTES
Values are so rooted that by observing an individual’s behaviour and attitude, one can have
reasonable idea about his values. People are driven by their value system. To understand an
employee’s behaviour, a manager must know his value system. As per Rokeach, values
represent basic convictions that “a specific mode of conduct or end-state of existence is
personally or socially preferable to an opposite or converse mode of conduct or end-state
of existence.”
3.12.2 TYPES OF VALUES

Values can be divided in two main categories:
`Terminal values" relate to ends to be accomplished or ends states of existence like decent
life, secured job, happiness, self-respect and sense of achievement. On the other hand,
“instrumental values” are means for reaching desired ends that is acceptable behaviour
which may be used reach the end state. These may be honesty, hard work and vision or a
dream. Terminal values represent a person’s, dream or ultimate aim, where as instrumental
values show how that person achieved them.
Values are so ingrained that they may be inferred from people's actions, traits and
expressions. These have an impact on behaviour. Values are generally stable and long lasting.
It is so, as that is the way these values were initially learned.
All port et al (1951) categorised values in six major categories, which are as follows:
• Theoretical: Liking for in seeking truth through logical approach.
• Economic: Emphasises pragmatism.
• Aesthetic: Places interest in beauty, art and harmony.
• Social: Love for people and human relationship.
• Political: Willingness to wield power and dominate.
• Religious: Understanding the existence of cosmos as a whole.
The importance given to these six values varies from firm to firm depending upon moral code
of the firm. The very fact that different people have different types of value-sets has led to
progressively organised and managed firms. These firms have made efforts to match value
of employees with his or her job responsibilities so there is no cognitive dissonance. In fact,
few companies have initiated a programme to diagnose values of employees then match
these types with suitable work environment within their company. This seems to enhance
performance of employees and consequently leads to higher job satisfaction and
productivity.
All individuals are not same. Some people, may want strong, directive leadership from their
superiors. These people fall in the category of "tribalistic" people. Whereas some are
"egocentric" wanting independence of work, responsibilities, so as to be innovative and
work in an enterprising mode style. Some employees are "socio centric" basically looking for
social affiliation that job provides. Another type is of "existential" employees, who are
seeking self-fulfilment and self-actualisation needs through their work. They perform like an
artist who loves his or her his art.
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Work that needs to be done in any organization is vast and varied. Hence, there is enough
NOTES
scope to fit in various types of work personalities. The aim should be that organisational
goals are achieved by keeping interests and goals of employees in mind.
3.13 IMPORTANCE OF WORK VALUES

Work values are dominant values in today’s work force and they dictate individual’s
perceptions what is right or wrong in their organisation.
Generally, following four work values influence employee’s perception
• Achievement and rewards are expectation of growth in the organisation

• Concern for others denotes caring attitude which enhances cooperation and
coordination
• Honesty is part of integrity which makes one trustworthy
• Fairness is impartiality in dealing with differing point of views
3.14 INDIAN WORK VALUES
In last two to three decades, some research has also been done in Indian firms regarding
value and management practices. From these studies it has emerged that salient social
values in India are:
• Cooperation and trust
• Work to be considered as worship
• Self-discipline and self-control
• Ensuring highest quality
• Respecting all individual irrespective of status
• Remaining within the ethical and moral limits
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• Zero tolerance for dishonesty, bribery and greed

NOTES
• Purification of mind and detachment from materialistic needs
CHECK YOUR PROGRESS-VI
Some employees are "Egocentric" who are basically looking for social relationship
that job provides.
Q.2 The four important work values are:
a. Achievement, concern for others, impartiality and loyalty
b. Affiliation, concern for others, impartiality and loyalty
c. Achievement, concern for others, partiality and honesty
d. Achievement, concern for others, impartiality and honesty
3.15 LET US SUM UP
Self-awareness means knowing oneself that is knowing about your characteristics,
attributes, traits and habits etc. It is of two types, public and private self-awareness. Public
self-awareness is that part of yourself which is known to others. Whereas, is private self-
awareness is only known to yourself. Self-analysis is an introspection about shortcomings
and strong points, failures and successes. Hence, self-analysis is easier said than done. As it
has to be done objectively without being too harsh about on your failings and not getting
excessively elated about minor achievements. Self-esteem, on the other hand is respect for
yourself. It emerges through abilities, talents and skills. Your past achievements and
successes give you confidence to take up more challenging tasks and thus enhancing your
self-esteem.
Personality is a relatively stable set of characteristics that influence an individual’s behaviour
towards goal achievement. The big five traits theory incudes consciousness, emotional
stability, extra version, agreeableness and openness to experience. Some of the
personality factors that affect organizational behaviour are need-pattern, locus of control,
extra version and introversion, decision under uncertainty, authoritative or dogmatic
approach, risk taking ability, self-concept and self-esteem, Machiavellianism, Type A or B
personalities and work-ethic orientation. MBTI is an instrument, developed by mother-
daughter team to measure Carl Jung’s theory of individual preferences. Personality is also
affected by national culture because every country has its own value set and culture. Hence,
it is seen that people from developed countries tend to be result oriented, like to
accumulate wealth and buy expensive luxury items. While people in developing countries
are generally God fearing, easy going and love people more than money. To be effective
managers, some skills are a prerequisite like risk taking ability, tolerance for ambiguity
and will to succeed. Managers with Type A personality are better suited for roles like
public relations, sales and human relations whereas mangers with Type B personality fit in
jobs like R&D. Personality traits are fairly stable but if there is a need to improve some of
the traits, that can be done through training and development programmes.
Values are enduring beliefs that a particular mode of behaviour and conduct or end state
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of living is better than any other mode of conduct. Values are of two types, Instrumental
NOTES
and terminal. Instrumental values are the means like honesty, responsibility and ambition
which are used to reach end states like happiness, self-respect and wisdom. The
important work values are honesty, impartiality, concern for others and high quality. The
salient Indian work values include cooperation and trust, work to be considered as worship,
self-discipline and self-control, ensuring highest quality, respecting all individual
irrespective of status and remaining within the ethical and moral limits.
3.16 KEY WORDS

Self-Awareness: means being aware of different aspects of the self that is being aware of
your characteristics, traits, behaviour, and feelings.
Self-Analysis: is defined as an evaluation of one’s own thoughts and behaviours.
Self-Esteem: is defined as belief and confidence in your own worth and abilities; self-respect.
Personality: A stable set of characteristics and tendencies that determine those
commonalities and differences in the psychological behavior of people.
Extraversion: A preference indicating that a person gets energized by interaction with other
people.
Introversion: A preference showing that a person is happy to spend time on his/her own.
Locus of Control: A person’s generalized belief about internal control or self-control versus
external control or control by fate or other people.
Type A Personality: people who behave in very aggressive and competitive fashion, show
time urgency and are achievement oriented. They tend to be coronary prone.
Type B personality: Basically, opposite of Type A personality that is easy going, relaxed and
highly flexible kind of people.
MBTI: means Myers Briggs Type Indicator, it is used to measure people’s preferences in
situation in order to understand individual differences. Machiavellianism: is a personality
attribute indicating one’s willingness to do whatever it takes to get one’s own way.
Values: are basic convictions that a specific mode of conduct or end-state of existence is
personally or socially preferable to an opposite or converse mode of conduct or end-state of
existence.
Instrumental Values: Values that are acceptable to reach a preferred end state like ambition
or honesty.
Terminal Values: Values that represent goals to be reached or end state of existence like
happiness or wisdom.
3.17 REFERENCES AND SUGGESTED ADDITIONAL READINGS

Stephen P. Robbins, Organisation Behaviour,7th edition, Inc,1996, San Deigo
Private Limited, 2007, New Delhi 53
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G W Aliport, Personality-a psychological interpretation, Holt, Rinehardand Winston, 1951,

NOTES
New York
R. M. Steers & Braunstein, D. N. (1976). A behaviorally based measure of manifest needs in
work settings. Journal of Vocational Behavior, 9(2), 251–266.v
3.18 SELF ASSESSMENT QUESTIONS
Q.1 Self-awareness is self-assessment to know
a. how you perceive yourself
b. how you want live
c. what skills you have
d. your strengths and weaknesses
Q.2 Self-analysis is
a. how you respect yourself
b. to evaluate your own thoughts and behaviour
c. what skills you have
d. what your strengths and weaknesses
Q.3 Which one of the following is not one of the big five traits
a. Aggression
b. Conscientiousness
c. Extra version
d. Agreeableness
Q.4 MBTI predicts how many types of personality types
a. 12
b. 14
c. 16
d. 18
Q.5 Which one of the following is not one of the determinants of personality
a. Heredity
b. Situation
c. Environment
d. Education
Q.6 Type A personality are
a. Always in hurry
b. coronary prone
c. Aggressive
d. All of above
Q.7 Locus of control means
a. controlling your emotions
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b. controlling your destiny

NOTES
c. control by self (internal) or fate (external)
d. control if your life by others
Q.8 Values are of following two types:
a. Instrumental and Experimental
b. Instrumental and Terminal
c. Instrumental and Essential
d. Theoretical and Experimental
3.19 CHECK YOUR PROGRESS- POSSIBLE ANSWERS CHECK YOUR PROGRESS-I
Q.1 False
Q.2 c

Q.1 False
Q.2 d

Q.1 False
Q.2 a

Q.1 True
Q.2 b

Q.1 True
Q.2 b

Q.1 False
Q.2 d
3.20 ANSWERS TO SELF ASSESSMENT QUESTIONS

Q.1 a Q.2 b
Q.3 a Q.4 c
Q.5 d Q.6 d
Q.7 c Q.8 b
55
UNIT 4
Emotions and Moods
NOTES UNIT 4
EMOTIONS AND MOODS
STRUCTURE
4.0 Objectives
4.1 Introduction
4.2 Differentiate between Emotions and Moods
4.3 Describing Emotions
4.4 Sources of Emotions and Moods
4.5 External Constraints on Emotions
4.6 Emotional Labor
4.7 Felt versus displayed emotions
4.8 OB Applications of Emotions and Moods
4.9 Emotional Intelligence
4.10 Models of Emotional Intelligence
4.11 Let Us Sum Up
4.12 Key Words
4.0 OBJECTIVES
• Differentiate between emotions and moods
• Know the sources of emotions and moods
• Understand felt and displayed emotions
• Understand Emotional Intelligence
4.1 INTRODUCTION
You must have experienced emotions and you also know how they get better of us. Emotions
like passion may lead to neglecting judgement or fear may intimidate our bold decisions and
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resentment to regrets.
NOTES
Emotions have been the building bricks of our abilities to act, interact and feel sense of
morality. Emotionality has generally been described as the forceful and irrational rival of
reason and rationality.
You can master your emotions by being Emotionally intelligent. In this unit you will
understand emotions and moods and their implications in the Management. You will also get
to know how you can regulate your emotions.
4.2 DIFFERENTIATE BETWEEN EMOTIONS AND MOODS

You will first differentiate between the three terms affect, emotions and moods. Affect is
a broad term encompassing both emotions and moods and a varied range of feelings.
When you have Intense feelings directed towards someone, or something are emotions
while comparatively less intense feelings then emotions often arising without a stimulus
are moods.
Think of a situation when somebody talks to you rudely; you feel angry but you will notice this
intense emotion arises and vanish quickly while in case of bad mood you will feel bad for
considerable hours.
Your reaction towards a person or an event are your emotions in contrast moods are not
usually directed towards person or an event. Emotions get converted into moods when you
lose focus on the event or object that initiated the feeling so your good or bad mood can
make you more emotional to a response or to an event. Some experts are also of the opinion
that emotions demand immediate action while moods are cognitive as it gives you time to
think, ponder and respond. The figure below will help you to differentiate between emotions
and moods.
Source:
https://www.pearsonhighered.com/assets/samplechapter/0/1/3/2/0132431564.pdf
4.3 DESCRIBING EMOTIONS

You experience dozens of emotions which include anger, contempt, enthusiasm, envy, 57
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Emotions and Moods
frustration, hate, hope, joy, laugh etc. Researchers have diverse opinion about having a
NOTES
fundamental set of emotions some argue that there is no point in terms of limiting the
emotions, for example, shock that can have powerful effect on us.
Philosophers, argue that there are universal emotions common to all of us. René Descartes,
often called the founder of modern philosophy, identified six “simple and primitive
passions”—wonder, love, hatred, desire, joy, and sadness—and argued that “all the others
are composed of some of these six or are species of them.” Other philosophers (Hume,
Hobbes, Spinoza) identified categories of emotions.
Although there is no unanimity among the psychologist to agree on a basics set of emotions
still, they agree on six essential Universal emotions like anger, fear, sadness, happiness,
disgust and surprise. Some have also put them in a continuum like
Happiness --> Surprise --> Fear --> Sadness --> Anger --> Disgust
If two emotions are closer to each other on this range, it is likely that it will confuse you, for
example, you might mistake happiness for surprise. The table below provides the description
of positive and negative emotions.
Source: Weiss, H. M., & Cropanzano, R. (1996). Affective events theory. Research in organizational behavior, 18(1),
1-74.
It is worth noting that culture also has a role to play in influencing the interpretations. The
emotions that you experience will not be the same as what you have been showing, for
example, smile indicates happiness in United States but in the Middle East a smile can be
seen as a sign of sexual attraction, so women are not allowed to smile at men. Collectivist
cultures believe that relationship exists on one another's emotional displays contrary to
those individualistic cultures don't think others’ emotional expression are directed at them.

Q.1 Mood is defined as
a. a transitory feeling
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b. a current state of feeling

NOTES
c. a temporary depression
d. none of these
Q.2 Which of the following best describes the concept of an emotion?
a. a response to an external or internal stimulus with the purpose of motivating an
action or behaviour
b. a continuing or recurrent state with no specific causes
c. the mental representation of common feelings within an individual
d. an irrational concept
4.4 SOURCES OF EMOTIONS AND MOODS
There may be times when you said to yourself, “I got up on the wrong side of the bed today”?
Have you ever shouted at a coworker or family member without any reason? If yes, it
probably makes you wonder where emotions and moods come from. Although emotions as
compared to moods, are more influenced by the events but most of the studies have been
conducted on sources of moods. You will now understand the sources of moods though a lot
of these sources also affect emotions.
Personality: Have you ever screamed at TV when you watch your favourite team losing a
cricket match while your friend is keeping calm, knowing that her team has a less chance of
winning the game? Let us take the case of Jaya and Navya, during team meets Jaya gets angry,
if any of the members criticises her suggestions while Navya takes this criticism as
constructive one for improvising her ideas or suggestions. What do you think would be the
explanation of these different reactions? It is the Personality of the person that prompts him
or her to experience certain moods and emotions. For example, some people quickly
experience guilt and anger as compared to others. Others, despite experiencing difficult
situations, may remain calm and composed. You can understand it further like, people have
traits to experience certain moods and emotions frequently than others. If a person is
experiencing any emotion, such people are high on affect intensity, or “individual differences
in the strength with which individuals experience their emotions.” You must have noticed
that while watching a tragic movie some people will feel sad but someone who is highly
in affect will cry uncontrollably. Such people are described as “emotional” or “intense.”
So, emotions differ in their intensity, but people also differ in how predisposed they are
to experience emotions intensely. If a person easily gets angry or excited, he/ she would be
high on the personality trait of affect intensity. Also, positive events are more likely to
affect the positive mood and positive emotions of extroverts, and negative events are
more likely to influence the negative mood and negative emotions of those scoring low
on emotional stability. To illustrate, there are two colleagues Ryan and Viraj. Ryan scores
high on extra version and emotional stability whereas Viraj scores low on both. They got to
know that the sales commission for them would be announced. Later the same day, their
boss reprimands them for no reason. In this situation, Ryan’s positive affect to increase
more than Viraj’s as Ryan is more extraverted and attends more to the good news of the
day. Conversely, you’d expect Viraj’s negative affect to increase more as he attends to the
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negative news of the day being low on the score of emotional stability.
NOTES
Day of the Week and Time of the Day: You must have experienced, as you work five days a
week from Monday to Friday that you are in the best of moods during the weekends,
where you have highest positive affect and lowest negative affect. But during the start of
the week, you are in the state of highest negative affect and lowest positive affect and
thereby in your worst mood. Let us also understand the time of the day when you are in
your best mood? The majority of the people follow a similar pattern, where you are in low
spirits when you wake up early in the morning, your mood improves as the day passes but it
tends to decline in the evening. Figure below shows that whatever time you wake up,
positive affect tends to peak around mid of the time between your waking and sleeping.
Although negative affect tends to fluctuate mildly throughout the day. From Organizational
behaviour’s perspective it is better not to ask someone for a favour or conveying bad news
on Monday morning. Interactions at workplace will be more positive from mid-morning
onward, and later in the week. So, for people who call them as morning persons have
slightly better moods in the morning compared with the evening persons.
Source: https://www.pearsonhighered.com/assets/samplechapter/0/1/3/2/0132431564.pdf
Weather: You must have heard people correlating their moods with weather i.e. they say as
it is bright and sunny so they are in the best of the mood; contrary may happen on dark and
rainy days. It is only illusory correlation that occurs when two events are correlated but not
causal. People often associate things even if there is no true relationship. The same is with
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weather and moods. Figure below interestingly depicts relationship of weather and moods.
NOTES
Source: https://open.lib.umn.edu/socialpsychology/chapter/3-1-moods-and-emotions-in-our-social-lives/
Stress you may have experienced that before the start of the exams you are afraid but once
exams are over, the fear also dissipates. At work if you have missed the deadlines, or lost a big
sales deal, your boss has reprimanded you or you have received nasty email, all such events
led to stress, that impact emotions and moods. Although you thrive under stress but
generally stress negatively impacts mood.
Social Activities for most of you, social activities increase positive mood. If you are out for
a dinner to celebrate friend’s birthday or at a barbeque with family, you tend to be happiest.
It is true either ways that people with positive mood seek out social interaction or social
interactions causes people to be in good moods. Research suggested that physical activities
like going on camping or informal and leisure like attending parties or eating with others are
more closely associated with enhancing positive moods than formal meetings at workplace
or sedentary events. Social interactions have impact on long term health benefits as well.
Sleep you must have listened from students and corporate workers that poor quality of sleep
has a negative impact on their decision making eventually putting them in a bad mood.
Quality of sleep affects your mood. Students and corporate workers who are sleep deprived
report fatigue, anger, irritability, hostility and are less alert. Studies also suggest that people
report less job satisfaction, the other day, if they are sleep deprived a previous day.
Exercise has a therapeutic effect on the people who feel depressed, it enhances people's
positive mood. The effect of exercise on mood is not very strong but it is consistent.
Age you will be surprised to know that in the case of older people, highly positive moods stay
longer while the negative moods fade off quickly it is likely because with the age, we tend
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to improve on our emotional experiences. It is incorrect to assume that positive emotions

NOTES
are associated with youth and older people exhibit negative emotions.
Gender it is a general belief that women react emotionally as they can read emotions better
than men. Women are good at showing expressions of both positive and negative emotions
except anger. Women are better at non-verbal communication and paralinguistics; this may
be because the ways in which men and women have been socialised. Men are taught to be
more brave and tough so showing emotions will be inconsistent with kind of image that men
are supposed to carry. Women by nature are nurturing, caring end friendlier. for example,
you see all happy images of women that is showing positive emotions. Women may have
a greater need for social approval and therefore, they must show higher propensity to
show positive emotions.
4.5 EXTERNAL CONSTRAINTS ON EMOTIONS

Consider Virat Kohli, captain of Indian Cricket team, he is known for his aggression towards
others on the cricket field. Clearly, he is easily moved to experience anger. But take
Mahendra Singh Dhoni, former captain of Indian cricket team, who rarely shows any
aggression and is known for relatively unemotional, and analytical nature. So, both these
players have tendencies to experience a specific mood or emotion. An emotion displayed on
athletic playing field is not accepted at the workplace. Organisations have defined what
emotions are acceptable and to what extent these can be used in an organization. Generally,
organisations do not want intense emotions either positive or negative as management
views it as undermining routine task performance. There are no such standard emotional
sets that every organisation can follow. There may be exceptional cases when a high-status
member of a group conveys impatience with a low status member.
Cultural Influences Cultural Influences you will understand cultural influences based on
variations in emotions experienced by the people across cultures for example in China
people report less emotional expressions, be it positive or negative, as compared to people
of other countries. Taiwanese are more expressive in their emotions as compared to their
Chinese counterparts. The frequency of the intensity and experience of emotions vary in
different cultures. Next, you will understand it from the perspective of interpretation of
emotions. People all over the world interpret positive and negative emotions in the similar
manner negative emotions include terror, anger, hate, anxiety etc while positive include
happiness, joy, enthusiasm etc. However, the value assigned to certain emotions in different
countries may vary. In China negative emotion is considered as more constructive whereas in
America they give more value to enthusiasm. Similarly, pride is considered as a positive
emotion in individualistic cultures whereas in collectivist culture pride may be seen else
something undesirable. There is an interesting thing to note in the collectivist culture, people
believe that emotional displays have something to do with their own relationships with the
person who is exhibiting the emotions. For example, in a collectivist culture, if a person sees
expression of anger on his or her friends face the person may think that the friend is mad at
her. In case of individualistic culture, the person may not attribute the angry expression
towards something done by him or her. By far accurate recognition of emotion is more in the
people belonging to same cultures then in other cultures.
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This discussion has presented to you a need for culture as an important influencing factor
NOTES
in what managers consider emotionally appropriate. Acceptability of some emotions in
one culture may seem extremely unusual or even dysfunctional in another. To send the
intended signals and to treat the reactions of the locals, it is important for the managers to
understand the emotional norms of every culture that they do business with.
4.6 EMOTIONAL LABOUR

At job, every employee spends some physical and mental labour, when they put their body
and cognitive capabilities into it. Emotional labour too is required at the job. Emotional
labour can be described as an employee's expression of emotions as desired by the
organization while transacting interpersonally at work. This concept of emotional labour
is an outcome of studies from service jobs. Think about flight attendants of airlines, here,
they are expected to be cheerful and carrying a smile every time, hospitals want doctors
to be emotionally neutral. So, you can now realise that there is emotional labour which is
relevant to every job. Your managers want you to be nice and courteous while interacting
with the customers. The challenge lies when you are feeling a different emotion than what
you are expected to project. This is called as emotional dissonance. Emotional dissonance
if it is left untreated can build up feelings of frustration and irritation and may lead to
burnout. As emotional labour is gaining importance for effective job performances,
understanding of emotions at work, has become a highly relevant field within
organisational behaviour.
4.7 FELT VERSUS DISPLAYED EMOTIONS

Think about a time when you were required to work with the person whom you simply do not
like it may be due to any reason like you find that the person's personality is abrasive, or
person has negative approach or may be this person has said things about you behind your
back. Regardless of all, still must work with him on regular basis so you are forced to become
friendly with this person. If you can separate emotion into felt and displayed, you will be in
a much better position to work with this person. Your actual emotions are your felt
emotions while the ones that are considered as appropriate by your organisation for
performing job, and you are expected to show are your displayed emotions. A person who
is working in the sales if not able to wear a smile regardless of actual feelings at that moment,
may not be able to continue in the sales profile for very long. Emotions that we show may
not be always same as the ones that we are feeling right now. People find it difficult when
they assume that whatever the other person is expressing as displayed emotion is also his
or her felt emotion. This is the case in the organisation there as per the roles and
responsibilities entrusted to an employee requires them to mask their true feelings. Also,
in today's time when majorly the jobs are in the service sector in which you must
continuously interact with the customers who can be rude with you, can complain and
sometimes come up with unrealistic demands, in such situations, to be effective in your
job, your felt emotions should be disguised. Here again two aspects should be kept in time
culture and gender differences.
You have now a fair idea that the cultural norms are not same around the world in United
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States the employees expected to smile and act friendly with the customers in service
NOTES
organization but in Israel, a cashier in Supermart, should look sombre as smiling cashiers may
make people think that they are inexperienced. In France employees do not hide their
feelings so for them, the case for emotional dissonance is minimal. Walmart’s experience
in Germany has been totally different from its home country that is US where emphasize is
on employees being friendly while German Shoppers do not really like Walmart’s helpful
and friendly staff.
Another aspect that you need to understand about gender differences; there is some
evidence that in same job, men and women are expected to display different emotions.
Women reportedly suppress negative feelings and a display more positive feelings as what
is expected by their bosses.
This leads to suppression of the emotions that you are feeling, and you have to act to keep
your job. This act can be surface acting and deep acting. The table below will help you to
differentiate in the two.
Surface Acting Deep Acting
Surface acting is when you are hiding your Deep acting results in modification of
felt emotions to confirm to the innate feeling to confirm to the display
organisationally desired emotional display rules of the organisation. For example,
rules. Health Care professional trying to
empathize with you genuinely.
Deals with one’s displayed emotions Deals with one’s felt emotions
A question might come to your mind that does emotionally demanding jobs are better paid.
Recent study as shown in the figure below shows a strong relationship between cognitive
demands and pay. It refers to that the emotionally demanding jobs are less paid while the
jobs of lawyers or nurses that are cognitively demanding are better paid. As per this model,
the jobs that are emotionally demanding but not cognitively demanding results in poor pay
while jobs that are cognitively demanding with increasing in motional demands results in
better pay. You may find a lacuna in this model as why emotional demands be reported in
only cognitively complex jobs? This may be due to difficulty in finding people who are willing
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as well as able to work in these jobs.

Source: https://www.pearsonhighered.com/assets/samplechapter/0/1/3/2/0132431564.pdf
NOTES

Q.1 A sales person hides his feelings by changing facial expressions is an example of:
a. deep acting
b. surface acting
c. felt emotions
d. all of these
Q.2 Concept of emotional labour is an outcome of studies from
a. service jobs
b. manufacturing jobs
c. all types of jobs
d. it is not related to any type of jobs
4.8 OB APPLICATIONS OF EMOTIONS AND MOODS
In this section, you will understand how emotions and moods can help in explaining and
predicting the various processes in the organisation like the selection process in
organizations, decision making, creativity, motivation, leadership, interpersonal conflict,
negotiation, customer service, job attitudes, and deviant work place behaviours.
Selection: Evidence have suggested that jobs that require high degree of interactions can be
highly benefitted by EI. Organisations are now open towards using measures of EI in their 65
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hiring processes. Many studies have also shown that that EI can help in lowering the attrition
NOTES rate, thereby saving a lot on hiring and training costs. At L’Oreal, salespersons selected on
EI scores outsold those hired using the company’s old selection procedure. On an annual
basis, salespeople selected on the basis of emotional competence sold $91,370 more than
other salespeople did, for a net revenue increase of $2,558,360.107
(https://www. pearsonhighered.com/assets/samplechapter/0/1/3/2/0132431564.pdf)
Decision Making feelings influences choice, you must have noted that your choices are
different when you are in a state of anger or in a state of calm. You will be surprised to know
that research have shown that people who are depressed makes accurate judgement, which
is true, as they search for the perfect solution by weighing all available alternatives. But in
management no decision is the perfect one. Positive people tend to make good enough
decisions as they can use problem solving skills and analysing new information. Example can
be a person with positive emotions will be able to correctly understand the performance
issues of an employees. People in good moods tend to use rules of thumb properly. But this
may also lead to some stereotypes like women are weak or men should not show their
emotions. Therefore, it is important to incorporate study of emotions in understanding the
process of decision making.
Creativity There are two points about implications of positive emotions on creativity. One
view state that people in good mood or with positive emotions are more creative as they are
quite flexible and open to new thinking and ideas. Studies have shown that when employees
get feedback from the supervisors about the job done well by them it encourages them to
become more creative. The other viewpoint is that people in good mood assume that thing
are going well, and they may become complacent. Until more research is done, you may
conclude that positive moods harbour creativity.
Motivation People who are highly committed show passion and are emotionally
connected with jobs that they do. A person who is engaged in the job is immersed in all sorts
of activity that is concerning the job. Two studies have been conducted to know the
importance of moods and emotions on motivation. One study is about two groups that
were given some puzzles to solve. One group was shown happy clip and then they were
asked to solve the puzzle the other group was given the puzzle to solve straight away
without showing any happy clip, the result was the group which was shown a clip before
solving the puzzle were able to solve high number of puzzles as compared to other group.
Another study has highlighted that there exists a cycle in which positive moods make the
people creative and their creativity is able to fetch positive feedback for the job that they
have done, this positive feedback works as a reinforcement for the positive mood which
again helps them to perform better. These studies have projected, positive moods if
promoted at work can lead to motivated workforce.
Leadership every organisation search for the people who are able to lead. Leaders make
emotional appeals to their employees to convey and get the goals of the organisation
achieved. Leaders message is accepted or rejected by the appeal that he makes to
the employees if the leaders show enthusiasm and passion towards the vision
of the organization it is likely that the managers and employees are going to follow the
6666 same specially in case of change management when the vision is distant and people are not
HRMC002
able to relate with the vision, leaders arouse emotions and link them to an appealing vision
NOTES
which increases the chances of acceptance of change by the employees.
Interpersonal Conflict Emotions surface when there is interpersonal conflict arising among
the employees. A good manager will be able to identify this emotion and make the parties
work through the emotion. The manager who is not able to identify the emotions involved
in the interpersonal conflict and focusing only on the task related concerns may not be able
to resolve the conflicts completely.
Negotiation is an emotional process, studies have shown that if a person is able to pretend
anger during a negotiation it is likely that the opponents conclude that the negotiator has
admitted all that she can and so the opponent gives in. Displaying a negative emotion that
is anger can be beneficial but feeling bad about your performance can have an impact on
the future negotiation. As a negotiator if you experience negative emotions, you develop
a negative perception for your counterpart and you will be less willing to share the
information and be cooperative in future negotiation. It is interesting to know that moods
and emotions have their benefits at work but in case of negotiation unless you are
pretending a negative emotion that is anger, it can hamper negotiator’s performance. One
study has proved that negotiator who have suffered damage to the emotional centres of
their brain are likely to perform better as when faced with negative outcomes they may
not overreact.
An interesting incident is of Northwest Airlines that faced

a strike from the mechanics Union the company came
prepared for the strike by initiating hiring of replacement
workers in advance so when the union struck, the
company was ready with hired replaced workers and it
could also ask for more concessions.
Customer Service Repeat business and high customer satisfaction is dependent majorly on
the workers emotional state thereby influencing customer service. Employees at times are
put into emotional dissonance as quality customer service is quite demanding. It may lead to
job burnout leading to poor performance and job satisfaction. Customers’ emotions get
influenced by the employees’ emotions; in OB it is called as emotional contagion which is an
effect that catches emotions from others. You must have experienced the working of
emotional contagion for example if somebody smiles at you to begin to copy by smiling back,
emotional contagion is also important as the customers respond positively to positive
emotions exhibited by the employees.
Job Attitudes you must have heard about the advice do not take your work at home; it is
easier said than done as most of the people experience if they had bad day at office, they
carry the same mood at home in the evening. Evidence also suggests if a person had a
stressful day at work, it is likely that the person will have trouble relaxing at home that
evening. The interesting part is that the effect of bad mood gets over for most of the people
by the next day.
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Deviant Workplace Behaviors Negative emotions may lead to deviant workplace behaviour
NOTES
a person who has spent considerable time in the organisation knows that people tend to
violate the established norms of the organization and that in turn threatens the members of
the organization and the organisation itself. For example, envy is a negative emotion in which
you resent someone because the other person is possessing something that you strongly
desire for. This may be better work assignment or better workspace or high salary etc. An
envious person in fact in a hostile manner, may backstab negatively, distorting others success
or may talk behind the back. People who experience negative emotions may indulge into
deviant behaviour.
Using humour and small tokens of appreciation go very well in infusing positive emotions
in the employees, managers may use these for the work done well by the employees. If
the leaders are in good mood, it results in more cooperation from employees’ side as they
reciprocate the moods of leaders. Here, the contagion effect works very well as positive
moods are transmitted through different employees.
4.9 EMOTIONAL INTELLIGENCE

To understand emotional intelligence, consider an office manager named Diana Marshall.
She is neither aware of her own emotions nor of others. She fails to generate enthusiasm
in her employees and appears to be moody. She overreacts to the emotional issues; she is
the one who has low levels of emotional intelligence. Emotional intelligence (EI) is one’s
ability to detect and to manage emotional cues and information. People who are able to
identify their emotions as well as read other emotions are more effective in the jobs.
Peter Salovey and John Mayer were the first to develop a psychological theory of emotional
intelligence and introduced EQ as a:
“set of skills hypothesized to contribute to the accurate appraisal and expression of emotion
in oneself and others, the effective regulation of emotion in self and others, and the use of
feelings to motivate, plan, and achieve in one’s life.”2
(https://positivepsychology.com/emotional-intelligence-eq/) EI has following five
dimensions:
● Self-awareness—you are aware of your feeling
● Self-management—the ability to manage your own emotions and impulses
● Self-motivation—the ability to persist in the face of setbacks and failures
● Empathy— the ability to sense how others are feeling, you are able to sense other
feelings
● Social skills— the ability to handle the emotions of others, you can ably handle others
emotions,
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Ken Chenault, Chairman and CEO of American Express, provides a good NOTES
example of socially intelligent. He relies on his ability to show empathy
and express his emotions to win his employees' trust and build cohesion.
Those who know him say his understated, modest, and unassuming with
quiet warmth and a style that makes people want to be on his team. His
social and interpersonal skills are evident in his emphasis on
communication: "You've got to communicate constantly." He also
believes that self-awareness and knowing what you stand for are
essential to leadership: " if you are not clear on who you are, on what it is
you stand for, and if you don't have strong values, you are going to run
your career off a cliff.
Source: Nahavandi, A., Denhardt, R. B., Denhardt, J. V., & Aristigueta, M. P. (2013).
Organisational behavior. Sage Publications.
The case of Emotional Intelligence

Emotional Intelligence has its advocates and cynics. The case for Emotional Intelligence
includes:
Intuitive Appeal: The concept of EI has lot of intuitive appeal, people who are able to detect
emotions in others, control their own emotions and handle social interactions very well, it
is good to have street smart skills and social intelligence.
Emotional Intelligence predicts principles that are important: Evidence promote that if
the level of emotional intelligence is high it means a person will perform well in the job.
Another point highlighted is that if you can recognise emotions through others’ facial
expressions, you will be highly valued by your people in the organisation. A review of 59
studies have indicated that emotional intelligence is moderately correlated with job
performance.
Based on biological concepts: People with damaged part of the brain tend to score low on
EI test. Even though these people performed well on the Standard measures of
Intelligence than people without the same brain damage, they were still impaired in
normal decision making. This study has given a clue that people who have neurological
damage can score low on emotional intelligence and that is why emotional intelligence is
neurologically based.
Criticism:
Vague concept: The concept of emotional intelligence is quite vague in nature. People fail
to stablish relationship between being intelligent and being self-aware or self-motivated.
Research have been focusing on different skills like self-discipline, empathy, self-
awareness etc which makes it difficult to define what exactly is Emotional Intelligence.
Measuring is difficult: As Emotional Intelligence is intelligence so there must be some
measure for getting the right and wrong on the test. The kind of trigger that is associated with
measures of personality and General Intelligence, the same has not been there for
Emotional Intelligence as the measures are varied and diverse.
Validity is doubtful: Some researchers are of the opinion that due to strong correlation with
measures of personality specifically emotional stability, if these factors get controlled then 69
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Emotional Intelligence has not much to offer.

NOTES
4.10 MODELS OF EMOTIONAL INTELLIGENCE
Different models discuss what consists of Emotional Intelligence. You will now read the
important ones.
Mayer and Salovey’s (1997) integrative model consist of four interconnected emotional
abilities:
1. Perception and expression of emotion
identifying your own and others’ emotions as well as able to differentiate between
isolated emotions.
2. Using emotion to facilitate thought
Integrating your emotions into reasoning and thinking processes.
3. Understanding and analyzing emotions
Decoding the emotions, interpreting and sensing the relationship with other
emotions and also the changes in emotions with time.
4. Reflective regulation of emotion
Being open towards all emotions, also regulating them by developing insights into it.
Bar-On’s model of social and emotional intelligence
According to Bar-On’s (1997, 2006) mixed model EQ includes competencies, skills, and
“facilitators” that contribute to how people express themselves, respond to external
environment, and connect with others.
Bar-On has given ten components for strengthening emotionally and socially intelligent
behaviors:
1. Self-regard
2. Emotional awareness
3. Assertiveness
4. Empathy
5. Interpersonal relationships
6. Stress tolerance
7. Impulse control
8. Reality testing
9. Flexibility
10. Problem solving For Bar-On facilitators are:
Self-actualization, independence, social responsibility, optimism, and happiness.
Daniel Goleman’s theory of Emotional Quotient
Daniel Goleman has included EQ abilities like “self-control, zeal and persistence, and the
ability to motivate oneself.” Goleman is of the view that EQ provides a sign of an individual’s
“potential” for developing emotional competencies (i.e., practical skills) that can help them
thrive at work.
He has given five key domains in his theory of emotional intelligence:
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1. Knowing your emotions

NOTES
2. Managing emotions
3. Motivating oneself
4. Recognizing emotions in others
5. Handling relationships
Practical Tips
Here are some tips for you to become Emotionally Intelligent and encouraging employees to
show emotions at work. This will result in making a supportive workplace.
1. Naming the emotions
Start naming your emotions like energized, lonely, worried, peaceful, motivated, fuming
and anxious are all valid feelings, it will help in defusing them. Try to adjust with the reactions
for your emotions. Here, some tools like Emotion wheels, RULER’s Mood Meter or Atlas of
Emotions may help you in developing a vocabulary of emotions.
2. Allow employees to bring their emotions
Encourage your employees to share their feelings at work. Pay attention to their feelings
and attempt to manage their emotions.
A green-yellow-red check-in system may be used, indicating green as you are in flow, yellow
means you’re feeling off, and red indicates you are experiencing a block due to some
feelings. You may also use the RULER Mood Meter with its yellow/green versus red/blue
check-ins and its ability to allow people to be more expressive.
3. Nurture Positive Emotions
Encourage your employees to post kind words for their colleagues. You may also create
kudos board in your office. This establishes a connect with each other and experience
positive feelings about their co-workers. It can help employees get in touch with and share
positive feelings. Remind your employees to relax.
4. Honest Leadership
As a team leader, be mindful of your moods, and in the best of your spirits before any
interaction with the team. You need to be honest with the feelings that you and your team
are experiencing. Faking feelings can work short term only, also lead to distrust in your
employees. Your negative emotions reflected in your posture, facial expressions and tone
will be caught by your team and it may turn into disastrous consequences.
4.11 LET US SUM UP

In this unit you have understood the meaning of emotions and moods. The different
sources of emotions like personality, weather, customer satisfaction, job attitudes etc. were
discussed. Emotional intelligence and its model were discussed. High emotional intelligence
is a must have for managers in today's time. It helps them in managing the presentation of
their emotions and trigger motions leading to higher productivity, increased job
satisfaction and improved team performance. Successful managers always pay attention
to the emotions at the workplace.
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Exercise:
NOTES
Employees in a restaurant strive for customer service and provide a pleasant dining
experience to them. What are some other occupations that require emotional labour?
4.12 KEY WORDS

Affect is a broad term encompassing both emotions and moods and a varied range of
feelings.
Emotions: When you have Intense feelings directed towards someone, or something are
emotions.
Moods: while comparatively less intense feelings then emotions often arising without a
stimulus are moods.
Emotional labour: can be described as an employee's expression of emotions as desired by
the organisation while transacting interpersonally at work.
Emotional dissonance: when you are feeling a different emotion than what you are
expected to project.
Felt Emotions: Your actual emotions are your felt emotions
Displayed Emotions: Emotions that are considered as appropriate by your organisation for
performing job, and you are expected to show are your displayed emotions.
Surface acting is when you are hiding your felt emotions to confirm to the organisationally
desired emotional display rules.
Deep acting results in modification of innate feeling to confirm to the display rules of the
organisation.
Emotional intelligence (EI) is one’s ability to detect and to manage emotional cues and
information.

Robbins, S. P., & Judge, T. A. (2013). Organisational behavior (Vol. 4). New Jersey: Pearson
Education.
Nahavandi, A., Denhardt, R. B., Denhardt, J. V., & Aristigueta, M. P. (2013). Organisational
behavior. Sage Publications.
Schwarz, N., & Clore, G. L. (1983). Mood, mis attribution, and judgments of well-being:
Informative and directive functions of affective states. Journal of Personality and Social
Psychology, 45, 513–523.
D. Watson, Mood and Temperament (New York: Guilford Publications, 2000).
T. M. Glomb, J. D. Kammeyer-Mueller, and M. Rotundo, “Emotional Labor Demands and
Compensating Wage Differentials,” Journal of Applied Psychology 89, no. 4 (August 2004),
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pp. 700–14.
NOTES
Internet Resources:
• https://www.forbes.com/sites/forbeshumanresourcescouncil/2020/05/06/
bringing-emotions-into-the-workplace/?sh=30120dd0162d
• https://positivepsychology.com/emotional-intelligence-eq/
• https://hbr.org/2016/01/manage-your-emotional-culture
• https://open.lib.umn.edu/socialpsychology/chapter/3-1-moods-and-emotions-in-
our-social-lives/
4.14 CHECK YOUR PROGRESS-POSSIBLE ANSWERS CHECK YOUR PROGRESS-I
Q.1 b
Q.2 a

Q.1 b
Q.2 a
4.15 SELF-ASSESSMENT QUESTION

Q.1 Emotions are feeling experiences that are often caused by a specific
event
a) intense
b) discrete
c) short-lived
d) all of these
Q.2 Moods are
a) cognitive in nature
b) their cause is clear
c) indicated by distinct facial expressions
d) all of these
Q.3 Which of the following terms refers to the practice of hiding feelings and foregoing
emotional expressions in response to display rules?
a) surface acting
b) anchoring bias
c) active camouflage
d) bandwagon effect
Q.4 Tina works as a showroom executive at a clothing boutique in New Delhi. Today, she is
in a positive mood, she welcomes a customer with a smile who has walked into the
boutique. The customer feels welcomed by her response. While browsing the store,
Tina assists the customer with the clothing line and passes on her positive mood to the
customer. The customer leaves the store feeling content with a smile on her face.
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Which of the following best describes this situation?

NOTES
a) emotional contagion
b) positivity offset
c) cognitive dissonance
d) framing effect
Q.5 An example of deep acting can be:
a) Shashi ignoring a colleague's question as she knows he has a personal grudge
against her.
b) Anandi hides her emotions and politely talks to annoying customers.
c) David tries to get along with a co-worker as soon they have to work jointly on a
project.
d) Jena is tired of long working hours and calls in sick on Monday to skip work.
Q.1 d
Q.2 a
Q.3 a
Q.4 a
Q.5 c
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UNIT 5 NOTES
PERCEPTION AND ATTRIBUTION
STRUCTURE
5.0 Objectives
5.1 Introduction
5.2 Basic Understanding about Perception
5.3 Elements of Perception
5.4 Attribution Theory
5.5 Factors determining Individual Attribution
5.6 Common biases and Errors in perception
5.7 Practical Implications- Workplace settings
5.8 Let Us Sum Up
5.11 Answers to Self Assessment Questions
5.0 OBJECTIVES
• Define Perception
• Meaning and understand the basic concepts
• Identify and explain the factors influencing Perception of an Individual
• Attribution
• Understand the Attribution Theory
• Factors determining an Individual’s Attribution
• Understand how Individual Perception impact decision making
• Common Errors in decision making
5.1 INTRODUCTION
Can you recall a time when you met someone at work or otherwise, for the first time! Do you
remember that probably you judged him/her in some way based on the way they talk, their
age, their appearance, etc.? But after interacting for some time, say a few days, you had 75
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Perception and Attribution
a completely different viewpoint of that person than what you thought earlier…! We all
NOTES
experience similar situations.
A phenomenon called ‘Perception’ played its role in a situation such as above. Perception is
a process that exists in our daily lives and influences our personal and professional life,
more often than less. It is one such important phenomenon related to individual behaviours.
Once understood it can really contribute in improving our understanding of and
appreciation for differences between people, ideas, cultures, and so on. Better
understanding can also improve our ability to effectively deal with people and situations.
So, let us begin to understand what ‘Perception’ is.
5.2 BASIC UNDERSTANDING ABOUT PERCEPTION
Definitions and Meaning of Perception- What is Perception?
The word Perception is derived from Latin words percipio. Based on the Oxford English
Dictionary, perception is “receiving, collecting, action of taking possession, and
apprehension with the mind or senses.”.
According to the APA Dictionary of Psychology, Perception is “the process or result of
becoming aware of objects, relationships, and events by means of the senses, which includes
such activities as recognizing, observing, and discriminating. These activities enable
organisms to organize and interpret the stimuli received into meaningful knowledge and to
act in a coordinated manner”.
Perception is an important dimension of human behaviour in general. A great deal of the way
individuals behaves depend on their perception of the situation. It also hugely impacts
individuals’ workplace behaviours. Thus, you may find that perception is an essential part of
our personal and professional lives.
You can relate the process of perception (Fig. 1)in largely three steps: It involves selection,
organising, and sense-making.
Selection: When exposed with an environment with a number of varied stimuli, selection
involves receiving these stimuli through the senses. It is not humanly possible to receive each
and every stimulus, hence individuals also tend to overlook some stimuli. The characteristics
of the perceiver (individual who perceives) such as his/her attention, experience, interest,
ability to receive stimuli, familiarity with the stimuli, etc. influence selection process, most of
the times even without perceiver’s awareness.
Fig. 1: Process of Perception
Selection Organise Sense Making
Organising: Individuals organise the information received in the selection process. They
organise information in the form of attaching some meaningful patterns to people or
objects being perceived. Information received is structured in patterns or categories
which are developed based on an individual’s prior knowledge, experience and memory.
For example, when asked about a tree, some people may describe it based on categories
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such as type of trees, colour of leaves, and some would use attributes of fruits. Another
NOTES
example can be, if you find that in a meeting, your boss is not paying attention to your
viewpoints, you can recall a similar experience that you might have had previously. This
pattern that you created would further be used to make sense of this information.
Sense-making: Here individuals interpret or associate meaning to the information received
and organised from the environment around them. We can also say that individuals try
making sense of the patterns developed in the organising step. As in the above example of
boss not paying attention to your viewpoints, here you may assign meaning to it that the boss
is playing favourites or does not like. People differ in the way they attach or assign meanings
to people and / or situations. Also, people can assign different meanings to the same set
of stimuli.
Now, refer to your experience as (as recollected in the ‘Introduction’) and try to understand
the meaning of perception and its process in reference to your thoughts/judgment about
that person. The process you engaged in involved selection, organising, and interpreting
information you collected through sensory organs, i.e., through eyes, ears, etc. In your first
meeting experience with that person, you attained some understanding about the person.
Later, views about that person changed. This is too impacted by perception. Here again the
new set information acquired based on your interaction with the person over a few days
influenced your perception, i.e., the selection of new information and its organization,
followed by sense-making of the organised information.
So, what is the significance of Perception? Well, if you noticed, in all the examples discussed
above, after you have made sense of the person, thing or situation (as part of perception
process), you tend to behave a certain way. That is, the way an individual perceives
influences his/her behaviour. Hence, the perception is going to influence your behaviour
towards that particular person or thing or situation.
As not every information (stimuli) can be registered by human mind hence making error at
the very selection stage is possible. The case is no different for the organising of information
stage and making sense stage. It is also important to note that an individual’s behaviour
depends on what they perceive about the situation or person, which may or may not be the
reality. According to Singer (1987, p.9), “We experience everything in the world not as it
is—but only as the world comes to us through our sensory receptors.” It is certainly possible
that with experience, our perception of things and situations may improve, however, there
is no guarantee. This highlights the relevance of getting better clarity on the elements of
perception, and also the barriers in the process of perception.
5.3 ELEMENTS OF PERCEPTION AND BARRIERS

Based on your experience, as discussed above, we can now discuss the elements of
perception process. There are three key elements involved in the process of perception.
These elements are, as in Fig 2:
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Fig 2: Elements influencing Perception

NOTES
Target
(object or person Perceiver
being perceived) (one who perceives)
PERCEPTION
Context
(Situation)
These elements influence perception, and also sometimes distort perception.

Let us assume that you are an interviewer in a MBA students’ selection panel. While you are
in the selection process, you found candidate 1 not up to the mark, rather you feel very
disappointed and sad after that interview. Then, Candidate 2 enters into the room who
appears to be a little nervous, and not dressed appropriately as you would have expected
him/her to be. What do you think, how would you be perceiving the Candidate 2 before the
actual interview starts?
Think about it… and we will use it to discuss the elements of perception.
Perceiver: The one who perceives the target. Aspects related to perceiver can be
characteristics of the perceiver such as personality traits, attitude towards target, familiarity
with target, experience, interests, mood, expectations, etc.
Target: Target is the person or object being perceived. Aspects related to the target can be
characteristics of the person. Characteristics, for example, personality traits, physical
features, appearance, communication style- verbal and non-verbal, confidence, etc. of a
person. For some objects, characteristics can be size, colour, motion, similarity, etc.
Context: The situation in which the phenomenon of perception is coming into play forms the
context to the phenomenon of perception. Situations have a great role in influencing how
a perceiver perceives a target. Examples of context are formal or informal social settings
of interactions, cultural differences, time, and place, etc.
The above mentioned elements of perception help us in better understanding of the
perception process and also the problems, if any, in the process. Assessing the characteristics
of each element will also give you the idea about what is causing a certain kind of perception.
It could be certain characteristic of a perceiver or target or something about the
context which is influencing a certain kind of perception.
Refer to the situation of the selection process, as mentioned above, again. Now, can you
identify the three elements of perception? Who is the target? Who is the perceiver? And
what is the context of the interaction?
If you read the above situation carefully, you will be able to clearly identify the three
elements. In the situation, you are the perceiver. Candidate 2 is the target. And the formal
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situation of selection process sets the context of the above situation. Here as a selector,
NOTES
you may perceive candidate 2 negatively, because of your own (perceiver) factors such as
feeling of disappointment from the previous experience (candidate 1), expectations from
the candidate to dress up properly. Characteristics of candidate 2 ‘s (target) can be described
as nervous, being reflected in his/her non-verbal (communication) behaviour, physical
appearance is not attractive or proper as per the situation. The context, i.e., formal selection
process in which the candidate would be evaluated by the panelists. In a way, highlighting
that this situation is important for both the panelists and candidates.

Q.1 What do you understand by Perception? Try to explain in simple words.
Q.2 You have full control over how you make sense of the environment around you?
True or False
Q.3 Can you think of a few examples of Target and its characteristics?
Barriers of Perception Process

It is important to also ask a question that is the perception process always correct? If you
recollect what we discussed in the introductory discussion on perceiving the actual reality or
correct perception of the situation or person, as is. Unfortunately, it is not so easy as it might
appear. This is because there are also some factors, apart from the target and perceiver
characteristics, which hinder a perceiver’s correct perception of the target. Some of the
errors that we make in the process of perception are:
Stereotype: We are stereotyping when we judge someone on the basis of our perception of
the group to which he or she belongs (Hilton and Hipple, 1996). For instance, some people
might think that ‘Men’ cannot manage households effectively. “Older” people are very
stringent with rules and not open to learn. Another way people stereotype others is based on
the nation or culture they belong to.
Halo/Horn effect: When we make a general opinion about individuals based on a noticeable
trait or a characteristic such as sociability, appearance, intelligence, communication style,
etc. This specific trait may interfere with recognition of other characteristics of that
individual. In case of Halo effect, that specific trait is a positive trait, and negative trait in case
of Horn effect while developing opinions about others. In the situation of the selection
process, as above, if you evaluate candidate 2 only on the basis of improper dressing, then
it is Horn effect.
Self-fulfilling prophecy: This may occur when you have inaccurate perception about an
individual which causes him/her to behave consistent with those perception and
expectations you have about them. For example, when a teacher perceives that a student
has the capability to do much better and that the student can do well. This expectation of the
teacher can result in the student trying to live up to teacher’s expectations and he/she
performs well. Self-fulfilling prophecy is also called as Pygmalion effect.
However, before jumping to the decision making, let us try to understand an important
application of perception in making judgements about others in the next section.
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5.4 ATTRIBUTION THEORY

NOTES
Attribution theory deals with perception about people and making decisions about them by
attributing their behaviour (displayed by them). According to this theory, we judge people
differently based on the meaning we attribute to a behaviour.
Individual Attribution
Let us try to understand the Attribution theory with the help of someone you know or knew.
I am sure you have a colleague/ friend or family member who is always late and because
of him/her you always get late to places or meetings. Have you ever thought about whether
or not there is some problem with your friend or with situation that he or she was in?
According to the Attribution theory, we try to attribute an individual’s behaviour, i.e., assign
the cause of his/her behaviour to either internal or external cause. Attribution theory can be
understood by dividing the concept into two aspects. First, is the causation of the behaviour,
i.e., Internal or External? Second, how to determine whether the cause of the behaviour
is Internal or External?
So, firstly, what do we mean by internally or externally caused behaviours?
If a perceiver perceives a target’s behaviour. Cause of that behaviour as Internal cause, as
perceived by the perceiver, would mean that the behaviour was/is in control of the person.
External cause mean that the behaviour in question was/is not in control of the person, and
but caused by other factors or situations of the person.
The perceiver attributes the behaviour of the person as Internal, if he/she thinks that the
behaviour was in control of the person (internal). And attribution will be External, if the
behaviour was out of control of the person, i.e., due to other situational (external) factors.
Secondly, how to determine whether the cause of the behaviour is Internal or External?
5.5 FACTORS DETERMINING INDIVIDUAL ATTRIBUTION
While determining whether the cause of the behaviour is Internal or External, mostly three
factors come into the picture. These three factors while one attributes individual’s behaviour
are:
Distinctiveness: Whether the individual often displays the behaviour in question in other
settings or situation as well.
Consistency: Whether the individual displayed this kind of behaviour in the past as well.
Consensus: Whether other people in similar settings also display same behaviour.
Let us clarify the above three factors determining an individual attribution with the help of an
example. Refer back to that person who you identified as someone who is always late. Let
us say your friend and colleague Amber. You had a meeting the other day, and Amber
reached late to the office and thus was late to the meeting. How would you interpret this
behaviour of coming late to the meeting?
So, here the behaviour in question is coming late to the meeting.
Distinctiveness: Whether the individual often displays the behaviour in question in other
settings or situation as well.
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Well, if Amber comes late to meetings as well as to lunch, parties, movies, etc. then
NOTES
distinctiveness of the behaviour (coming late) is low, as behaviour is not distinct across
different settings. Amber is late in all situations. Therefore, coming late is Amber’s fault i.e.,
cause of behaviour is internal and not external (traffic, sick, family emergency, or the like).
Distinctiveness high would mean Amber has been late only for this meeting and not in other
different settings, i.e., cause of behaviour is external.
Consistency: Whether the individual displayed this kind of behaviour in the past as well.
Here, you can assess the behaviour by looking at Amber’s past behaviour. If Amber comes
late to the meetings very often, say 85 % times whenever the meetings are scheduled in
a week, then you would probably think that Ambers behaviour of coming late is same over
a period of time. This means that consistency is high, hence the behaviour is internal
caused i.e., may be being late has become Amber’s habit. But, if Amber is rarely late for
meetings then the consistency is low, hence attribution would be externally caused.
Consensus: Whether other people in similar settings also display same behaviour.
Here, you can assess Amber’s behaviour by looking into whether others (friends or
colleagues) in the meeting were late too. If the answer is yes, then consensus is high, which
would mean behaviour is caused by external factors. As others showed same behaviour
(coming late) as Amber, it could be external factors such as traffic. But, if the answer is ‘no’,
then consensus is low, meaning the behaviour is caused by internal factors. If others could be
present for the meeting on time, then you would probably internally (for example, Amber’s
laid-back attitude) attribute Ambers behaviour of coming late.
• When high consistency, low distinctiveness; low consensus- Internal attributions of
the observed behaviour of an individual.
• When low consistency, high distinctiveness, and high consensus- External
attributions of the observed behaviour of an individual.
Understanding attribution is an important application of perceptual process. At workplace
situations, we are continuously perceiving and attributing people, their behaviour, and the
situation around us. One can understand the application of Attribution theory by attributing
colleagues behaviours while working in teams on projects. This attribution further
influences the decisions we make about performance of team members, appraisal process,
etc. The way we respond with co-workers is immensely influenced by the our internal or
external attribution.
The two errors are .important attribution errors that we often commit are Fundamental
attribution error and Self-serving bias (as described in section 1.7).
What about an individual who mostly tends to external attributions about his/her own
behaviour whatever be the outcome, positive or negative? Do you think that this person will
be focused on achieving goals?
Well, if you try to reflect on such tendencies of a person, it may imply that the person thinks
that largely situations are not under his/her control but dependent on external factors such
as others’ support, resources, problems with other team members, etc. Now, I hope you
have the answer to the above question. An individual who mostly tends to attribute his/her
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behaviour externally is likely to feel that he/ she does not have the capability or lack
NOTES
confidence to do tasks.

Q.1 What do you mean by attributing of behaviour of a person?
Q.2 High distinctiveness of a behaviour would mean that the person shows different
behaviour in different situations. True/ False
Q.3 attribution of a behaviour means that the behaviour
displayed by an individual is/was in control of him/her.
INDIVIDUAL PERCEPTION AND DECISION MAKING

As discussed above about how integral part perception plays in influencing the way
individuals make sense of people or situation around them. Perception has a strong
influence on the decision making.
Decision making is a process that largely involves identification of problem at hand, exploring
alternatives to address the problem, choosing the best alternative i.e., best solution to solve
the problem.
Let us take an example of a problem that a manager faces- hiring the best candidate out of
the ten candidates applied for a job. Now, try to relate the problem of choosing the best
candidate with perception. Perception is playing its role from the very beginning phase-
going through the resume of candidates till the final selection interview of candidates.
Similarly, at workplace managers are exposed to different stimuli (people, their work,
behaviour- verbal, nonverbal, etc.) in different settings (i.e., contexts). Managers are
undergoing the perceptual process and making sense of information even without being
aware about it. This consequently, influences managers’ decisions. It is a constant challenge
to take rational and informed decisions.
Perception influence decisions at workplace. Some decisions that individuals at work make,
as mentioned below (however not limited to):
• Assessment of potential employees while hiring
• Assignment of projects, tasks, roles, etc. to employees

• Decision related to interpersonal relationships between colleagues and team
members
• Evaluation of competency assessment
• Decisions about formulating plans/ goals – individual and organization
• Team discussions involving interactions- formal and informal
• Performance evaluation
• Decisions about resource allocation, investments, etc.
The above mentioned processes that employees engage in have an underlying and ongoing
perceptual process. These processes involve, continuous, selection, organising and sense
making for different types of information managers are exposed to at work. It is a fairly quick
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process.
NOTES
5.6 COMMON BIASES AND ERRORS IN PERCEPTION
Biases and errors can also be understood as the Barriers in the perception process (as in
section 1.4) Perceptual process cannot be ignored, but the idea is to attempt making fairly
accurate perception and decisions that lead to better outcomes. This requires awareness
about different errors and biases. These barriers might sneak into the perceptual process
and in the consequent decision-making process.
Following are some of the common errors and biases. These can be easily related to the
workplace settings. However, there are many others. You may refer to the additional
readings for the same towards the end of the chapter.
• Fundamental attribution error: When we tend to underestimate the role of internal
cause i.e., the person, and attribute the behaviour to external cause. It refers to our
tendency to see the person rather than the situation as the main cause of that person’s
behaviour (Gilbert and Malone, 1995). For example, if your team member performed
well in a task, you would probably attribute his/her behaviour to the support or
guidance that you provided and not to member’s abilities or intelligence.
• Self-serving bias: In case of failure, when one tends to attribute the outcome of a
behaviour to externally caused and in case of success or favourable outcome to internal
factors. For example, if a program was successful, then the reason of success was ‘me’.
And if the program was a failure or did not turn out as expected, then we tend to blame
it on the external factors such as not enough time, or lack of resource or support of
others, etc.
• Anchoring Bias: When individuals’ assessment of people or situation is based on the
already existing information or on the first set of information. For example, if you go
to the market and find something at a certain price, say INR 560 in a shop. And if you
find the same thing at a price of INR 600 in another shop, you might think that the
former shop was offering was much cheaper.
However, in reality that thing might not be worth more than INR 500 in reality.
• Recency effect: This effect comes into existence, when the most recent information
dominates our perceptions (Steiner and Rain,1989). For example, when you discuss
with your manager about the things that need to be done. You would probably
remember the things which were mentioned/ discussed towards the end i.e., the
recent ones. It is easy to recall the recent information. But it could act as a barrier, if we
missed any information that was mentioned in the beginning of a discussion and was
an important information.
• Selective perception: Wen we tend to be selective in the kind of the information we
select and interpret based on our interest, experience, and background, etc.
One of the cases of Selective perception is Confirmation Bias. This bias comes into
existence when we lookout for information that supports or confirms the decisions
that we took in the past. In this process we tend to ignore any such information that
disapproves the decisions taken in the past. For example, if you bought a car recently,
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then you tend to see (select) the brand of car you bought more often on the roads as
NOTES
compared to other brands. This kind of approves the decision of buying that particular
brand.
• False-consensus effect: The false-consensus effect is a bias is when we think that other
people would also hold the beliefs or thought process about something similar to your
thoughts. For example, if you think that your team or organization is inconsiderate
about people needs. Here, you might think that your other colleagues and team
members also think the same (i.e., inconsiderate) about the team or organization.
Another example, you may consider is- what you consider important in a project/ task,
you tend to think that your team members also share similar thinking process as yours.
It is also called the similar-to-me effect.

Q.1 When your manager thinks that you did not perform as expected and that you do not
have enough knowledge and experience to do this job effectively. Which attribution
error is it?
Q.2 Is it possible for a manager to make an error while assigning tasks and resource
allocation to his/her team members?
5.7 PRACTICAL IMPLICATIONS- WORKPLACE SETTINGS

Perception and Attribution processes both find its application in workplace settings.
Everyday employees- teams, managers, leaders, make decisions every now and then about
different aspects of work. Perception is process than one cannot ignore. Referring back to
the section 1.6, I think you can relate with perception and the role it plays in different kinds of
decisions people make at work.
There could be question in your mind that is there a way to improve our perception? Well,
although we can’t ignore the perceptual process, but we can certainly explore ways that help
us reduce the distortions and the adverse effect of factors that hinder accurate perception
about a thing or a situation or a person.
How to improve Perceptions?
I believe that by now you would have a clear idea about how perceptual processes takes
place and how attribution influences our decisions.
So, for achieving better decisions and improving decision making, attempts can be made to
improve our perceptions and consequently decision making.
A few potentially effective ways to improve perceptions can include the following:
• It begins with the awareness and understanding about the biases and errors that have
been identified and exist. This can further help in recognising them when come into play
at workplace settings.
• Realisation about your own set of biases and errors that you tend to commit while
making decisions. Being aware of your own tendencies to slip into biases can help you
regulate them. Only when you realise or are aware of your predispositions you can
control them.
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• Trying to be open to different experiences, ideas, situations can help one to

understand perspectives of others and their situations better. Also, being open to NOTES
ideas and acquiring information can help being empathetic towards others and
situations supporting accurate perceptions and decisions.
• Goal orientation of an individual can support in avoiding the deviations that may hinder
assessment of situation and effective decision making. Clear goals help one to look for
relevant and adequate information and thus not to lose on achieving results.
• Most importantly, engaging in meaningful interaction with people around you or in
your teams is instrumental in knowing each other much better, thus helping in
overcoming the urge to jump to conclusions and hasty assessments of them and
situations.
• Being aware of the contextual factors is equally important for managers. Cultural
differences form an important part of the global workplace today. Hence forms one
of important contextual factors that managers operate in.
5.8 LET US SUM UP
Perception is a psychological process that exists in our daily lives and influences our personal
and professional life. It is a phenomenon that cannot be bypassed. On it depends on an
individual’s behaviour and decisions about a person, thing or a situation.
Managers’ activities at work rely on the way they perceive the world around them. Being
involved in small to high stakes decision making, understanding the role of perception in the
same can act as a differentiating factors between effective and not so effective managers.
Managerial decisions could be related to- tasks, interpersonal relations, company practices
and policies, etc. These decisions require managers to take more informed decisions with
greater degree of accuracy. Although, being able to or learning to take effective decisions is
a process in itself, but awareness about perception and its traps can certainly be an
advantage. Overall, it is important for managers to strive to be aware of the perceptual
process, factors affecting it, biases and errors which are part of the understanding.

Hilton, James, and William Von Hippel. 1996. “Stereotypes.”Annual Review of Psychology47
(1): 237– 271.
Singer, M. (1987). Inter cultural communication: A perceptual approach. Englewood Cliffs,
NJ: Prentice Hall.
Steiner, D. D. and Rain, J. S. (1989). Immediate and Delayed Primacy and Recency Effects in
Performance Evaluation, Journal of Applied Psychology 74 (1989 ),pp. 136–142.
Hammond, J. S., Keeney, R. L., & Raiffa, H. (1998). The hidden traps in decision making.
Harvard Business Review, 76(5), 47-58. https://hbr.org/2006/01/the-hidden-traps-in-
decision-making
H. H. Kelley , Attribution in Social Interaction ( Morristown, NJ: General Learning Press ,
1971).
P. Babcock , “Detecting Hidden Bias,” HRMagazine , February 2006 , p. 50 .
Keil, M., & Mähring, M. (2010). Is your project turning into a black hole? California
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Management Review, 53(1), 6-31.

NOTES
http://www2.comm.virginia.edu/CMIT/activities/Keil%20-%20Black%20Hole.pdf
R, Pepperell (2019). Art, science and the paradoxes of perception, September 11, 2019
https://theconversation.com/art-science-and-the-paradoxes-of-perception-122486

Q.1 Perception can change over a period of time with experience of an individual.
a. Yes
b. No
c. Can’t say
Q.2 occurred in case of Aarti when she used to believe that
Jyoti, her team member, is capable to perform much better. After six months,
everybody in the team saw a gradual improvement in performance. Choose the most
appropriate one:
a. Stereotype
b. Anchoring Bias
c. Self-fulfilling prophecy
d. False-consensus effect
Q.3 Attribution is about a person’s behaviour is , when person is held
responsible for the actions.
a. External
b. Internal
c. Situational
d. All of the above
Q.4 mean that behaviour displayed is same over a period of time.
a. Consensus
b. Distinctiveness
c. Consistency
d. Internal caused
Q.5 To interpret or give meaning to the information received in form of stimuli in the
environment is called as:
a. Organising
b. Commit error in decision making
c. Consistency
d. Sense-making
5.11 ANSWERS TO SELF ASSESSMENT QUESTIONS
Q.1 a
Q.2 c
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Q.3 b
NOTES
Q.4 c
Q.5 d
Q.1 Perception is basically the way we make sense of the world around us. It largely
involves selection, organising, and sense-making of a situation or object or a person.
Q.2 False
Q.3 Examples of target; and its characteristics can be:
a) Your colleague; somebody who you know for 5 years; is well-mannered, great
spoken English.
b) An advertisement hoarding; with bright colors and moving images capturing your
attention while you are driving.

Q.1 It means to judge whether the behaviour displayed by an individual is internally
caused or externally caused.
Q.2 True
Q.3 Internal

Q.1 Fundamental attribution error
Q.2 Yes
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UNIT 6
Motivation
NOTES UNIT 6
MOTIVATION
STRUCTURE
6.0 Objectives
6.1 Introduction
6.2 Definition
6.3 Need Based Theories of Motivation
6.4 Dual Structure Theories of Motivation
6.5 Process Based Theories
6.6 Reinforcement Based Approach to Motivation
6.7 New approaches to Motivation in Organisations
6.8 Enhancing motivation in Organisations
6.9 Managerial Techniques for Improving Motivation
6.10 Motivation in Various Life Stages
6.11 Let Us Sum Up
6.12 Key Words
6.0 OBJECTIVES
• Understand the meaning, features and importance of motivation
• Discuss various theories of motivation
• Describe new approaches and integration of motivation theories
• Describe how to enhance motivation in organisations and motivation in various life
stages
• Explain managerial techniques for improving motivation
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NOTES
6.1 INTRODUCTION
Fig. 1
The concept of motivation originates from word ‘motive', meaning a want, need, desire,
craving or aspiration which that must be fulfilled. Motivation is the force driving
organisational effectiveness. Managers, have to get the work done from their employees.
Employees are human being who are to be motivated to achieve organizational tasks.
Motivation is the reason for an individual’s intensity, direction, and persistence of effort
toward attaining a target.
The term motivation finds its origin in the Latin word movere, which means “to move.” It
becomes clear from following exhaustive definition:
“Motivation is a process that starts with a physiological or psychological deficiency or need
that activates a behavior or a drive that is aimed at a goal or incentive”.
Hence, to understand the process of motivation one must know the meaning of, and
relationships among, needs, drives, and incentives. Needs initiate drives aimed at goals or
incentives; this is what the basic process of motivation is all about. The key Key to this process
are:
• Intensity: how hard a person tries
• Direction: towards benefits of goal
• Persistence: how long a person tries
6.2 DEFINITIONS
As per, Robbins “Motivation is the willingness to exert high levels of efforts towards
organisation goals, conditioned by the effort ability to satisfy some individual need.
As per George R. Terry, "Motivation is the desire within an individual that stimulates
him or her to action.”
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In the words of Robert Dubin, it is "the complex of forces starting and keeping a person at
NOTES
work in an organization".
Viteles defines motivation as "an unsatisfied need which creates a state of tension or
disequilibrium, causing the individual to move in a goal directed pattern towards restoring
a state of equilibrium, by satisfying the need.”
According to Encyclopedia of Management. "Motivation refers to the degree of readiness of
an organism to pursue some designated goals and implies the determination of the nature
and locus of force inducing a degree of readiness.”
6.2.1 CHRACTERISTICS OF MOTIVATION

The following are the characteristics of motivation:
• Motivation is an inner force, which compels a person to act.
• It is an ongoing process.
• It is dynamic in nature and is different for different people andvaries with time.
• It could be high or low and may be absent in some individuals.
• Lack of motivation is generally the cause of failure.
6.2.2 IMPORTANCE OF MOTIVATION
A group of highly skilled employees may not be able to achieve its objective if they are not
motivated. As employees are motivated, they make best use of resources at their disposal.
Well-motivated employees are committed and make goal-directed efforts. Over the years
these employees become loyal and sincere which helps in reducing absenteeism and
employee turnover.
Motivation is a need driven process. Hence, it differs from person to person. It starts with
what an individual wants. Like, when a worker feels that he is being underpaid then he
becomes dissatisfied then he asks for a raise or he/she starts looking for a new job.
Alternatively, he/she may try harder for a promotion or an increment and at the same time
searching for a job. If his efforts result in increase in pay, then the need is satisfied and he/she
will continue to work sincerely. But if no raise is given then changing job becomes an option
because of unsatisfied need. Needs are never satisfied because if one need is satisfied it may
lead to the identification of other needs. Thus, the cycle of motivation may continue.
Managers must understand behaviour and motivation of their employees. Exhaustive
studies have been done to establish find what motivates people at work including managers,
social scientists, behaviorists and psychologists. Various theories have been proposed, but
till now there is no universally acceptable motivation theory. Managers may get some idea
about the human behavior by going through various motivation theories which are
discussed in following paragraphs.
6.3 NEED BASED THEORIES OF MOTIVATION

These theories try to answer a simple question, "what factor(s) motivate people to behave in
a particular fashion?" Few of these popular need-based theories are discussed below:
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6.3.1 MASLOW'S NEED HIERARCHY

NOTES
Popularly known as the need-hierarchy theory, it postulates that individuals are motivated to
fulfill five levels of needs viz physiological, security, belongingness, esteem and self-
actualization needs.
Fig. 2
According to this theory, five levels of needs are arranged in descending order of importance,
starting from the bottom of the hierarchy. First and foremost are physiological needs. When
these needs are satisfied, then the person is motivated and 'moves up' the ladder to satisfy
security needs. This 'moving up' the ladder continues until the individual reaches the self-
actualization/fulfillmentlevel. His concept has been appreciated for its intuitive logic
universally by managers but it appears that five levels of needs were not always present.
Also, the order of the levels was not always the same as suggested in Maslow's need-
hierarchy.
6.3.2 ERG THEORY OF MOTIVATION

Sometime later, Alderfer proposed another hierarchy of needs, calling it the ERG theory of
Motivation. ERG denotes Existence, Relatedness and Growth.
The existence needs represent the physiological and security needs of Maslow. Relatedness
needs have replaced belongingness and esteem needs. Growth needs means both self-
esteem and self-actualization needs. ERG theory proposes a hierarchy of needs but for two
main points of difference.
• Firstly, ERG theory suggests that any point of time, a person may be motivated by more
than one need. Like, a person may be motivated by a desire for money (existence);
friendship (relatedness), and an opportunity to learn new skills (growth)
simultaneously.
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Fig. 3
NOTES
• Secondly, Alderfer introduced an element of frustrations-regression. Maslow

believed that one need has to be satisfied before an individual can move to satisfy
higher level of need. This is called as satisfaction-progression process. Though,
Alderfer included this concept, he also suggested that if a particular need remained
unsatisfied after moving to a higher level, it will frustrate that person who will then
regress to a lower level and try to satisfy that low level need again. Like, an employee
once craving for money gets a pay increase which satisfies this need now, he tries to
make friends to satisfy relatedness needs. For some reason he/she finds that it is not
possible to become friends with others in the organization, then he/she may get
frustrated and regress to being motivated to make more money. The ERG theory
emphasizes that:
• All needs are not similar, some are more urgent than others.
• People change their behaviour, once a need is satisfied.
Once a particular need has been satisfied an individual may alter his/her behavior
6.3.3 McCLELLAND'S THEORY OF MOTIVATION
McClelland et al had identified three basic motivating needs, which are:
• nAchievement: is motivation for excellence, achievement and success.
• nAffiliation: is motivation for making friends and personal relationships.
• nPower: is the motivation to have power to influence and control others.
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Fig. 4
NOTES
nAchievement
Achievement, driven people are generally better than competitors. They are good at solving
complex problems and can carry out a challenging assignment successfully. Their motto in
life seems to be- create challenges, enjoy challenges.
They are keen to take calculated risks and ensure that they meet deadlines. Failures do no
dishearten them and they are always ready to put in their best foot forward to produce
excellent performances.
nAffiliation
Human beings are social animal, they crave for companionship and acquaintance. This type
of people will go all out for maintaining friendship. They take up such jobs which requires
a good deal interaction with people like public relations or human relations department.
Such people are mild mannered, gregarious, cooperative, happy to be part of the team.
nNeed
People with a high need for power have the desire to control others or to influence their
behavior, or to be responsible for others. These kinds of people seek influence over others.
They like attention and recognition. These people will be assertive, authoritative and take
decisions quickly.
6.4 THE DUAL-STRUCTURE THEORIES OF MOTIVATION

It was developed by Herzberg and is called the dual-structure approach. Also known as two-
factor theory. Herzberg developed this approach after interviewing hundreds of workers.
These, interactions indicated that satisfaction and dissatisfaction are at two extremes.
Workers therefore would lie either on extremes of satisfaction or dissatisfaction or
somewhere in between. Herzberg was of the opinion that attitudes and motivation make
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dual structure, one consisting of a set of factors that cause satisfaction or no satisfaction, the
NOTES
other dissatisfaction to no satisfaction.
6.4.1 HERZBERG’S TWO FACTOR THEORY

Herzberg listed two sets of factors namely motivation and hygiene factors. The factors
causing satisfaction were called motivation factors, others were called hygiene factors.
These were related to the job and working conditions of job respectively, as shown in the
below.
Fig. 5
On the basis of these interviews, Herzberg proposed that managers must first ensure that
hygiene factors are taken care of and that employees are satisfied with pay, security and
working conditions. Once that is taken care of, then a manager must pay attention to a
different set of factors to motivate employees by providing scope for promotion, recognition
and growth. He recommended job enrichment as a tool for increasing motivation factors.
Though accepted in some quarters by managers, Hertzberg’s dual structure approach had
some flaws as well. It was criticized for its failure to establish the relation between
satisfaction and motivation. Notwithstanding that, it did influence managers in
differentiating between satisfaction and dissatisfaction.
6.4.2 McGREGOR’S THEORY X AND Y
Douglas McGregor enunciated two contrasting assumptions of managers about their
employees; one being negative, called Theory X and the other being positive, called Theory
Theories X and Y
Simply put, theory X relies upon external control of human behavior, whereas theory Y, relies
on inner control. While, theory X points to the orthodox approach of management, theory
Y seeks the commitment of workers to organizational goals. Theory X is applied in firms
that lay hard and rigid standards of work-behavior and where rules are at times very
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Y does not favour using authority to drive and control employees, as they are expected to
NOTES
exercise self- direction and self-control.
Fig. 6
Obviously, McGregor wanted managers to apply motivational theory Y, instead of theory

X. Modern concepts of 'Job Enlargement', 'Participation' and 'Management by Objectives'
seems to have emerged from theory Y.
6.5 PROCESS-BASED THEORIES TO MOTIVATION

Need theories are content-oriented, explaining the causes leading to motivated behaviors.
They fail to explain why or how motivated behavior occurs. These questions relating to
behaviors or actions, goals and feelings of satisfaction are addressed by various process-
based theories of motivation.
How motivation occurs and why people choose to act in certain fashion to satisfy their
needs? and how people measure their satisfaction level after they reach their goals? These
types of questions are answered by process-based theories to motivation.
Two of the process-based approaches to motivation are:
• Expectancy theory
• Equity theory
State true or False
Q.1 All human beings are motivated one way or the other.
Q.2 ERG theory discusses following number of needs.
a. 5
b. 4
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c. 3
NOTES
d. none of the above
6.5.1 EXPECTANCY THEORY OF MOTIVATION
Developed by Victor Vroom, expectancy theory is all about making choices. This theory tries
to find how people decide that a particular behavior is better than other options. This theory
postulates that motivation in an individual is dependent on two factors, for example how
keenly one desires a particular goal and what are the chances of getting it. Figure 6.7
shows the expectancy theory of motivation.
Fig. 7
Expectancy theory disregards the basic assumption that all employees or all situations are
same and therefore ‘one size fits all’ type of method of motivating everyone will work.
Instead, expectancy theory propounds that the behaviour of each and every individual is
dictated by their own aspirations, perceptions and estimation of gap between
performance and rewards. Therefore, the next step in this approach is to estimate the effort
required to fill this gap to achieve the desired goal and will there ward be worth the effort put
in. Three basic components of this approach are:
• Outcome Expectancy
• Valence
• Instrumentality
Vroom expressed it mathematically as
Motivation=Valence X Expectancy X Instrumentality,
if any of three is nil, there will be nil motivation.
Practical Applicability of Expectancy Theory
Managers wishing to encourage workers towards better performance have to motivate by
ensuring that the reward are given in fair and impartial manner. Hard work or high quality
should always get its due. Another point which the manger must ensure is that rewards
must be given as far as possible, according to the various preferences of employees and not
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as per firm’s liking.

NOTES
Undoubtedly, expectancy theory did become popular among theorists, but for it to be used
as a tool to explain motivation with all its implications, a lot of ground needs to be covered.
Porter-Lawler Extension
Lyman Porter and Edward Lawler made Vroom’s theory more useful and practical. Four basic
premises of the expectancy are:
• that behavior is result of interaction between person and in his environment.
• that people choose their own way of behavior.
• that each individual has his/her personal needs, incentives, ambitions and goals.
• that people choose a particular option of behavior depending upon their
perception of the how a that particular behavior will lead to desired goal.
People view their chances for success in different jobs from different angles. Therefore, to
dangle some rewards in front of them is not enough, they must get that motivation leads to
convinced that they have it in them to get the reward. This approach suggests effort is a
result of motivation, which when added to one’s ability and situation leads to performance.
Consequently, performance will have many outcomes, each one having a value called its
'valence'. As per this approach, each individual develops a kind of sense of what to expect
before he/shedisplaysa behavior which may be motivated or otherwise.
6.5.2 PORTER-LAWLER MODEL

Generally, a person will have the perception about the effort and associated value of reward
and the probability of the effort resulting in a reward. The chances of improving
performance due to a better effort depends on one’s skills, characteristics and what one
thinks about one’s role in the firm. The model dwells upon how different are intrinsic and
extrinsic rewards. This model concludes by highlighting the fact that an individual’s
relationship between satisfaction, perceived equity of the rewards vis-à-vis effort put in and
the resulting performance.
This model has following elements, which are:
• Effort: refers to the amount of energy spent on the work.
• Value of reward: people try to figure out whether rewards that they would receive by
putting in effort will be attractive enough or not, like somebody in need of money will find
overtime more attractive than vacation.
• Perceived effort: Additionally, people try to assess the chances of putting that level of
effort that will lead to the kind of performance which may result in desired reward.
• Performance: Efforts lead to performance which depends upon individual’s
knowledge, skill set, abilities and traits.
• Rewards: Performance can result in two types of rewards viz extrinsic or intrinsic.
Extrinsic awards are given by others in the form of money, recognition. Intrinsic awards
are internal feelings of self-esteem and sense of achievement.
• Satisfaction: satisfaction will result from the type of rewards, however for being
satisfied, actual award should be either equal or more than perceived rewards.
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6.5.3 ADAMS’ EQUITY THEORY

NOTES
Fig. 8
APPLICATION OF EQUITY THEORY
Adams proposed that comparisons of input and outcome ratios is carried out by employees.
Input by employees are his/her time, knowledge, abilities, experience and loyalty.
Outcomes include pay, perks, recognition and social relationships provided by the firm. As
suggested by this theory, people tend to treat their outcomes and inputs as ratio. It is then
compared vis -a vis ratio of “other’. This ‘other’ person could be peer, colleague or anyone
else. The comparison yields three results:
• Equally
• Negative equity means same input, less outcome.
• Positive equity means less input, more outcome.
Obviously, a person will be happy when the two ratios are equal. If an individual has the
feeling of equity, then he/she is likely to do something about it, like change the input or
outcome. It is human tendency to eliminate any felt inequity in the rewards received for their
work in comparison with others in and outside the organization.
Some new perspectives of this theory are:
• People have a great deal more tolerance of overpayment inequities than of
underpayment in equities which means employees do not mind if they are paid more
than others for the same amount of work. They feel that they are the ‘entitled’ ones.
• Not all people are equity sensitive, such as benevolent types meaning there are some
‘benevolent’ types of employees who do not mind if they are paid less than others for
same amount of work.
Practical implications of equity theory
It is important for managers to understand the importance of a fair & equitable system of
pay and rewards. They must pay attention to employees’ perceptions of a fair and
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impartial system.
NOTES
Employees must be allowed to participate in decision making process. Also, employees
should be allowed to appeal against decisions that affect their welfare. Any organizational
change will be acceptable to employees when they believe it is implemented fairly.
6.6 REINFORCEMENT BASED APPROACHES TO MOTIVATION

This approach, pioneered by Skinner, tries to understand why some behaviors remain the
same and why some are altered after some time. This approach is based on a simple premise
that if a behavior is rewarded, it is likely to be repeated. On the other hand, behavior
resulting in punishment is not likely to be repeated. Similarities exist between expectancy
theory and reinforcement theory. Both stress the processes which an individual goes
through in making his choice of behavior in a given situation. However, the focus of
expectancy theory is more on behaviorial choices while the reinforcement theory is more
about the consequences of those choices.
Fig. 9
Source: iEduNote

State true or false
Q.1 Punishment is used by some managers to avoid undesired behaviors.
Q.2 In equity theory, a person may feel
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a. Equitably rewarded,
NOTES
b. Under-rewarded
c. Over-rewarded
d. All the above
6.7 NEW APPROACHES TO MOTIVATION IN ORGANIZATIONS
Over the years, some new approaches have emerged to add to the already existing models
and theories of motivation. These are:
6.7.1 GOAL-SETTING THEORY

Edwin Locke is name associated with this theory which proposes that managers and
subordinates should discuss and decide the goals for an individual periodically, as in MBO.
The goals set must be very specific, they can neither be too easy nor too difficult to achieve.
Once an employee accepts them, then he/she should remain committed towards achieving
them. Rewards should be directly proportional to the achievement of goals. When
employees are involved in goal-settings, they are clear about how their efforts can lead
to performance, rewards and personal satisfaction. Salient features of this theory are:
• A goal is a target level of performance
• If a goal is difficult and specific and
• If employees accept the goal and feel committed to it, get feedback on their progress
• Then their performance improves because, their behaviour is focused
• They try hard, and they keep trying and they develop strategies. This theory names two
factors which affect the performance. These are:
• Goal commitment
• Self-efficiency
Fig. 10
Actually, there are three important criteria that must be met if they are to motivate the
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behavior of employees. These criteria for goal setting are:

NOTES
Goal Specificity
Goals must be specific and should be in quantitative terms of work performance, like
number of units produced or to be sold etc. within a month, quarter or year.
Goal Difficulty
There exists a direct relationship between level of goal difficulty and work motivation. The
higher the difficulty level, higher would be the level of motivation and performance. Goals
that are too difficult to attain cannot motivate as they may be well beyond the reach of the
employee.
Goal Acceptance
A goal must be internalized by an employee so that it influences motivation and
performance. In other words, an employee has to own it. That is, employees must exhibit
some kind of personal ownership and commitment to achieve the goal.
Goal Setting in work place
Obviously, goal-setting theory suggests that managers and employees should set goals
which are specific to the employee but somewhat difficult so that he/she accept them as
his/her own goals. However, some issues do crop up during goal setting in practice.
• Though goals should be specific and measurable, but that should not affect the
validity and attainability of the goal.
• To stimulate goal acceptance managers can help subordinates in following manner:
→include employees in goal setting.
→demonstrate a supportive and problem-solving attitude and approach
toward his subordinates.
→linking a reward scheme to the goals.
Management by Objectives (MBO) is a method to improve motivation and performance
of employees by using goal-setting techniques.
6.7.2 COGNITIVE EVALUATION THEORY

It is a psychological concept that explains how external consequences affect internal
motivation. Cognitive Evaluation Theory proposes two-fold motivation systems, which are
intrinsic and extrinsic corresponding to two kinds of motivators.
Intrinsic Motivators
Internal qualities such as abilities, achievements, skills and competence are self-motivators
which come from within after performing and attaining the goal. This is the intrinsic aspect
of the work. These feelings come from one’s inner self.
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Fig. 11
NOTES
Extrinsic Motivators
Extrinsic motivators are not within one’s control and are provided by one’s organisation or
environment. These include pay, perks, promotion, recognition, praise and work culture.
Depending upon the individual, any of these factors may become the dominant motivator
for him/her.
Intrinsically motivated, employees perform for their own sense of achievement and
satisfaction. They do not take up a job because of the money involved or some other
extrinsic factor, if that becomes a factor, they will lose motivation to work.
The underlying concept is the fact that strong extrinsic motivators can negatively affect an
individual’s intrinsic motivation. The reason being, that individual starts feeling that extrinsic
motivators are being controlled by other people.
This theory opposes the carrot and stick theory, any superior who usually dangles a carrot or
a stick will turn off the employees who are internally motivated.
Implications for managerial practices
Cognitive evaluation theory has major implications in practices like:
This theory poses a dilemma, that is how to balance extrinsic motivators’ influence on
intrinsic motivation. Extrinsic rewards to be effective motivators should be linked to an
employee’s performance. The jury is out that this will tend to decrease the internal
satisfaction an employee derives from doing the job and doing it well. Then would it sense to
make delink an individual’s pay with performance in order to avoid decreasing intrinsic
motivation? This is the dilemma that this theory proposes.
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6.7.3 JAPANESE APPROACH TO MOTIVATION

NOTES
In last few decades, the Japanese approach to motivation has gained increasing popularity
around the world. This approach is basically a management philosophy and not any theory
or model. The underlying principle of this approach is that neither there is a boss nor a
subordinate. Everyone is a part of the same group; all partners are equally committed and
motivated to work in the best interests of a firm. The aim is the achievement of
organisational goals. No one there is an employee, instead everyone is designated as a team
member or team leader or coach. Each one owns the 'share' of an organization.
The main job of a Japanese manager is to ensure cordial environment in which the team can
grow. To ensure this, employees should have access to him at all times for guidance and
trouble shooting. Obviously, he would expect team members to keep him always in the loop.
This reciprocal relationship forms the foundation of sound management and teamwork.
Japanese management style is becoming quite popular in businesses all across the world,
much like goal-setting theory did.
6.7.4 ATTRIBUTION THEORY

The focus of this theory is on the attributions that people consider to be explanations for
work motivation. These theories originate from the work of cognitive theorists like Lewin
and Festiger. Fritz Heider is considered to be the pioneer of this theory. Heider believed that
both internal forces like personal or internal attributes like ability, effort and
characteristics and external or environmental attributes like company rules and policies,
climatic conditions combine additively to determine behavior. He asserted that it is more of
perception than the real factors that are determinants of behavior. Concepts of these
theory include:
• Locus of control
• Fundamental attribution error
State True or False
Q.1 In Japanese management, there is no one called employee.
Q.2 In goal-setting theory, three components are
a. goal -specificity, difficulty and clarity
b. goal -setting, difficulty and acceptance
c. goal -specificity, target and acceptance
d. goal -specificity, quantity and clarity
6.8 ENHANCING MOTIVATION IN ORGANISATIONS
When it comes to methods of improving the motivation of their employees, managers can
by drawing on any models or theories of motivation. However, practically only certain
specific interventions are used to motivate employees through the firm's reward system.
Following are some methods, a firm can use to motivate its employees:
• Be Humane: Treat each employee as a human being irrespective of the work he/she
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does.
NOTES
• Make public organizational goals: Allow people and departments to set their own
goals.
• Promote internally: As far as possible, promote people from within from your
employees, it boosts morale and is simpler to hire.
• Use incentives: Try to promote creativity by inculcating the sense of innovation and
that creativity is encouraged and suitably rewarded.
• Establish appropriate deadlines: Deadlines are to be met without exception. Every
project should have a deadline.
• Praise in public and punish in private: It is a golden principle. Follow it the hilt.
• Lead from front: Your integrity should be beyond doubt, set an example by your
conduct.
• Take a personal interest in your employees: Relations are always better when there is
a personal touch than formal relations.
• Admit mistakes: If you make a mistake, then own it. People will respect you for it and
are likely to follow suit.
• Do not sugar coat unpleasant tasks: Sub ordinates would be able to tackle
unpleasant assignments if you offer them support.
6.9 MANAGERIAL TECHNIQUES FOR IMPROVING MOTIVATION OF EMPLOYEES
Some of the popular techniques to motivate employees to improve their performances and
enhance intrinsic motivation are:
• Behavior Modification
• Job-Redesign
• Alternative Work Schedules
• Workers Participation in Management (WPM)
• Management by Objectives (MBO)
However, two approaches have become very popular and effective that are: linking pay to
job performance and quality of work-life programs.
6.9.1 PAY AND JOB PERFORMANCE

Salary is usually biggest motivator for employee performance but a salary structure also
must ensure:
• that good work will lead to better appraisal and rewards
• Good work should never go unnoticed
• Some rewards other than monetary should be instituted as related to good
performance like employee of the month/year.
6.9.2 QUALITY OF WORK LIFE
It is an approach that uses a formal plan to combine needs and welfare of the employees with
the enhanced productivity for better involvement and higher job satisfaction among
workers.
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Various programs for QWL entail changes for better. Improvements include minor changes as
NOTES
well as major changes in a firm. Major overhauls are sometimes required in structure,
personnel or in utilization of resources.
6.9.2.1 QUALITY CIRCLES

The concept of Quality Circles (QC) originated in Japan. These are nothing but small groups
of workers who regularly have meetings with their 'circle leader'(supervisor) to sort out
work-related issues. Thus, these so called ‘’circle workers’ get a chance for involvement,
social-need satisfaction, participation in work improvement, challenge and opportunity for
growth. As a matter of fact, QCs are a method of providing employees an opportunity to
satisfy lower and upper-level needs as suggested by Maslow but by using the motivators
described in Herzberg's theory.

State True or False
Q.1 In Quality circles, there is no leader.
Q.2 Some rewards other than monetary should be instituted as related to good
performance like employee of the month/year.
6.9.3 ALTERNATE WORK SCHEDULES

It is a generic term to denote various types of work schedules like:
Compressed work schedule is a schedule where an employee can finish his/her fortnightly
work with no flexible time slots.
Flexible schedules are the work schedules which consist of core hours and flexible time slots.
Core hours represent scheduled hours of work during which an employee’s presence is
mandatory but for leave of absence or use of credit hours.
Flexible time bands are those time slots before and after core hours of any working day,
workweek or pay period. These time slots are for employees to plan their time of arrival or/
and departure or work credit hours.
Many firms have started using the concept of modified 'workweek' to enhance employee
motivation. A modified 'workweek' provides a lot of flexibility in terms of work schedules
because employees do not have to follow a traditional 8 hours a day or 5 days a week format.
This kind of schedule helps individuals satisfy higher-level needs and provides an
opportunity to fulfil several needs simultaneously by giving employees better control over
their work schedule.
6.9.4 JOB-REDESIGN
Job-Redesign or altering the type of people's work is also considered as a motivational
technique. The idea being that managers have many options like job rotation, job
enlargement, job enrichment to choose from in a motivational programme. Expectancy
theory elaborates the role of motivation in job design.
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Job Enlargement: Specialised jobs can become routine, monotonous and boring for the job
NOTES
holders. Employees doing such jobs develop feelings of isolation, often leading to
absenteeism and turnover. Such situations warrant job enlargement. Job enlargement
would provide a better variety of operations to workers.
As a result of job enlargement, employees
• Use a variety of skills
• Have control over work completion
• Have solo responsibility for entire work, and
• Are given the feedback
Job Enrichment: It means designing a job in a manner as to enhance its motivation
potential. Herzberg was of the opinion that the job context is the motivator which
increases employee’s challenge, task completion, responsibility, opportunity for growth
etc. Job enrichment can be tried by upgradation of following parts of the job:
• Skill Variety of skills
• Task Identity
• Task Significance
• Autonomy
• Feedback
Managers can undertake job enrichment in organisation with the help of some
management consultants and behavioural scientists. Generally, it is done by first studying
and analysing the existing contents of the jobs and then by rotating of tasks, increasing area
of responsibility and reducing supervision and broadening qualifications and skills of the job
holders. Allowing more say and influence of job holders in setting standards of performance.
Adding new and more difficult tasks not handled by the job holders earlier. Supplying
necessary information to the job holders which they need to monitor their performance.

State True or False
Q.1 Flexible schedule means one of several types of work schedules all of which comprise
fixed hours and flexible time bands.
Q.2 Skill Variety, task identity and task significance are part of
a. Job enlargement
b. Job enrichment
c. Job rotation
d. Job design
6.9.5 EMPLOYEE ENGAGEMENT AND MOTIVATION
Employee engagement is much more than merely knowing whether someone likes
his/her job. A measure of employee engagement determines how committed are the
employees to the firm. It gives one idea about how motivated and emotionally involved they
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An employee is engaged, when he/she is motivated to aligns his work towards a common
NOTES
goal which is aligned with the firm’s vision. These employees are committed fully to the
values of their organization. Employees who get engaged with their firms know clearly about
the objectives of the work they are doing.
Comprehending the level of engagement of an employee is the first requisite in utilizing and
fore most requirement for making use of this knowledge to organization’s advantage.
Second step is to improve employee their engagement. As a manager, aim should be to

create a workforce which is contended, engaged and committed to the task.
Managers must clearly know that not only should they understand employees’ level of
engagement not only with the firm, but also with them. This will enable them to find what
employees think of their immediate bosses and whether they are getting fair and impartial
treatment.
When the level of engagement of employees and their managers reaches a high level,
employees feel they are being guided and getting directions and feedback on their
performance. Such subordinates develop respect for their managers, which gradually
evolves them into valuable assets of the firm.
Firms using employee engagement schemes are confident about the faith of their workers
in their leadership. Employees believe that the firm treats everyone in a fair and respectful
way. If high levels of employee engagement with the firm are coupled with vigilant and
nurturing managers, business all round business flourishes. It increases production,
enhances customer satisfaction and increases the efficiency of employees to a new high.
6.9.6 TRUST AND MOTIVATION

The present business environment is moving more rapidly than it has ever done before.
Presently, companies count on the energy, commitment, and engagement of their
employees in order to survive and flourish in the 21st century. Trust is not only difficult to
build but must be constantly re-earned by the employer.
Following steps may help:
• Get right people and give them right role and position.
• Train them right
• Communication must be consistent and transparent.
• Establish Values
• Create Opportunities for Involvement
• Ensure Employee Growth and Development
• Learn to Trust Employees
• Show Empathy and Benevolence
• Notice the Employees’ Contributions
• Transparency is a Must
6.10 MOTIVATION IN DIFFERENT LIFE STAGES
The very fact that the mind of each individual is unique, makes it more difficult to understand
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motivation because of its multi disciplinary origin. Notwithstanding the fact that motivation
NOTES
has been the focus of research, we have to yet to have consensus on the source of
motivation. The mystery remains “unsolved”, because motivational factors are not
permanent and vary with time. These individual factors are person’s age, what life stage
he/she is in, and how long he/she has served in that firm. Hence, different factors come into
play at various stages of life of an individual. Few factors like security and salary, generally
have decreasing importance with age but factors such as the craving for personal
development never ceases. Generally, as the person ages, need for money and materialistic
things decrease and need for self- fulfillment increase. Hence, one may conclude that
motivation is not a characteristic that an individual may or may not have it. It happens due
to interaction between an individual and environment.

State True or False
Q.1 Managers must know that not only should they understand employees’ level of
engagement with the company, but also with them.
Q.2 An employee is engaged, when he/she is motivated to work towards a common goal
that is aligned:
a. with the company’s vision
b. with the company’s mission
c. with the company’s policies
d. with the company’s rules
6.11 LET US SUM UP
The concept of motivation originates from word ‘motive', meaning a want, need, desire,
craving or aspiration which that must be fulfilled. Motivation is the key to organizational
effectiveness. Various theories of motivation have been proposed and discussed
threadbare, but even now there is not a single universally accepted theory. Old theories
have been classified as, need based, (Maslow’s, Alderfer’s. McClelland’s), dual-structured,
(Herzberg’s, McGregor’s),) process based, (Vroom’s, Porter-Lawler’s, Adams’s),
reinforcement based, expectancy theory and equity-based (Skinner’s) theories. Whereas,
some modern theories include goal-setting theory, cognitive (Locke’s), Cognitive
(Locke’s), Cognitive evaluation theory, (Heider), Japanese management and attribution
theory. Managerial techniques to improve motivation include job redesign, quality of work
life programs, quality circles, and alternative work schedules. New areas of interest in the
field of motivation are trust building, employee engagement motivation in different life
stages.
6.12 KEY WORDS

Compressed work schedule is a schedule where an employee can finish his/her fortnightly
work with no flexible time slots.
Flexible schedules are the work schedules which consist of core hours and flexible time slots.
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Core hours represent scheduled hours of the work during which an employee’s
NOTES
presence is mandatory but for leave of absence or use of credit hours.
Flexible time bands are those time slots before and after core hours of any working
day, workweek or pay period. These time slots are for employees to plan their time of
arrival or/ and departure or work credit hours.
Fred Luthans, Organizational Behaviour,12th edition, Tata McGraw-Hill Education Private
Stephen P. Robbins, Organization Behaviour,7th edition, Inc, 1996, San Deigo
John. W. Newstrom, Organizational Behaviour12th edition, Tata McGraw-Hill Education

Q.1 Motivation is the process that has three components that are individual’s
a. intensity, direction, and persistence
b. intensity, direction and performance
c. incentive, direction and persistence
d. intensity, drive and persistence
Q.2 In ERG Theory of Motivation, the letters E, R and G stand for
a. Existence, Relations and Growth.
b. Existence, Relatedness theory Y and Group.
c. Existence, Relatedness and Growth.
d. External, Relatedness and Growth.
Q.3 The concepts of 'Job Enlargement', 'Participation' and 'Management by Objectives'
are quite consistent with
a. theory X
b. theory Y
c. theory Z
d. theory X and Y
Q.4 Expectancy theory has three components, which are
a. Effort, performance and result
b. Effort, persistence and rewards
c. Effect, performance and rewards
d. Effort, performance and rewards
Q.5 Goal setting theory lists two factors, which influences the performance. These are:
a. Goal commitment and self-efficiency
b. Goal acceptance and self-efficiency
c. Goal commitment and self-commitment
d. Goal specificity and self-efficiency 109
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Motivation
NOTES Q.6 Cognitive Evaluation Theory suggests that there are two motivation systems.
a. internal and extrinsic
b. internal and external
c. intrinsic and extrinsic
d. intrinsic and external
Q.7 Two concepts of Attribution theory include:
a. Internal and external locus of control
b. intrinsic and extrinsic locus of control
c. External locus of control and fundamental attribution error
d. locus of control and fundamental attribution er
6.15 CHECK YOUR PROGRESS- POSSIBLE ANSWERS CHECK YOUR PROGRESS-I
Q.1 False
Q.2 c
Q.1 True
Q.2 d
Q.1 True
Q.2 c
Q.1 False
Q.2 True
Q.1 False
Q.2 b
Q.1 True
Q.2 a
Q.1 a
Q.2 c
Q.3 b
Q.4 d
Q.5 a
Q.6 c
Q.7 d
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UNIT 7 NOTES
DECISION MAKING
STRUCTURE
7.0 Objectives
7.1 Introduction
7.2 Characteristics of Decision Making
7.3 Classification of Decisions
7.4 Decision Making Process
7.5 Effective Decisions
7.6 Individual & Group Decisions
7.7 Decision Making Conditions
7.8 Quantitative Techniques & Operations Research
7.9 Decision Tree
7.10 Creativity
7.11 Let Us Sum Up
7.12 Key Words
7.13 Unit End Questions and Possible Answers
7.14 Reference And Suggested Additional Readings
7.15 Answers to Check Your Progress
7.0 OBJECTIVES
• Understand the concept of decision making
• Classify the decision and the important factors associated with it
• Individual and group decision making
• Quantitative techniques for decision making
• Decision tree and creativity in decision making
7.1 INTRODUCTION
Decision making is one of the important skills of managerial process. This is applicable at
every level of the management. The performance of any organization is directly linked to the
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decision making processes which can bring changes in development, improvement or

NOTES
enhancement of the people, processes and outcomes. The managers have to take both long
term and immediate decisions in order to sustain the operations and achieve the
organisational objectives.
William Moores considers the decision making so important that he has equated it with the
management itself saying “Management means Decision Making”. However, decision
making is not only the managerial process but also an organisational process. Decision
making permeates through every management process and sets the tone of an organisation
beginning from planning to the ultimate outcome or objective.
Managers come across problems and take decisions to solve it. They evaluate the outcome
of the decisions and evaluate if any corrective measure has to be taken. Thus, decision
making is a continual mental process that produces an outcome which can be a
recommendation, action or even an opinion.
Good decision making is the key for a successful management and/or a mature organisation
as it determines its ability to identify and resolve problems, manages its resources, and
reaches its goals with optimal efficacy. Decisions are also considered as a choice among the
available alternatives that an individual or manager selects to produce a desired result.
Decision making is relevant only when one has at least two alternatives. If there is only one
path to follow, there is no need to make any decision.
It is very important to note that every decision making has a futuristic element as the
decisions are linked to the future outcome or goal. So, the decision making is an intellectual
process which needs judicial thinking, imaginative spectrum and application of mind.
In this unit, you shall learn the decision making process, its characteristics and, its
classifications. Further, various models of decision making shall be evaluated. Individual and
group decision and its effects on the organisation shall also be compared. In addition, the
scientific approach to decision making, operations research and the use of decision tree
in managing organisation shall also be considered.
Fig.1
Felix M. Lopez has defined decision making as

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and a commitment to action made in face of uncertainty, complexity and even irrationally.”
NOTES
In brief, in order to arrive at decision, an individual or an organisation arrives at a selected
position out of several alternatives which helps it in reaching the final goal. Forment A. Shull,
Andrew L. Delbecq and Larry L. Cummings in their book “Organisational Decision Making”
MacGraw-Hill, 1980 defined decision making as
“Decision making is a consious human process involving both individual and social
phenomenon based upon factual and value premises which concludes with a choice of one
behavoural activity from among one or more alternatives with the intention of moving
toward some desired state of affairs.”
The three factors which affect the decision making are cognition, conation and affection.
Cognition is associated with knowledge, conation is the willingness & desire and affection
is associated with feeling, mood, emotion and temperament.
We can summarize decision making as follows:
• Selection of most desirable alternatives to get the desired result.
• Decision maker has freedom to choose alternatives.
• Decision making may or may not be rational and its success depends on the decision
maker ability.
• Decision making is a goal directed process.
7.2 CHARACTERISTICS OF DECISION MAKING
The important chracteristics for the decision making is as follows
• Alternatives: The decision makers searches for opportunities, evaluates the choices,
takes decision most suitable to option which is then termed as the decision.
• Goal Orientation: The basic purpose of the decision making is to arrive at a goal.
Therefore, the achievement of goal is the very purpose of taking the decision.
• Dynamic Process: The environment in which the decision is taken is not static but
dynamic. This implies that the manager has to take the decision based on situational
requirement using discretion and judgement.
• Pervasiveness: Decision making is embedded into entire management and every part
of the organization is affected by the decisions taken.
• Analytical Process: The decision making is not purely intellectual process but requires
application of logical thinking, conscious and unconscious aspect.
• Planning: Decision making is core aspect of planning. It is based on forecast and
assumptions for future and has risk and uncertainty involved.
• Continual Process: The decision making is not a one time deal but needs continuous
evaluation on regular basis.
• Commitment: Decision making is a commitment with respect to time, efforts and
money to help the organization move in right direction.
• Social Process: Decision making is human and social process which involves
intuition, intellectual ability and individual/collective judgement.
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7.3 CLASSIFICATIONS OF DECISIONS

NOTES
Decision making is one of the primary functions of management. All tasks and functions of
the management are done through decision making process. It is a continuous function of
the management because managers working at all levels will have to take decisions at every
point of time. In the words of Joseph A. Literer, “decision making is the core of managerial
activity”. A manager is continuously engaged in making decisions because all the functions
of management like planning, organising, directing, controlling, staffing can’t be
conducted without it. It is the decision making process through which managers try to
achieve organisational goals. In other words, it is required to support organizsational
growth. According to Peter Drucker, “whatever a manager does, he does it through making
decisions and getting them implemented in an effective manner”. In addition, without
decision making process follow-up actions are not possible.
Some of the important types of decisions are
I Basic & Routine Decisions:
Routine decisions are generally taken by the middle level managers or by lower level
managers. Such decisions do not require any special effort by the managers. It is related
with day to day problems. As manager progresses to higher levels, the quantum of
decisions increases.
These decisions are repetitive in nature and require very little deliberation and are
generally considered as short term commitments. The effect of these decisions does not
have a large impact on the organization.
II Programmed & Unprogrammed Decisions:

The classification of decision making as programmed and unprogrammed decisions was
initiated by Herbert Simon. The rules and policies of programmed decisions are well
established and structured in advance. An example is the school admissions or hospital
admissions where the criterion for admission is well defined. The process manager has to
take decisions based on these set rules. Similarly, disciplinary actions against an employee
is carried out based on pre-defined criteria. So, a decision which is reasonably structured
and is repetitive in nature is called a programmed decision. The chances of error in
programmed decision are low.
In contrast to programmed decisions, unprogrammed decisions deal with unusual or
unique problems. The decision maker has to deal with such a situation through
application of mind and evaluation of the situation as he does not have any pre-defined
path to follow. Non-programmed decisions are usually taken by the higher management.
Some of the examples of unprogrammed decisions are restructuring of the organisation or
taking over of a sick unit or addition of a new product in the organization. A decision
taken in response to a unique situation which is poorly defined and is largely unstructured
is known as unprogrammed decision. Such decisions have large and lasting consequences
for the organization.
Some of the important comparisons are as follows
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a. Programmed decisions are routine and repetitive while the unprogrammed

decisions are unique and novel. NOTES
b. Solutions requiring programmed decisions have set procedure and rules.
However, there are no pre-established guidelines for unprogrammmed
decisions.
c. While higher certainty exists for programmed decisions, condition for
unprogrammed decisions are highly uncertain.
d. Unprogrammed decisions are made by higher management, but the
programmed decisions are carried out by lower or middle management.
III Strategic & Tactical Decisions
Another important classification of decision is strategic and tactical decision. The tactical
decisions are delegated to a lower level of management. However, strategic decisions affect
the organisation and therefore is limited to the top management or to a limited level of
higher management.
The strategic decision is mainly related to certain actions which is important for
deployment of resources and its effect on organisational goals. The characteristic of
strategic decision is given below.
• These decisions are major in nature and affect the organisation in part or whole.
• It is a major departure from the earlier policy or practice.
• The strategic decision is a unprogrammed decision.
• Strategic decisions directly affect the organisational objectives or goals.
• The strategic decision has three elements namely, action element, result
element and allocation of resource to achieve the objective.
Tactical decisions are also known as operational decisions. These are the outcomes
of strategic decisions. The characteristics of tactical decisions are listed below:
• Tactical decisions are related with routine operations and are repetitive in
nature,
• The impact of tactical decision is narrow and carried out by lower management.
• By delegating tactical decisions to lower management, the higher management is
able to concentrate of strategic issues.
• Tactical decisions are short term and operational in nature. Tactical decisions are
programmed decisions.
IV Personal & Organisational Decisions
Organisational decisions are taken within an organization by associated managers in their
formal capacity. While individual decisions are taken by the individual decision maker and
cannot be delegated, organisational decisions are delegable. Organisational decisions are
aligned with the organisation objective and goals.

Q.1 Decision is derived from Latin work Decidere which means.
a. To gather
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b. To evaluate
NOTES
c. To Cut
Q.2 Decision making is
a. Choice of alternatives
b. Removing competition
c. None of the above
Q.3 Tactical decisions are implemented by
a. Higher Management
b. Middle or Lower Management
c. Workers
7.4 DECISION MAKING PROCESS
Decision making is a systematic process starting from the setting up of the objective, going
through the decision process leading to results and then using as a feedback to reorient the
objective. Kindly note that the decision making is not a fixed but dynamic process.
Fig. 2
The steps are discussed in brief below:

Setting Objective: Setting objective is the basis of the decision making. You will appreciate
that the starting point of a decision making is that if a decision is to be made or not. This
means that the current decision is the result of some earlier decision. However, setting
objective is the first step of the current decision to be taken.
Problem Identification: Problems arise due to the discrepancy between what is and what
it should be. Therefore, identification of the gap between the current and desired state is
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the key element. Such conditions may arise due to changes in the competition, increasing
NOTES
operating costs, government regulations, employee inefficiency or process changes.
Alternatives: Once the problem is clearly identified, the next step is to look for alternatives
available. If there is no alternative or one has no choice, this does not require decision
making. Managers have to identify alternatives which will enable them to overcome the
limitation. Alternative can be identified through previous experiences, experiences of
others in similar conditions or through creative process of collectively generating new
ideas.
Evaluating Alternatives: In this step, it is important to evaluate each alternative with respect
to achieving the objective including identifying its pros and cons. In this process, the
alternatives are shortlisted to suit into the organisational environment including its
implementation.
Selecting Alternatives: This is a very critical step and requires a very cautious approach.
The evaluation is carried out based on experience, experimentation and research &
analysis. Kindly note that the rational process of decision making is affected by personal
factors related to the decision maker. However, it is important to be ready with contingency
plans, if required.
Implementation: Once the decision is made, it has to be implemented and the process must
be critically monitored. Implementation of a decision requires effective communication with
all stakeholders. The decision has to be implemented at an appropriate time to ensure its
effectiveness.
Result and Feedback: After implementation of the decision, it is necessary to evaluate the
outcome of the implementation of the decision. If the decision made does not yield the
desired result, the decision maker should not hesitate to accept it. Kindly note that decision
making is a continual process and corrective measures result in reaching the objective more
precisely.
7.5 EFFECTIVE DECISIONS

Decision making is basically a process to solve the problems or deviations from the desired
objectives through effective decisions. Effective decisions are the ones which help any
organisation reach its goal. These must be goal oriented, action directed and efficient in
implementation.
It is important that the decisions made are pragmatic and implementable. The prime
objective of the decision should achieve the goal. The three important factors affecting the
efficiency of implementation is
• The decision must be viable.
• Congruency between result and prediction.
• Enthusiasm and skill set of implementors.
A decision can be effective if the proper decision making process is followed. Decision should
be realistic instead of being an ideal decision. This can be achieved if the following process
is effectively followed.
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• Critical Interpretation: It is often observed that the problems are not identified
NOTES
critically. The real problem must be identified and interpreted with in depth study.
Problem identified properly effectively results into half solution.
• Limiting Factor Identification: Identification of the limitations or limiting factors are
key element in the process in the decision making. Analysis must be carried out on
what the organization can do and what it can not implement. However, the limiting
factors are not static but change with time and conditions.
• Information: The quantity of reliable information available is directly proportion to the
effectiveness of the decision. Common sense and experiences are often used
disproportionately by the managers and result in effective decisions. It is therefore
very important to gather relevant information and base the evaluations on the
information as well as experiences in similar circumstances.
• Seeking Other’s View: It is equally important to take the view of others adequately
before arriving at any decision. Preferences and values of the decision maker often affect
the decision. As many of the qualitative decisions get affected by the personal traits of
an individuals, taking view point of others brings out different perspective and help
in reaching a more effective and implementable decision.
• Time Factor: The timing for a decision is quite important for its effectiveness. Delay
in making a decision may lead to loss of opportunity or falling behind in a competitive
environment. On the contrary, a quick decision may lead to taking a wrong decision
which may have huge implications. A balance is necessary, and the managers must set
a deadline depending on the type of internal and external impact of the decision.
7.6 INDIVIDUAL & GROUP DECISIONS

Every manager in an organisation takes decisions in order to reach the objectives assigned to
him or her. These decisions can be individual decisions or collective/group decisions. Both
have positive and negative implications. So, it is important to understand under what
circumstances an individual or a collective/group decision is desirable.
Some of the factors which help in deciding to go for individual or group decision are:
• Usually, the group decision produces better quality output unless the individual has
expertise in the decision needing field.
• In case the policy guidelines are available, the individual decisions will be brought
both creativity and efficiency. However, if the problem requires diverse expertise, group
decision is preferable.
• Group decisions are time consuming and individual decisions are preferable when we
have a shortage of time.
• Legal requirement is another factor which requires use of domain expertise. An
individual or group may be involved depending on the nature of the decision and
associated problem.
Individual Decision Making:
Decision making process is expected to be rational, logical and unemotional. It is often
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referred that the failure of Hitler during World War 2 was that he has often set aside the
NOTES
suggestions of his Generals. The three approaches for individual decision making is
discussed below.
1. Rational Economic Model: In this model the individual’s main objective is to select
the best alternative among the possibilities to maximise the objectivity considering
the economic considerations as prime requirement. The basic element of rational
economic model are as follows
• Goal oriented process is key in decision making
• All choices, relevant criteria, feasible alternatives and its consequences are
known.
• Ranking of all alternatives in order most preferable to least preferable.
• Freedom to choose alternative.
2. Administrative Model: Individual and organizational limitation often makes it very
difficult to reach perfectly rational decisions. The administrative model provides
highly useful approximations through which the decision makers take decisions. It is a
realistic approach and gives reasonable freedom and flexibility to decision making
process. Knowledge helps in understanding the very basis of why and how the
decisions are made.
3. Political Model: The political model is relevant in taking decisions in non-programmed
decisions where the information is limited, managers have disagreement, and the
conditions are uncertain. When the outcomes are clear, decision makers gain support
through negotiations, discussions and bargaining.
Group Decision Making:
Groups often play an important role in decision making in organizations. The groups may
be in the form of study teams, committees, review team, task force or any other formal
shape. Group decisions usually give an advantage of diversified experience contribution,
knowledge sharing and mutual support.
Group decision making involves brainstorming, synthetics (fitting together of diversity),
nominal group technique (use of individual & collective ideas together), and Delphi
technique of reaching consensus.
The advantages and disadvantages of group decisions are given in the table below:
Group Decision
Advantages Disadvantages
Group members bring in diversified Group waste lot of time, energy and
knowledge and expertise. resources.
Groups bring in better alternatives Creates pressure towards conformity and

through their wider experience. often compromises on base line.
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NOTES Better understanding of the decision Group decisions may increase the effective
by all stakeholder as they participated cost of decision in terms of resource
in the decision process. Leads to utilized in addition to economic cost.
better implementation.
Increases acceptance and Powerful members may influence and

commitment of participants. derail the objectivity.
Enhances the individual talent Disagreement in reaching a decision may

through cohesive interaction and lead to conflicts, resentment and bad
leads to growth. feelings between members.
Increases creativity through Leads to pass of buck and lack of

intergroup discussion. responsibility.
7.7 DECISION MAKING CONDITIONS

Decision making is a process of choosing the best out of the available alternatives. The
manager is taking the decision for future conditions which means that he is dealing with
unknown conditions. The continuum of the future varies between perfectly certain and
completely uncertain conditions. This is depicted below.
Fig. 3
The outcome of defers as the condition varies. With multiple alternatives, knowledge of the
outcome becomes important. The decision making strategy differs with the variation of
knowledge of the outcomes. The three important aspects are discussed below.
I Certainty:
When the decision maker knows exactly what is the state of nature that will happen, it
is called a circumstance under which certainty exists. In such conditions, the manager
exactly knows about the outcome of a decision. This may happen due to his previous
experience. In such situations, the manager uses a deterministic model in which all
factors are known and chance does not play any role in the process.
II Risk:
The situation of complete certainty is rare in real life. Practically, every decision is
based on variables which have an element of uncertainty built in it. Therefore, it brings
us to two important facts, namely, the amount of risk involved and the ability of the
organization to take the risk. Risk analysis becomes very important in this scenario.
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Risk analysis involves to evaluate the probability of every critical variable to occur in
NOTES
the outcome.
Therefore, the decision has to be made with maximum caution and alternative strategy
should be evaluated.
III Uncertainty: When the manager or the decision maker has no idea or information of
the outcome or even a single relative chance, it means that he or she is operating
under complete uncertainty.
Under such a situation, the manager has to evaluate the following.
• Optimistic Scenario: Maximum criterion (Maximum possible payoff)
• Pessimistic Scenario: Maximin criterion (Minimum possible payoff)
• Minmix criterion: Minimising the maximum possible regret
• Insufficient Criterion: Insufficient reasoning.
Q.1 Rational Economic model is part of
a. Individual decision Making
b. Group decision making
c. Both Individual and Group decision making
Q.2 The following is not part of decision making conditions.
a. Risk
b. Uncertainty
c. Irrational thinking
Q.3 The first step of the decision making process is
a. Result and Feedback
b. Setting Objectives
c. Evaluating alternatives
7.8 QUANTITATIVE TECHNIQUES & OPERATION RESEARCH

With the business getting dynamic and the role of availability of relevant information has
become very important in decision making. Various quantitative tools have been integrated
into a tool called “Operation Research” which helps in assisting the managers to take vital
decisions.
Operation research has uses many techniques. Some of the most widely used techniques
are described below.
Probability Theory:
Probability theories help the decision maker in creating a strong base to evaluate the
outcome. Probability varies from 0 to 1. A probability value of 1 means complete certainty
while a value of 0 means total uncertainty. Probability can be subjective and objective
both. Objective probability is based on historical relevant data while the subjective
probability are educated guesses.
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Probability theory is applied in pricing, innovation of products, market research and many
NOTES
other related fields.
Game Theory:
This theory was developed by John Von Newman and Oskar Mongenstern in 1944 in “Theory
and Practice of Game and Economic Behaviour” The game theory deal with situation the
decision-making process when two or more rational and intelligent individuals or
organisations are involves in a competitive environment/condition. Examples of gaming is
FMCG companies operating with the same perspective customers or even in case of the
negotiations with unions or associations.
Game theory in decision making can be based on number of players, sum of gain or losses
and number of strategies involved. If there are only two players involved, it is called two-
person game. Similarly, if the sum of gain and losses is zero, it is called zero sum game. If the
sum is not zero, it is called non-zero-sum game.
There are certain assumptions associated with the game theory.
• Every player is Rational and Logical.
• Players are aware of each other but do not communicate with each other.
• The game is repetitive.
• Players choose strategy to suit themselves.
• Each player is having only a limited number of strategy.
• Outcome of all actions is known to the players.
• The main objective is to maximize profit and minimize losses.
Queueing Theory:
Queueing is a regular phenomenon is our life. We have seen queue is everyday life such
as queues in banks, queues in offices, in post offices etc. Why do queues happen? Queues
appear when there is a mismatch between the seekers and providers. For example, you
may come across queue at a mobile repair center. One important fact about queues is that
either the service seeker or the service provider has to wait in queue. When customers or
service seekers have to wait, it may lead to dissatisfaction of the customer and the
organisation may lose customer. Alternatively, if the service provider has to wait for the
customer, the organizational resource is left idle with adds to the cost of the service.
The fundamentals of the queueing theory is to maximise customer satisfaction with
minimized idle resources. The queueing model has the following assumptions.
• Calling population size infinite. Example is people buying airline ticket.
• The service time is limited. Example is people buying a theater ticket.
• All customers will join the queue and there is no jumping the queue permitted.
• Length of the queue depends on the availability of space.
• Queue is based on first come first serve basis. Example is Hair Saloon shop.
• All customers will be in line until served.
It is really difficult to find a suitable mathematical model for queueing but once developed
it helps the organisation to optimize its resources and have satisfied customers.
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7.9 DECISION TREE

NOTES
Decision Tree is a technique to use to solve complex decisions. Decision tree uses a tree like
model of decisions which helps in evaluating the consequence, outcomes and the
possibilities. It is a way to create an algorithm that is having only conditional statements.
It helps the decision maker to visualize the possible alternatives that the future decisions
may depend on.
Decision tree is a graphical depiction of possible events and actions using the probability
model or expectation of its occurrence and helps the decision maker to find the optimum
path. Decision tree is slightly different from the actual tree as its branches are made
horizontally from left to right or from top to bottom instead of natural tree which grows from
bottom to top. The base is called the “First decision point” and normally represented by
a square. The branches represent the “chance event”. Every chance may produce two or
more possible effects leading to another decision point.
Fig. 4
With the use of computers, processing large and complex data has become simple and
easier. This has made the use of decision trees quite popular and effective. However, the
decision trees have their own limitations. Though the decision tree looks simple in the
concept its application is complex. At the ultimate or final level, it may have too many
alternatives and may create confusion. Another issue with the decision tree is assignment of
probabilities to the different events and alternatives.

Q.1 Gaming theory was developed by
a. Felix M. Lopez
b. Newman and Mongestren
c. William Moores
Q.2 A is a model which is developed in a tree shaped depiction
which helps in taking decisions based on possible consequences, outcomes, resource
and utility.
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a. Queueing Theory
NOTES
b. Decision Tree
c. Probability Theory
Q.3 Which one of the following is not correct assumption of Queueing Theory of
Operation Research?
a. All customers will be in line until served.
b. Calling population size is infinite.
c. Jumping queue is permitted.
7.10 CREATIVITY
Creativity is to link knowledge with novel ideas and can be said to be the first step in the
process of innovation. The basic meaning of creativity is to develop or build something new.
For a painter, creativity is creating new picture; a musician considers it as preparing a new
musical theme; In business, creativity means new ideas in terms of service, development
of product or a business idea. The four essential elements of creative process are
discussed below.
• Preparation Stage:
This is the first step in the process of creativity. It requires defining the problem,
information collection, peripherals for the creative task, looking for alternatives,
carrying out critical evaluations and analysis of the data collected. The individual has to
get immersed into every aspect of the issue and dream about the alternatives without
evaluating them.
• Incubation Stage:
Incubation is the key step towards creativity. At this stage, one has to carry out internal
and unconscious deliberation on the available information. There may be a conflict in
the current practice and the possibilities. This step involves diversified thinking
process to explore something new, innovative, unusual and out of the box.
• Inspirational Stage:
This stage may also be called the “EUREKA” stage. The creative solution to the problem
illuminates out. Creative people often use notebooks to record such inspirational
thoughts which ultimately lead them into creating an innovative solution which is not
otherwise thought off.
• Verification Stage:
At this stage, the validation of the creative idea has to be established. Logical and
pragmatic thinking is the need of the hour. If the solution is not feasible, one has to go
back and further look into a new alternative. This is called cycling back to the previous
stage. Often innovative ideas are rejected in the initial stage for being impractical.
However, many of such rejected ideas have been most successful ones with little
tweaking or adjustments.
Out of Box Creativity:
The famous nine dot puzzle is a typical example of out of the box thinking examples used in
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management programs. The audience is asked to join nine dots with four lines without lifting
NOTES
the pencil. The solution is shown below which requires one to go beyond the dots. Normally
people limit themselves in a boundary.
Fig. 5
7.11 LET US SUM UP

Decision making is another important function of management. Decision making is one of
the primary functions of management. All tasks and functions of the management are done
through decision making process. It is a continuous function of the management because
managers working at all levels will have to take decisions at every point in time. The term
decision making has been defined as the process of selecting the best alternative course
of action from among various alternative courses of action. There are two ways in which
managers can take decisions i.e., rationally or irrationally. Rational decisions are those
decisions which are based on some facts, figures or logical reasoning whereas irrational
decisions are based on intuition and without using the relevant facts and figures. Experts
have developed two alternatives model in decision making i.e., Rational Economic Model of
Decision Making and The Principle of Bounded Rationality. According to the first model,
decisions are fully based on logical facts and decision maker select the best optimum
alternative whereas second model states that decisions are based on different combination
of intuition and rational thinking.
7.12 KEY WORDS

Decision Making: It is the process of selecting a best alternative course of action from among
various alternative courses of action.
Rational Decision Model: It is the process in which an individual or an organization takes
decision based on facts, information, analysis and a step by step approach.
Group Think: It is the tendency of cohesive groups get to an agreement, at the expense of
realistically appraising situation.
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Delphi Technique: Delphi technique is the formal procedure for converging to the consensus
NOTES
of many experts by using a series of questionnaires.
Uncertainty: Here the decision makers do know the goal they intend to reach but
information and about the alternatives and future event is incomplete or not known.
Decision Tree: A graphical and empirical process of decision making which evaluates the
probability of alternative through tress formation typically used to evaluate decisions
containing a series of steps.
7.13 UNIT END QUESTIONS AND POSSIBLE ANSWERS

Q.1 Explain the concept and features of decision making.
Hint. The term decision making has been defined as the process of selecting a best
alternative course of action from among various alternative courses of action. The
main features are – Firstly, it is an intellectual, continuous and a goal-oriented process.
Secondly, it is pervasive in nature. Thirdly, it is situational and a dynamic process.
Q.2 Define corporate planning. Explain the main characteristics of corporate planning.
Hint. Corporate planning is planning for the total enterprise as a whole and
emphasizes the future growth of the business organization. Formal, continuous,
systematic and rational processes are some of the main characteristics of corporate
planning.
Q.3 What are three theories in Operation research? Explain briefly.
Hint. Probability theory, Game theory and Queueing theory. For details go to Section
7.8.
Q.4 Briefly explain the Decision-making conditions?
Hint. Certainty, Risk and Uncertainty. See Section 7.7. for further details.
Q.5 Discuss the advantages and disadvantages of Group decisions? Hint. See Section 7.6.

The Paradox of Choice by Barry Schwartz
Smart Choices: A practical guide to making better decisions by John S. Hammond, Ralph
Keeney and Howard Raiffa.
Decisive: How to make better choices in life and work by Chip heath and Dan Heath.
Thinking Fast and Slow by Daniel Kahneman
Thinking in Bets: Making smart decisions when you don’t have all the facts by Annie Duke.

Q.1 c
Q.2 a
Q.3 b
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NOTES
Q.1 a
Q.2 c
Q.3 b
Q.1 b
Q.2 b
Q.3 c
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UNIT 8
Group and Group Dynamics
NOTES UNIT 8
GROUP AND GROUP DYNAMICS
STRUCTURE
8.0 Objectives
8.1 Introduction
8.2 Classifying Groups
8.3 Concept of Group Dynamics
8.4 Stages of Group Development
8.5 Group Properties
8.6 Group processes and functions
8.7 Let Us Sum-Up
8.8 Key Words
8.11 Reference and Suggested Additional Readings
8.0 OBJECTIVES
• Understand the reasons for people to join groups
• Understand the various types of groups
• Understand the stages of group development
• Understand the properties of groups
Quotes on the importance of Groups!
* "Alone we can do so little; together we can do so much...".
* "It is literally true that you can succeed best and quickest by helping others to succeed.”
* " A Chain is no stronger than its weakest link, and if one of the team cannot handle
the forces, everybody is going to suffer.”
* "Power is a phenomenon created by group dynamics, never solely by the 'powerful
man'.”
* Winning Groups follow -
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• Trust each other

NOTES
• Respect each other
• Understand each other
• Enjoy each other.
* " If you've ever been part of an energized team, whether around a conference room
table or on a playing field, you know the feeling of pulling together to reach a common
goal: suddenly everyone's work becomes essential and meaningful. “
* " The group dynamic can bring synergy, or tear things apart.”
8.1 INTRODUCTION
After the unit on Decision Making, you will now hone your learning about Groups and Group
Dynamics in the present unit.
Decision making began with the identification of a problem and ending with the decision
on a chosen course of action along with the way the decision is to be implemented.
In Groups and Group Dynamics, you will be familiarized with a group, that is, how two or
more persons relate to one another continuously, they share some interests and feel that
they are close to each other. Each group member works in the direction of a common goal.
You will learn the dynamics of how groups emerge, what the group members do and how
they behave. You will understand ways by which groups shape the behaviour and
performance of its members through communication, decision making, enforcement of
discipline, cohesiveness and so on.
8.1.1 REASONS TO JOIN GROUPS

I am sure it interests you to know the reason for people to join groups.
There is no single reason why people join groups. Different people may have different
reasons to become part of different types of groups. Some of the common reasons to join
groups are-
• Security : A lot of people feel stronger and tend to be more resistant to threats when
they are a part of a group. It reduces the level of insecurity of " standing alone".
• Status : When you are part of a group which is held high in the eyes of society, you too
enhance your public image!
• Self-esteem : The feeling of belonging to a group often enhances the level of self worth
of a person.
• Affiliation : Social needs are met by being part of a group. Regular interaction fulfills
a person's need for affiliation.
• Power : By being a member of a group, the power of the group as a whole helps you,
as there are many people in the group.
• Goal achievement : It is when you pool talent, power and knowledge that tasks are
accomplished.
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NOTES
Mark True or False-
Q.1 Irregular interaction between the members of a group fulfils a person's need for
affiliation.
Q.2 Tasks in a group are often achieved better by combining the knowledge and skills of
group members.
8.2 CLASSIFYING GROUPS

Groups can be classified in many ways.
• Small and large groups : A compact cluster of a few individuals who often have
interactions and is defined as a small group. A large group is a collection of many small
groups. Example- an organization is like a large group. A state or a nation are examples
of large groups. Unlike a small group, interpersonal relations are weak in a large group.
• Primary and Secondary groups : Primary groups are identical to small groups. Unlike
small groups all primary groups have a shared sense of identity among the members
and their common goals, interests and values.
Secondary groups are larger. They are made of many primary groups. A secondary group
is less cohesive than a primary group.
• Formal and Informal groups: A formal group can be described as a work unit which is
established as a part of the organisation. Its members are selected by the management
and given certain roles to do specific tasks which relate to the goals of the organisation.
Formal groups are governed by the rules, regulations and procedures of the
organisation.
These are of two types-
a. Command group: This is made up of the manager and a set of his immediate
subordinates who report to him/her directly.
It undertakes certain regular activities and is relatively permanent in nature.
b. Task group: This group is specially assembled for undertaking specific tasks. A project
group or a committee is a task group. It is a stand-alone group or an ad-hoc one.
An informal group is unofficial in nature. It is the voluntary formation of a small number
of members in the organisation. These members are attracted towards each other on the
basis of some shared common background, interest, value, need or the like. These informal
groups arise as members seek interaction, relationships and social alliances on a selective
basis while working in the organization.
These are of two types-
a. Friendship groups : These emerge to fulfil the social affiliation needs of members, like-
need for affection, acceptance, belonging etc.
b. Interest groups: They form to pursue certain goals and interests. Example- a football
group.
Principles of Successful Groups:
• Every successful group has a shared dream
• To achieve this shared dream the individual egos have to be sacrificed
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• Successful groups develop strong qualities of leadership in the members

NOTES
• Successful groups are the result of careful recruiting
• Successful groups mostly produce tangible results
Mark True or False-
Q.1 Command groups fulfil the need of affection and belonging.
Q.2 A Football group can be called an interest group.
8.3 CONCEPT OF GROUP DYNAMICS

Group dynamics relates to the various patterns of small groups which get informally formed
within an organisation. It studies their composition, inter-action and behaviour. Kurt Lewin,
a social psychologist, is the founder of Group Dynamics as an academic and research
discipline. It brings out the understanding of the following aspects:
• Why and how groups are formed
• The forces which operate in the structure of groups
• How groups grow, decline and then die
• How the members of the group solve problems and make decisions
• The way groups manage conflict and achieve unity
• The way groups adapt and change according to the dynamic needs.
• The way they influence task performance and the satisfaction of members
Group dynamics is of great help in the management of organizations, as it enables the
professionals and managers to improve their understanding of group handling. It refers to
the behavioural and the attitudinal characteristics of a group. Group dynamics is concerned
with how groups are formed, about the structure and the process involved. It studies the
functioning of the group too. Group dynamics concerns formal as well as informal groups.
The dynamics within a group is important in every business. A good group is productive at the
level of individuals as well as a group as a whole.
Today groups are digital diverse and dispersed to a higher level than earlier times. But their
success still depends on the core value system.
Stories highlighting the importance of group dynamics:
I Four Seasons Hotel and a fresh croissant -

This is a short story shared by Steve Wynn founder of Wynn Resort and Casino. It is
about a vacation with his family in Paris. They were staying in the hotel - Four Seasons.
They ordered breakfast in the room. His daughter ate half the croissant and left the
other half in the room for later. They went out to explore the city. On return the
daughter was disappointed at not seeing the remaining croissant and assumed that
the housekeeping would have thrown it away.
Soon they noticed a message written by the side of the telephone. It read -that the
housekeeping had removed the left -over half croissant, assuming that they would
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prefer a fresh one. The front desk had contacted the kitchen to set aside a croissant
NOTES
and the room service had been informed to deliver it on request.
The level of group dynamism and communication between the different departments
was magical. All participants understood the end result- customer satisfaction. Each
did their best to make the experience fantastic for the customer. It means that to
achieve satisfaction and delight the employees at the different levels in the
organization, should be empowered to be creative, thorough, intuitive and generous.
II After years of intensive analysis, Google discovers the key to good group dynamics -
Google spent millions of dollars on measuring nearly every aspect of an employee in
the effort to compile the 'perfect team'. In 2012 Google ran " Project Aristotle'.
Through this project they analysed more than 100 active teams at the company. The
People Analytics head concluded that - " We had lots of data, but there was nothing
showing that a mix of specific personality types or skills or backgrounds made any
difference. The 'who' part of the equation didn't seem to matter." They came to the
same conclusion that managers have always known in the best teams, members
show sensitivity, and they listen to each other.
Matt Sakaguchi, a mid-level manager at Google put the findings of Project Aristotle
into practice. He took his team off-site. There he opened up to the members about his
diagnosis of cancer. Initially the people were silent, but slowly most opened up and
started sharing their own personal stories.
This brought out the important concept of ‘Psychological safety' which goes on to
state that the group/team is safe to take interpersonal risks.
Google has since then stressed that in the best groups, all members should contribute
to the conversation equally and respect each other's emotions.
It is less to do with who is in the group; it is more to do with how each member
interacts with the other member!
III This is a story about a self-governed tribal village, where with team work the
villagers brought prosperity and achievement.
In Maharashtra, in the district of Gadchiroli, there is a beautiful village by the name of
Mendha. This village did not accept any facilities from the government. The villagers
got together and built houses, water treatment plants, roads etc by their team work.
These people are well versed in music, medicine and social activities. In the village
they have nurtured a democratic environment. Everyone gets equal opportunity. So
much is possible with effective group dynamic.
8.4 STAGES OF GROUP DEVELOPMENT

There are many different models which study the development of a group. You will learn
about some of them here. You will also understand the various stages that a group has to go
through before it shapes up and forms itself as a group.
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8.4.1 THE FIVE STAGE MODEL

NOTES
The Five Stage Group Development Model was formulated by Bruce Tuckman. Its main focus
is on leadership and on the evolution of behaviour in teams. He brought out that team
behaviour goes through the five stages of -
• Forming
• Storming
• Norming
• Performing
• Adjourning
Before 1960 it was believed that the formation of groups follows the above listed
sequence. However, later it was realized that groups do not follow a standard pattern of
development. The duration of each stage too varies from one group to another, and some
groups may not even pass through all the stages. Groups which emerge successfully after
the stages of development become mature and productive units. These groups confidently
and with ease work through interpersonal tasks and authority concerns to achieve higher
levels. At times demographic diversity, subgroup formation and group conflict at any one
or more stages makes the process of group development rough and unpleasant.
Forming: This is the first stage of group development. There may be uncertainty about
the purpose of the group, its structure and its leadership. The members try to
identify the acceptable behaviour pattern and mould themselves
accordingly. They are not clear about their roles and responsibilities. They
look forward to the leader for guidance and direction to understand the
purpose and the objectives of the group. When the members begin to think
that they are a part of the group, then the development of the group enters
the second stage.
Storming: As the name suggests, this stage is characterised by intergroup conflict.
There may be disagreements amongst the members with regard to
leadership. Members tend to accept the existence of the group willingly but
often resist the constraints on individuality which the group imposes.
Clarity of the purpose of the group increases. Members assess one
another with regard to trustworthiness. Soon a clear hierarchy of
leadership emerges in the group and this takes the group to the third stage of
development.
Norming: This stage is marked by the cohesiveness which grows when close
relationships form among the group members. The members learn the
common set of accepted behaviour patterns. The roles and responsibilities
are clear. Activities towards decision making to enable achievement of
tasks is highlighted among the members.
Performing: This stage is reached after the members have successfully worked through
various issues like- interpersonal relationships, understanding tasks and
authority. The team is capable of taking decisions. It can deal with
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disagreements and resolve issues where and when any change needs to be
NOTES
made to the structure or process being followed. Group now performs the
tasks at hand. There is commitment to achieve goals which were set at the
time of norming. Members at this stage do not need to be instructed. They
can, however, ask for assistance from the leader if need be. This is the last
stage of group development for permanent groups.
Adjourning: After the given task is accomplished all the group members are free to move
on to new and different things. However, many times groups in the
organization remain on the performing stage and do not adjourn; unless the
group was formed for a specific task to be done only. Most members feel
happy when the task is accomplished. Some do feel depressed over the loss
of friendship which was formed. The members work in the direction of
wrapping up activities.
8.4.2 THE PUNCTUATED EQUILIBRIUM MODEL

Temporary groups which have deadlines follow their unique sequence of action. In the group
formation and functioning there are long periods of inactivity combined with brief periods of
activity. In the Punctuated Equilibrium Model the first meeting sets the direction and the
expected behavioural patterns from the group members. This may be followed by inactivity
and inertia. However, when the group members realise that a lot of time has gone by, a
transition takes place and this transition initiates major changes. The group executes the
plans which were made earlier. Another phase of inertia may follow. Then toward the
deadline time another spurt of accelerated activity may be there to complete the task.
You can see long periods of inactivity followed by a period of a lot of activity based on as and
when the members of the group become aware of time and deadlines. This model generally
applies to temporary task groups which have time-constrained completion deadlines.

True or False
Q.1 The Five Stage Group Development Model has been given by Stephen Robbins.
Q.2 In the adjourning stage the focus of the group members is to wrap up activities.
8.5 GROUP PROPERTIES

The properties of groups which work together have properties that shape the behaviour of
their members. This makes it possible to predict the behaviour of individual members. It
also helps to predict the performance of the group itself. Some of the properties of groups
are discussed below.
8.5.1 GROUP PROPERTIES: ROLES

Role is the expected behaviour pattern of an individual according to his/her position in the
organisation. Each one of you plays multiple roles at work and also outside work. Your
behaviour varies with the role that you are playing. Group roles can be understood by
putting them under four heads- a. role identity b. role perception c. role expectation d. role
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conflict.
NOTES
8.5.1.1 Role Identity: Certain attitudes and behaviour patterns are consistent with a
specific role. This creates the identity with the given role. As your role changes, you have to
have the ability to change your attitude and behaviour to identify with the new role.
Example- when you are promoted to a higher level or to another department, your role will
change. so now, you are expected to have a different pattern of behaviour. You need to
understand the new requirement and work towards the new role identity.
8.5.1.2 Role Perception: Your view on how you should behave in a given situation is
called role perception. Employees of an organisation observe, perceive and interpret the
behaviour of other employees. You get stimuli from your surroundings which shape your
perception. Example- In any apprenticeship program, the beginner watches the expert and
the experienced person, and this way learns to act and work the way they are supposed to
act and work.
8.5.1.3 Role Expectation: The way you are expected to behave in the
organization/situation is referred to as role expectation. In an organisation the employers
and the employees have different role expectations from each other. Example- The role of a
senior faculty is viewed as having dignity whereas the role of a young football coach is
expected to be energetic and inspiring to his players.
8.5.1.4 Role Conflict: At times two or more roles which you have to play may have
contradictory expectations. This creates a conflict. It helps to minimise such conflicts. The
group members should understand this demanding situation and work on the roles in the
most manner.
8.5.2 GROUP PROPERTIES: NORMS

In the context of group dynamics, 'norms' are referred to as the standards of behaviour and
performance which is expected of members.
Group norms showcase the beliefs and ideas about the expected patterns of behaviour
which are followed in the group. These may be unwritten and informal in nature, but they are
binding on all members. Norms evolve over a long period of time. Group norms ensure that
the members behave in a consistent, proper and predictable way. They work like the rules
of conduct and guide the members in the expected do's and don'ts while working in the
group. Norms lend a measure of structure, balance and discipline to the activities of group
members. Conformity to the norms is an important aspect of the functioning of the group.
It is seen that groups evolve certain systems of rewards and penalties to press members to
conform to norms. When members conform to these norms, they get rewards like
recognition, security, support, esteem, appreciation and the like. On the other hand, when
there is non-conformity or when behaviour deviates from the expected norms, there may be
penalties like disapproval, social isolation, rebukes, loss of membership etc. depending on
the gravity of deviance levied on the concerned member or members.
Norms may relate to performance-related processes. Appearance norms include dressing
up. Norms which pertain to informal social arrangements control social interactions among
the group members. Example- lunch groups within an organization are determined by the
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informal social arrangement norm. There are norms which regulate the allocation of
NOTES
resources like new tools, equipment, projects, overtime etc.
8.5.3 GROUP PROPERTIES: STATUS

Status is the position or rank given to groups or the members of a group by society. Status of
a person helps you to understand human behaviour. It is a motivator. The people with a
high status in any organisation at times deal with the norms of the organisation as per
their convenience. At times a disequilibrium in status is created when there is a mismatch
between the ranking and the perceived ranking of an employee in an organisation. This
disequilibrium may lead to correction in behaviour.
Status may be derived from one of the three sources mentioned below-
• The power a person wields over others
• The ability of a person to contribute to the goals of a group
• The personal characteristics of the individual
8.5.4 GROUP PROPERTIES: SIZE
Do you think the size of a group impacts the overall behaviour of the group? The answer to
this important question is a definite-Yes. The size of the group does influence the behaviour
of the group at large. Research shows that smaller groups are faster at completing tasks than
larger ones. When it comes to problem solving, research points out that the large groups
consistently perform better than their smaller groups. It can be said that large groups with
approximately twelve or more members help to gain better inputs because of diverse
perceptions of more members. groups of about seven members or so have been seen to be
more effective in taking action.
Social Loafing is an important finding which is related to group size. According to this concept
it has been seen that an individual puts in less time and effort when collectively work is done
in a group as time gets wasted in socializing. When measures to measure individual
performance are not clearly measurable, then a person is not motivated to do his/her best,
as the productivity is rated on the performance of the entire group as a unit. Also, you may
see that when the other group members are lazy, the otherwise active individual also
slackens and indulges in social loafing.
8.5.5 GROUP PROPERTIES: COHESIVENESS

This property refers to the extent to which the members of a group are attracted to each
other and are therefore motivated to stay together in the group. Cohesiveness among the
members directly relates to the productivity of the group. Studies point out that the
relationship between cohesiveness and productivity is affected by the norms related to
performance, which have been established by the group.
When the norms related to performance are high (for example, high output, quality work,
cooperation etc), then the productivity of a cohesive group will be more in comparison to
a group which is less cohesive. At the same time when cohesiveness is high, but the
performance norms are low then the productivity will tend to be low.
To encourage the cohesiveness in the group, you should try to -
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• make the group smaller in size

NOTES
• encourage the members to agree to the group goals
• increase the time that members spend with each other
• increase the status of the group
• stimulate some type of competition with other groups
• give reward to the group as a unit rather than to the individual members
• isolate the group physically
Conformity often is a problem with groups. To deal with this effectively, managers should
encourage the leaders of the group to get input actively from all the members. The
managers should take care not to express too much of their own opinion, especially in the
early stages of deliberation on any issue in the group.
8.5.6 GROUP PROPERTIES: COMPOSITION

A lot of the activities that a group does require a diverse skill set. When the members of the
group have different knowledge levels and skills, they can work together effectively and
attain higher output levels. You can well understand that the heterogeneous group tends to
be more effective. This is true to tasks which demand creativity and cognitive skills.
You should try to make the composition of the group diverse in aspects of personality, age,
gender, educational background, experiences, work specialisations and the like. This
variable is referred to as 'group demography'.
Research also shows that people tend to stay together in groups where members have
common attributes. The differences in group members may lead to difficulties in
communication and interpersonal abilities. Organisations are composed of 'cohorts'.
These are defined as groups in which the members have a common attribute. Example-
all the people born in 1960, have the same age today. So, you can say that they have
shared common experiences.
The composition of the group should be such that it reduces the negative effect of diversity
and at the same time gets the maximum positive effect of diversity among the members.

True or False
Q.1 Norms tell you about the expected pattern of behavior from the group members.
Q.2 When there is diversity in the composition of the group, the availability of different
skill sets makes difficult tasks easier.
8.6 GROUP PROCESSES AND FUNCTIONS:

In the organisation, groups engage in functions which affect the performance and morale of
the entire organisation. Groups are formed to pursue some goals. Certain tasks have to be
done in order to achieve these goals. These tasks vary in complexity, skill requirements and
the like. During the process of working towards the goals co-operation or conflict may
surface between the group members. During the process different roles are assigned to
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members.
NOTES
• Groups partially determine the role expectations of members. They bring out how
members should behave with respect to the position they occupy. The roles may be
task-oriented, relations-oriented or self-oriented. Groups help to clarify, elaborate and
harmonise the roles of the members. By doing this you can see that groups contribute
to the performance and morale of the organisation.
• It has been noticed that at times groups take decisions and solve problems replacing
individual managers. These decisions and solutions tend to be more acceptable,
feasible and pragmatic. When the group takes these steps, it helps to boost
commitment of the group members in the process of implementation.
• You may have often seen that in informal groups, leaders emerge who may be more
powerful and influential than leaders who are formally designated. They easily gain
the acceptance of members. They enable the organisation to manage change, resolve
crisis situations and conflict better. This is indeed very useful to the organisation as a
whole.
• The process of communication and interaction serves to perform organisational tasks
and gives the members a sense of satisfaction. Intra- group and inter-group interaction
and communication enhance cohesiveness and unity in the organisation. When the
level of group cohesiveness and unity in groups is high, it leads to greater performance
and satisfaction.
• To help the members conform to the norms which are developed, groups fix rewards
and penalties. When the patterns of expected behavior and norms are followed well,
you can see that the performance and effectiveness of the group will converge into
the sustained high performance of the organisation.
8.7 LET US SUM-UP
Workgroups give social identity to people. The behaviour of the group as a whole, impacts
the performance of the members at work. The nature of groups may be formal or informal.
The formation of the group is well brought out by the Five Stage Model and the Punctuated
Equilibrium Model. Properties of groups help you understand the roles, norms, size,
composition and the like of the group. Group tasks are characterized by varying levels of
complexity and interdependence of the members.
8.8 KEY WORDS

Group: Two or more people who have a common interest and continuing interaction.
Group dynamics: this refers to the attitudinal and the behavioural characteristics of the
group.
Formal Group: A designated work group which is defined by the Organisation.
Informal Group: This group appears in response to social contract. It is neither formally
structured nor defined by the Organisation.
Synergy: It is the positive force within a group through mutual influence and
encouragement.
Social Loafing: This refers to the failure of a group member when he/she is unable to
contribute personal time, effort, resources etc to the group as a whole.
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Norms of Behaviour: These are the standard rules of behaviour set by the group for its
NOTES
members.
Brainstorming: This is a technique used to freely generate ideas in a group from the
members. These ideas are evaluated at a later date and time.
8.9 UNIT END QUESTIONS MULTIPLE CHOICE QUESTIONS

Q.1 Which of the following would be considered a formal group?
a. task force for employee birthday celebrations
b. reading group
c. football team
d. bringing people from functions to solve a business dilemma
Q.2 Which of the following statements about groups is true?
a. You need five or more people to be considered a work group
b. The definition of groups suggests that a group is two or more people together
c. Groups can be either formal or informal
d. Formal groups are aimed at social agendas
Q.3 Which of the following is not a formal group?
a. task force
b. cross-functional teams
c. business unit alliances
d. command groups
Q.4 are work groups which are established by the organisation That have designated work
assignments and clearly specific tasks allotted to them.
a. formal groups
b. informal groups
c. tasks group
d. cross-functional groups
Q.5 The stage in group formation is said to be complete when members begin to think
themselves as part of a group.
a. performing
b. norming
c. storming
d. forming
Q.6 Group development is ---.
a. necessary if individual performance is to be maximized
b. an ever-changing process
c. the result of leader behaviour
d. maximized when the performance of the individual group member is maximized.
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Q.7 A good group decision approach is when the objective is to maximise the number of
NOTES
alternatives is —
a. brainstorming
b. dialectical inquiry
c. Delphi technique
d. nominal group
Q.8 An emergent group is known as group.
a. formal
b. assigned
c. informal
d. temporary
Q.1 F
Q.2 T

Q.1 F
Q.2 T
Q.1 F
Q.2 T
Q.1 T
Q.2 T
ANSWERS TO UNIT END QUESTIONS
Q.1 d
Q.2 c
Q.3 c
Q.4 a
Q.5 d
Q.6 b
Q.7 a
Q.8 c
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NOTES
1. Robbins, S. P., & Judge, T. A. (2013). Organizational behavior (Vol. 4). New Jersey:
Pearson Education.
2. Fred Luthans, Organisational Behaviour,12th edition, Tata McGraw-Hill Education
Private Limited, 2013, New Delhi.
3. John. W. Newstrom, Organisational Behaviour12th edition, Tata McGraw-Hill
Education Private Limited, 2007, New Delhi.
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UNIT 9
Interpersonal Conflict
NOTES UNIT 9
INTERPERSONAL CONFLICT
STRUCTURE
9.0 Objectives
9.1 Introduction
9.2 Classification of Conflict
9.3 Sources of Conflict
9.4 The Conflict Process
9.5 How to Reduce Interpersonal Conflict
9.6 Styles of Conflict Management
9.7 Negotiations
9.8 Let Us Sum-up
9.9 Key Words
9.12 Answers to Self Assessment Question
9.13 Reference and Suggested Additional Readings
9.0 OBJECTIVES
• To understand about conflict and why it happens
• Understanding the different kinds of conflict
• Learning about the sources of conflict
• Understanding Interpersonal conflict
• Learning ways to handle interpersonal conflict
Let’s start by understanding differing perceptions of people through a simple story! "
MARKET FOR SHOES"
(Author- Unknown)
Once a Shoe Company wanted to expand its business. The people heading the marketing
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department decided to send a team of marketing professionals to understand and assess the
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market feasibility of this idea. The team was sent to a remote part of the country. After
NOTES
research and study the team returned. The report they sent said-" There is no need to try and
expand here, as there is no market of shoes in this remote, small poor country because no
one wears shoes.”
Another Shoe Company too had sent its marketing team to the same country. After a study
their team reported, " There is a great potential to expand the shoe market here, as presently
no one wears shoes!”
(On introspection you can realize that perceptions can be so different in the real world. Often
it is these differences which sow the seeds of conflict in organisations and social
relationships. There is a need to recognize them and work around them instead of creating
confrontations and unpleasantness.)
9.1 INTRODUCTION
A psychologist said-" We are what we are only in relationship to the other person we are
interacting with." This profound statement highlights the significance of interpersonal
relationships. One-to-one dealing is important as this is what sets into motion events which
affect the whole set-up.
Organisations have people who have divergent personalities, value systems, beliefs and
perceptions. Most of the problems that create a barrier to the effective functioning of
organisations are 'people' problems. Lack of trust, self-centeredness, deceit, non-
cooperation, unfriendly atmosphere and the like, may lead to distortions and breakdown of
the environment within the organisation.
These people with divergent views work on unequal levels and varying degrees of status,
which brings in competition. Too much competition gives rise to conflict as people have
limited resources to accomplish the assigned goals. It can arise from multiple sources.
Conflict in an organisation can be compared to wildfire; it has to be controlled and put out
timely or else the organisation may be seriously disrupted.
Conflict is a general term that pervades different types of situations which involve
individuals, groups or organizations. It is a feature common in groups and organisations. One
has to learn ways to minimize it and synergise when working together.
9.2 CLASSIFICATION OF CONFLICT

What is a conflict?
A conflict refers to a gap, disagreement over a tense issue. It is created by competition
between two or more people or groups of people. The inability to understand the view point
of the other side may often be the root cause of the conflict.
(a) Horizontal Conflict- this occurs between groups /departments which are placed at the
same level in the hierarchy of the organisation. In such situations horizontal
coordination helps to reduce conflict and achieve collaboration.
(b) Vertical Conflict- this is the conflict which happens up and down the scalar chain, that is
conflict amongst higher and lower departments/groups in the order of hierarchy in the
organisation. The issues of conflict could relate to matters of discipline, allocation of
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resources, work methods, remuneration and the like. The distribution of power plays
NOTES the key role here. It is important that the seniors do not mishandle the power they
get over the ones who are place at lower levels of power.
Intra-individual / intra-personal, intra-group and intra-organisational conflict implies those
situations which are conflicts within the individual or within the group or organisation, as
the case may be.
Conflict can be classified under three main heads-
• Individual Conflict
(a) Inter-individual conflict
(b) Intra-individual conflict
• Group Conflict
(a) Inter-group conflict
(b) Intra-group conflict
• Organisational conflict
(a) Inter-organisational conflict
(b) Intra-organisational conflict
9.2.1 INDIVIDUAL CONFLICT
These are conflicts which occur among individuals. They can happen over any type of issue.
At times the conflict begins over a very small issue but may take an ugly big shape.
Interpersonal or inter-individual conflict refers to a conflict between two or more
individuals. These conflicts are marked by polarised points of view held by the two sides.
These individuals are intolerant of ambiguities, and they ignore the delicate shades of grey
in the situation of conflict. They tend to be quick to jump to conclusions.
Example- Two boys fighting for the same movie ticket.
Example-Two managers who are competing for the same promotion.
Intrapersonal or intra-individual conflict is the conflict which happens within an individual.
You may have noticed that at times the goals of the organisation are in conflict with the goals
of some employees. This causes frustration in the minds of the concerned individuals. often
there is very little space a person gets for creativity in the work-place. He/she is confused
with the introspection of thoughts within and the conflicting demands of the external
environment. 'To do or not to do', is a difficult question which needs a decision. Sometimes
there is intrapersonal conflict when the person is confronted by two or more competing
goals or when the goal desired has both the positive and the negative aspects to it.
9.2.2 GROUP CONFLICT

Intergroup conflict mostly happens over resources, authority and jurisdiction. The various
departments of the organization compete among themselves for the allocation of the
limited resources of the organisation. They compete for power. The groups differ in goals,
power, prestige and work. It is in these differences that the seeds of intergroup conflicts are
sown. Some of the common reasons for group conflicts are-
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interdependence.
NOTES
• Resource allocation- resources symbolise power and are the means to accomplish
goals. The allocation of resources is often a cause of conflict in groups.
• Competitive incentives and rewards- Whenever tasks have to be done in individual
capacity, incentives and rewards work very well. But you have often seen that many
times tasks are interdependent; it is in such cases that competition, incentives and
rewards may create conflict among the members and undermine performance.
• Line and staff conflicts- The differences between line and staff lead to a lot of inter-
group conflict. These conflicts are mainly because of dividing authority, expertise and
roles. You may have experiences that very often the line people think that the staff
people are highly academic, view themselves as experts but have untested ideas and
lack experience. The staff people, however, look at the line people as being bull
headed.
• Differences in perceptions, beliefs and values- The differences in perceptions, beliefs
and goals often lead to differences in goals among members of the different
departments of the organization.
• Heterogeneity of group members- The differences in background, age, education,
culture and the like are reasons which make the group heterogenous. This decreases
the interpersonal rapport and the level of collaboration between the various
departments of the organization.
• Distortions in communication- Sometimes communication may be unclear or
inadequate. This may give rise to conflict as the members do not understand the job
required by them.
• Participative decision making- In this situation, there is opportunity to express the
existing disputes. This has a tendency to increase the differences. Instead of facilitating
cooperation and coordination, joint decision making or participative decision making
sessions land up adding to disagreements and the level of conflict increases.
• Low formalization- You have seen many times that when situations are not subject to
rules and regulations; formalization is less. This may lead to conflict between
departments.
Intragroup conflicts refer to the disputes which take place among some/all the members of
the group. These conflicts take away from the effectiveness of the performance of the group
as a whole.
9.2.3 ORGANISATIONAL CONFLICT
Inter-organisational conflict refers to the conflict which happens between two or more
organisations. Competition, takeovers, mergers and acquisitions produce inter-
organisational conflict.
Intra-organisational conflict is the conflict within the organization.
AN INSIGHTFUL LEARNING !
In 1949, a German reported the findings of an experiment-
' Some psychology students were given puzzles and issues relating to human relations which
had to be discussed in groups. Two types of groups were formed.
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(a) Co-operative group- here the students were told that the grade each one got would
NOTES depend on the work of the group as a whole.
(b) Competitive group- here the students were told that each student would be graded in
accordance with his/her individual effort.
There were no significant differences in the level of interest and involvement of the
students or the amount of learning between the two kinds of groups. When both the groups
were compared, it was noticed that the 'co-operative group' had a greater level of
productivity per unit of time, greater sun-division of activity, better coordination, better
quality of discussion, more diversity in the amount of contribution per member, more
friendliness and attentiveness in their attitude towards members than the 'competitive
group'.
(This learning is leveraged by companies and institutions at selection and recruitment times
to gauge the cooperative and the competitive traits in the personality of potential
candidates.)

State True/False
Q.1 Internal conflict means the type of conflict that is outside. Ans.
Q.2 External conflict means the type of conflict that is outside. Ans.
Q.3 You are playing sports with some friends. One of them is not playing a fair game and
you do not like it. This is an example of interpersonal conflict.
Ans.
Q4. You are trying to lose weight and there is a cake in your fridge. You are unsure as to
whether you should eat it or not. This is an example of personal conflict.
Ans.
Q.5 You are in a class and your friends are laughing at another student. You think this is
unfair, but your friends encourage you too to laugh. This is interpersonal conflict.
Ans.
Q.6 You find a wallet with money in it. You are not sure whether you should keep it or hand
it over to the police. This is an example of intra personal conflict.
Ans.
9.3 SOURCES OF CONFLICT

“Courage is what it takes to stand up and speak; courage is also what it takes to sit down and
listen.”
This is a famous quote by Winston Churchill.
A conflict may occur whenever two or more individuals or groups differ in their objectives,
goals and achievements. At times conflict may also arise when mutual agreement is not
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there over an issue. Some of the common factors are-

NOTES
• Personality clashes: Failing to understand the differences in the personalities of
people who you work with can cause conflict.
• Organisational change: You may have seen that employee of an organisation
generally differ in their views with respect to the structure, style of management,
technology platforms used and the like, within an organization. This has the tendency
to create differences in opinion and lead to conflict among the employees.
• Threats to status: Sometimes conflicts arise when you feel that the spoken words or
actions of another person may affect your reputation in society/
organisation/institution in an adverse manner.
• Differences in values: The chances of conflict happening increases, whenever people
holding contradicting value systems and beliefs interact with one another.
Mason Haire said, "It seems clear that labour and management differ very widely in their
perception when they confer with one another. Labour sees itself and management so
differently and management sees itself and labour so differently, that although there are
only two people in the room, four people seemed to be involved in the conversation.”
This highlights the extent of variation in perception of people regarding the same situation!
It will lead to conflict as the people concerned look at things so differently! This is so, as
the management will always want the maximum work with the minimum wage; and the
labour will want maximum pay/compensation for the work done. The two are placed at
opposing sides naturally.
9.3.1 INTERPERSONAL CONFLICT

9.3.1.1 FUNCTIONAL VERSUS DYSFUNCTIONAL CONFLICT-
You may be surprised to know that all types of conflict are not bad. At times managers
encourage some conflict within the organisation for the positive effects it can bring.
(a) Functional conflict- this may give new solutions to problems. It enhances creativity in
the organisation and pushes people to think up out of the box ideas and solutions. It
promotes learning and growth in the individuals. Even though the parties have
disagreements and a conflicting situation, they accomplish something together.
Working together in this way binds them, releases tensions, boosts energy and
translates into an increase in productivity.
(b) Dysfunctional conflict- this is the conflict which is unhealthy. The disagreements which
take place between the two parties are destructive in nature. The focus from work
moves to focus on the conflict and the parties involved. It drains energy and is
unpleasant.
9.3.1.2 DIFFERING PERCEPTIONS CAUSE CONFLICT
Your eyes are not the cameras of television nor are your ears tape-recorders. Tremendous
filtering is at work. You see this and you don't see that; you hear this and you don't hear that.
Perception is at play. Perception is a very active process. It takes shape by your interests,
needs, past experiences. It is also influenced by your value system, culture and your physical
and emotional state. Your expectations also play a role in moulding your perception. There
are so many dynamic factors which help you make sense of your environment. To a very large 147
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degree you see and hear in accordance to your choice. Your perception can be very selective.
NOTES
You understand that if your perception can be so selective, in the same manner the
perception of another person regarding the same situation too can be selective and
therefore so different.
This is the root cause of conflict. You will act on the judgement and decision based on your
perception while the other person’s action will depend on his/her perception. Differing
perceptions cause conflict! Individuals notice the environment differently, their viewpoints
are a result of their own experiences, needs and values. This is why perception is so different
for different people. When they have so many different viewpoints, often these points of
view will not match and therefore conflict will arise.
Let us look at some aspects of different perceptions/viewpoints-
• VALUES: People value different things. Example- an entrepreneur values freedom
whereas workers value job security.
• ATTITUDES: People have different behavioural tendencies. They differ in feelings and
beliefs. Example- the attitude of labour leaders and industrialists towards
any labour law reform is bound to be different.

• INFORMATION: You may have noticed that the information which people have on a
matter varies as per the department and seniority they are placed in. This logically
will make them view events differently.
• NEEDS: It has been seen that hungry children draw bigger pictures of food in
comparison to well fed children.
• INTERESTS: The artist will look at a picture differently than you or me.
• PSYCHOLOGICAL TYPES: The approach of people is different with regard to gathering
information, making judgements, directing their attention. The general approach
towards life differs from one person to another.
• STEREOTYPES: The image you have of someone or of some group changes according
to the relationship you have with them.
• EXPERIENCE: The experiences which you have had earlier in life will shape your
present viewpoints.
• EXPECTATIONS: If you were to see a black paper with white print, it is bound to baffle
you as it does not follow your expected way of writing.
HALO EFFECT: At times you tend to look at someone with a very positive feeling and
inclination.
• HORN EFFECT: This is the opposite of halo effect. For no real reason you may not like a
person, or may dislike him/her.
• CULTURE: The interpretation of symbols and gestures varies in different cultures.
• PERCEPTUAL DIFFERENCES: Conflict may arise when people believe that whatever
they perceive is really true despite the actual situation; then they will block
themselves to the ideas coming from the other people. This situation has the
tendency to lead to conflict.
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9.3.1.3 CONSEQUENCES OF CONFLICT

NOTES
It is a common belief that conflict is undesirable and you must try your best to avoid it.
However, some thinkers believe that a certain amount of controlled conflict is helpful in
avoiding myopic decision making and stagnation in organisations and groups. Often it has
been seen that by permitting disagreements and criticism many assumptions are
challenged; this leads to better quality decisions for the organisation.
Positive Consequences-
• It leads to new ideas
• Motivates change
• It can serve to indicate problems
• It stimulates creativity
• It promotes vitality within the organisation
• Helps individuals and groups to establish identities
Negative Consequences-
• Wastes resources
• It diverts energy from work
• It creates a negative environment in the work-place
• It tends to threaten mental well-being of people
• It breaks the cohesion of groups
• Tends to increase the aggressiveness and hostility in behaviour patterns
CASE-LET
Think about it...
Sweet Lime is a company which produces a yellow lemon drink concentrate. The inventory
department decided to work on the 'Just-in-Time’ system of inventory. They did not maintain
stocks but got them as and when required in the process of making the lemon concentrate.
Last month due to the negligence of the suppliers, the raw material arrived two days late. As
a result of this incident, the production department had to incur considerable loss of time
and money.
This incident led to a conflict between the inventory and the production department. The
production team wanted the conventional method of maintaining stocks was the desired
approach. But the inventory department saw logic in the 'Just-in Time' way of managing
the work.
You need to think out the way...
State True/False
Q.1 Conflict takes away energy and focus from work
Q.2 Halo-effect happens when you dislike someone for no reason
Q.3 When people with different value systems work together, the possibility of conflict
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arising is more
NOTES
Q.4 The positive effect of conflict is that it does not generate new ideas
Q.5 Differences in perceptions is a common reason for conflits to happen
Q.6 The interpretation of signs and symbols is the same in all cultures
9.4 THE CONFLICT PROCESS

To understand interpersonal conflict better, you should learn about the process of conflict.
There are five stages in it.
Stage 1
Potential opposition or incompatibility- In the first stage of conflict, there is bound to be
some condition, because of which conflict may surface at some later time.
This could be in the category of- communication, structure or any personal variable.
(a) Communication- There are some people who are easy to communicate with and
some who are not so. Communication is a possible reason for misunderstandings and
barriers to clear information taking place between people. Too little or too much
communication; both have the potential of creating conflict.
(b) Structure- refers to variables like size of the organization, degree of specialization
required to do the tasks. The leadership style, interdependence between groups,
reward systems and the like, make a lot of impact to the working of the organization. It
has been seen that the chances of conflict are greater when the turnover is high.
(c) Personal variables- This has variable factors like personality, emotions and values. You
must have seen that certain personality types which are highly authoritarian and
dogmatic often lead to potential conflict. Emotions too can lead to conflict.
Stage 2
Cognition and personalization- The potential of incompatibility gets actualized in the second
stage. It is at this time that the issues of conflict get defined. The parties decide the issue of
conflict. Emotions play an important role.
Stage 3
Intentions- In this stage you have to infer the intent of the other party to understand how it is
best for you to react to their behaviour. A lot of conflict happens when one party attributes
the wrong intentions to the other.
Stage 4
Behaviour- In this stage the conflict actually gets visible. The statements, actions and
reactions made by the conflicting parties are in the forefront. This stage marks a dynamic
process of interactions.
Stage 5
Outcomes- The outcomes are the consequences of the process of conflict. In case the
conflict results in an improvement of the group's performance, the outcome is called
Functional Outcome. If the outcome is such that it hinders the performance of the group, it
is called Dysfunctional Outcome.
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9.5 HOW TO REDUCE INTERPERSONAL CONFLICT

NOTES
"It is as naive to expect that you will like all your co-workers; as it is to expect that all your co-
workers will like you!"
Understanding each other, learning to work together is necessary.
You can say that conflict creates a competitive environment; but this is true to a very limited
extent. Conflict, if prolonged is detrimental to the organization as a whole. The process of
negotiations is often used to resolve conflict.
You must have at times experienced trouble in getting along with others. Interactions may
have caused misunderstanding and conflict. Here are some points to reduce interpersonal
conflict-
• It is best to confront interpersonal conflict. Denying it or avoiding does not help.

• Try to get people to share their expectations with each other in the group.
• You should understand that differences in background, experiences and motivational
level will get people to view the same situation differently. To realize that people have
different ways of looking at and perceiving situations, interactions and people is a
given fact.
• You should be very careful of self-fulfilling prophecies. This makes people behave in
accordance with the prophecy made unintentionally only to prove the point.
• Often people have mixed or negative feelings towards senior people. It is for the senior
to realize that the negative emotions are not personal, but more because of the
authority vested in him/her. They should try to absorb some amount of the negative
feelings in a non-defensive manner.
• When you are hurt or upset or annoyed with someone, it is better for both parties if
reasons for such feelings are shared. Disregarding and suppressing them may escalate
the issues and injure or dampen the relationship.

True/False
Q.1 Outcome is the final stage of the process of conflict.
Q.2 The process of negotiation does not help to resolve conflict.
Q.3 Prolonged conflict is not detrimental to the growth of the organization.
Q.4 It is natural that you like all your coworkers and that they like you.
Q.5 In the Functional outcome of conflict, the group moves towards better performance.
Q.6 In Dysfunctional outcome of conflict the group's performance drops.
9.6 STYLES OF CONFLICT MANAGEMENT

There are many styles which managers use to manage conflicting situations in the
organisation.
• Avoiding- This style of conflict management emerged when power struggles among
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executives and massive changes in the structure of organisations took place. Avoiding
NOTES is when you decide to take no action on the conflicting issue or even choose to stay
out of it. There is hope that the conflict will subside itself. It is also a way to give people
time to cool down and regain perspective.
• Accommodating- In this style of management of conflict, one is primarily concerned
and focused that the other party gets its goals. You are more concerned about the
welfare of the other over your own welfare and goals. In other words you
accommodate and allow the situation to help the other party.
• Competing- managing conflict by competing is a very uncooperative style. In this way
you are out to satisfy your interests even at the expense of the other party.
This style leads to maximize relationship conflict. Whenever the situation demands
quick action, like in an emergency situation, this method is used. When an unpopular
decision has to be implemented, example - cost cutting, enforcing discipline or
unpopular rules, competing style works best.
• Compromising- In this style, both the parties have to give up something in the conflict
to be able to reach the decision. It lies between assertiveness and cooperativeness.
When effort towards collaboration are not successful, then compromise is done.
In this the party surrender's its position to come to terms. Compromise is not the
optimal way out and may therefore be temporary in nature.
• Collaborating- When the concerns of both the parties are too important to
compromise on, collaborating is done. It merges insights from people with different
perspectives. Through this style it is possible to incorporate concerns into consensus.
It is indeed a win-win style with assertiveness as well as cooperativeness built into it.
It requires open discussions of the conflict and the proposed solution. The behaviour
of the people of both the parties has to be trusting. Information should be shared for
the benefit of both parties. In the long- term collaborating improves relationships and
enhances performance.
9.7 NEGOTIATION
Negotiation is a process in which two or more parties exchange services or goods and tend to
agree on the exchange rate/terms.
The process of negotiation can be divided into five steps for ease of understanding.
• Preparation and planning-
In this step the people must know the facts about the economic, legal or political issues
which are relevant. Good preparation is needed to negotiate deals better.
Prepare on (a) self-assessment (b) assessment of the other party (c) assessment of the
situation. You should know what is the best you want in the situation.
The negotiator must understand the ' Best Alternative To a negotiated Agreement '
(BATNA).
Your BATNA enables you to understand the lowest value which should be acceptable
to you over a deal being negotiated. It is clear that to make the deal with the other
party come through, you have to Make the offer more attractive than their BATNA.
• Forming the ground rules- The rules for the negotiations have to be formulated in
consultation with both the parties. In these rules clarity is given on issues like- where
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will the negotiation take place, who will do it, what issues will it be limited to, what
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are the time constraints and the like.

NOTES
• Information exchange- In this step, each side tries to get information about the other.
Questions are asked and the terms which have to be addressed are
determined. Participants try to find out the preference of items which each side holds
important. This stage focuses on clarifying and justifying the demands initially put
forth.
• Bargaining and problem solving- This stage is characterized by what each party wants
and what each is willing to give to the other side. Now they have entered the
distributive stage.
• Closure and implementation- This is the end of the bargaining. The negotiations are
done. Agreement is reached. This agreement is formalized and procedures for
implementing and monitoring it are developed.
9.8 LET US SUM UP
Conflicts arise when there is disagreement among two or more individuals over the
achievement of some common goal.
Conflict involves behaviours which are incompatible. In conflict there is one or more than
one person interfering and disrupting, thereby making the others’ actions less effective in
some way or the other. There are many factors which may lead to conflict - organisational
change, perceptual differences, personality clashes, threats to status, differences in
values and the like. Differences in personality and the way people look at situations due to
the experiences they have had, make different mind-sets.
The process of conflict goes through- incompatibility, personalisation, intentions, behavior
and finally the outcomes. There are many styles which managers use to manage conflict in
organizations. There are many ways in which conflict is managed.
9.9 KEY WORDS

• Conflict- It is a process which starts when one party feels that the second party is
negatively affecting something that the first party cares about.
• Intrapersonal conflict- This refers to the conflict that happens within an individual.
Like before making a decision as to which option to choose.
• Interpersonal conflict- Conflict between two or more individuals.
• Functional conflict- This is a healthy constructive disagreement between two or more
people.
• Dysfunctional conflict- This is an unhealthy, destructive disagreement between two
or more people.
• Negotiation- This refers to the process where two or more partied exchange some
good or service and agree to the terms of exchange for the same.
• BATNA- The ' Best Alternative To a Negotiated Agreement'. This refers to the lowest
acceptable value to an individual for an agreement which has to be negotiated.
9.10 SELF ASSESSMENT QUESTIONS MULTIPLE CHOICE QUESTION
Q.1 Any situation in which the ideas or interests go against one another is called ...
a. conflict
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b. emotion
NOTES
c. empathy
d. anger
Q.2 A willingness to see the other person's point of view is referred to as ...
a. empathy
b. conflict
c. emotion
d. fantasy
Q.3 When you have two choices, and you are not sure which one to pick; this situation is
called ...
a. internal conflict
b. external conflict
c. tough
d. tension
Q.4 A solution to a conflict in which both sides give up something is called ...
a. anger
b. violence
c. conflict
d. compromise
Q.5 When the meaning of behaviour or language may be misunderstood, it is a ... conflict.
a. preferences
b. resources
c. communication
d. complex
Q.6 Usually there is/are ... sources to any given conflict.
a. distinct
b. single
c. multiple
Q.7 In interpersonal conflict the reality understood by each participant is highly ...
a. personal
b. subjective
c. biased
d. objective
Q.8 One can infer attitudes and make judgements about people and things through ...
a. perception
b. stimuli
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NOTES
Q.9 There are ... styles of managing conflict in organizations.
a. one
b. twenty-three
c. five
Q.10 Functional conflict enhances ... within the organization.
a. anger
b. creativity
c. frustration
d. perceptions
Q.1 False
Q.2 True
Q.3 True
Q.4 True
Q.5 True
Q.6 True
Q.1 True
Q.2 False
Q.3 True
Q.4 False
Q.5 True
Q.6 False

Q.1 True
Q.2 False
Q.3 False
Q.4 False
Q.5 True
Q.6 True
Q.1 a
Q.2 a
Q.3 a
Q.4 d
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Q.5 c
NOTES
Q.6 c
Q.7 b
Q.8 a
Q.9 c
Q.10 b
1. Robbins, S. P., & Judge, T. A. (2013). Organisational behavior (Vol. 4). New Jersey:
Pearson Education.
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UNIT 10 NOTES
POWER AND POLITICS
STRUCTURE
10.0 Objectives
10.1 Introduction
10.2 Power and its importance
10.3 Sources of Power and Influence
10.4 Responses to Power and Influence
10.5 Understanding Organisational Politics
10.6 Political Landscapes
10.7 Organisational Justice
10.8 Let Us Sum Up
10.9 Key Words
10.11 Self Assessment Questions
10.12 Check Your Progress- Possible Answers
10.0 OBJECTIVES
• Understand Power
• Know the sources of Power
• Understand how to navigate power
• Manage Organisational Politics
• Understand Organisational Justice
10.1 INTRODUCTION
Power and politics are among the most important, yet incomprehensible, concepts in
organisational behavior. When you hear the words power and politics, you always want
power.
If you say you don't want power you may be missing out on important opportunities.
Without power and influence you will not work well in organisations.
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If you want to do things, you must be able to influence others. And the influence comes from
NOTES
political power and ability. Being involved in power and politics is not something that most
people think. As you will read in this unit, the key is building self-reliance while expanding
the power of those around you.
10.2 POWER AND ITS IMPORTANCE

“The fundamental concept in social science is Power, in the same sense in which Energy is the
fundamental concept in physics.” Bertrand Russell
Individual or group’s ability to influence or exercise control on another person or group is
known as power. In organisations, it is often associated with the management of the
resources that others need, such as finances, information, decisions, etc. It is said that power
derives from high positions, since the executives are placed at positions with the authority,
they are powerful. But this may not hold true always. Imagine a supervisor who is less
effective as no one listens to him or her, or the teacher is not able to exercise control over his
or her class? A person is powerless, if others do not agree to his/ her authority. In other
words, power is imperfect. It should be given to others who are willing to be influenced, this
results in social power in the organisations. Social power is the power where a person is able
to influence others in social relationships. Public power is gained through relationships, and
if not used appropriately it can be taken away. Employees take away the power of
management if they do not act respectfully or badmouth managers to others in the
organization.
POWER AND DEPENDENCE

The basis of Power is dependency. By dependency, it means that a person or group’s wants,
or needs are dependent on another person or group. Organisational dependence is often
related to access to other people's needs, that can be information, resources, and decision-
making. This may be a prominent reason that the CEOs of an organisation are often the ones
with the necessary skills (e.g., powerful managers, high-level vendors, trained
professionals). Power in organisations is also related to strategic decision-making tasks
such as budgets, schedules, operational reviews, organisational strategy, and so on. We have
to deal with dependency in order to manage power by increasing others' dependence on
us and reducing our dependence on others, which creates potential. People reduce
addiction by keeping options open, e.g. other work. We reduce dependence on employers
by not taking money too seriously, which can make us more dependent on an
organization for survival.
In addition, we reduce dependencies and increase strength and self-control by eliminating
the power of others over us. Some power over us is by choice.
THE PROBLEM OF POWERLESSNESS

Perception of powerlessness is the major challenge linked with power and dependence. Lack
of autonomy and reduced participation may make a person feel powerless. Imbalances in
power can make the person feel that he/ she has to follow others and there is no option left.
You start feeling that you cannot exercise any control over your work processes.
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Powerlessness also reflects in your body language. You become angry, frustrated, anxious
NOTES
and the opposite happens if you feel powerful. Contrary to the popular belief, the crisis in
organizations is not power, but powerlessness, which implies that to achieve power and use
it responsibly, you should work upon increasing the power of others instead of reducing it
to a few.
POWER AS AN EXPANDING PIE

The idea that social power is an expanding pie is the basis of the ongoing trend in
organizations of empowerment. Empowerment involves sharing power, knowledge, and
rewards with employees making decisions and resolving problems in their work. Considering
the power held only at the highest levels in the traditional pyramid of organisations, this view
assumes power as something that can be distributed in the organization having flatter
structure. When managers empower others, they also empower themselves by finding more
dedicated and hardworking employees. Though empowerment is very difficult to achieve in
an organization as it requires people to change their perceptions of power away from being
a zero game. A zero-sum game means that one person's gain is equal to another person's
loss ("I win, you lose"). It stands for the belief that “to gain power, you must lose power.
“In the zero sum game you lose power over time because increasing your power while
others lose power leads to power imbalance. When the power imbalance worsens, it
causes the rising power to take power away to regain balance. This is known as the Iron Law
of Responsibility. An example is when lobbying parties work to seize organizational power
by breaking the rules. The notion that powers is attuned to the forces of nature is also
embodied in the theory of psychology, which states that human’s rebel against issues and
efforts to control their behavior. The extent to which we do this varies, but for some of
us, when we feel empowered, it can cause us to drift backwards in an effort to maintain our
independence — perhaps without realizing it! The ideas of empowerment, therefore,
change our perception of power from a focus to “power” to others and to “power to
others”. It recognizes that the more power we have over others, the more power we will
have over ourselves (e.g., treat people with respect and they will respect you).

Q.1 Power is known as a:
a. “capacity to influence another person or a group to accept one’s ideas or plans
b. “inability to influence another person or a group to accept one’s ideas or plans
c. “capacity to influence one’s ideas or plans
d. “inability to influence one’s ideas or plans
Q.2 Power is a function of structure, as you gain power owing to your position in the
organization, and this provides access to:
a. people, information and financial resources
b. physical resources, information and financial resources
c. people, physical resources and financial resources
d. people, information, physical resources
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NOTES
10.3 SOURCES OF POWER AND INFLUENCE
John French and Bertram Raven identified five types of power bases which may broadly be
classified into position power and personal power. Position power is derived from a position
or authority arising from a hierarchical set up; higher official rank or authority given to a
certain role or position. Personal power, on the contrary is not dependent on position or
authority. The power of relationships with others rather than any position. This is power that
resides within the individual.
You can imagine that the power of a person with his/her position rests with the position only
once the position is gone the power also goes on the other hand when a very good manager
or teacher leaves a vacuum is created it is because they had great personal power.
Position Power
Position power in organisations can be divided into three types: legitimate power, reward
power, and coercive power.
a. LEGITIMATE POWER
Power arising out of legitimate position in the organization is called Legitimate Power. It
is the belief that those in certain positions may suspend operations as they have the legal
right to do so and those who are reporting to them have a legal obligation to comply.
Managers in organisations wield authority while subordinates are expected to follow suit.
Managers who are dependent solely on legal power are unlikely to be strong in the long
run. Because they think of themselves as “the wielder” only to later find out that others
are unwilling to go along with them. Simply the administration of authority can create a
level of power that separates managers from employees, and the excessive use of legal
power is often supplemented by high-level thinking in organisations. Consequential
assumptions occur when high-level systems create high-level positions between
managers and lower staff. It may result in problems as people holding such powers will
not allow flexibility which may hamper thriving of the organization.
b. REWARD POWER
It arises from the ability to manage results with positive valence (e.g., provide positive
rewards) and to eliminate or minimize effects with negative valence (e.g., eliminate negative
rewards). These rewards include monetary rewards, promotions, praise, enriched jobs.
Rewards will work only when they are considered equal. Issues related to reward power arise
when it does not go as per the expectations of the employees.
c COERCIVE POWER
The assumption behind coercive power is, a person will be punished if he or she fails to
comply with the persuasive attempt. Threat or punishment is involved with this power. You
must have heard people while using coercive power, may threaten the other person with
transfer, demotion, or suspension if there is no complying. Withholding salary increases or
threatening to do so can also be a form of coercion used by the managers. Sometimes it
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is required to use coercive to address operational or behavioral issues, but if it is not used
NOTES
carefully and appropriately, it can weaken the quality of relationships., organisations create
policies to protect employees from abuse of coercive powers.
PERSONAL POWER
The power that resides within the individual and comes from personal qualities such as a
person's reputation, charm, intellectual ability, perceived value, and the right to be
respected by others. It resides in a person and not in a position, it is there with anyone in the
organisation, not just with those in official or administrative positions. Sources of personal
power include expert power and referent power.
Expert Power It comes with special skills and abilities. It includes knowledge, experience, and
judgment. An individual's performance record is determined over time. The importance of
a professional environment is also greatly influenced. Interestingly expert power is not
absolute but relative. Example: If you are a good software engineer, you will continue to
remain, until an expert joins your organisation.
Referent power is one’s ability to alter another’s behavior as the latter is identified as a
source of power. Identification acts as a source of referent power because it causes
individuals to want to behave, believe, and perceive in ways like the leader. Individuals
having referent power enjoy respect and are always looked up to by others. Referent power
can be variable. To enjoy referent power, executives are under pressure to continue being
exemplary and match with expectations.
d. INFORMATION POWER
The Power of information is very close to expert power. Managing or accessing valuable
information wields a lot of power. A person holding a position also has information power
by virtue of his or her position. Example a manager being a part of the chain of command has
all the information. Or it may come from informal networks and personal relationships
with people who have access to information.
Information power should be used with great caution as you must exercise your prudence
while sharing or distributing identity information. Violation of confidentiality and trust can
lead to the loss of relationships, which harms all forms of power that one can hold in
organisations.
e. CONNECTION POWER
In information-based organizations, the power of connectivity due to networks and
relationships is becoming vital. Due to Connection power, you communicate and request
within and outside the organisation for support in doing things and meeting personal goals.
There are two forms of connection power association power and reciprocal alliances.
Association power: Individuals enjoy association power when they know people in strategic
positions or have networking relationships with senior people who in turn with other
influential people. It is reflected in the statement "It is not what you know but who you
know." This type of power is valuable as in organizations many things happen through social
relationships. It helps you to remove barriers of bureaucracy, give access to support, and
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allows you to gain access to the positions and services needed to make things happen.
NOTES
Reciprocal alliances: The kind of power that comes from interacting with others and
reciprocating the same. It is based on the idea that if one person does something for another,
it will require an obligation to return the favor. For example, if your friend does his best to
pick you up and you answer, “I owe you,” you realize that your friend has obliged you and you
have to reciprocate it is some way. Active networkers recognize that reconciliation and
collaboration is a powerful way to build strong networks in organisations. Such networks are
characterized by the exchange of resources and funding, including access to information,
technology, best practices, advice, development feedback, and political support.

Q.1 When power is so legitimated, it denotes:
a. politics
b. authority
c. influence
d. conflicts
Q.2 Power comes to individuals from two major bases:
a. Position power and Coercive power
b. Position power and Personal power
c. Personal power and Coercive power
d. Personal power and Reward power
10.4 RESPONSES TO POWER AND INFLUENCE
Your power depends on how others response to your efforts when you are trying to influence
them. You are less powerful if people do not get influenced by you. This means that to
understand power you need to be mindful of people’s response to you and your influence.
So, you can broadly categorise the responses to power and influence into two: conformity
and resistance.
Conformity
In early formal research into power and influence, Herbert Kelman identified three levels
of conformity that one can make towards others’ attempt to influence them:
compliance, identification, and internalisation.
Compliance:
• It occurs when people accept the influence of another because of the good or bad
consequences tied to it. When people obey, they do so, not because they want to,
but because they should. The motive here is to earn only a certain reward or to avoid
the punishment associated with disobedience. It is a form of extrinsic motivation; it
causes little effort as it is not a persuasive strategy that works overtime. In addition,
it needs to be monitored by management. For example, employees who are not
committed to customer service will often avoid it, when the manager does not
monitor their performance.
Identification
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• When people accept an attempt made by a person or group to influence them as they
want to maintain a good relationship with them. You must have associated yourself NOTES
with some group or joined fraternity because of an influence attempt made by your
peers.
Internalisation
• It occurs when a person accepts an influence because you believe in the idea as it is in
line with your value system. For example, members of religious organisations today
adhere to the precepts of religion because they believe in the doctrines and
philosophies that are promoted.
Resistance
Responses to power may also include resistance from the people as they may say no, delay or
make excuses or oppose the move. There are two main types of resistance strategies people
use when they see an impossible request from their manager:
• Constructive Resistance
It appears to be a controversial disagreement aimed at challenging the manager to
reconsider the matter. People who use constructive resistance make suggestions for
alternatives related to the reasons for non-compliance. They do this in hopes of
opening a dialogue to try to find a suitable solution to the problem.
• Dysfunctional resistance
It involves ignoring or rejecting an application from an influential agent. Employees
involved in idle resistance try to disrupt and demean the manager by disrupting work
flow (e.g., ignoring requests, making a heartless effort only etc.). They show that
employees are more likely to refuse when their bosses harass them, but that these
consequences depend on the employee's personality. Conscientious workers are
more likely to use constructive resistance, while less conscientious workers may be
more prone to resisting inefficiency. Employees who use resistance to work are
more likely to get negative ratings from management.
How Power Corrupts
“Power corrupts, and absolute power corrupts absolutely.” The question is why? What is
it about power that causes people to lose perspective and do terrible things that cause
great harm to themselves and others?
The key to being strong, therefore, is to treat yourself in the face of power. Maintaining
humility and being close to others who may back off may help you to maintain a positive
outlook. To be strong means to bear the burden in the face of the strength of others. Proper
handling of power means doing things to keep power in check.
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NOTES
Dean Ludwig and Clinton Longenecker describe the problem as the Bath sheba
syndrome. The Bath sheba syndrome is based on the story of King David, a once great
and revered leader who got caught up in a downward spiral of unethical decisions
when his success led him to feel so privileged and self-indulgent that he took another
man’s wife (Bath sheba), and then covered it up through murder and deception. It
describes what happens to men and women of otherwise strong personal integrity
and intelligence, who just at the moment of seemingly “having it all”—and despite
the fact that they know it is wrong—engage in unethical and selfish behavior with the
mistaken belief that they have the power to conceal it.
The lesson from the Bath sheba syndrome is that power can have corruptive effects
that, if not prepared for, may lead to devastating outcomes. To avoid the Bath sheba
syndrome, individuals should prepare themselves for success. Success often leads to
complacency—
it can make those who have it too comfortable and inflate their ego, causing one to
lose perspective. Power can have an intoxicating allure that makes people crave more
and more of it.
10.5 UNDERSTANDING ORGANISATIONAL POLITICS

You normally relate word politics with thoughts of illicit deals, favors, and advantageous
personal relationships. However, if used properly it can help workplace function in a much
broader capacity.
Causes of Organisational Politics?
Causes of politics in both formal and informal systems in organizations are as follows:
In the formal system of organizations, employees are directed about work processes for
increased coordination and structuring. The “rational” side of organisations controls
employee behavior and reduces uncertainty. But employee behaviors in organisations
may be prescribed which leads to creation of informal systems.
The informal systems include activity and relationships of individuals and groups work to get
the work done in the organisation. Such relationship matrix can be changed through
personal connections. Such as, personal connection of a salesperson with the employee
working in production department can speed up an order for a client.
When organisational members seek resources to achieve goals through the informal
systems of the organisation it is termed as organisational system. Politics. In this set up,
determines how people get ahead by using and gaining power to get things done for good
and bad intentions in the organisation.
The Role of Self-Interest
Organisational politics as power is also neutral. Depending upon how it is being used, it can
be termed as good or bad. If it is progressing towards interests of the organization and not
harming any employee intentionally, it is termed as positive. It will be negative if it is favoring
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vested interest of few creating disharmony in the organisation.
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Self-interested politics occurs when people work to change some of the more subtle results
NOTES
for their own benefit. It includes illegal political activities such as building a coalition, paying
for elections and promotions, fraud, retaliation, and using information as a political tool to
promote or harm others.
Political Climates
Political climate refers to working of the people in organisation “within” or “around” the
ambit of formal policies and procedures. The climate is perceived as political if people work
around the formal procedures and tend to interpret the policies in their own way. Opposite
happens if the processes are clearly laid out and there is less requirement for interpretation.
Informal Systems and Work a rounds.
Politics work better in informal systems; the extent to which people involved themselves
in work a rounds define the political climate in the organisation. When people are not able
to accomplish their goals with normal processes, they get involved in work a round. Which
includes seeking support from the people who are influential, taking benefits of the
loopholes in the system or using connections to gain access to vital information for
influencing decisions.
Political climate is viewed on the basis of nature and motivation of work a rounds. If you are
taking the benefits at the expense of others it will result in instigating dysfunctional political
climates. It can be seen in other way as well that a loophole identified in a system may trigger
working on making the processes efficient and for advancing interests of the organisation.
Connections and Perceptions: Two persons belonging to the same party may have different
political affiliations depending on the position and position of the party. For someone who
knows and is very connected, the political situation may be considered very good. For a
person who is disadvantaged or poorly connected, the political situation can seem very bad.
Those who belong to an “external party” and who do not have the power of the organization
and positions of power have a very negative view of the organisation's politics. Those who
report strong political views of the organisation often face significant work pressures and
difficulties, reduce the satisfaction of the activities and responsibilities of the organisation,
and, ultimately, increase profits.
10.6 POLITICAL LANDSCAPES

Power and politics are inevitable in organizations. To be effective we need to use our power
effectively in political situations. Those who do not navigate politics in organizations are at
risk not only for pay raises and promotions, but also perhaps by keeping their jobs. The key
to power and political mobility to manage one's attitude and behavior. People who are
politically neutral or who believe in power may find themselves in a position to be promoted
and excluded from important decisions and activities in the organization. Those who are
passionate about politics and abuse their power can be considered as Machiavellians or be
self-serving. A moderate amount of political behavior wisely, therefore, is a tool for survival.
It involves understanding how to lay the foundations for power, develop political skills, and
build strong and efficient networks.
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Building Power Bases

NOTES
For efficient management of power and politics, one has to build power bases like position,
personal, information, connection. These power bases form the causes of power that
employees and subunits progress in organizations. Powerful people access to scarce
resources and are able to advance important initiatives
as can be seen in Figure below these causes of power can help in navigating political climates
in organizations. Employees who have not build these power bases are more vulnerable to
powerlessness. The ability to influence others also gets limited due to powerlessness.
Powerful people have access to vital initiatives and strategic resources; also, they are able
to guard themselves from other powerful people.
Fig. 1: Building Power Bases
Source: Schemerhorn: Wiley
Power bases should be built before their need arises; it is futile to start building them once
the need has arose.
There are two main ways to build power bases in organisations.
1. Build capacity and add value to the organisation.
• This builds your strengths and positions by proving your ability to perform at
higher levels and having skills that are difficult to change. Higher efficiency and
added value keep the individual or unit of operation unchanged. Increase
consistency by making their work more sensitive, responsive, visible, and at the
center of organizational performance.
2. Building the foundations of power is about developing knowledge and the power of
connection.
• Building relationships and networks. Information comes from official access to
information, informal access to information and the opportunity to disseminate
or share information with others. Spending more time making connections that
allow them to "know". The ability to connect comes from internal networks,
external networks, and even in-network networks.
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Developing Political Skills

NOTES
Organisational politics is almost never same as it appears to you. People who are politics
savvy knows very well how to decode political situations and are able to decipher the real
intentions and connections that are behind the scenes. They are able to use their influence
in such situations. These people have political skills which is defined as the ability to
understand and influence others to act in ways that enhance personal and/or organizational
objectives. People with high political skill can read others and make them act in a desired
manner. They skill fully use resources and connections to achieve the goals by adapting their
behaviours to the specific situation but with authenticity and genuineness to build trust and
credibility rather than suspicion or disdain. They negotiate rather negate and send messages
that will attract. You can develop these skills by observing others who have these skills. you
may also find people who can provide you developmental feedback about interpreting and
responding to political environments.
Networking
There are two terms which you will come across one is social capital while other is human
capital. Human capital focusses on your knowledge and skills while social capital is an
outcome of networks of relationships. Human capital is about what you know while social
capital is who you know. The idea behind social capital is that your intellectual assets are not
enough if you are not able to communicate and implement them.
Networking can prove to be beneficial for individuals if they want to get better jobs and be
successful in their occupations. Studies have found out that relying on weaker ties or your
acquaintances provide you more opportunities with finding better jobs compared with
strong friendship ties as they require more time and costly to maintain. With networking
your access to resources and influence on others rise.
10.7 ORGANISATIONAL JUSTICE

The term Justice is derived from a Latin term “jus.” It means right or lawful. It emphasizes on
fairness in conduct while dealing with people. Fairness here refers to treating people as main
component of all social systems. These people form organisations and thus organizations are
social systems. Therefore, it is the duty of the management to design the organizational
processes, outcomes, and interactions in such a manner that it is mutually beneficial to
organisational members or employees and the society. Organisational justice is significant
from the view point of multiple stakeholders, especially the employees.
The key elements required for organisational justice research are as follows:
(1) understanding the significance of justice at work to employees;
(2) developing the process of formulation of judgments;
(3) analysing the repercussions of workplace injustice; and
(4) identification of factors leading to justice perceptions.
In case of organisational justice, fairness is important for organisational processes that
relates to selection, compensation, grievance resolution, and participatory decision-making.
It is important to understand that the employees spend a significant part of their day in the
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organisation and thus the compensation given to the employees by the organisations is the
NOTES
major source of their income. Therefore, they attach lot of importance to organisational
justice in economical and psychological manner. Researchers are giving much significance to
the organisational justice topic because they want to understand the pattern of just and
unjust decision making done by the employees within the organisation.
Understanding the Concept of Organisational Justice

The term organizational justice developed after contribution of various theories in this field
such as distributive justice theory, equity theory, and relative deprivation theory. According
to these theories, distributive justice and procedural justice facets of organizational justice
were important.
While interpersonal justice is divided into two parts namely, interpersonal justice or the
degree of treating an employee with dignity and respect and informational justice or the
degree of relevant information shared with an employee.
As per distributive justice employees felt motivated when the ratio of their perceived
outcomes and perceived inputs was equal to the corresponding ratio for their referent
employee. It can be expressed as:
(Self/Itself = Referent/Irreverent)
Further developments in distributive justice research shows that the employees measure
beyond equity and considers equality and need before analysing distribution of outcomes
to be just or unjust.
The procedural justice is a concept of fair process effect. It refers to the intensity of negative
perceptions which relates to unfavourable outcomes in a reduced manner, depending upon
the condition if the procedures underlying the distribution are considered to be just.
The main characteristics of just processes are:
• consistent application for all individuals,
• freedom from bias
• emphasis on accuracy
• consistent ethical norms established in the organization
The employees consider procedural fairness when outcomes are unfavourable and when
the outcomes of referent other employees are unknown. The concepts of procedural and
distributive justice are based upon social interactions in general and is applied to the
organizations. But organisations are different from other social settings in terms of the
frequency and regularity of interactions with the same group of people. In such case,
procedural and distributive justice fails in terms of employees’ perceptions of justice. To
overcome this problem, the concept of interactional justice was introduced.
As per some research, organisations are a unique social setting. The concept of
interactional justice is therefore more significant for organizations. The meta-analysis,
therefore, validates the models of organisational justice as:
• The three-component (distributive, procedural, and interactional),
• four-dimensional (distributive, procedural, interpersonal, and informational)
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The organisational justice is inspired by ethical considerations. Some scholars link it between
NOTES
organisational justice/injustice perceptions and organisational outcomes. While the
perceptions of organizational injustice are linked to negative effects on health also.
The high perceptions of organisational justice can improve trust of employees in
management, employee commitment, and increased job performance.
But organisational justice is negatively impacted from the context of the relationship
between possible antecedents and organizational justice. Hence universal conclusions
cannot be drawn. The degree of adherence shows employees positively linked to the degree
of decentralisation in the organisation. The degree of informational justice during employee
layoffs is positively related to the degree of unionization in the organisation.
The image of managers is important in framing employees’ perception of justice with
neuroticism. It changes with time and differs by geography.
Distributive justice perceptions are stable when compared to interactional justice
perceptions. It based on the fact that distributive justice perceptions are shaped by
structural factors whereas interactional justice perceptions are based on the characteristics
of managers working in the organisation.
Understanding the Intersection between Justice, Power, and Politics
Usually, justice is treated a positive term, but negative emotions are attached to the terms
power and politics. The below figure -2 explains an analysis of the terms-power and politics
and its interrelatedness with the term justice.
Influencing as the term indicates, includes influencing the perceptions of others while the
term power is linked with justice. Politics, on the other hand, refers to acquisition and use of
power, and it is influenced by justice considerations. Politics affect perceptions of others
while power is associated with justice in following ways:
• Power shapes norms and perceptions of just and unjust behavior of an individual to
confirm the established norms.
Fig. 2
It refers to the
It refers to an It refers to the processes through
individual’s potential of a person which a person or
perceptions of or group to hold group increase their
fairness; others t o d o power, especially in an
something that they informal setup
otherwise would not
have done
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NOTES
• Power establishes that the people feel empowered, and powerlessness would lead to
being unjust
The employees believe that the management promotes self-serving norms and thus keep
them powerless, this leads them to get involved in politics to change the scenario in their
favour.
Organisational politics decreases job satisfaction and commitment. It leads to increased job
stress.
Organisations must measure employee perceptions of organisational justice on regular basis
by using surveys. Implementation of corrective actions to improve work life must be
encouraged by the management of the organisation. But there is no guarantee of eliminating
the politics in organisations, But such corrective action will lead to feeling of working in a just
environment among the employees
10.8 LET US SUM UP

Individual or group’s ability to influence or exercise control on another person or group is
known as power. Social power is the power where a person is able to influence others in
social relationships. Public power is gained through relationships, and if not used
appropriately it can be taken away. The basis of Power is dependency. By dependency, it
means that a person or group’s wants, or needs are dependent on another person or group.
Lack of autonomy and reduced participation may make a person feel powerless.
Empowerment involves sharing power, knowledge, and rewards with employees making
decisions and resolving problems in their work. John French and Bertram Raven identified
five types of power bases which may broadly be classified into: position power and personal
power. Position power in organisations can be divided into three types: legitimate power,
reward power, and coercive power. Sources of personal power include expert power and
referent power. You have also read about information power and connection power. Your
power depends on how others response to your efforts when you are trying to influence
them. You can broadly categorise the responses to power and influence into two: conformity
and resistance. You have also read about why Organisational politics occur and how you can
manage politics. At the end of the unit reference of Organisational Justice was made.
10.9 KEY WORDS

Legitimate Power: Power arising out of legitimate position in the organisation.
Reward Power: It arises from the ability to manage results with positive valence (e.g.,
provide positive rewards) and to eliminate or minimize effects with negative valence (e.g.,
eliminate negative rewards).
Coercive Power: The assumption behind coercive power is, a person will be punished if he or
she fails to comply with the persuasive attempt. Threat or punishment is involved with this
power.
Expert Power: It comes with special skills and abilities. It includes knowledge, experience,
and judgment.
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Referent power: is one’s ability to alter another’s behavior as the latter is identified as a
NOTES
source of power.
Power bases: are the sources of power (position, personal, information, connection) that
individuals and subunits develop in organizations.
Distributive justice: suggested that employees were motivated when they felt that the ratio
of their perceived outcomes to their perceived inputs was equal to the corresponding ratio
for a referent other (Self/Itself = Referent/Irreverent).
Procedural justice: The concept of procedural justice is based on the concept of fair process
effect, which suggests that the intensity of negative perceptions related to unfavourable
outcomes is reduced if the procedures underlying the distribution are considered to be just.

UHL-BIEN, M. S., OSBORN, J. R., & RICHARD, N. (2014). Organisational Behavior, Wiley E-text
Student Package. JOHN WILEY & Sons.
Robbins, S. P., & Judge, T. A. (2013). Organizational behavior (Vol. 4). New Jersey: Pearson
Education.
Nahavandi, A., Denhardt, R. B., Denhardt, J. V., & Aristigueta, M. P. (2013). Organizational

Q.1 Position power is obtained by a combination of one’s:
a. Job Title or designation, Performance evaluation and prescribed responsibilities
b. Performance Evaluation, Job Description and prescribed responsibilities
c. Job Title or designation, Job Description and prescribed responsibilities
d. Job Title or designation, Job Description and Performance evaluation
Q.2 Reward power includes:
a. Allocation of resources, Job Title or designation, performance evaluation,
approvals, giving of higher salary, incentives, bonus or even better work
b. Job Title or designation, selection, performance evaluation, approvals, giving of
higher salary, incentives, bonus or even better work
c. Allocation of resources, selection, Job Title and designation, approvals, giving of
d. Allocation of resources, selection, performance evaluation, approvals, giving of
Q.3 Use of coercive power might create:
a. Anger, resentment and even retaliation
b. Anger, job dissatisfaction, and even retaliation
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c. Job dissatisfaction, resentment and even retaliation

NOTES
d. Anger, job dissatisfaction and resentment
Q.4 Expert Power is gained through specialized knowledge arising out of;
a. Informal education or observation
b. Formal education or work experience
c. Informal education or work experience
d. Formal education or observation
Q.5 Coercive power of the organisations is derived out of access, control and use of
physical resources such as:
a. a gun or money
b. money or a lock
c. a gun or a lock
d. money or sticks
Q.1 A
Q.2 A
Q.1 B
Q.2 B
Q.1 C
Q.2 D
Q.3 A
Q.4 B
Q.5 C
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UNIT 11 NOTES
FOUNDATIONS OF
ORGANISATION STRUCTURE
STRUCTURE
11.0 Objectives
11.1 Introduction
11.2 Organisational context
11.3 Let Us Sum Up
11.4 Key Words
11.6 Self-Assessment Questions- Possible Answers
11.8 Unit End Answers
11.0 OBJECTIVES
• Explain the contextual elements that impact organisation
• Understand the different components of environment
• Define technology and its impact on the organisation
• Know the basic components of structure of the organisation
• Know the relationship among mission, goals and strategy
An organisation starts with creating a vision for itself; vision is futuristic, and it helps
organisation understand its boundaries and provide a focus. Vision provides direction and
the general framework in which the activities of the organisation will take place. For
example, Amazon vision statement is “to be earth's most customer centric company; to build
a place where people can come to find and discover anything they might want to buy online".
Vision statement also describes the ethics and values that the company believes in. For
example, Johnson and Johnson's vision statement is" put simply, are credo challenges us to
put the needs and well being of the people we serve first". It further explains the credo that
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the company’s responsibility is to serve the people who are using the products as well as to
NOTES
the stakeholders like suppliers, distributors and employees. Johnson and Johnson has put its
focus on people and their wellbeing.
11.1 INTRODUCTION
How many times you have thought of the strategic issues that concerns organisation are the
domain of top management? However, if you dig deep you will get to know that being aware
of the context and strategic issues will support you to take informed decisions in the
organisation. It will help you to develop your perspective and you will be able to manage
effectively, even on day-to-day basis. Strategic issues are everyone's business even if you
work in a small organisation or you want to start your own start up. In this unit you will
understand about all these contextual factors that impact and organisation.
11.2 ORGANISATIONAL CONTEXT

There are five elements that form the context of the organization:
• Environment: it includes all external factors that have potential to impact an
organisation
• Technology: tools and technical know-how used by the organisation to produce goods
and services by transforming inputs into output.
• Strategy: it includes how the organization will achieve its missions and goals
• Structure: organising human resources to achieve organizational objectives
• Culture: commonly held values by the people of the country or an ethnic group or a
company. Culture will be discussed in a separate unit.
Leaders of the organisation must constantly monitor all these five elements as changes in
one may have an impact on the others for example changes in external environment and
increase in competition may lead to change in the strategy of the organisation which will lead
to change or updating in the technology and also restructuring in the organisation.
11.2.1 ORGANISATIONAL ENVIRONMENT

It is important for you to understand that not every factor or component of the organisation
is going to affect the organisation. For example, environment for an Airlines and a restaurant
franchise cannot be identical. The type of Human Resource required, the parts and supplies,
regulatory bodies etc. are going to be different for these two lines of business. Companies
in the same industry may also have different factors or components impacting them due
to different mission, strategies, markets, size, product lines guiding the company.
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Fig. 1: Business Environment and General Environment of an Organisation

NOTES
Fig: source: Nahavandi, A., Denhardt, R. B., Denhardt, J. V., &Aristigueta, M. P. (2013). Organizational behavior.
Sage Publications.pg 384
Environment can be divided into two categories general environment and business
environment. General Environment deals with the broad context like social, political,
demographic, global business environment while business environment deals with the
specific sectors like customers, competitors, regulatory bodies, economy, technology etc
typically related to the line of business. The interaction with the business environment is
on day-to-day basis.
One interesting aspect of general environment that you must have observed in the figure
that is national and regional culture. The managers need to develop a cultural mind set so
that benefits of diversity and multiculturalism may be cherished.
Enacting the environment

When managers can differentiate between the general and specific environment then now
have to identify the factors that are relevant. This process is known as enactment which gives
a clear picture about the environmental factors impacting the organization.
Take example of a mobile phone manufacturing company if it considers itself to be too
powerful to worry about the competitors (local/ foreign), this mindset may bring them to the
doom as they will not pay attention to the rising competition, changing demands of the
customers and overlooking the signals that political and global factors are pointing. It is due
to their misreading of the environment they enacted it poorly.
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Environmental Uncertainty
NOTES
In general parlance you may assume that a company's external environment can be either
stable or dynamic, but research have suggested that companies go through both. According
to punctuated equilibrium theory, companies experience stability (equilibrium) having
long and simple periods where incremental changes occur, this period of stability is
followed by fundamental changes (revolutionary periods) which brings in the stability
again and as a result forming a new equilibrium.
There are two factors that causes environment to become; rate of change and the other
is complexity of the environment.
Rate of change is the rate at which a company's general and business environments change.
• Stable- if the rate of change is slow
• Dynamic - if the rate of change is fast
Environmental complexity refers to the number and intensity of factors in the external
environment that affect organisations. Simple environments have few environmental
factors affecting the organizations, while there are many environmental factors in complex
environments.

Q.1 The degree of change in the external factors affecting organisations is referred as
environmental complexity.
Q.2 An organisation's environment is either stable or dynamic, but not both.
11.2.2 ORGANISATION AND TECHNOLOGY

Technology is an umbrella term for the knowledge, tools, and techniques used to transform
inputs into outputs. Changes in technology can help companies provide better products or
produce their products more efficiently.
Technology differs according to the nature of the organization for example outputs of
manufacturing firms is tangible while in case of service firms they deliver service that is
intangible. Take Amazon's example Amazon does not manufacture anything, but it sells
other company’s products you may easily assume that internet is the technology that
Amazon uses primarily but the core technology is its well laid out distribution system that
delivers product to the customers in time and it is reliable.
Companies that use high technology are considered as Hitech as they use the latest
technology available to keep up with the ever growing and changing demands of the
customers.
Green technology: impetus on sustainability has pushed new businesses to work on
renewable energy and green technology. We are continuously seeing the impact of green
technology on organisations. Consider how Walmart's decision to go green has impacted
many other organisations and may have social benefits in the long run. Walmart CEO Lee
Scott says: "Our goal is for supplier factories to meet or exceed on social and environmental
laws and regulations". For Scott it is required to meet environmental standards. It is due to
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the changes in sustainable technology that Walmart can take such business decision and
NOTES
engender technological changes.
11.2.3 ORGANISATION AND STRATEGY

Strategy provides legitimacy to the organization, employee direction, decision guidelines,
and criteria for performance.
Mission statement provides the reason and purpose of the existence of the organization.
It can be referred to whenever organisational members feels that they are deviating from
their focus in the organisation. Goals are set to achieve mission of the organisation this
specify needs to be achieved and within what time. Strategy provides a road map about
how the organisation is going to achieve its goals within the defined time frame.
Figure -2 below will help you to understand the relationship between mission, goals and
strategy.
Fig. 2: Relationship between mission, goals and strategy
Mission
What are we and what
do we want to be ?
Goals
what needs to be
achieved by when?
Strategy
How do we get there?
What do we need to do?
Source: Source: Nahavandi, A., Denhardt, R. B., Denhardt, J. V., &Aristigueta, M. P. (2013). Organisational
behavior. Sage Publications. Pg 393
Managing Strategy
Strategic management process as shown in the figure below includes strategy formulation
and strategy implementation. Strategy formulation is the process of forging a cohesive
integrated set of strategies designed to deal with the environment and achieve the business
mission and goals.
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NOTES
Fig. 3: Strategic Management Process
Strategy implementation is execution of the strategy that is formulated by the organization.

In strategy formulation managers analyse strength and weakness of their organization as
well as opportunities and threats that may come from the external environment this analysis
is called as SWOT analysis. Strengths and weaknesses are internal to the organization. SWOT
analysis helps in working on the weaknesses and attempting to eliminate the threats thereby
facilitating achievement of organizations mission and goals. Table below will help you to
understand SWOT matrix.
Table 1: Swot Matrix
Source: Nahavandi, A., Denhardt, R. B., Denhardt, J. V., &Aristigueta, M. P. (2013). Organisational behavior. Sage
Publications.Pg. 395
Cost versus differentiation strategy
Cost leadership ascertains manufacturing of a product or service at lower production costs
as compared to the competitors for the firm to gain competitive advantage in the industry.
It safeguards companies from competition from new entrants in the industry segment. It
places the firm in a strong position to force down the prices offered by the producers of
substitute products or services. It helps the firm in achieving strong position in terms of
bargaining power with the suppliers. The firm thus attracts more buyers and becomes an
industry leader.
Differentiation: As the term suggests differentiation, differentiates a firm's product or
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service from its competitors'. It can lead customers to pay a premium price for the firm's
NOTES
products or services. It safeguards firm from the threat of substitute products. A firm can
thus retain its customers and attract new customers.
11.2.4 ORGANISATION AND CULTURE

Adaptability is the ability to notice and respond to changes in the organisation’s
environment.
Company mission is the business’s purpose or reason for existing. In an organisational
culture that includes a clear company mission, the organization’s strategic purpose and
direction are apparent to everyone in the company.
In a consistent organisational culture, the company actively defines and teaches
organisational values, beliefs, and attitudes. Consistent organisational cultures are also
called strong cultures because the core beliefs are widely shared and strongly held.
Fig. 3: Three levels of Organisational culture
Organisational cultures exist on three levels. On the first, or surface, level are the elements of
an organisation’s culture that can be seen and observed, such as symbolic artifacts (e.g.,
dress codes and office layouts) and workers’ and managers’ behaviors. Next, just below the
surface, are the values and beliefs expressed by people in the company. You can’t see these
values and beliefs, but they become clear if you carefully listen to what people say and
observe how decisions are made or explained. Finally, unconsciously held assumptions and
beliefs about the company are buried deep below the surface. These are the unwritten views
and rules that are so strongly held and so widely shared that they are rarely discussed or even
thought about unless someone attempts to change them or unknowingly violates them.
Changing such assumptions and beliefs can be very difficult. Instead, managers should focus
on the parts of the organisational culture they can control. These include observable surface-
level items, such as workers’ behaviors and symbolic artifacts, and expressed values and 179
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beliefs, which can be influenced through employee selection.

NOTES
Q.1 Technology is the used to transform inputs (raw materials, information, etc.)
into outputs. (products or services)
a. knowledge, tools, and techniques
b. knowledge and machinery
c. plans and machinery
d. tools and techniques
Q.2 The is the set of key values, beliefs, and attitudes shared by
members of an organisation.
a. industry code of ethics
b. internal environment
c. organisational culture
d. organisational strategy
Q.3 Which of the following is a mechanism used to examine external threats and
opportunities facing a firm as well as its internal strengths and weaknesses?
a. organisational scanning
b. internal marketing
c. corporate strategy
d. a SWOT analysis
11.2.5 ORGANISATION AND STRUCTURE
Purposes of Structuring:
• work can be divided into defined and specific jobs and departments
• Tasks and responsibilities associated with particular jobs can be assigned
• diverse tasks in organisations gets coordinated
• Jobs can be clustered into units
• Relationships among individuals, groups, and divisions can be established
• Authority to be established on formal lines
• Allocation and deployment of organisational resources
The table-2 below provides six basic components of structure an organization organises its
human resource in a variety of ways based on the following components. As you can see in
the table that centralised and standardised are both characteristics of a formal organisation
however there is a possibility of making combinations that will give a unique character to an
organisation. For example, employees in government sector works in tall hierarchical
structure with formalisation and centralised decision making whereas in case of private
organisations, the structure is less formalized and decentralised.
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NOTES
Table 2
Component Description
Formalisation the number of formal, written documentation relating to

organisational procedures, activities and behaviours. A formal
organisation clearly describes all activities in writing.
Specialisation The degree to which each individual, department or team performs

special, narrow tasks as compared to a broad set of tasks. High
specialisation means that individuals perform specific limited tasks
Standardisation The degree to which similar activities are performed in standardised,

similar way. In a standardised organisation, all individuals performing
a similar task perform it the same way.
Centralisation The extent to which decisions are made at either the top or at the
other levels of the organization. In a centralised organisation a few
people at the top make most decisions.
Span of control The number of reporting relationships and the span of control of
managers. Managers with wide or large span of control have many
employees reporting to them.
Departmentation How the organisation is divided into divisions, departments, groups,

and or teams.
Source: Nahavandi, A., Denhardt, R. B., Denhardt, J. V., & Aristigueta, M. P. (2013). Organisational behavior. Sage
Publications.
Organic and Mechanistic Structures
Organic Structure – an organisational design that emphasizes teamwork, open
communication, and decentralized decision making.
Mechanistic Structure – an organisational design that emphasizes structured activities,
specialized tasks, and centralized decision making.
Table 3
Mechanistic Organisations Organic Organisations
Specialised tasks General tasks
Well defined departments with clear Loosely defined departments with

hierarchy loosely defined hierarchy
Centralised decision making by few people Decentralised decision making by many

individuals
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Integration achieved by relying on formal Integration achieved by employees and

NOTES meetings and communication among manag ers in t era c tin g and
managers exchanging information as needed
Clear and efficient reporting relationships Flexible and adaptable
Appropriate in low-uncertainty Appropriate in high- uncertainty

environments environment
Source: Nahavandi, A., Denhardt, R. B., Denhardt, J. V., & Aristigueta, M. P. (2013). Organisational behavior. Sage
Publications.
Available Structural options
Now you will know about the available structural options. You will also understand the
advantages and disadvantages of each structural option.
1. Functional Structure
An organisation with a functional structure is divided based on functional areas, such as
IT, finance, or marketing. Based on specialised functions applicable to an organisation, it
is divided into groups like finance, IT, marketing etc. Employees having common
knowledge and skills are grouped into specialised functions allowing operational
efficiency. Limitation of functional organisation is it reduces flexibility and decreases
innovation as the different functional groups works on highly specialised modes creating
silos for themselves. Communication among these specialised groups also gets
hampered. Organisations have tried to address this limitation by using cross functional
teams for better coordination within these traditional functional lines.
Functional structure at FedEx: This organizational chart shows a broad functional structure
at FedEx. Each different functions (e.g., HR, finance, marketing) is managed from the top
down via functional heads (the CFO, the CIO, various VPs, etc.).
Fig. 4: Functioned Structure at FedEx
Source:https://courses.lumenlearning.com/boundless-management/chapter/common-organizational-
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structures/
NOTES
Advantages of a Functional Structure
• Higher operational efficiency
• Sharing of skills and knowledge due to grouping of functions
• Specialists operating independently
• Division of work leading to specialisation
Disadvantages of a Functional Structure
• Lack of communication among different function
• Increased rigidity and lack of innovation
• Each function views organisation and its processes within its own frame of
operations.
Functional structures are prominent in large scale organization of many industries that
manufactures homogeneous products, as for smaller companies need to be more flexible
and creative.
2. Divisional Structure
Grouping of organisational functions into divisions based on product or geography. A
divisional organisation groups different organisational function into divisions.
Fig. 5: Divisional Structure
U.S. Department of Energy organisation chart: The DOE organisation chart shows a divisional
structure with different divisions under each of three under-secretaries for energy. Each of
the three division is in charge of a different set of tasks: environmental responsibilities,
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nuclear-energy responsibilities, or research responsibilities.

NOTES
Divisional Strategies
In this structure each division corresponds to the various products or geographies within the
organisation. Each division has resources and functions to support its product line or
geography that can be categorised as product or geographic departmentalisation.
Product departmentalisation: In this structure an authorised manager takes care of all the
activities that are associated with that product or service. For example, if the division builds
SUV or sedan, the SUV division will have its distinct departments like sales, marketing,
manufacturing etc. from those that corresponds to Sedan division.
Geographic departmentalisation: here the grouping takes place on the basis of activities that
are taken up in various geographical locations such as Asia Pacific or South American division.
It has its own importance as it responds to the various taste and brands across different
Geographic regions and it also allows greater flexibility with respect to product and
marketing strategies, it is also known as localisation that is responding as per the local
requirements.
The Divisional structure is also used by a legal structure known as multi divisional form or 'M'
form. In this form the subsidiary companies are owned by one parent company, and each has
its brand and name. There is a central management to control the whole organisation but the
divisions are given autonomy with respect to most of the decisions. Such business
structures are often found in organisations that operates across the countries for example
Virgin Mobile and Virgin Records are the subsidiaries of the parent company that is Virgin
group
Advantages of a Divisional Structure
• Works best for the companies offering wide range of products or functioning across
geographic regions.
• Provides higher operational flexibility
• If one division fails, its impact will be negligible on other divisions
• Subsidiaries gets benefited by the parent company’s brand and capital. Disadvantages
of a Divisional Structure
• Specialised functions are separated resulting in efficient operations
• Increased implications of accounting and taxation in multidimensional forms
3. Matrix Structure
In a matrix structure two operational frames are used to group individuals. Operations and
performance of the organisation is determined by the structure that it has adopted. In matrix
structure there are two operational perspectives in which the individuals are grouped. This
type of structure is adopted by the companies that are large enough and have high
complexities. The organisation can be grouped into two frames of references that the
organisation considers appropriate. Generally, the organisational perspectives include
function and product, function and geography, and geography and product. For example, an
organisation that is using two operational perspectives; function and product, each function
will have management that corresponds to its product lines, If the organisation has three
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functions and three products, the matrix structure will have nine ([latex]3 \times 3[/latex])
NOTES
potential managerial interactions.

Advantages of a Matrix Structure
• Readily sharing of information across task boundaries
• Counters silos
• Increase in knowledge and assigning resources as per the need of the projects
Disadvantages of a Matrix Structure
• Assigning employees to functional and project managers may result in
complexities in chain of command
• It may result in higher ratio of manager to worker which can lead to increased cost
and decreasing employ loyalties.
• A deadlock may be created if manager at one end of the matrix disagrees with another
manager.
• Vague authority in a matrix structure can lead to decreased swiftness in decision making
and resolution of conflicts.
Matrix structures should ideally be used depending upon organizational demands due to
growing operational complexity. Matrix structure may be a fit if an organisation operating
in various regions with various products require interaction between product
development teams and geographic marketing. Large organizations requiring increased
cross- departmental communication benefit most from this structure.
4. Team-Based Structure
The team structures are organisational structure in which individuals are grouped into teams
that are less hierarchical.
Teams are fluid, less hierarchical and less structed and are comparatively newer form of
organisational structure adopted by large organizations in teams’ employees have
complementary skills and they work in synergy to achieve a common goal. Teams addresses 185
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typical operational aspect of organisation and offers varied expertise. As teams are fluid,
NOTES
they can easily adapt themselves to fulfil organisational strategies and objectives.
Teams may last very long or like project teams they get disbanded on fulfilment of objective.
Cross functional teams have members belonging to different functions of the organisation.
As such teams are known for being less hierarchical, still management structure exists in
a team,
Critics are of the opinion that teams are misnomer in organization as these are just groups of
staff. Still, you will agree that many organisations now take up team building activities which
can at least bring in bonding and cohesion among team members. These exercises are also
proven to improve employee motivation which may lead to overall productivity.
Integration with Other Structures: Integrating team cultures with broader structure is likely
to persist for example teams interspersed in a functional structure as such integration has
a concrete structure that provides more authority and organization as well as benefitting
from cross functional and other advantages of teams.
Imagine a company like Proctor and Gamble forms a group of employees from various
functional areas like finance, marketing, and research and development and these
employees are representing various geographic regions. This newly formed project team
is given a task of developing a laundry detergent that is convenient, economic, and aligned
with the company's manufacturing capabilities. The project team might be given a deadline
to fulfill its objective but simultaneously teams members are expected to work within their
functional domains.
5. Network Structure
In the network structure, managers coordinate and control relationships with the firm that
are both internal and external. A network structure characterises as flatter, more
decentralised, better flexible than other types of structure. Managers exercise control as
well as coordinate relations that exist inside and outside the organization.
The network structure has an underlying the social network—a social structure of
interactions. The social network may include formal or informal relationships that are based
on intra or inter organisational ties. Its scope may increase to include complex technological
and innovation networks at the industry level. That can work across geographic regions.
From a management perspective, it focuses on internal dynamics of network in the
organisation.
A network organization is quite simple. You may take example of a company that designs
T shirts. The leaders of this company are focused on designing while the other aspects like
manufacturing and retailing are not the core considerations but at the same time they are
necessary in order to complete operations. Here the leaders of the company can use their
network of partners companies owning manufacturing facilities and also rent the space for
retailing. This network of partners will support the company to enable all processes that are
required after designing and the company can focus only on designing part.
Like other organisational structures, the network structure has its advantages and its
disadvantages.
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Advantages of a Network Structure

NOTES
• More agile
• Free flow of communication
• Opportunities for innovation and creativity
• Decentralised that is less levels
• Span of control is wide
• Flow of ideas from bottom
Disadvantages of a Network Structure
• May lead to complexities in relationship in the organization
• Unclear accountability
• High reliance on external vendors
• Reduced control on operational success of core companies
6. Modular Structure
When an organisation concentrates on developing specialized and strategic business units,
structured differently to determine organisational operation and performance, it is termed
as modular structure. It divides the business into small, tightly knit strategic business units
(SBUs), to concentrate on specific steps of the organizational process. Such integrated units
are limited for SBUs inward focus and strong loyalty.
The term modularity is technical. Modular product systems can be broken down into a
number of components to be mixed and matched to connect, interact, or exchange
resources within the organisation. It leads to the disaggregation of the traditional form of
hierarchical governance into relatively small, autonomous organisational units (modules)
within the organisation. These modular organization is extremely flexible.
For instance, in-house manufacturing in an organization represents independence of the
manufacturing unit. It will include various consumer services to cater different needs of
consumers or demographics as compared to a contracted job outsourced by the
organisation.
Advantages of a Modular Structure
• Increased flexibility
• Easy restructuring
• Responsive to market requirements
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Modular Organisations
NOTES
Disadvantages of a Modular Structure

Critics are of the view that managers should carefully analyse the pros and cons of having
degree of modularity in the organisations. Flexibility should result in gains. Many times, such
loosely held structures may result in distorted communication and intellectual property
losses.

State True or False
Q.1 An organic organisation is characterized by broadly defined jobs and responsibility;
loosely defined, frequently changing roles; and decentralized authority and
horizontal communication based on task knowledge.
Q.2 The most common matrix combines customer and functional forms of
departmentalization.
Q.3 The coordination of departmental activities tends to be more difficult with the
geographic approach to departmentalisation than with the other approaches.
11.3 LET US SUM UP

In this unit you have understood that an organisation starts with creating a vision for itself.
You have read about the role of vision contextual elements that impact organisation namely
Environment: it includes all external factors that have potential to impact an organisation.
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Technology: tools and technical know-how used by the organisation to produce goods and
NOTES
services by transforming inputs into output. Strategy: it includes how the organisation will
achieve its missions and goals. Culture: commonly held values by the people of the country
or an ethnic group or a company. Structure: organising human resources to achieve
organisational objectives. Environment can be divided into two categories general
environment and business environment. Two factors rate of change and the other is
complexity of the environment make the environment uncertain. Technology differs
according to the nature of the organisation. Green technology has pushed new businesses
to work on renewable energy and green technology. Strategy provides legitimacy to the
organisation, employee direction, decision guidelines, and criteria for performance.
Strategic Management process includes environmental scanning, SWOT analysis, strategy
formulation and implementation. Organisational cultures exist on three levels. You have
understood the various available structural options like functional, divisional, matrix, team
based, network and modular. You have also understood the advantages and disadvantages
of these structures.
11.4 KEY WORDS

General Environment deals with the broad context like social, political, demographic, global
business environment
Business environment deals with the specific sectors like customers, competitors,
regulatory bodies, economy, technology etc.
Network: Any interconnected group or system.
Decentralized: Diffuse; having no center or several centers.
Hierarchical: Classified or arranged according to various criteria into successive ranks or
grades.
Modular: Consisting of separate units, especially where each unit performs a specified
function and could be replaced by a similar unit for the same function, independently of
other units.
Departmentalization: Groupings within the organisation based on function, geographic
location, etc.
Matrix: A two-dimensional array.
Social network: a social structure of interactions.

Q.1 Give three differences between organic and mechanistic structures.
Q.2 Briefly differentiate between the external and internal environments that companies
face and explain why these environments are important.
Q.3 Compare and contrast the general environment with the business environment faced
by a company.
Q.4 What is a modular organisation? Briefly identify the advantages and disadvantages
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associated with this organisational form.

NOTES
11.6 SELF-ASSESSMENT QUESTIONS-POSSIBLE ANSWERS
Q.1
Mechanistic Organisations Organic Organisations
Specialised tasks General tasks
Well defined departments with clear Loosely defined departments with

hierarchy loosely defined hierarchy
Centralised decision making by few Decentralised decision making by

people many individuals
Q.2 The external and internal environments that companies face refers to two different
sets of forces that affect those organisations. External environments are the forces
and events outside a company that have the potential to influence or affect it. The
internal environment, on the other hand, consists of the trends and events within an
organisation that affect the management, employees, and organisational culture.
One set of forces exists outside of the organization, while the other set of forces exists
within the organisation. In order to be successful, companies must continually adapt
to changes in both sets of forces.
Q.3 Both the general and business environments faced by a company would be
considered part of the external environment facing the firm, in contrast to the firm's
internal environment. It is here that the similarity ends, however. The general
environment consists of the economy and the technological, socio-cultural, and
political/legal trends that indirectly affect all organizations. Changes in any sector of
the general environment eventually affect most organizations. By contrast, each
organization has a business environment unique to that firm's industry. The business
environment directly affects the way a firm conducts day-to-day business. The
business environment includes customers, competitors, suppliers, industry
regulation, and advocacy groups.
Q.4 Except for the core business activities that they can perform better, faster, and
cheaper than others, modular organizations outsource all remaining business
activities to outside companies, suppliers, specialists, or consultants. The term
"modular" is used because the business activities purchased from outside companies
can be added and dropped as needed. Advantages of modular organizations include
being less expensive to run and being able to focus on the core activities that they do
best. Disadvantages include requirement that relationships with reliable suppliers
and vendors be extremely close, potential loss of control, and the threat of creating
new competitors if the wrong business activities are outsourced.
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Q.1 For sensing the changes in the environment, the first step taken by managers is:
NOTES
a. environmental scanning
b. perceptual re-engagement
c. budget modifications
d. downsizing
Q.2 Improvement in the survival rate of premature babies may be attributed to the
following component of hospital.
a. technological
b. socio-cultural
c. economic
d. legal
Q.3 departmentalisation evolves from simple to complex
forms due to issues related with conflicting schedules, budgets and resources of all
types.
a. functional
b. customer
c. product
d. matrix
Q.4 Following is the major drawback of geographic departmentalisation .
a. the absence of cross-departmental coordination
b. spans of control that are too wide
c. the lack of empowerment
d. duplication of resources
Q.5 In a(n) organisation, the normal procedure for dealing with any matter lying outside
the boundaries of one individual’s functional responsibility is to refer it to the point in
the system where such responsibility is known to reside, or, failing that, to lay it before
one’s superior.
a. Centralized
b. Mechanistic
c. Organic
d. Departmentalized
11.8 UNIT END ANSWERS
Q.1 a
Q.2 a
Q.3 d
Q.4 d
Q.5 b
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NOTES
Q.1 F
Q.2 F
Q.1 a
Q.2 c
Q.3 d
Q.1 T
Q.2 F
Q.3 T

Nahavandi, A., Denhardt, R. B., Denhardt, J. V., &Aristigueta, M. P. (2013). Organisational
Robbins, S. P., & Judge, T. A. (2013). Organisational behavior (Vol. 4). New Jersey: Pearson
Education.
Williams, C. (2013). Principles of management. South-Western Cengage Learning.
UHL-BIEN, M. S., OSBORN, J. R., & RICHARD, N. (2014). Organisational Behavior, Wiley E-text
Student Package. JOHN WILEY & Sons.
https://courses.lumenlearning.com/boundless-management/chapter/factors-to-consider-
in-organisational-design/
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NOTES
UNIT 12
ORGANISATIONAL CULTURE AND CHANGE
STRUCTURE
12.0 Objectives
12.1 Introduction
12.2 Role of Culture in an Organisation
12.3 Characteristics of Organisational Culture
12.4 Culture as a liability
12.5 Role of Change in an Organisation
12.6 Forces of Change
12.7 The Change Agent
12.8 Managing Change
12.9 Let Us Sum-up
12.10 Key Words
12.11 Self Assessment Questions
12.12 Self-Assessment Questions-Possible Answers
12.13 Answers to Check Your Progress
12.0 OBJECTIVES
• Understanding organizational culture and how it is learnt
• The functions and characteristics of culture
• How culture can become a liability
• Understanding different types of cultures
• Understanding the role of change in organisations
• What are Learning Organisations?
• Forces of Change
• Model of Change
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Change
12.1 INTRODUCTION
NOTES
In the previous unit - 'Foundation of Organisational Structure', you have learnt how job tasks
are divided, grouped and coordinated in a formal manner. This structure represented the
broad picture for organisational behaviour.
In the present unit you will get familiar with the understanding of culture and change in an
organis ation.
Culture within an organisation distinguishes it from another organisation. Culture within
an organisation influences the behaviour of the employees, which in turn influences the
society at large.
12.2 ROLE OF CULTURE IN AN ORGANISATION

Culture refers to the shared values, beliefs and codes of a community or organisation. The
customs of the society or an organisation and the self- image of its members make its culture.
It is a system of shared meaning held by members that distinguishes one organisation from
another.
In earlier times when there were tribal cultures, each member of the tribe knew and
followed the norms of behaviour which were taught and followed by the group members
who formed that tribe. This culture was different than that followed in another tribe. Each
tribe dictated how its members would behave amongst themselves and with people outside
the tribe.
In the same way, you have organizations which have different cultures and which follow
varying rules of how its employees will behave within the organisation. Like people, cultures
may be rigid, friendly, warm, conservative, innovative and the like. These in turn will shape
the attitudes and behaviour patterns of the employees of organisations.
The founders of the organisation also create the culture within the organisation as it is what
they hold important goes down with a trickle-down effect throughout the organisation. It
is natural that the founders will focus on the ways and goals they give priority to according
to their perception.
12.2.1 CULTURE AS A LEARNT BEHAVIOUR

It can be learnt in many different ways.
• Stories
Stories related to the past experiences of employees in an organization help the new
employees to understand the expected accepted behaviour. These stories also create the
public image of the organisation.
• Rituals and ceremonies
Understanding the rituals and ceremonies in an organisation help you learn the culture of
the organisation. Rituals reveal the core values and ceremonies are conducted with the
aim to appreciate exceptional performance.
• Material Symbols
Some organizations encourage equality among employees whereas some give
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Company logos, signs, the way the office looks, the clothes that employee’s wear; are all
symbols through which the culture of the organisation is shared. Material symbols and NOTES
rewards given to recognize employees at different levels also help to understand the
organizational culture.
• Language
The jargon words used by most employees while communicating with each other, should be
quickly understood by the new employee and learnt by him/her. This will help the new
employee to adapt to the culture of the organisation.
12.2.2 FUNCTIONS OF CULTURE

There are many important functions of culture in any organisation. Some of them are as
follows:
• Culture develops a sense of identity among the employees
• It creates a boundary to define the roles of the employees
• Culture encourages collective commitment
• Culture has an important function of keeping the social system stable
• Culture brings a shared meaning in an organisation
12.2.3 UNIFORMITY IN CULTURE
In an organization the degree of adaptation to culture varies because people have different
mindsets. You can see that there is a dominant culture and a subculture which exists at the
same time.
Dominant culture- is the one most employee adopt. The general behaviour in the
organisation is guided by the dominant culture. This guides the way the policies and
procedures in the workplace are interpreted.
Subculture- this is adopted by small groups. At times people who oppose the dominant
culture tend to be part of a subculture which may be a modification or a contradiction to the
dominant culture.
12.2.4 STRONG VS WEAK CULTURES

The culture in the organisation is strong or weak depending on the degree of how many
people share it and the intensity with which they adapt to it.
The culture is strong when the sharedness is greater. The new employees attend induction
programs which facilitate them in understanding and adapting to the culture of the
organisation.
Intensity of the culture is the degree of commitment of the employees to the values of the
organisation. When the employees adhere to the culture, the intensity is high. The
organisation creates a reward system accordingly.

True/ False
Q.1 Culture refers to the shared values within an organisation.
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Q.2 Stories are a common way in which culture is passed on and learnt by people.
NOTES
Q.3 Culture discourages collective commitment.
12.3 CHARACTERISTICS OF ORGANISATIONAL CULTURE

As you are understanding, Organisational Culture guides the behaviour of the employees.
Some of the characteristics are as follows:
• Norms- these relate to the quality and quantity of the work standard that is expected
in the organisation. For example, the norm in ABC Company is that the tele-marketers
should make a minimum of 100 calls per day.
• Attention to detail- As per the job requirement in some companies, a lot of precision
and detail is emphasised on.
• Innovation and risk taking- In some organisations a culture develops which
encourages employees to think creatively and generate new ideas. They also invest a
lot of money for research and development.
• Rules- There are strict guidelines and rules which are followed in the organisation.
The new employees are made aware of them and are expected to learn and follow the
rules to become effective members of the organisation and perform their duties
efficiently.
• Philosophy- This refers to the value system of the organization. They define the way
the organisation treats its employees and customers.
• Dominant values- This brings out the values which are dominant in the organization.
They have to be followed by one and all. These values differ from one organisation to
another. For example- one organisation may follow professionalism another may
stress on globalisation. One may have a very aggressive culture whereas the other
may be tolerant in nature.
• Observed behavioural regularities- The behavioural regularities which are commonly
observed are symbols, rituals, language, terminology and the like.
• Outcome orientation- At times the desired outcome is stressed upon without
clarifying the means which lead to the outcome. This may indirectly encourage
unethical behaviour in the employees.
• People orientation- This encourages the participation of employees in the process of
decision making. The welfare of employees is given a lot of importance. The
organisation takes it upon itself to organise facilities like housing, schools, medical,
recreational and the like. This goes a long way to add to the employee satisfaction
level.
• Team orientation- In this culture, the efforts of the team as a whole are given more
emphasis than work done individually. They function on synergy between the team
members.
• Innovation and risk taking- Some organizations have a culture which is marked by the
encouragement to risk- taking, innovations and experimentation. Narayana
R. Murthy says, " The hallmark of any successful corporation is innovation."
12.3.1 Hall's Model
Edward T. Hall was a famous anthropologist. He is well-known for discovering the high and
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low context cultural factors. In the high-context culture there are a lot of unwritten rules
which are taken for granted. Whereas in the low-context culture a lot of explanation is NOTES
done, very little is taken for granted. There are less chances of misunderstanding in the
low-context culture as compared to the high- context culture.
Features of High-context cultures -
• Long lasting relationships
• Exploiting context
• Spoken agreements
• Outsiders and insiders distinguished clearly
• The cultural patterns are ingrained, so the change is slow
Features of Low-context cultures -
• Shorter relationships
• Less dependent on context
• Written agreements
• Outsiders and insiders are less clearly distinguished
• The cultural patterns change faster
12.3.2 GLOBE MODEL
There are two dimensions which the GLOBE model highlights.
a. The orientation towards performance which indicates the degree to which societies
emphasize performance and the levels of achievement
b. The orientation towards humane values which indicate the extent of importance
societies place on fairness, altruism and caring.
True/ False
Q.1 In the culture of the organisation, norms relate to the standard of work quality are
expected from the employees.
Q.2 Dominant values are followed by the minority people within the organisation.
Q.3 When organizations stress on the outcome more than the means they are referred to
as organisations which are outcome oriented.
12.4 CULTURE AS A LIABILITY

At times you may have seen that in some organizations culture acts like a hindrance at times.
It tends to become a barrier in the path of growth and development. It may be a barrier
to change, diversity or to mergers and acquisitions.
* Barrier to Change- When the behaviour of the employees is consistent in the
organisation, during times when change is needed, this consistency may become a huge
barrier in its way to survival and growth. You have often seen that flexibility in many ways is
necessary for the organisation especially during turbulent times.
• Barrier to Diversity- Very often when new employees are recruited in the
organisation, the management looks forward to the generation of new ideas. They
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look forward to the change that the new employees will get into the organisation
NOTES based on their different experiences and exposure. At the same time the organisation
wants that the new employees, very quickly learn and adapt to the prevailing culture
and adhere to the norms that have been a part of the organisation since earlier times.
You see that the culture of the organisation itself becomes a liability to change and
growth.
• Barrier to Mergers and Acquisitions- Companies hesitate to merge and acquire or be
acquired because they fear the loss of the culture which it has been used to as an
independent entity. You are aware about the multiple benefits which a company may
get after merger and acquisition, but culture tends to become a liability to let this
take place.
True /False
Q.1 Flexibility in the organisation reduces the barrier to change.
Q.2 Often organisations want the new employees to learn and follow the culture of the
organisation. This acts like a barrier to bring in diversity.
Q.3 Culture encourages mergers and acquisitions.
12.5 ROLE OF CHANGE IN AN ORGANISATION

'WE UNDERSTAND THAT THE ONLY COMPETITIVE ADVANTAGE THE COMPANY OF THE
FUTURE WILL HAVE IS ITS MANAGER'S ABILITY TO LEARN FASTER THAN THEIR
COMPETITORS.' - ARIE P. DE GEUS
Change means the new, the unfamiliar, the uncertain. Change involves people. You should
remember that the manner the change is brought about is of utmost importance. At times
change is welcome and at other times it is resisted. It is resisted when it threatens the
security of the orderly and familiar ways that you have been used to in the past. It helps to
have an understanding and supportive environment when change has to take place. The
people who are affected by the change have to establish a new value system and learn to look
at things differently.
It is important that the change is internalized and institutionalized otherwise it might slip
back to earlier ways. For example- In a school the present principal starts a new math
programme. This is followed till he/she is there to enforce it. You have seen that the teachers
go back to the previous ways as soon as the principal is transferred.
'Business as usual' seems to be a saying which was true in the past. In the current times, an
organisation must adapt to the new conditions of the evolutionary process. Continual
change means continual learning. Life-long learning has to be made the way for individuals
as well as organisations to enable them to survive and grow.
A STORY- 'CALF PATH’

Once upon a time there was a calf. One evening she walked home through a jungle. The
distance to her home was only one kilometer but she walked three. This happened because
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The next morning it so happened that a shepherd's dog passed that way. Seeing the path
NOTES
made from the hoof marks of the calf, he followed the same path. Soon the first sheep of the
flock followed and took the path with the marks on it. Like this, it was no surprise that then
the entire flock took the same path.
Soon it was seen that people started using the same path. They would cause the twists and
turns in it but follow it all the same without doing anything about it.
Gradually the path became a lane, and the lane became a road. Soon horses and bullock-
carts started using it. All followed the path of the wandering calf! After decades and more
decade, the road became a street, and then it became the city's crowded thoroughfare.
Thousands followed the footsteps of the wobbly calf. Later, this road became the main
street of a very large city. Buses, trams, cars all followed the path of the zig-zag calf.
• This story tells us that it is so important to be dynamic in nature, analyse the
environment, and change to survive and optimise on resources. You should learn from
this simple powerful story and never be in calf-paths!
12.5.1 LEARNING ORGANISATION
A learning organisation is," an organisation that is continually expanding its capacity to
create its future." said Peter Senge.
According to Stephen Robbins, "A learning organization is an organisation that has
developed the continuous capacity to adapt to change”.
Learning in an organisation takes place in two ways:
Single-loop learning:
In this method the organisation diagnoses and solves a problem. Then it adds the learning
from this experience to the knowledge base which has been existing earlier. There is no effort
made by the management to change the existing norms and policies in the organisation.
Double-loop learning
In this method the individuals attempt to solve the problems in ways which are significantly
different from the ways which have been followed in the organisation. The norms and
assumptions held in the organization are challenged. As and when an error is detected, it
is corrected in a manner that involves modifications of the policies, objectives and
standard routines of the organization. In this way the double-loop learning method opens
opportunities to get solutions which may be very radical and thereby give high levels of
improvements.
12.5.2. CHARACTERISTICS OF A LEARNING ORGANISATION

• The people in a learning organization have a shared vision.
• People communicate openly with each other without fear of criticism across
horizontal as well as vertical boundaries of the organisation.
• People tend to do away with their earlier routines and look forward to learning new
ways of thinking and working.
• The focus is to achieve the goals of the organization. They put their personal goals on
low priority, keeping the shared vision of the organisation as primary focus.
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• Members think of the processes, activities, interactions and functions as interrelated

NOTES within the organisation. These are just sub-divisions to facilitate the working within the
entire organisation. The organisation is taken to be one whole body, so there is a lot of
stress on synergy.
True/ False
Q.1 Change involves situations which are certain.
Q.2 In the double-loop learning process, it is possible to find solutions which give a
quantum jump to solving problems.
Q.3 A Learning organization develops a capacity to adapt to continuous change.
12.6 FORCES OF CHANGE

12.6.1 CHANGE IS THE ONLY THING THAT IS CONSTANT:
Change is the only reality; all else is subject to change. It happens all the time. This is the only
aspect of life which does not change. Day after day it happens more and more at a faster
pace. One has to keep pacing fast continuously even to be on the same level. Change is the
spice of life. You can say- ' Change is life'. Each one of us is constantly changing every
microsecond, right from the time to conception to death. It is believed that almost every
molecule of our body changes every seven years. You know you are changing physically,
emotionally, mentally and spiritually.
Change is the essence of both the individual and the organization. Management is efficient
when it can maintain a high rate of change at the individual as well as the organisation's
capacity.
In the context of business, change is defined as - " The coping process of moving from the
present state to the desired state that individual groups and organisations undertake in
response to dynamic internal and external factors."
You already know about the changing nature of the workforce in organizations. Most of
them have a multicultural environment. Changing patterns in demographics, immigration
and outsourcing have led to changes in the work-force.
12.6.2 FACTORS WHICH CAUSE CHANGES IN ORGANISATIONS ARE

• People: The diversity in the work-force forces differences in attitudes, expectations,
perceptions, personalities and the like. The changes in the customers mindset drives
organisational change. The ever-changing needs of the potential customers is one of
the main reasons for the company to constantly upgrade its policies and practices.
• Technology: Technology is changing the work you do; and the way you do it. The pace
of change in technology is too fast. you may have experienced that by the time you
get used to a particular technology and adapt to it, it changes to a new one. This is a
constant change. You also understand that failure to adapt to these constantly
changing technologies impacts the growth and even the survival of business in a big
way.
• Information processing and communication: Improved versions of computers,
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software, diverse platforms, internet and data transmission devices enable

employees to work from anywhere. Organisations have become-'virtual' in nature. NOTES
Physical space of an office is no more the need of an organization.
• Competition: Globalisation brings with it a higher degree of competition. The
organisations which respond fastest to the ever-dynamic needs of the customers across
the globe are the ones which will survive and grow. Just like the notion of Charles
Dickens in his book-' Survival of the fittest', the organizations which fit well to the new
business needs will survive. It means that the ones which can develop new products
and services rapidly to fulfil the new need of the customers will be there. It is
important that organisations are flexible and can adapt very quickly constantly.
• Social trends: Organizations have to adapt their products and marketing strategies to
the changing needs of society. The organisation which is early to catch and
understand the changes about to come in social trends, and then produce early, will
beat the competition and grow by understanding the changing social trends. This too is
a constant change. It is influenced by many factors which are by themselves dynamic in
nature.
12.7 THE CHANGE AGENT
The Change Agents are responsible for managing change related activities in the
organisation. They may be people from within the organisation or from outside the
organisation too. They may be managers or non managers. They may be current employees,
newly hired people or consultants from outside the organisation. Change agents are like
catalysts who take on the activities which have to be undertaken in the organisation to bring
in change.

True/ False
Q.1 Technology is a factor which may cause change in an organisation.
Q.2 Social trends are influenced by many factors which are not dynamic in nature.
Q.3 Change Agents are like catalysts who help to bring in change within an organisation.
12.8 MANAGING CHANGE

'IMAGINATION IS MORE IMPORTANT THAN KNOWLEDGE, FOR KNOWLEDGE IS LIMITED,
WHILE IMAGINATION EMBRACES THE ENTIRE WORLD.' - ALBERT EINSTEIN
Let us look at two very different approaches in which one can understand and respond to
change.
(a) APPROACH-1
The organization is like a large ship sailing across the calm Mediterranean Sea to a specific
port. The captain of the ship with the same crew has done this very trip over a hundred times.
However, once in a while a storm will appear and the crew has to respond. After the captain
had maneuvered through it, he would get back to calm waters.
Through this example you can understand that to implement change within an organisation
and return to status quo is only an occasional need. This view tells us about planned change.
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The Kurt Lewin Model (explained later), helps us to adapt to planned changes.
NOTES
(b) APPROACH-2
Let us take an example to understand unplanned change. Imagine that the organisation
is like a 40-feet raft rather than a ship as in approach -1. Unlike in the first approach where
the sailor was to sail on a calm sea; in approach-2, the raft has to traverse a raging river. This
river has uninterrupted white-water rapids. To make the situation worse this raft is manned
by ten people who have never worked together earlier and one of them has navigated
this river before. A major part of the trip is in the dark. There are unexpected turns and
obstacles which have to be faced in the river. To manage this the raft has to be pulled to the
shore often. This is also the time when new crew members are added and some of the earlier
ones have to leave. To top it all in this difficult situation, the exact destination where the
raft has to go is also not clear. You see here that change is a natural state and coping with
constant change is a continuous process!
In the present times you may have noticed that many employees face constant change at
their workplace. Stability and predictability do not exist. The momentum of the change is
so rapid that it makes situations border on chaos.
EXAMPLE: Let us take another situation to explain the increased need to understand and
adapt to change at a very fast rate, as an everyday lifestyle.
Consider attending a university with the following curriculum. The courses vary from two
weeks to thirty weeks in duration. The instructor can conclude the course any time without
any prior notice. To add to this tricky situation, the time duration of the session changes each
time, at times it is for about twenty minutes and at times it lasts for more than three hours.
During the session the instructor sets the time and date for the next session. The exams are
all unannounced, so you are required to be ready for a test anytime.
To succeed in this university, you would have to be incredibly flexible. You need to be able to
respond to every changing condition with great speed and focus. Students who are rigid,
over-structured or slow to respond will not be able to survive. Learning to adapt to change
at utmost speed has become a necessity!
12.8.1 KURT LEWIN'S MODEL

Today employees in all categories understand that they will have to face training and
retraining constantly in the professional career. Kurt Lewin's model is a very popular model
of bringing about permanent change which a lot of organizations follow.
You must first understand the two types of forces that operate during the process of change.
1. Driving force- this force pushes the behaviour of the people away from the status quo,
or the existing situation in the organization.
2. Restraining force- these are forces which act as barriers or hinder the change from
taking place.
You can understand that both these forces work in opposite directions. The Driving forces
help to bring the change; while the restraining forces represent resistance to letting the
change take place. It is like the tug-of-war game you must have played in your childhood. It
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is easy to follow that the resultant of the two forces will be the winning one. That is if the
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push of the driving forces is greater than the push of the restraining force, the desired
NOTES
change will happen. And in another situation if the forces which are resisting the change sum
up to more than the those driving the change, no change will occur; the situation will remain
as it was ie. status quo will be maintained.
The Kurt Lewin's model of change has the following three steps-
• Unfreeze: This step is about moving away from the status quo. The management of the
organisation tells its employees about the need for the change and how the change will
benefit the employees and the organisation. It shakes up the way people had been
used to doing things. It prepares them towards new methods which will soon come
in place of the old ones.
• Movement to Change: This stage is about implementing the change in the
organisation. When the management feels confident that the employees are ready
for the change, then this step is introduced.
• Refreeze: The employees must follow the change and make it an innate part of
themselves. The change is reinforced in this stage so that the employees do not make
the mistake of going back to the earlier methods of work. This step is very important
to avoid employees going back to their earlier comfort zone. In refreezing the
organization tries to balance the driving and the restraining force, so that the new
balance and the new equilibrium becomes the constant.
12.8.2 MODEL FOR INDIVIDUAL CHANGE- ADKAR
The acronym ADKAR stands for Awareness, Desire, Knowledge, Ability and Reinforcement.
This is also called Prosci's model for individual change. Here,
A stand for- Awareness of the need for change. D stands for- Desire to support and
participate in the change. K stands for- Knowledge of how to change.
A stand for- Ability to implement the change. R stands for- Reinforcement to sustain the
change.
In an organization change will happen only if and when it takes place at the individual level.
The organization is only a summation of all the individuals that comprise it. When the
mindset of the individual changes, accepts the change and works to implement the change;
does the change happen in the organisation. In an organisation, it is possible for change to
take place only when the concerned employees can confidently say- " I have the Awareness,
Desire, Knowledge, Ability and Reinforcement to make the change.”
12.8.3. SEQUENTIAL PROCESS OF CHANGE

Change can take place through various steps. These are done in phases. This complex
process of change for an individual involves eight stages. The stages are-
(a) Initiation-This is the stage when someone takes the initiative to propose the concern
that some change is needed in the functioning or the like within the organisation.
(b) Motivation- Large parts of the organisation are involved towards the new thinking and
motivated in that direction.
(c) Diagnosis- The main cause of the symptoms faced are found.
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Change
(d) Information Collection- Detailed information which is required as per the diagnosis is
NOTES collected.
(e) Deliberation- The various alternatives which have been generated for change are
evaluated.
(f) Action Proposal- In this stage the action plan is made.
(g) Implementation- The proposal is put into action.
(h) Stabilization- Change is generalized and made a part of the norms of the organisation.
12.9 LET US SUM-UP

In the present world of increasing uncertainty; change is like a journey without a tangible
destination. The organisation along with its competitors and the market are in a constant
flux. Like a nomadic tribe, you can say that the present organizations maintain their
competitive health by endless renewal of its capabilities. The winners are the organisations
and individuals which adjust, readjust and constantly keep readjusting to the changing
demands of the dynamic environment. Real life requires you to get more and more flexible!
12.10 KEY WORDS

Organisational Culture - A system of shared meaning. It is a common perception which is
held by the members of the organisation.
Dominant Culture - These are the core values in the organization which are shared by the
majority of members.
Sub-cultures - This refers to the mini cultures present in departments, offices in different
geographical locations and the like.
Strong Culture - When the core values are intensely held and widely shared.
Planned change - This is change which occurs due to the result from a deliberate decision
in the organisation.
Unplanned change - The unforeseen change which takes place in the organisation.
Change agent - The group / individual that takes on the activities of introducing and
managing change in the organisation.
Unfreezing - The first stage in the process of change where employees are motivated to
discard old behaviour and ways of doing work.
Moving - New attitudes, ways of work and behaviour are changed in place of the earlier ones.
Refreezing - This is the last stage in the process of change. In this the new attitudes,
behaviour patterns and ways of work are established as the new way in the organisation.
12.11 SELF-ASSESSMENT QUESTIONS MULTIPLE CHOICE QUESTIONS

Q.1 Culture is ....
a. the same thing as society
b. limited only to human beings
c. possessed only by males
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NOTES
Q.2 A culture is usually...
a. fixed
b. stable
c. evolving
d. stagnant
Q.3 Which of the following statements is true of culture?
a. Languages are culture
b. Archaeologists dig up culture in their excavations
c. Culture is a powerful human tool for survival
d. All the above
Q.4 Which of the following terms is NOT included in the definition of Culture?
a. sensible procedure
b. shared, often implicit assumptions
c. guides the behaviour and thinking of the members of the organization
d. benefits and values
Q.5 There are a number of factors that decide the culture of an organization, including-
a. structures and size; leadership
b. environment, events, nature of business and nature of clients
c. both a and b
Q.6 Force that works against change is called -
a. driving force
b. resistance force
c. frictional force
d. gravitational force
Q.7 A person who acts as the initiator and assumes responsibility for the management of
change is called -
a. consultant
b. change agent
c. arbitrator
d. liaison official
Q.8 Employees may resist change for which of the following reason?
a. fear
b. self interest
c. habit and personal inertia
d. all the above
Q.9 According to the psychologist Kurt Lewin, which of the following is not a stage in the 205
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Change
process of change management?

NOTES
a. unfreezing
b. mediating
c. refreezing
d. changing
Q.10 Which of these are the reasons which make it difficult to accomplish change in
organisations?
a. People are afraid of the unknown
b. People are cynical about change
c. People think things are just fine
d. All the above
12.12 SELF-ASSESSMENT QUESTIONS-POSSIBLE ANSWERS
Q.1 d
Q.2 c
Q.3 d
Q.4 a
Q.5 c
Q.6 b
Q.7 b
Q.8 d
Q.9 b
Q.10 d
12.13 ANSWERS TO CHECK YOUR PROGRESS CHECK YOUR PROGRESS-I
Q.1 True
Q.2 True
Q.3 False

Q.1 True
Q.2 False
Q.3 True

Q.1 True
Q.2 True
Q.3 False
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NOTES
Q.1 False
Q.2 True
Q.3 True

Q.1 True
Q.2 False
Q.3 True

Pearson Education.
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UNIT 13
Leadership: Contemporary
Theories and Techniques
NOTES UNIT 13
LEADERSHIP : CONTEMPORARY
THEORIES AND TECHNIQUES
STRUCTURE
13.0 Objectives
13.1 Introduction
13.2 Understanding leadership
13.3 What do we expect from a leader
13.4 Leaders and Managers
13.5 Formal and Informal Leadership
13.6 Leadership styles
13.7 Managerial Gird
13.8 Classical Leadership Theories
13.9 Contemporary Leadership Theories
13.10 Leadership Development Techniques
13.11 Qualities of a Good Leader
13.12 Let us sum up
13.13 Key Words
13.14 Check Your Progress-Possible Asnwers
13.16 Self-Assessment Question - Answers
13.17 References and Suggested Additional Readings
13.0 OBJECTIVES
• What leadership is all about in a business environment?
• What is expected from a leader?
• Leadership styles and managerial grid.
• Brief understanding of Classical leadership theories
• What are the Contemporary theories and its impact?
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• Transformational and Transactional theory of leadership NOTES

• LMX, Servant and Authentic theory of leadership
• Leader development techniques and quality of good leader
13.1 INTRODUCTION
You shall understand the term “Leadership” as a value loaded term which had been in focus
from the beginning of the study of management. The term leadership has changed over the
period of time from the earlier notions of personal abilities to the new era definition as social
influencer.
Some of the denotations for the leadership are given below…
• Leadership in business is the capacity of a company’s management to set and achieve
challenging goals, take fast and decisive action when needed, outperform the
competition, and inspire others to perform at the highest level.
• Leadership is a process by which an executive can direct, guide and influence the
behavior and work of others towards accomplishment of specific goals in a given
situation. Leadership is the ability of a manager to induce the subordinates to work
with confidence and zeal.
• Leadership is the potential to influence behavior of others. It is also defined as the
capacity to influence a group towards the realisation of a goal. Leaders are required
to develop future visions, and to motivate the organisational members to want to
achieve the visions.
• According to Keith Davis, “Leadership is the ability to persuade others to seek defined
objectives enthusiastically. It is the human factor which binds a group together and
motivates it towards goals.”
In short, the leadership may deciphered as
Leadership is the ability to influence people towards the accomplishment of

organisational goals.
13.2 UNDERSTANDING LEADERSHIP

The concept of leader may bring the image of a President or a Prime Minister leading their
nation to prosperity of its citizens, an army general motivating and leading its soldiers to
protect their country from any external aggression, a police chief managing its team to keep
the city crime free, a school principal cohesively working with his colleagues to provide best
education to the students, a surgeon carrying out integrated collective effort to save a
human life or a CEO doing an integrated performance to achieve the organisational goal; are
some of the pictures which emerge in mind.
Leaders definitely inspire, challenge, and encourage others. They can persuade and
influence, and they show resilience and persistence.
Leaders motivate others to aspire to achieve and help them to do so. They focus on the big
picture with a vision of what could be and help others to see that future and believe it is
possible. In this way, leaders seek to bring about substantive changes in their teams,
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organisations, and societies.

NOTES
Leadership is a relationship between followers and those who inspire them and provide
direction for their efforts and commitments. It affects how people think and feel about their
work and how it contributes to a larger whole. Effective leaders can mean the difference
between increasing a team’s ability to perform or diminishing its performance, between
keeping efforts on track or encountering disaster, and even between success and failure.
Characteristic of Leadership:
• Leadership is the process by which an individual motivates others and
mobilizes resources to achieve a goal.
• Leadership is both a set of behaviors that can be learned and a set of traits that
can be nurtured.
• Leadership is a relationship between followers and those who inspire and
provide direction for them. It involves emotional ties and commitments.
13.3 WHAT DO WE EXPECT FROM A LEADER

While trying to achieve the organisational objectives or goals, the leader performs a variety
of functions. Some of the key elements are described below.
• Teamwork: Leader, subordinates and the environment are the three vital
determinants for team work. All three factors are interdependent. However, it is the
leader’s role to create a conducive environment at works to achieve the objective of
the team.
• Counselor: The team members often suffer from emotional problems such as inability
to get desired wage increase or promotion or transfer to a good location and many such
barriers which may keep them from delivering on the track.
• Representing team: Rensis Likert termed leaders as “linking pins” who serve as
integrator for the organisation and the effectiveness of the organisation depends on the
strength of these linking pins.
• Effective use of Power/Authority: The leader uses appropriate power or authority
carefully to garner the desired objective.
• Effective use of Time: A leader uses his time productively by following scheduling
techniques, and using information, facts, and statistical inputs to produce timely
decisions.
• Effectiveness: Leaders take certain cautious decisions in order to achieve goals. They
delegate work, invite participation, offer rewards for performance and enforce
discipline/control when required.
• Motivational Role: In order to increase the performance of the work force, it is
essential to keep all the stakeholders motivated.
• Morale Building: Morale is considered as attitudes of contributors towards
organisation. High productivity is a natural result of high morale of the team.
13.4 LEADERS & MANAGERS
The term Leader and Manager are often misunderstood as one and the same. However, they
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are quite different. Managers are the part of a defined hierarchical system which is defined
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by the organisation whereas the Leader may or may not be part of the structure. A person
NOTES
can be an effective manager as well as a good leader. However, it is not always true. The
following diagram shows that desired relationship between manager and leader.
Fig. 1: Leader vs Manager
The differences between Managership and leadership are described below based on various
aspects characterizing the managers and leaders.
Table 1: Difference between Managership & Leadership
Managership Leadership
Manager uses processes to controls Leadership inspires its team to achieve result
Exists in formal groups. May exists even in unorganised informal
groups
It required organised structure. No organized structure is needed.
It is considered as a wider term It is considered as a narrow term
Needs formal functions like planning,
organising, directing & controlling etc. It is the activity requiring motivation, confidence
building and influencing people
to work willingly.
Emphasis is on individualism Emphasizes on collectivity.
Authority is derived from Authority is derived from own skill, abilities
organisational hierarchy. and situational demands.
It is transactional in nature. It is transformational in nature.
Believes in Operating results Leadership focuses on vision and purpose
Reactive with respect to future. Proactive with respect to future.
13.5 FORMAL/INFORMAL LEADERSHIP

Formal Leadership is normally derived from organizational structure. Their functional
authority and power usually generates in the form of orders or commands. However, an
informal leader may not, or may, have any defined authority in the organisation. Informal
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leaders often influence by connecting with others and building relationships through inter
NOTES
personal interactions.
13.5.1 FORMAL LEADERSHIP

Formal leadership is predefined structure of an organization and brings definite
responsibilities of the individual who is assigned the task. Such leaders are equipped with
resources through which they have to perform their task and achieve the objective of such
organisation. A school principal, a sports coach, a CEO of a company is typical examples of
formal leadership.
13.5.2 INFORMAL LEADERSHIP

Informal leaders are not appointed by any hierarchy or any authority. They are experienced
people who are trusted by group they represent. Such people are lookup to resolve the
issues faced by their team members as this informal leader is capable of understanding the
problem and often provides acceptable way forward.
13.5.3 DIFFERENCES BETWEEN FORMAL & INFORMAL LEADERSHIP

The table below summarizes the difference between formal and informal leadership:
Table 2
Formal Leadership Informal Leadership
Has Authority to perform Does not have any authority
Has Rights &Privileges Does not have any Rights or Privileges
Are the Decision makers Cannot take any decision. They have to influence
to get the decision done by
formal leadership
Can take disciplinary steps Cannot take any such steps.
Has ability to punish/reward Does not have any such privilege.
Directs others to perform Cannot direct any one. Has to use open
communication skills, shared vision and guidance
to influence.
Leads through formal organizational Leads through personal examples and
guidelines charisma
13.6 LEADERSHIP STYLES

The term leadership styles refer to the behavior of a leader in a particular situation. Different
behavior exists among leaders in different times and at different situations. Leadership style
is the outcome of leader’s personality, past experience, types of followers, organisational
atmosphere etc.
13.6. 1 AUTOCRATIC STYLE OF LEADERSHIP

An autocrat leader is a leader who is very strict and gives orders to their subordinates.
Subordinates have to follow the orders of their leaders without questioning them.
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Table 3
NOTES
Advantage Disadvantage
Facilitates quick decision making. Leads to frustration and conflict
Developed leadership skills can be Full potential of subordinates not utilized.
used directly.
Useful for less educated and unskilled Subordinates cannot give suggestion.
workers.
Gives satisfaction to the leader. Subordinates may try to avoid responsibility
Suitable for inexperienced subordinates Not good for development of subordinates.
13.6.2 PARTICIPATIVE STYLE OF LEADERSHIP

Participative leadership is also known as democratic leadership. Under this style of
leadership leader determines policies in consultation with their subordinates. He gives full
freedom to their subordinates to participate in decision making.
Table 4
Gives job satisfaction to the employees. Individual may make disruptive
contributions.
Increases the cooperation between Not useful when minimum interaction with
them. subordinates is required.
Boosts the morale of the employees. Time-consuming and may result in delays.
Reduces labor turnover and labour Individuals may use to suit their personal
absenteeism. ends.
Individual ability is enhanced. Leaders may appear incompetent.
Information is in two way May be misinterpreted as inefficiency.
communication.
Managerial goals also become participant Leader role may be considered Low.
goal
13.6.3 LAISSEZ FARE OR FREE REIN LEADERSHIP STYLE

Under this style, leader delegates complete authority to their subordinates so that they can
take their own decisions. Such a leader does not lead but leaves the group entirely to itself.
Subordinates themselves establish goals and work out their own problems.
Table 5
Independent working can be Lack of coordination
motivational.
Encourage suggestions and creativity. Individual objective may become a priority.
Opportunity develops for self-expression. May lead to disruptions.
Group has flexibility to adopt changes. Individualism may lead to chaos and
confusion
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It utilizes the full potential of the Useful only with highly educated employees.
NOTES
employees.

Q.1 Leadership exists at the level of the organisation.
A. Lower
B. Middle
C. Top
D. All of the above
Q.2 Leadership is
A. a science
B. an art
C. both an art and a science
D. none of the above
Q.3 Coordinating people and human resources to accomplish organizational goals is the
process of
A. directing
B. planning
C. leadership
D. management
Fill in the blanks:
Q.4 Participative leadership is highly motivating to employees.
(technique/style/behavior)
Q.5 Leadership is also known as authoritarian, directive or
monothetic style. (Free Rein/ Autocratic)
13.7 MANAGERIAL GRID

Managerial grid is used to identify/classify different styles for managers and helps in
understanding the reaction which comes out from the subordinates. It helps in
understanding alternative styles which may be available to him. Managerial grid is used
universally as a tool in managerial training and in identifying the different combinations of
leadership styles. The visual aspect of the managerial grid is depicted Fig. 2
13.8 CLASSICAL LEADERSHIP THEORIES

Leadership theories are the tools which help us to understand why and how certain people
become leaders. These theories focus on the behaviors and traits that people can follow to
increase their leadership capabilities.
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Fig. 2
NOTES
13.8.1 TRAIT THEORY

Trait theory considers leadership as a combination of certain personality traits and is based
on the Great man theory. Great man theory puts emphasis on skills like communication,
intelligence, technical skills, energy, emotional balance, inner drive, teaching skills and
human relations skill as key factors.
The key traits which really differentiate the leader from their followers are intelligence,
attitude, social maturity, motivation and achievement drive.
Fig. 3
13.8.2 BEHAVIOURAL THEORY

Behavioural theory emphasizes that behaviour plays a vital role in a strong leadership built-
up. Unlike the Trait theory which gives importance to the Trait only, behavioral theory
focuses on what the leaders do. So, the effective leadership is the result of effective role
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behaviour. The two important tasks to be performed are

NOTES
1. Task related functions
2. Group maintenance functions.
It is imperative that an individual can become a successful leader if he is able to perform both
the roles effectively.
13.8.3 SITUATIONAL THEORY

There is no one best style of leadership which is universally applicable to all situations. This
means that leader has to choose that style of leadership which is best suited to the situation.
According to situational theory, there are four variables which affect leadership style. These
variables are – leader, followers or subordinates, organization structure and situation. These
variables not only affect leadership styles but also determine leadership effectiveness. Four
interesting theories (situational) have been developed and are briefly discussed below.
13.8.3.1 FIEDLER’S CONTINGENCY MODEL

Four situational areas of Fiedler’s model is also known as contingency model is shown below.
Member–Leader Relation: The main aspect in this is the degree of trust, respect and
confidence that the followers have in the leader.
Leader Positional Power: The power of the leader is derived from the organizational position
and its degree depends on the sanctions and rewards tool available to him.
Task Structure: The task structure basically looks on how routine and predictable a task is for
the group.
Situational Favorableness: Fiedler’s classification of situational favorableness provides
eight possible combinations from highly favorable to unfavorable situation.
Fig. 4
13.8.3.2 PATH GOAL THEORY

R. J. House states that the leaders should guide the subordinate on the path to achieve
rewards of the work goals and to remove the obstacles to their performance.
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Fig. 5
NOTES
In this Path-Goal process, the leader adopts different leadership styles which Directive,
Supportive, Participative and Achievement Oriented.
13.8.3.3 LIFE CYCLE THEORY OF LEADERSHIP

Life cycle leadership is based on an inter-play among three variables as follows
1. Task Behaviour: It is in terms of the amount of guidance and direction a leader
provides.
2. Relationship Behaviour: Determined by socio-emotional support provided by the
leader.
3. Maturity of Followers: Reflected by the willingness level exhibited by
subordinates in performing a task.
CHECK YOUR PROGRESS - II
Q.1 Which one of the following is not a form of Autocratic Leadership?
A. Strict
B. Benevolent
C. Incompetent
D. Free Rein
Q.2 Managerial Grid has been developed by
A. R. Likert
B. Elton Meyo
C. Blake & Mouton
D. W.J. Reddin
Q.3 What does situational theory of leadership emphesise?
A. Environment
B. Events
C. Personality Traits
D. Political situation
Q.4 What term is used for the leadership style which takes account of other’s view,
opinions and ideas?
A. Autocratic
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B. Free Rein
NOTES
C. Democratic
D. People Oriented
Q.5 Charismatic Leadership theory is also called theory. (Greatman/ Trait/
Transformational)
13.9 CONTEMPORARY LEADERSHIP THEORIES

With the advent of new challenges and weaknesses of the existing historical theories of
leadership, new thought process has evolved which are later named as contemporary
approaches to leadership. The new theories which came into existence include the
following:
• Transformational Leadership
• Transactional Leadership
• Leader-Member Exchange (LMX) Approach.
• Servant Leadership
• Authentic Leadership
It is very important to mention here that no one single approach or theory is considered as
absolute and it is expected that an effective leader shall change his/her approach depending
on the circumstances and environment required the most suitable leadership application.
The transformational approach basically focuses on inspirational motivation, leader’s
charisma, intellectual stimulation and other individual influence. Transactional approach
is considered as the counterpart of the transactional approach focuses on utilizing the
employees in achieving the organizational goals. In LMX approach, trust based relationship
developed by the leader with the employee plays the key role in effectiveness of the
leadership. Servant leadership is a new leadership philosophy where the motto of the leader
is to serve and helps people to develop themselves to achieve the ultimate goal of the
organisation. The key element in the authentic leadership is to be honest and be self while
switching to the requirement of a particular complexity.
You will learn the five contemporary leadership approaches in detail.
13.9.1 TRANSFORMATIONAL LEADERSHIP
Transformational leadership encourages everyone in the organization to sharpen their
individual performance and contribution based on their passion and experiences. In this
process, the leaders and managers develop connection with the employees, encourage
enthusiastic inputs, garner their passion, provide support and create positive motivation.
Individual team members and employees are look into by the transformational leadership
in order to provide positive transformational support from within to benefit the good of
the whole group/team. Every individual member is considered as a leader-in-development
with the aim to nurture and facilitate their growth.
Four important factors in transformational leadership are idealized influence, intellectual
stimulation, individualized considerations and inspirational motivation. The factors are
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shown in fig 6.
NOTES
Fig. 6: Four I's of Transformational Leadership
Idealized Influence: The leader projects himself as a strong, powerful and robust role model
for the organisation and leads by example. Such leaders are very charismatic and ethical.
Their followers try to emulate them and tend to identify the leadership easily.
Intellectual Stimulation: In order to cater and to become catalyst for the intellectual
stimulation, the leaders are very creative, innovative and are open to new ideas. These
leaders create learning opportunities for their followers and move away from obsolete
practices. In this process they encourage the employees and promote growth and
improvement within the organization.
Individualized Considerations: The leader establishes a strong interpersonal relationship
with the followers and provides caring, supporting resource for their followers and their
organisation. As such they become the mentors of their followers which further helps in
achieving the goal.
Inspirational Motivation: Inspirational motivation is the result of leader’s effort to inspire
their followers to achieve the desired objective. Reasonably high goals are set for both
individuals and the organisation. The leader articulates the expectations clearly by utilizing
motivational to motivate followers internally as well as externally. Inspirational motivation
in closely linked with charisma which leads directly to authority and is considered
as inspirational and visionary. This leads to a positive emotional impact on the
leader’s followers.
Famous Story of Seed:
A CEO called his organisational leaders announced that he is going choose one of them as
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successor in a years’ time. He gave each one of them a seed and asked them to plant it into
NOTES
a pot and nurture it. The performance of individual shall be judged after a year.
Mary was one of the recipients of the seed and has taken utmost care to grow it. However,
the plant never grew up. She was very upset but kept on watering it for the whole year but
the pot remained empty.
After a year, everyone brought their blooming plants to the CEO. Mary was afraid but she
bought the empty pot. CEO examined every pot and on seeing that Mary’s empty pot,
enquired why she has no plant. Mary was afraid but she told the CEO that all her efforts to
grow the plant failed.
Everyone was surprised when the CEO selected Mary to be the successor. He informed that
he has given boiled dead seeds to everyone but only Mary was honest and can lead the
organisation into the future.
This story is often used by Management Guru’s to emphasize the transformational
leadership.
13.9.2 TRANSACTIONAL LEADERSHIP

Rewards and punishments are considered as key factors in transaction leadership. The
leader influences the subordinates without any emotional inputs or considerations. The
focus is always on the end results in a practical way. Transactional leaders hold the formal
authority and positions of responsibility in an organisation. He is responsible for regularly
maintaining and managing the individual/group performance.
This type of leadership style is more concerned with maintaining the routine flow of
operations. Disciplinary power and a set of incentives are used to motivate employees to
give their best performance. This type of leadership is solely concerned with the smooth
flow of operations. They rarely guide the organisation into market leadership.
The transactional leadership usually carries out the following:
• Set goals
• Provide specific directives
• Specify rewards based on performance
• Evaluate performance
• Focuses on routine and procedures
• Not open to making changes
• Standardization of procedures and practices
• Evaluates deviation from expected results
• Corrective action plan to improve efficiency
Fig. 7
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NOTES
13.9.3 LEADER-MEMBER EXCHANGE (LMX) APPROACH

In the LMX theory, the relationship between leaders and their followers is having a very
important role in the way the leaders influence the employee in an organisation. Leaders
have different type of relationship with the employees. Both members and leaders develop
trust based relationship with each other. They help each other when like the members
including the leadership. They have the tendency to go beyond their JDs in order to achieve
the collective success. However, if the LMX level is low, it means low level of trust, likings and
respect.
Fig. 8
It is often observed that leaders have different relationship with different employees within
the same group. They may have some members who are close to them (In-group members)
while others may not be close to them (Out-group members). In group members are also
called as High-Quality LMX while others are Low-Quality LMX.
High quality LMX relationship members are more satisfied with their jobs than Low quality
LMX members. High quality LMX people are more committed to their job, have more job
satisfaction and are clear in their vision about what is expected from them. They are
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motivated and have the tendency to get aligned not only with the leadership but also with
NOTES the organisation as a whole. They often have the tendency to go over board and help their co-
workers. They also reciprocate with their managers and assist them in getting the final goal.
Such employees are also less likely to leave their job.
Fig. 9
Satisfaction
Citizenship High Quality

Performance
Behaviour LMX Outcome
Commitment
However, the low quality LMX does suffer in the process and do cause negative impact. It
is very important for the leader to be on look out and convert such employees into high
quality LMX group. But how do we achieve it? This is achieved when the leader is fair and
treats the employees in dignified manner. They need to test the trust worthiness of the
employee by delegating the tasks and evaluating their performance on it.
Building high quality LMX is a two way process and is developed through mutual fairness and
objectivity. While it is necessary for the leaders to regularly evaluate the performance and
provide feedback to the employees, the employee can also seek the feedback from the
leadership. Leader should always be watchful of flattery and should take corrective measure
to rationalize such incidence.
13.9.4 SERVANT LEADERSHIP

Servant Leadership philosophy was developed by Robert K. Greenleaf. Servant leadership
defines the role of leader as serving the need of others. Thus, the primary objective of the
Servant leadership approach is to develop the employees and help them in reaching the
goal. The employees are first in the view of servant leader and they understand the desires
and needs of the employees. When leaders shift their mindset and serve first, it is beneficial
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to the leader as well as employees. Such leaders empower the employees and help them to
develop their carrier. NOTES
In fact, the servant leadership is unique in itself as the leader tends to serve the people
instead of people serving the leader. This is definitely different from the traditional
leadership phenomenon. The irony is that the servant leader feels it as an obligation to serve
their employees, customers and the associated external community. Thus, he is taking care
of all stakeholders with a positive and result oriented mindset which is based on the
development of the stakeholder itself.
Further, the servant leader is different from historical leadership as he/she tends to sacrifice
in order to help the employee succeed. In other words, they do not restrict them to company
insiders, and are genuinely make efforts to serve the community as a around the company.
Servant leaders do have some of the trait with the other leadership style such as
transformational leadership. They have keen focus on fairness, ethics, community
development and are committed to it.
Joe Iarocci who is the author of “Servant Leadership in the Workplace” has identified three
key priorities, three key principles and three key practices which distinguish the servant
leadership in the workplace environment.
Fig. 10
Larry Spear defined ten trait/characteristics which is required for a servant leader. The same
is listed below: -
1. Empathy
2. Listening
3. Healing
4. Awareness
5. Persuasion
6. Conceptualization
7. Foresight
8. Stewardship
9. Commitment to the growth of people.
10. Building community
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Various authors identified three key elements for the servant leadership and set it apart from
NOTES
other leadership styles. These are also called the three M’s of the servant leadership.
Motive:
• Underlying personal motivation for taking up a leadership responsibility.
• Requiring a strong sense of self character.
• Display of Psychological Maturity.
Mode:
• Focus on subordinates needs.
• Priority of people above organizational bottom line.
Mindset:
• Reorientation of the follower to develop them to focus towards other’s needs.
• Display of their orientation towards other through self-demonstration.
13.9.5 AUTHENTIC LEADERSHIP
Authentic leadership style puts emphasis on three specific qualities. They are transparency,
genuineness and honesty within the workplace. The authentic leaders can develop and built
strong and honest relationship with their team member with the help of these behavioral
characteristics. The team shall respect them and follow the leader based on these traits.
“Be yourself” is the key word for authentic leaders. They have realistic knowledge of their
capacity and they continue to evaluate themselves with respect to external and internal
challenges. They further derive strength from their past experiences as learning steps.
Honesty and genuineness in self-evaluation is the key for their success.
Authentic leadership has four major components:
Self-Awareness: Continual assessment of own weaknesses and strengths, as well as their
values within a work environment is the most important element of an authentic leader.
If these factors are clearly understood, it helps to become more authentic and able to
share themselves with their team members. Self-reflection, asking for feedback and
remaining aware of feelings experienced in the work environments is necessary for
practicing “Self Awareness”.
Balanced Evaluation: Authentic leaders must take into account Both supporting and
opposing opinions related to decisions must be taken into account by an authentic leader.
Seeking out opposing ideas of decisions can help illuminate flaws and avoid potential pitfalls.
Balanced processing encourages employees to feel open and honest to share their own
opinions in relation to workplace decisions.
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Fig. 11
NOTES
Transparency: It is essential for the authentic leaders to be willing to be transparent in their

workplace relationships as well as remain honest when sharing their own thoughts and
feelings including constructive feedback to team members for positive as well as negative
behaviors. This further helps an authentic leader to lead by example and fosters
transparency and honesty among the team and organisation.
Internalised Moral Perspective: For an Authentic leader, the needs of the company are first
and he/she keeps on their own feelings and needs as secondary. Organization success is an
authentic leader's primary objective even when it means the leader may face challenging
situations or be required to put in additional work.
CHECK YOUR PROGRESS - III

Q.1 Which of the following political leaders could not be termed as a Transformational
leader?
A. Mahatma Gandhi
B. Nelson Mandela
C. Bill Clinton
D. Donald Trump 225
UNIT 13
Q.2 What are the characteristics of transactional leaders?

NOTES
A. Guiding, Motivating and Mentoring
B. Guiding, Commanding and Motivating
C. Guiding, Demonstrating and Motivating
D. Guiding, Mentoring and Demonstrating
Fill in the blanks:
Q.3 Servant Leadership theory was founded by . (Green Leaf/ Larry Speers/
Newton)
Q.4 Three M’s of Servant Leadership are Motive, , and the Mindset.
(Management/Mode/Meticulous)
Q.5 The outcomes of High quality LMX are Co mmitment , Satisfaction,
and Citizenship behavior. (Performance/Direction/Ethics)
13.10 LEADERSHIP DEVELOPMENT TECHNIQUES

As you know, the development of the leadership is one of the key objectives of the
organizations globally. This is achieved through training and development and by creating
conducive work environment.
Leadership development is basically developing those traits and skills in the managers which
will not only help in enhancement of the current objective but will also develop those
qualities and attitudes that will help them to look into future on a proactive basis rather than
in a reactive basis.
Alastair Robertson identified three levels for the development of leadership as follows.
1. Business leadership by top team. This includes explicit operational processes.
2. Leadership of the top team by CEO. The focus here is the effectiveness.
3. Development of individual executives. This is also called personal development.
13.10.1 CONSTITUENTS OF LEADERSHIP DEVELOPMENT
Alastair Robertson in his article “Leadership development: No smoke and Mirrors,” in March
2000 specified that the characteristics such as “self-awareness”, “knowledge of one’s own
motivational level”, “understanding one’s own capability” and knowing how one affects
others are the critical constituents to become successful in today’s organizational
performance. The above characteristics help in following manner:
Fig. 12
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13.10.2 LEADERSHIP DEVELOPMENT PROCESS

NOTES
Anderson adopted the leadership development process depicted in Table 11.2.
Table 6
S.No Leadership Development Process
1 Create strategies for executive communication for key stakeholders
2 Assessment of existing state and direction.
Evaluate the speed at which business objective have to be achieved.
3 Assess present organizational culture.
Prepare action plans to change the culture in line with new business goals
4 Mentoring of executive teams on individual leadership and effective team work.
5 Coach individual executives on personal behaviors, communication and actions.
13.11 QUALITIES OF A GOOD LEADER

In order to influence followers, leaders must possess various qualities. Some of the
important qualities are discussed below:
a) Physical Qualities: Leaders should have sound health, good appearance, enthusiastic,
physical and nervous energy etc.
b) Intelligence and ability Quality: Another quality which leaders should have is the ability
to teach, to comprehend, conceptualize etc. Apart from this, they should be intelligent
enough to solve the problem and to guide, supervise as well as to direct their
followers. They must have the ability of sound judgment and self- understanding.
c) Moral Qualities: Another quality which should be present in the good leader is to have
courage, will power, sense of purpose, objectivity, integrity etc.
d) Social Qualities: As far as social qualities are concerned, leaders should be such who
have the ability to understand the human relations, human nature and human
attitude and so on.
e) Task Related Quality: Task related qualities include self - confidence, tactful, ability
to inspire their followers etc. Leaders should be initiative and persuasiveness. He
should have the quality of persuading their subordinates.
13.12 LET US SUM UP
Leadership is a dynamic and an essential element for the survival of an organisation. Without
leadership no organisation can achieve their goals. Good leaders can give the success to the
organisation whereas poor leadership can nullify the soundest organisation. Leadership is
a process of influencing others. It is a continuous and dynamic process of influencing the
behaviour of followers or subordinates. There is always a misconception that leadership and
Managership are same. But in practice both concepts are different. Leadership is a part of
management. Apart from types of leaders there are different styles which are followed by
leaders to influence their subordinates. These styles are described as autocratic,
participative and free-rein styles of leadership. In case of autocratic, leaders are very strict
and do not listen to their subordinates whereas participative leaders give chance to their
subordinates to participate in decision making. Free-rein leaders give full freedom and
delegate full authority to their subordinates in making objectives and solving problems.
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There is no one best style of leadership which is universally applicable to all situations. This
NOTES
means that leader has to choose that style of leadership which is best suited to the situation.
This is called situational theory. According to situational theory, there are four variables
which affect leadership style. These variables are – leader, followers or subordinates,
organization structure and situation. The main thing in situational theory is that leader will
first determine the situation, the needs and expectations of their followers, the nature of
their followers etc. and then will select that method or style of leadership which will give
maximum satisfaction to their subordinates or followers.
Transactional, Transformational, LMX, Servant and Authentic leadership theories are the
contemporary theories which help in better understanding that the historical theories.
13.13 KEY WORDS

Autocratic Leadership: Management style wherein one person controls all the decisions and
takes very little inputs from other group members.
Behavioral Theory: The behavioral leadership theory focuses on how leaders behave, and
assumes that these traits can be copied by other leaders.
Free Rein Leadership: It is also called Laissez-Faire leadership. This is a type of leadership
style in which leaders are hands-off and allow group members to make the decisions.
LMX Theory: LMX theory explains the effects of leadership on members, teams, and
organisations.
Managerial Grid: It is a self-assessment tool by which individuals and organizations can help
identify a manager's or leader's style.
Participative Leadership: A style of leadership in which all members of the organisation
work together to make decisions.
Path Goal Theory: The path-goal theory states that a leader's behavior is contingent to the
satisfaction, motivation and performance of their employees.
Servant Theory: Servant Leadership is a recent theory of leadership that argues that the
most effective leaders are servants of their people.
Situational Theory: Situational leadership is a way of adjusting one's management style to
adapt to each situation or task, and the needs of the team or team member.
Transformational Theory: A leadership style in which leaders encourage, inspire and
motivate employees to innovate and create change to achieve the organizational goal.
Transactional Theory: Style of leadership that focuses on supervision, organisation, and
performance wherein rewards and sanctions are the key factor.
13.14 CHECK YOUR PROGRESS - POSSIBLE ANSWERS

CHECK YOUR PROGRESS - I
Q.1 D
Q.2 C
Q.3 C
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Q.4 Technique
NOTES
Q.5 Autocratic
CHECK YOUR PROGRESS - II

Q.1 D
Q.2 C
Q.3 B
Q.4 C
Q.5 Great Man Theory
CHECK YOUR PROGRESS - III

Q.1 C
Q.2 A
Q.3 Green Leaf
Q.4 Mode
Q.5 Performance

Q.1 motivate their followers in the direction of established goals by clarifying role and
task requirements.
A. Transformational leaders
B. Charismatic leaders
C. Dominant leaders
D. Transactional leaders
Q.2 leadership is built on top of transactional leadership.
A. Transformational
B. Ethical
C. Charismatic
D. Level 5
Q.3 According to theory, followers make attributions of heroic or
extraordinary leadership abilities when they observe certain behaviours.
A. transformational leadership
B. transactional leadership
C. level 5 leadership
D. charismatic leadership
Q.4 A leader transcends his own interests for the good of the
company.
A. transactional
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B. transformational
NOTES
C. level 5
D. charismatic
Q.5 Charismatic leaders are likely to be .
A. extraverted and achievement-oriented
B. introverted and achievement-oriented
C. introverted and narcissistic
D. extraverted and humble
Q.6 Discuss the concept and features of leadership.
Q.7 Explain the differences between Leadership and Managership.
Q.8 Write a short note on Situational theory.
Q.9 Explain the different qualities of a good leader.
Q.10 Explain the differences between Leadership and Managership.
13.16 SELF-ASSESSMENT QUESTION - ANSWERS

Q.1 D
Q.2 A
Q.3 D
Q.4 B
Q.5 A
Q.6 Leadership is the process through which one can influence the behaviour of others.
Leadership is a dynamic and continuous process. A leader must have followers.
Q.7 The main differences are - a leader need not be a manager but manager must have the
qualities of leadership. The main functions of manager are to plan, organise, direct
and control the business affairs but the main task of a leader is to influence the
individuals or a group of individuals.
Q.8 According to situational theory, there is no one best style of leadership which is
universally applicable to all situations. This means that leader has to choose that style
of leadership which is best suited to the situation.
Q.9 The different qualities of a good leader are personal, moral, intellectual, social and
task-related qualities.
Q.10 See Section 5.0

Rensis Likert, The Human Organisations, McGraw Hill Book co., New York, 1965. Robert
Tannenbaum, Leadership and Organisation, McGraw Hill Book Co., New York, 1961.
B. P. Singh and T. N. Chhabra, Business Organisation and Management, Dhanpat Rai and Co.,
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Delhi, 2007.
NOTES
J. W. Newstorm & Keith Davis, Organisational Behavior, Tata McGraw Hill, New Delhi, 1995.
G.R.Terry, Principles of Management, Richard D. Irwin, Inc, Home Wood, Illionios, 1972.
N. G. Morse & E. Reine, The Experimental Change of a Major Organisation variable, Journal
of applied Psychology, Jan 1958.
E. C. Ganguly, Structure and Process of Organisation, Asia Publishing, 1964.
J. M. Burns, Leadership, Harper & Row, New York, 1978.
B. N. Bass, “Leadership: Good , Better, Best” Organisational Dynamics, B. Winter, 1985.
R. Likert, The Human Organisation, McGraw Hill, New York, 1967 Joe Iarocci, Servant
Leadership in Workplace.
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Managing Stress
NOTES UNIT 14
MANAGING STRESS
STRUCTURE
14.0 Objectives
14.1 Introduction
14.2 What is Stress?
14.3 Understanding Causes and Sources of Stress
14.4 People's Perception, Thoughts and Quotes on Stress
14.5 Settle the Mind to Reduce Stress
14.6 Stress Management Techniques
14.7 Wellness Program
14.8 Let Us Sum Up
14.9 Key Words
14.11 Answers to Self Assessment Questions
14.12 Self-Assessment Question-Possible Answers
14.0 OBJECTIVES
• To understand what stress is
• To learn about positive and negative stress
• To learn about the common causes of stress
• To get an understanding of the potential sources of stress
• Analyse, comprehend and learn from various examples
• Learn the techniques to manage stress
14.1 INTRODUCTION
“STRESS SPELLED BACKWARDS IS DESSERTS. COINCIDENCE? I DON'T THINK SO!!" -
UNKNOWN
Stress is a dynamic condition in which a person is faced with an opportunity, constraints or
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demand, for which the outcome is perceived to be important but uncertain. Since the
NOTES
outcome of the situation is not certain, but the outcome is important, the concerned person
feels stress. This will be in proportion to the importance of the outcome and is also affected
by the personality traits and environmental factors in which the individual is placed. The
present life situations and dealings of most people are complex. This creates more stress.
Simple living, few wants, less competitiveness were factors of low stress in society in times
gone by. Today most of us have complicated our lives, wants are near infinite, competition
is high; these factors along with many others tend to make life stressful.
Stress may be beneficial at times, when it pushes you to better gains and has a clear positive
value.
At other times stress is in negative value. It creates anxiety, pain and suffering in the
individual concerned and his/her near ones.
Managing stress within the organization for employees is a critical role which is taken up by
the management.
Wellness programs are run. Stress management practices, counselling is regularly taken up
by organizations in the hope to minimize stress in the work environment and also outside
work. You endeavour to have a positive attitude yourself and work towards making the
environment stress free, conducive to efficient work and enhanced output.
14.2 WHAT IS STRESS?

Stress defines feelings of tension and exhaustion which are generally associated with over-
demanding or too much work. Stress is caused when the demand on the physical and mental
energies of an individual becomes overwhelming. Overwork, feelings of insecurity or failure,
monotony and the like are factors of pressure.
14.2.1 EUSTRESS AND DISTRESS

" To achieve great things, two things are needed- a plan and not quite enough time!"
At times a little stress may be actually desirable. It helps people energize and push
themselves to better levels of performance. This stimulates people to better output,
meeting deadlines and targets, clearing work which may otherwise remain pending. This
type of stress is called EUSTRESS. It is positive stress and has a beneficial effect on health,
performance, motivation, performance and emotional well-being. People see and feel the
pressure of deadlines and heavy workload as positive challenges and this perception
enhances their work quality. The level of satisfaction therefore gets higher. The situation
does feel stressful, but you feel you can handle it.
Example - The excitement of a roller-coaster ride, a fun challenge and the like.
- The enhanced performance of an athlete or stage performer.

On the other hand, stress is harmful. It may lead to lack of motivation at work. Personal
problems too will surface. It decreases performance of individuals, creates nervous tension,
lowers morale, people may withdraw, signs of repressing the problems and the like. This type
of stress is called DISTRESS. It is a state of extreme sorrow, anxiety, suffering or pain. It is
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associated with a feeling of being in trouble.

NOTES
14.2.2 HOW DO YOU RECOGNIZE STRESS?
• Nervous tension: This may show up in many ways. Sleeplessness, mood swings,
irritability and increased sensitivity, preoccupation with detail and the like are ways
in which tension manifests itself in individuals because of stress. There may be stress
related physical symptoms like headaches, muscle-tension, digestive and skin
disorders and the like.
• Low morale: Low morale often leads to dissatisfaction, low confidence, hopelessness
and frustration and increased rate of accidents and poor quality of work.
• Withdrawal: This manifests itself when the concerned person is reluctant to
communicate, he/she is unusually quiet. It may result in absenteeism, poor time-
keeping or even leaving the organization. It is a defence mechanism.
• Repressing the problem: At times the individual may deny the problem and force
himself/herself to be cheerful or playful. It may lead to excessive drinking.
'True' or 'False’
Q.1 Stress is good if it is in small quantities.
Q.2 Too much stress is good.
Q.3 Stress brings about changes in behavior.
14.3 UNDERSTANDING CAUSES AND SOURCES OF STRESS

Understanding the causes and the source sof stress paves the way to handle stress.
14.3.1 CAUSES OF STRESS
Stress is associated with CONSTRAINTS and DEMANDS. Constraints are the forces which
prevent individuals from doing what they desire to do. Demands refers to the loss of
something which was desired.
Example- I am sure you will recollect that at the time when you faced an examination or at
the time of your performance appraisal at work, you must have faced stress. This was so
because in any or both of these situations you had constraints and demands before you.
Opportunities would be created due to these situations. A good review of your performance
would make the way for promotions in the future. At the same time a poor review may get
the person fired from the job.
This is how stress gets linked or associated with situations- because in the situation there
is uncertainty of the outcome and the outcome is very important. You can understand that
for a person if the outcome of a particular situation is very important, stress will also be
very high. In another situation if the outcome does not matter at all there will be no stress.
It is all very specific to the nature of the problem/situation and the importance of the
outcome to individuals. The same situation may create varying degrees of stress to the same
individual at different timings and circumstances. Also, the same circumstances and timing
of a situation will cause different degrees of stress to different people.
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• Personality:
NOTES
People who are sensitive, insecure and have a very competitive nature tend to
feel stress more acutely.
• Conflict or ambiguity in the roles a person is required to do:
At times there may be two demanding roles for one individual at the same time
which lead to mental conflict which shows up as stress.
Example - employee and mother of a small child.
- when an employee has to report to two bosses, especially if the roles expected
of the individual are different and at the same time; or when the two bosses of
the concerned individual don't see eye to eye.
• Insecurity, risk and change:
In an organization when a risky change has to be brought about by a manager
he/she and the others concerned will face stress due to the insecurity, change
and risk of the entire process of the new idea/setup/process/operation
system/etc.
• Management style:
• If the style of management is unpredictable, it will create stress because of the
constant threat of the possibility of a threat.
• If the style makes the employees feel helpless and insecure and is detrimental
to their self-esteem, it is bound to lead to a lot of stress in a number of people
at regular intervals.
• If the style of management is such that there is a constant fight for control and
win/lose situations are set most of the time.
• If there is too much or too little stimulation being provided to the employees.
• Job related factors:
• Any required skill or ability which is inadequate will lead to stress, especially if
the opportunity for training is less.
• The working environment is an important part of every day work life for the
employees. It is undesirable if it is poorly lit, noisy or dirty. Overload of work
too is unhealthy and may lead to stress.
• Social factors- In case the concerned employee is unable to get along with
colleagues or clients and the like, it will create stress and isolation from the
contact may happen.
14.3.2 POTENTIAL SOURCES OF STRESS
EXAMPLE-
Let us take an example from the previous unit- intercultural competencies. Suppose you
were doing very well in your job and got a promotion. This implied that you with your
family were to join another office in another country. The result definitely is some stress
for you and each family member. The excitement, motivation, happiness at the promotion
sure caused positive stress. The movement to another office in another location causes
mixed stress. The process and work involved may too be mixed in positive and negative
feelings of stress. The friends, connections, relationships which you, your spouse and the
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children leave behind will create a lot of negative stress. In case this change means moving
NOTES
along with aging parents; they may not be happy at changing their lifestyle location and
the like. Even you will feel stress about the adjustment issues which greatly impact the daily
life of each member. The children will be stressed to a greater level in the earlier part of
the new tenure as they will miss the school and play routine. The culture, life-style,
language, behavior of people there, food habits and the like, all will be reasons which will
demand adjustment. So, you see a common example has the element of stress, both
positive and negative for each family member.
To deal with this the organisation gives pre- transfer training about how things will be
there in the new location. Sometimes they facilitate the job of the spouse if that is required.
They organisation aids with the admission in school. Some preparation for a better
thereby a less stressful fit is made by the individual by learning the customs, language,
form of greeting, way of work and the like.
Despite all the effort from the organisation and the individual it happens that the
person/family is unable to adjust and finds the change too stressful. In that situation the
person is moved back to the earlier location. This again is a stressful situation for both the
organization and the individual.
The potential sources of stress can be put into three categories-
• Environmental - the uncertainty in the environment impacts the structure of the
organisation. It also influences the levels of stress in the employees.
• Organisational
• Individual
14.3.2.1 ENVIRONMENTAL FACTORS
You know that the environment is dynamic in nature, The only constant is change! The
changing nature of the factors which impact the employee and the organisation,
definitely generate a lot of stress. Some people handle it better than the others; but some
or the other factor does cause stress to most employees.
There may be changes in any aspect like- Political, Economic, Socio-cultural,
Technological, Legal, Economic. (This is referring to the utmost PESTEL model).
Economic uncertainty: When changes occur in the business cycle, they create uncertainty
in the area of economic well-being in the people of the organization.
Example: at the time when the business cycle is undergoing the phase of contraction,
employees may get stressed about the issue of their job security.
Political uncertainty: changes in the political set-up may create stress. Changes in this area
could lead to changes in policies, export import policies (EXIM), taxes and subsidies and
the like, which impact costs and other deliverables of the organization.
Technological uncertainty: Innovations and upgrades in computers, robotics, automation
etc are taking place at a very fast rate. By the time an organization has trained and enabled its
employees on a certain platform, the new one comes and the whole process of training and
getting people to work on the new system of doing things commences. This is indeed
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challenging and stressful.

NOTES
Terrorism: This is a stress which has been a concern of the twenty first century. Concerns
about safety and security create a lot of stress due to terrorism.
14.3.2.2 ORGANISATIONAL FACTORS

You know of examples of insensitive bosses, work overload, unpleasant co-workers and the
like which are an everyday occurrence in most organizations. Each of these is a potential
source of stress.
Task demands:
These are those factors which relate to the job of an employee. The way the job is designed,
the degree of automation involved, the task variety, autonomy along with the physical
layout and the working conditions impact stress levels of employees in every organisation.
Each of these factors creates differing stress levels at different times for different people.
At times working in an overcrowded office may be a source of anxiety to someone. Working
from a location which is visible or where the number of interruptions are many, may be
stressful. Work using an assembly line may become a concern if the employee feels that
the speed of the assembly line is a mismatch to his/her own speed.
Role demands:
Each one of you has a specific assigned to you in the workplace. This relates to the functions
that are given to you to perform in the organisation. Pressure on the deliverables from
the assigned role is often a potential source of stress. Role overload happens when the
person is required to do more work than the time allotted. Role conflict may create
expectations which cause stress as they are difficult to meet. Stress is also caused by role
conflicting situations when an employee has to report to two bosses, especially if they do
not see eye to eye. Role ambiguity means that the employee has not clearly understood
his/her role and therefore unclear in what is required to be done. You will agree that this
may be a stressful situation.
Interpersonal demands: Poor interpersonal relations, lack of support from colleagues are
potential sources of stress. The people who have a greater need for social recognition will
tend to feel a higher level of stress in such an environment.
Organisational structure: This relates to the rules and regulation which have to be
adhered to, by the employees. Too much of this, with little or no participative decision
making may lead to stress.
Organisational leadership: This relates to the style of management of the senior
executives of the organisation. You may have heard that some of them create anxiety,
fear and tension by establishing a very harsh culture. They put pressure, impose excessively
tight controls and often fire people who they consider are not 'measuring up' to his/her
expectations.
Organisation's life stage You have studied about the Product Life Cycle (PLC) in
organisations. In the same way an organisation also has to go through a cycle.
Organisations are (a) established, (b) they grow, (c) become mature, (d) die.
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These four stages create different problems and pressures for the employees. The stage of
NOTES
establishment and death are the most stressful; though establishment is characterised by a
lot of excitement and uncertainty and the last stage requires layoffs etc. The stage of
maturity has least stress as there are minimum uncertainties at this time.
14.3.2.3 INDIVIDUAL FACTORS

The individual faces family problems or economic problems. Some problems may happen
due to work and some are issues related to life outside the work area. It is not really
possible for an individual to totally compartmentalize the two areas in life; so, problems
at one end will bother the other end too.
Research points out that though some people manage stressful situations well, others get
overwhelmed by them. There are some aspects in individuals which count for the differing
abilities in individuals to handle stress. These variables are-
(a) Perception, (b) Job experience, (c) social support, (d) self-efficacy, (e) hostility,
(f) belief in locus of control.
EXAMPLES: You know that people often react to their perception of reality rather than
reality itself. Therefore, perception moderates the reaction of an individual to a perceived
stress condition. At the time of downsizing, an employee may fear and get stressed about
having to lose his/her job, whereas someone will take the situation with no or much less
stress with the thought that even if there is job loss, he/she will use the time to study further.
Social support from co-workers, managers and peers buffers the impact people feel.
Self-efficacy relates to the ability an individual feels within to be able to accomplish the
job. This confidence a person has in his/her own ability decreases stress. People with a
higher level of self-efficacy deal with overload of work or longer hours at work in a better
way and are less stressed by the concerned situations.
The people who have a high degree of hostility and anger are generally suspicious and
mistrustful of others. Research shows that such people experience more stress than
others in situations which may be similar.
Locus of control is an important attribute of an individual's personality. People who have
an inner locus of control tend to believe that they control their own destiny. Whereas
people whose locus of control is external in nature believe that their lives/destiny is
controlled by outside forces which are beyond their control. The individual who believes
in the internal locus of control, sees the situation where he/she can take control of events.
Such people are less stressed than the externals who are likely to be more passive with a
feeling of helplessness, in the same situation.
14.3.2.4 OTHER FACTORS

Family problems- Family relationships are generally important to any individual. Discord or
conflict there is stressful.
Economic problems: At times individuals are in the habit of spending more than their
earnings. So, it is at times not about how much a person is earning; it may be more about how
she or he is managing the money that is being earned. If the wants exceed the earning
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capacity for a long time, there is going to be a high level of stress.

NOTES
Personality: There are people with innate personal traits who tend to accentuate the
negative aspects of the world and the people around them. They seem to have a fault-finding
nature. This creates stress and should be handled with care.

State ‘True/False’
Q.1 The chances of stress being caused are more when the result of the concerned issue is
uncertain but important.
Q.2 The dynamic nature of the environmental factors may be a source of stress to most
people.
Q.3 A lot of stress with regard to security and safety occurs due to terrorism.
14.4 PEOPLE'S PERCEPTION, THOUGHTS AND QUOTES ON STRESS

* 'You can easily manage if you take the burden of one day at a time. The load
becomes too heavy if you carry yesterday's burden again today and add to it
tomorrow's burden before tomorrow comes.' ( John Newton)
• "It's always a good idea to do something relaxing prior to making an important
decision in your life." ( Paula Coelho)
• "The greatest weapon against stress is our ability to choose one thought over
another." ( William James)
• "Adopting the right attitude can convert a negative stress into a positive one!" (
Hans Selye)
• " Stress does not come from what is going on in your life; it comes from your
thoughts about what is going on in your life." ( Andrew Bernstein)
• " Be yourself. Within you, there is a stillness and a sanctuary to which you can
retreat at any time and be yourself!”
• " Over-thinking ruins you. Ruins the situation, twists things around, makes you
worry and just makes everything much worse than it actually is.”
• In times of great stress or adversity, it is always better to keep busy, to plow your
anger and your energy into something positive." ( Lee Iacocca)
14.5 SETTLE THE MIND TO REDUCE STRESS
Some ways to settle the mind during a crisis and reduce stress-
Stress over a long time can be overwhelming for everyone. Everyone should aim to have
a settled mind every day. This is the best for you and the people around you. The things
that one should do to help oneself and others are simple ordinary things. They are available
to all easily. It is just about clear thinking, taking charge and putting focused effort to manage
the situation. Yes, it is difficult to deal with stress, but it has to be done.
Some tips are given below to manage stress-
• Sit and discuss the issue and your anxiety with your family members with a view to
getting past the anxiety.
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• The person should try and not dwell on thoughts which are stressful. It helps to take
NOTES out time to go to a quiet place, close eyes and focus on breathing, soon the mind will
become calmer.
• Problems in general can be divided into three categories-
(a) Things that you can fix
(b) Things you have to put up with
(c) Things you should walk away from
It will help to take the problem at hand and see which category it falls under. If you are able to
put it into a clear category, you will have clarity of decision and then you can work accordingly
to resolve the issue.
• It is important to empathise with the anxiety of other people, to be helpful,

reassuring and focus on the positives that are likely to emerge.
• It is important to use your free time in a productive/creative manner, as an empty mind
is a devil's workshop!
• The person should endeavour to read uplifting books and articles.
• Regular meditation helps. Otherwise even sitting quietly with closed eyes doing deep
regular breathing helps to calm the mind.
• Imagine the future after the stressful issue is resolved. It gives courage and
encouragement at the time of crisis and stress while you are facing it.
• It is important to take out some time everyday to do something which makes you smile,
laugh and be happy.
14.6 STRESS MANAGEMENT TECHNIQUES
• ' THIS TOO SHALL PASS...'. You have seen, heard and know, loud and clear, that
nothing is constant. Change the only constant. This being the only universal truth
means- the present stressful situation too will change!!
Sometimes things, circumstances, people and the factors causing stress take time to
resolve/ change/ modify/die; but surely the situation will change. This period of
waiting and struggling may be long and is perceived to be longer.
You have to with a calm mind think what best you can do, get other people to do- actively
work to do or getting it done!
There are some things which are outside your control, if you realize that, then accepting
them is the only way out.
So, change what you can and accept what you can't change- this may sound simple, but it
is indeed the most effective technique to manage stress.
Organisations are putting in more effort to understand and be aware of the various types of
stress the employees may be going through from time to time. The management is trying to
remove the causes of stress as much as possible.
Example-
• Arranging for flexi hours.
• Improving the work environment.
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HRMC002
• Suitable management style.

NOTES
To deal with stress, organisations are teaching 'stress management techniques'. Some of the
techniques commonly used in most organizations are-
• Counselling
• Regular rest breaks or time off
• Physical exercise ( which works like a safety valve to release tension).
• Relaxation techniques like- meditation, breathing exercises.
• Planning and delegation of work ( to avoid stress by overload of work)
• Assertiveness ( helps to control stress which is due to insecurities in personal
relations).
There are many ways which are being researched, studied and shared by experts, which tell
you how to handle stress better. Each person is unique; so, one technique may work for
an individual in a given situation and another for the other person in the same situation.
Also, different situations will demand different solutions to stress management. You
should be aware about the maximum ways in which stress can be handled so as to improve
the chances of managing it better.

State- 'True' or 'False'.
Q.1 Physical exercise helps to release stress to some extent.
Q.2 Improving the work environment has no bearing on stress levels of the employees.
Q.3 Different stress management techniques work for different people even in the same
situation.
14.7 WELLNESS PROGRAMS

In present days, wellness programs are often run by a lot of organizations for their
employees. The program is designed in a manner that it focuses on the total mental and
physical condition of the individual. The wellness program provides workshops where
people focus on ways to lose weight if they are overweight, follow a regular exercise routine,
control smoking and alcohol consumption. It shares ways of better sleep routines; helps
people learn to improve their eating habits and the like. The program emphasizes that
individuals need to take responsibility to be incharge of their complete mental and physical
health. Wellness programs facilitate the people, give them the required information and
share ways to make good mental and physical health a reality.
It has been seen that when people work on these concerns as a team, it motivates each one
at an individual level to keep up the effort required to maintain mental and physical
wellbeing. Mere absence of illness is not the focus; the focus is to be well and happy as a
normal state of mind and body.
For most organizations, the return on the investment of these programs is definitely worth
running them.
EXAMPLE- Johnson & Johnson offered savings in insurance premiums to people who
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Managing Stress
exchanged bad habits for healthy ones- like quit smoking and started to exercise, lowered
NOTES
the cholesterol level, slimmed down from obese to normal weight.
The financial department reported that this led to savings in medical expenses which were
five times the cost of the wellness programs.

State- 'True' or 'False".
Q.1 Organisations run wellness programs for entertainment.
Q.2 Wellness programs encourage and enable employees to form and maintain habits for
healthy mental and physical health.
Q.3 The organisation saves overall, by spending on wellness programs.
14.8 LET US SUM UP

Stress is faced by all people at different times and situations. Some stress moves you faster
and in a better way to achieve your goals when it is positive in nature. It does so by increasing
work intensity, alertness and the ability to react. However, if the stress level is high, or even
if the moderate level stress carries on for a long period, it turns negative and takes a toll on
the person. It is dissatisfying and bothersome. There are various factors which can be the
source of causing stress in the dynamic environment. Individuals and organizations both put
in a lot of conscious effort to minimise stress. By managing stress well, the employee can
work to maximise output and profitability, in the organizational environment which is
conducive to working as well as looks into the wellbeing of individuals.
14.9 KEY WORDS

Stress: Stress can be defined as a dynamic condition, in which a person is faced with an
opportunity, constraint or demand, for which the outcome is perceived to be important but
uncertain.
Eustress: This means good stress or beneficial stress.
Distress: A state of being very upset or in pain/suffering/difficulty
Constraints: Forces which prevent the individual from doing what he/she desires
Demands: The loss of something desired
Wellness programs: Programs that focus on the total physical as well as mental condition of
a person.

Q.1 Which of the following are the basis of stress?
a. Thoughts
b. Environment
c. social stressors
d. All of the above
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HRMC002
Q.2 The following are characteristics of Positive Stress...

NOTES
a. It motivates
b. It feels exciting
c. It enhances performance
d. All of the above
Q.3 The following are the characteristics of Negative Stress...

a. It decreases performance
b. It increases anxiety
c. It feels unpleasant
d. All of the above
Q.4 Which of the following are true...
a. Thoughts about fear, uncertainty, worry can cause negative stress.
b. Habits like over-scheduling, procrastination can cause stress.
c. Both 'a' and 'b'.
d. None
Q.5 From the following statements, which ones are stress busters?
a. A relaxing walk
b. A supportive network
c. Looking at the situation in a positive manner
d. All of the above
Q.6 The physical and mental responses that our bodies go through in situations of
perceived threats is :
a. Trauma
b. Distress
c. Eustress
d. Stress
Q.7 The following change may happen in the behavior of a person after stress...
a. The person sleeps more or less than before
b. The person eats more or less than before.
c. The person isolates from others.
d. All of the above
Q.8 Which of the statements given below is true about managing stress?
a. Stress management helps us to control our health in a positive manner.
b. Stress management teaches us about the connection between the body and
mind.
c. Stress management tells us how to avoid all kinds of stress.
d. Only statements 'a' and 'b'.
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Managing Stress
Q.9 Through Stress management we learn ...

NOTES
a. to avoid the pressures of life
b. enhance skills to help the body adjust to pressures of life.
c. both 'a' and 'b' are true.
Q.10 The following are true about the effects of stress-
a. Hypertension
b. Spasmodic pain in the neck and shoulders
c. Hair loss and baldness
d. All of the above
Q.1 True
Q.2 False
Q.3 True

Q.1 True
Q.2 True
Q.3 True

Q.1 True
Q.2 False
Q.3 True

Q.1 False
Q.2 True
Q.3 True

Q.1 d
Q.2 d
Q.3 d
Q.4 c
Q.5 d
Q.6 b
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Q.7 d
NOTES
Q.8 d
Q.9 c
Q.10 d

Pearson Education.
245
ORGANISATIONAL
BEHAVIOUR
246
246 ISBN is 978-81-951960-3-6
Published by: Institute of Management Technology,
Centre for Distance Learning, Ghaziabad
Printed by: M/s. Vikas Computer & Printers

VIK072023

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HRMC002

Prof. (Dr.) Ravindra Kumar Dr. Rajib Lochan Dhar

Prof. (Dr.) Subhajit Bhattacharya Mr. Bhagwat Kharat

Prof. (Dr.) A. H. Kalro (Retd.) Prof. (Dr.) Asif Zameer

Prof.(Dr.) P.K Jain IIT,Delhi

Prof. (Dr.) B. B. Chakraborti (Retd.) IIM, Kolkata

SLM PREPARATION TEAM

Dr. Prachi Bhatt Dr. Zeenat Hasnain

COURSE COORDINATOR EXPERT REVIEW

PUBLISHER & PRINTER

We acknowledge, with gratitude, the assistance taken, in preparing the study

What do you mean Organisational Behaviour (OB)?

CHECK YOUR PROGRESS-I

• Individual Level: Deals with aspects related to an individual such as personality,

1.3 SIGNIFICANCE OF ORGANISATIONAL BEHAVIOUR (OB)

try to connect these dots together.

1.4 WHAT MANAGERS DO AT WORKPLACE?

associated activities in this realm.

Fig. 3: Mintzberg’s Roles of Manager

Fig. 4: Managerial Skills across Management Levels

the management principles to be used by a manager.

mode of implementing the change brought about in an organisation.

diﬀerent age-groups, educational backgrounds, gender, ethnicity, cultural backgrounds,

and development initiatives.

• Organisation Behavioural (OB) knowledge emphasises managers to assess each

• Organisational Behaviour (OB) improves managers’ ability to realise the need to be

1.9 KEY WORDS

Organisational Behaviour (OB): is the multidisciplinary study of employee interactions

1.11 UNIT END ANSWERS

1.12 CHECK YOUR PROGRESS-POSSIBLE ANSWERS

CHECK YOUR PROGRESS ANSWERS-II

1.13 REFERENCE AND SUGGESTED ADDITIONAL READINGS

CHECK YOUR PROGRESS-I

example of cognitive dissonance. As manager, one must try to comprehend cognitive

Table form of ABC Model

Component Measured by Example

A Aﬀect Emotion Physiological parameters I do not like this tea

B Behavioural Intentions Observed Behaviour I will never have tea here

Cognitive Dissonance can bring people to cross roads.

CHECK YOUR PROGRESS-II

2.4 ATTITUDE FORMATION AND CHANGE

2.6 JOB SATISFACTION

What aﬀects Job Satisfaction?

2.6.1 THE JOB ITSELF

2.6.2 SCOPE FOR GROWTH

2.6.3 SUPERVISION: LESS OR MORE?

2.6.4 WORK GROUP: MY TEAM?

2.6.5 WORKING CONDITIONS

CHECK YOUR PROGRESS-III

• Develop ‘people-ﬁrst’ culture. Put it in black and white and ensure

CHECK YOUR PROGRESS-IV

behaviour, whereas negative behaviour promotes unacceptable behaviour. Employee

2.10 KEY WORDS

Aﬀective Commitment is employee’s intention to remain in the organisation. It

2.11 REFERENCES & SUGGESTED ADDITIONAL READINGS

2.12 SELF-ASSESSMENT QUESTIONS

2.14 ANSWERS TO SELF-ASSESSMENT QUESTIONS

SELF AWARENESS, PERSONALITY

• Discuss concept of personality and big ﬁve factors

3.2 SELF AWARENESS

motives, purpose, desires, needs, strengths and weaknesses or it is accurate self-

3.2.1 TYPES OF SELF-AWARENESS

3.2.1.3 PRIVATE SELF-AWARENESS