Ob Ch1-9 Kassahun

Dandi Boru College Shambu Campus Management Department
CHAPTER ONE
AN OVERVIEW OF ORGANIZATIONAL BEHAVIOR
Chapter Objectives:
Upon the completion of this chapter, you should be able to:
 Understand the historical background of organizational behavior
 Differentiate those individuals who contribute for the advancement of organizational
behavior as a discipline
 Elucidate the nature and meaning of organizational behavior
 Recognize the nature of managerial work and the roles played by managers.
 Identify the major challenges and opportunities to organizational behavior in 21st c
 Differentiate the major disciplines that contributed towards the development of
organizational behavior
1.1. What is Organizational Behavior?
Definitions
“Organizational behavior is a field of study that investigates the impact that individuals, groups
and organizational structure have on behavior within the organization for the purpose of applying
such knowledge towards improving an organizational effectiveness.”
The above definition has three main elements; firstorganizational behavior is an investigative
study of individuals and groups, second, the impact of organizational structure on human
behavior and the third, the application of knowledge to achieve organizational effectiveness.
These factors are interactive in nature and the impact of such behavior is applied to various
systems so that the goals are achieved. The nature of study of organizational behavior is
investigative to establish cause and effects relationship.
An organization is a collection of people who work together to achieve a wide variety of goals,
both goals of the various individuals in the organization and goals of the organization as a whole.
The behavior of people at work depends on numerous factors such as technology, structure,
group, social set up, and so on. Organizational behavior is directly concerned with the
understanding, prediction and control of human behavior in organizations.” It is the study of the
behavior of people to improve the efficiency of organizations. The understanding and analysis of
the behavior of people helps in motivation to achieve the organization’s goals. The study of
behavior is essential because of the different nature of people. Besides individual differences,
people are whole persons and total human beings. Behavior is changed as a result of motivation.
Human dignity and ethics are observed in their behavior. An organization’s internal
environment, social environment, individual perception and learning, group affiliations and
technological developments are instrumental in shaping behavior.
Although many people assume that understanding human behavior in organizations is intuitive,
many commonly held beliefs about behavior in organizations, such as the idea that a “happy
worker is a productive worker,” are either entirely false or true only in specific situations. The
study of organizational behavior provides a set of tools, concepts and theories, that help people
understand, analyze, and describe what goes on in organizations and why. How do the
characteristics of individuals, groups, work situations, and the organization itself affect how
members feel about their organization?
Organizational Behavior, Teaching Material: C.I Kassahun T.Benti Page 1

To sum up, Organizational behavior is concerned with the study of what people do in an
organization and how that behavior affects the performance of the organization. It is academic
disciplines that can help managers make good decisions while working with people in a complex
and dynamic environment.
1.2. Historical Foundations of Organizational Behavior
By most estimates, organizational behavior emerged as a distinct field around 1940s (Warner,
1994). However, its origin can be traced much further back in time. The Greek philosopherPlato
wrote about equity in work relationships. Another Greek philosopher, Aristotle spoke about
the elements of persuasive communication. The writings of sixteenth-century Italian
philosopher, Niccolo Machiavellilaid the foundation for contemporary work on organizational
power and politics. In 1976, Adam smith advocated a new form of organizational structure
based on division of labor. One hundred years later, the German sociologist Max Webber,
wrote about rational organizations and initiated discussion on charismatic leadership. Soon after,
Fredrick Taylor introduced the systematic use of goal setting and reward or incentives to
motivate employees.
As organizations increased in size and complexity, the need for human concern also increased.
Different management theorists studied employees’ needs and motives or behavior in an
organization and the impact of employee behavior on productivity.
As coined by Luthans, the early management pioneers such as Henry Fayol, Henry Ford, Alfred
P. Salon and even the scientific management advocators at the end of the 19 th century such as
Frederic W. Taylor, recognized the behavioral side of management. However, they did not
emphasize the human dimension; they let it play only a minor role in comparison with the roles
of hierarchical structure, specialization, and the management functions of planning, organizing,
staffing, leading and controlling.
At the time of World War I, Fayol headed up what was at that time the largest coal mining firm
in Europe. Writing the generally considered first book in management, he emphasized that the
purpose of organization was to get the work done in specialized machines. He did not emphasize
that the organization is made up of people that is not a machine. Yet, perhaps the most widely
recognized management expert in modern times, peter Druker, has stated, “The organization is
above all social. It is people.” There are varied and complex reasons for the emergence of the
importance of the organization as social system, but the Hawthorne studies is famous that
provide historical roots for the notion of a social organization made up of people and makes the
generally recognized starting point for the field of organizational behavior.
Generally,the historical background of organizational behavior can be learned by having a
through look at the following theories of management forwarded by various individuals. As
forwarded by Mishra, these theories can be grouped into four main categories as Classical
Approach, Neo Classical Approach, Behavioral approach and Modern Approach.
1) The classical Era
Theories developed at the early stages were included under classical approach. The theories
included in this category are bureaucratic, administrative, and scientific approaches. They
emphasize on the structural or functional factors. The classical approach stresses on four S’s
that is, structure, specialization, scalar principle, and the span of control. This theory lays
emphasis on the organizational structure. Moreover, it treats employees as economic beings
like machines and money. Their maximum exploitation is suggested by applying the
bureaucratic and coercive approach. Hire and fire is the basic approach of this theory. It led
to a dehumanized organizational structure without considering the factors of flexibility and

adaptability. The rules and regulations become the governing factors. Specialization based on
the division of labor, scalar chain hierarchical organization, discipline, are the advantages of the
classical approach. This approach ignores the significance of human beings in organizational
growth. There is an absence of flexibility, adaptability, intrinsic rewards and personal
attachment. Ignoring initiative, innovation and changes is not beneficial for the health of an
organization.Among the categories of classical theories, the most recognized one are the
scientific management theory and administrative theory and we will have a brief look at them.
Scientific Management Theory
The scientific management theory was propounded by F.W.Taylor and was carried out by Frank
and Lillian Gilbreth, Henry L Gantt and Emerson. Taylor was considered as the father of the
principles of scientific management. His primary concern was to increase productivity through
greater efficiency in production and increase in payment for workers. As to this approach,
the personal talent of the manager guided the workers who were motivated by bonus and
monetary benefits. To this end, he tried to find out the basic principles of management by using
time and work study, detailed analysis, investigation and planning of work allocation. It is
known as scientific management because systematized knowledge is used for work allocation
and assignment of specific jobs. The salary, wages, etc. are to be decided as per the work
performance of individuals. Taylor described how the scientific method could be used to define
the “one best way” for a job to be done.
The scientific management approach was concerned with the principles mentioned below among
others:
 developing a standard method of doing a job
 Scientific selection of personnel
 assigning workers to jobs depending on their abilities
 training workers on the work method
 eliminating interruptions
 offering economic incentives
 specialization
 work order and
 coordination
Administrative theory:
It is also called the universal process school of management. The origin of administrative theory
approaches can be traced to Hennery Fayol, the French industrialist. In 1916, Fayol divided the
manager’s job in to five functions; planning, organizing, command, coordination and control. He
then recommended 14 universal principles of management. Fayol viewed as potentially
disruptive factor to be closely controlled by management. Thus, these 14 principles emphasized
on division of labor, authority, discipline, and strictly enforced chain of command. They include.
No. Principles Description
1 Division of labor The more people specialize, the more efficiently they can perform the task.
2 Authority Managers have the right and the authority to give order and to get things done.
3 Discipline Members of an organization need to respect the rules and agreements that
govern it.
4 Unity of command Each employee should receive instructions about particular operations from
only one person to avoid conflicting expectations and confusions.

5 Unity of direction Managers should coordinate the efforts of employees working in projects.
However, one manager should be responsible for one employee’s behavior.
6 Subordination Subordination of individual interest to the common goods
7 Remuneration Pay for work done should be fair to both employee and employer.
8 Centralization Managers should retain final responsibility but should also give their
subordinates enough authority to their job properly.
9 Scalar chain A single, uninterrupted line of authority should run rank to rank from top
management to lowest position in the company.
10 Order Materials and people should be at the right place at the right time.
11 Equity Managers should be both free and friendly to their subordinates.
12 Stability & tenure of There should not be high rate of employee turnover.
staff
13 Initiative Subordinates should be given the freedom to formulate and carry on with their
plans.
14 Esprit de corps Promoting team sprit gives the organization sense of unity.
2. Neo Classical Approach

The classical theories concentrated on discipline and the economic wellbeing of people. They
ignored their morale and desires. Neo classical theories while accepting the merits of classical
theories have given more importance to human relations and behavioral sciences. These theories
modified, added, and extended the classical theories by realizing the fact that management exists
in social system wherein human factors have noteworthy roles in performance. Employees can
play crucial roles in decision making process provided that they are allowed to take part. Human
relations and behavioral science have become two important approaches of neo classical
theories.
Human Relations:
This theory was developed by Elton Mayo and his colleagues from 1924 to 1932 at the
Hawthorne plant of western Electric Company. Below the Hawthorne study which was
conducted in four phases is described in brief.
Elton Mayoand His Hawthorne Experiment: without any question, the most important
contribution to the human relations movement within organizational behavior came out of the
Hawthorne studies undertaken at the western electric company. The four phases of this study are:
1. The Illumination Experiments: this phase of the study revealed that light had no
significance impact on productivity of workers. The intensity of light did not influence the
productivity of telephone relays. Here attempts to predict behavior were made by studying
the relationship between physical variables in the work environment such as
illumination, rest periods, length of work weeks, length of work periods, and employee
productivity.
2. Relay Assembly Test: this one provided several facilities to telephone relay assembly
wherein it was observed that special attention and treatment caused employees to
increase their productivity. It was termed as the Hawthorne Effect, where people feel the
pride of belonging to a group. Herein, the relationship between nonphysical variables such as
improved human relations, supervisory methods, social interaction, incentive systems,
workers’ authority, and productivity was studied.

3. Interviewing Programs: this one tested on human relations rather than on favorable physical
conditions. It revealed that employees are unwilling to answer direct questions. They gave
important clues towards management style when asked indirectly.
4. The Bank Wiring Observation Room Experiments: here sufficient freedom was given to
the informal groups. It revealed that employees were not only economic beings but social
and psychological beings as well. Their productivity was influenced by sentiments,
beliefs and the group behavior of employees.
3. Behavioral Management Theory

The proponents of behavioral school recognized employees as individuals with concrete human
needs as part of the work groups and as members of a large society. This theory believes in
interpersonal relations. It states that employees are assets that can be developed not nameless
robots expected to follow orders blindly.
Robbert Owen, a successful textile mill manager in Scotland, is considered as the father of
modern personnel management. He emphasized that management should show concern for
employees.
Abraham Maslow- a humanistic psychologist- proposed a theoretical hierarchy of five needs;
physiological, safety, social, esteem and self-actualization needs. From a motivation standpoint,
he argued that each step in the hierarchy must be satisfied before the next can be activated and
that once a need is substantially satisfied, it no longer motivates behavior.
Unlike the beliefs of classical theory, behavioral science believes that human beings like work
and but it should not be super imposed rather be self-realized.
Some of the major contributions of the behavioral science theory are described below.
Individual behavior: behavior of individual employees has been considered important in the
field of management. Their behavior is influenced by their respective feelings, perception,
learning, and personality.
Group behavior: the cultural and social backgrounds of employees have a significant role to
play in management. People work together to accomplish the corporate objective, i.e., group
objectives.
Task: effective performance of a task is important while giving due importance to coordinated
efforts and achievement.
Participative management: employees have the right to take part in management decisions.
Giving such opportunities to workers in the management process will help increase productivity
and efficiency.
Motivation: monetary and non-monetary incentives should be used for motivating people.
Employee development and worker satisfaction contribute greatly to production.
Communication: two way communications is essential to establish a common flow of
understanding in any organization. Formal and informal communication is exercised for
managing people, although informal communication has more impact on management success.
Group communication, team spirit, man to man relations and group harmony have been realized
by neo classical theorists.
4. The modern Era
According to Mishara, the modern organizational theory has become complex for it synthesizes
the classical and neo classical theories, while incorporating technological development. The
modern theory is classified into quantitative, systems and contingency.

Quantitative Theory: this theory includes operations research and quantification of the
problem. It analyses the problem from quantifiable angles and provides solutions to complex
problems only with the help of statistical and mathematical models such as linear and nonlinear
programming, decision tree, game theory, simulation, probability, and many others.
Systems Theory: a system is a set of interconnected and interrelated elements of
management activity. It is an arrangement of components of activities performed for achieving
certain objectives. Here the importance of considering an organization as composed of different
work units/ sections striving to achieve a common goal and thereby the need of paying due
attention to every unit is emphasized. According to this approach, if one section of the
organization fails to accomplish its tasks then the overall wellbeing of the organization would be
in jeopardy. Contingency Management Theory: this theory is based on the premises that
managers prefer actions or approaches depending on the variables of the situation they face. It
recognizes that there is “no one best way” to manage people in organizations and no single set
of simple principles that can be applied universally. A contingency approach to the study of
organizational behavior is intuitively logical because organizations obviously differ in size,
objectives, and environmental uncertainty. Similarly, employees differ in their values, attitudes,
needs, and experiences. Therefore, it would be surprising to find that there are universally
applicable principles that work in all situations, but it is one thing to say “it all depends.”
1.3. The Three Basic Units of Analysis in Organization Behavior
The study of organization behavior includes everything about organizations. As this is a rather
large undertaking, it is helpful to breakdown the field of study in to more manageable units for
investigation.In this regard, this material will use three different but interrelated levels of
analysis:
1) The individual
2) Group behavior and
3) Organization structure and job design.
I. The Individual
At one level, we can view organizations as consisting of individuals working on tasks in the
pursuit of personal and organizational goals. As a result, in order to understand organizations,
it is necessary to understand people, particularly from the perspective of individual
organizational member. Much of what we know about individuals is drawn from the discipline of
psychology and it is formal forthis field that theories and explanations regarding why individuals
behave and react as they do in response to different organizational policies, practices, and
procedures is obtained. Within this perspective, theories of motivation and satisfaction are
explored to assist in understanding the behavior and performance of individual organizational
members.
II. Group Behavior
A second level of analysis focus upon the interactions of people as they work in committees,
teams, groups, units, or departments. This perspective on organization behavior considers the
functioning of these various types of groups, asking questions such as:
 How do people work together in groups?
 What factors determine whether a group will be cohesive and productive, as opposed to
fragmented and unproductive?
 How does leadership influence group members and their ability to work together co-
operatively and productively?

This level of analysis draws in particular on theories from social psychology.

III. Organizational Structure and Job Design
The third level of analysis has to do with the way organizations are formally structured and
with the way in which jobs are designed. Concern at this level of analysis is with the
relationship between organization & its environment, and emphasis is placed upon
understanding how organization structure & job design influence effectiveness (for example,
how different ways of assigning duties and responsibilities to departments may influence the
ability of these departments and the whole organization to do their work effectively).
Additionally, an understanding of organizational design must characterize and influence
organizational behavior.
Why Do We Study OB?
The following are some of the reasons why we study organizational behavior:
To learn about yourself and how to deal with others
You are part of an organization now, and will continue to be a part of various organizations
Organizations are increasingly expecting individuals to be able to work in teams, at least
some of the time
Some of you may want to be managers or entrepreneurs
1.4. Integrating Intuition and Analysis
Effective organizational behavior management process attempts to organize quantitative and

qualitative information under conditions of uncertainty.
Intuition is based on:
 Past experiences
 Personal Judgment
 Feelings
 Personal thought and guess
Intuition is useful for decision making in:
 Conditions of great uncertainty
 Conditions with little precedent
Science or analysis
Decision based on:
o Research
o Tangible evidence
o Rules and procedures
1.5. A Review of the Manager’s jobs and its Relation to the Study of OB
As per Robbins, managers get things done through others. They make decisions, allocate
resources, and direct the activities of others to attain goals. If you do not know where you are
going, any road will get you there. Since organizations exist to achieve goals, someone has to
define these goals and the means by which they can be achieved. Management is that someone.
In the early part of 1960’s Heneri Fayol wrote that all managers perform five management
functions- planning, organizing, commanding, coordinating and controlling. Today, authors
condensed these down to four- planning, organizing, leadership and controlling.
In the late 1960’s Henry Mintizberg concluded that managers perform ten different highly
interrelated roles or sets of behaviors attributable to their jobs. The ten roles can be categorized
into three broad categories as follows:

Interpersonal Roles: The interpersonal roles consist of three sub categories. These are:
a) Figurehead/symbolic head: as figurehead a manager is required to perform a number of
routine duties of legal or social nature.All managers are required to perform duties that are
ceremonial and symbolic in nature. Example, attending official ceremonies. When the
president of a university hands out diplomas at commencement or a factory supervisor gives
a group of high school students a tour of the plant, he or she is acting in figurehead role.
b) Leadership: here the manager is responsible for the motivation & direction of subordinates.
All mangers have a leadership role. It includes hiring, training, motivating, and disciplining
employees.
c) Liaison: in this case the manager maintains a network with important people and groups. It
is concerned with contacting outsiders who provide the manager with information and other
supports. They may be individuals or groups inside or outside the organization. Example,
acknowledgement of mail, external board work
2. Information Roles: all managers, to some degree, receive and collect information from
organizations and institutions outside their own. Typically, this is done through reading
magazines and talking with others to learn of changes or new things that may affect his/her unit
directly or indirectly. This role has got three important sub roles as described below.
a) Monitor: a manager receives wide variety of information, serves as nerve center of internal
and external information of an organization. Example, handling all mail and contacts
categorized as concerned primarily with receiving information.
b) Disseminator: a manager transmits information received from outsiders or from other
subordinates to concerned parties. Examples include forwarding mail into organization for
informational purposes; verbal contacts involving information flow to subordinates such as
review sessions.
c) Spokesperson: is concerned with transmitting and sharing relevant information with
outsiders by representing the organization. Examples include communicating to interest
parties an organization’s plans, actions, policies, and the like.
3. Decisional Roles: all managers are required to make decisions. This role has four important
sub categories as stated below.
a) Entrepreneurship: initiates and oversees new projects that will improve their
organization’s performance. Example, strategy and review sessions involving
initiation or design of improvement projects
b) Disturbance Handler- engages in resolving conflicts
c) Resource allocator: the manager is supposed to allocate various resources in an
efficient manner to various section/departments.
d) Negotiator: involves dealing with other parties representing the organization For
example, contract negotiation
Still another way of considering what managers do is to look at the skills or competencies they
need to successfully attain their goals. Three essential managerial skills are:-
1. Technical skill: encompasses the ability to apply specialized knowledge or expertise.
2. Human skill: is about the ability to work with, understand and motivate other people
both individually or in groups.
3. Conceptual skill: is the mental ability to analyze and diagnose complex situations.
Decision making, for example, requires managers to spot problems, identify
alternatives that can correct them, evaluate these alternatives, and select the best one.

1.6. Characteristics of Organizational Behavior

Organization behavior explores the nature and functioning of all types of organizations, not just
private sector or profit oriented organizations. The field is equally concerned with understanding
educational organizations, hospitals, government agencies, voluntary organizations, and soon.
Organization behavior seeks to develop general principles and concepts that are relevant to
understanding the operation and performance of all types of organizations.The following are
common defining characteristics of an organization
1. Organizations are composed of individual and groups.

While at first glance it may seem obvious that all organizations are made up of people, the key
point is that people are the organization. We may have a tendency to identify the products and
service it creates. However, buildings are simply places for people to work, technology is
something that the people make use of, and products and services are created by people. It is the
people who are the organization, and without them, there is no organization.
2. Organizations are oriented toward the achievement of goals.
Organizations are created and continue to exist only because some groups of peoples have a
common goal that they cannot accomplish alone. For instance, hospitals exist in order to meet
the goal of providing health service to people who are sick. Every organization is goal-oriented.
3. Organizations need employees’ specialization and coordination in order to accomplish
their goals.
Organization exists because a single individual is unable to perform all the functions and
activities necessary to create a product or provide a service to a group of customers or clients.
The members of an organization do not attempt to do all the jobs and perform all the functions
that need to be carried out for the organization to accomplish its goals. Instead, the organization
divides up the work to be performed and each person or group of people takes responsibility for
performing some set of specialized functions. However, once the work has been divided up and
people have become specialized, the organization requires some means for coordinating their
activities.
1.7. Contributing Disciplines to Organizational Behavior
 Psychology:
Psychology is an applied science, which attempts to explain human behavior in a particular
situation and predicts actions of individuals. Psychologists have been able to modify
individual behavior largely with the help of various studies. It has contributed towards various
theories on learning, motivation, personality, training and development, theories on
individual decision making, leadership, job satisfaction, performance appraisal, attitude,
ego state, job design, work stress and conflict management. Studies of these theories can
improve personal skills, bring change in attitude and develop positive approach to organizational
systems. Various psychological tests are conducted in the organizations for selection of
employees, measuring personality attributes and aptitude.
 Sociology:
Science of Sociology studies the impact of culture on group behavior and has contributed to a
large extent to the field of group-dynamics, roles that individual plays in the organization,
communication, norms, status, power, conflict management, formal organization theory, group
processes and group decision-making.
 Political science:

Political science has contributed to the field of Organizational behavior. Stability of

government at national level is one major factor for promotion of international business,
financial investments, expansion and employment. Various government rules and regulations
play a very decisive role in growth of the organization. All organizations have to abide by the
rules of the government of the day.
 Social psychology:
Working organizations are formal assembly of people who are assigned specific jobs and play a
vital role in formulating human behavior. It is a subject where concept of psychology and
sociology are blend to achieve better human behavior in organization. The field has contributed
to manage change, group decision-making, communication and ability of people in the
organization, to maintain social norms.
 Anthropology:
It is a field of study relating to human activities in various cultural and environmental
frameworks. It understands difference in behavior based on value system of different cultures of
various countries. The study is more relevant to organizational behavior today due to
globalization, mergers and acquisitions of various industries. The advent of the 21st century has
created a situation wherein cross-cultural people will have to work in one particular industry.
Managers will have to deal with individuals and groups belonging to different ethnic cultures and
exercise adequate control or even channelize behavior in the desired direction by appropriately
manipulating various cultural factors. Environment studies conducted by the field of
anthropology aims to understand organizational human behavior so that acquisitions and mergers
are smooth. Organizations are bounded by its culture that is formed by human beings.
1.8. Management &Organization Behavior in the 21st century (Challenges &
Opportunities)
Understanding organization behavior has never been more important for mangers. A quick look
at a few of the dramatic changes now taking place in organizations supports this claim. For
instance, the typical employee is getting older; more and more women and nonwhites are in the
work place; corporate restructuring and cost cutting are severing the bonds of loyalty that
historically tied many employees to their employers; and global competition is requiring
employees to become flexible and to learn cope with rapid change and innovation.
In short, there are a lot of challenges and opportunities today for managers to use organization
behavior concepts. In this section, we review some of the more critical issues confronting
managers to day for which organization behavior offers solutions or at least some meaningful
insights to ward solutions.
1) Improving Quality and Productivity: most managers are confronting the challenges to
improve their organizations’ productivity and the quality of the products and services they
offer. Towards improving quality and productivity, managers are implementing programs
like Total Quality Management (TQM) and Business Process Reengineering (BPR)-
programs that require extensive employee involvement. Today’s contemporary managers
understand the success of any efforts at improving quality and productivity must include their
employees. These employees will not only be a major force in carrying out changes but
increasingly will participate actively in planning those changes.
2) Improving people skill: since managers work with and get things done through others, they
must have good human skills to communicate, motivate and delegate. Organizational
behavior theories and concepts can help managers explain and predict the behavior of people
at work. In this regard, managers are required to have the skills of effective listener, the

proper way to give performance feedback, how to delegate authority, and how to create
effective teams.
3) Managing Work Force Diversity: one of the most important and broad based challenges
currently facing organizations across the globe is adapting to people who are different.
Organizations are becoming heterogeneous in terms of gender, race, and ethnicity of their
employees. But the term encompasses anyone who varies from the so called norm. Managers
should shift their philosophy from treating every one alike to recognizing differences and
responding to those differences in ways that will ensure employee retention and greater
productivity-while, at the same time not discriminating. Diversity, if positively managed, can
increase creativity and innovation in organizations as well as improve decision making by
providing different perspectives on problems.
4) Responding to Globalization: management is no more constrained by national borders.
Globalization affects a manager’s people skills in at least two ways. First, managers are
increasingly likely to be assigned in foreign country. He/she will be transferred to the
employer’s operating division or subsidiary in another country. Once there, the manager has
to manage a workforce that is likely to be very different in needs, aspirations, and attitudes
from the ones he/she were used to back home. Second, even in one’s own country, managers
find themselves working with bosses, peers, and subordinates who were born and raised in
different cultures. What motivates you may not motivate them. While your style of
communication may be straightforward and open, they may find this style uncomfortable and
threatening. This suggests that if a manager has to work effectively with these people, he
needs to understand their culture, how it is shaped them, and learns to adapt your
management style to these differences.
5) Empowering People: nowadays managers put employees in charge of what they do
previously. They act as coaches, advisers, sponsors, or facilitators; apart from acting as
bosses. In many organizations employees are becoming associates and there is a blurring
between the roles of managers and workers. Decision making is being pushed to the
operating level, where workers are being given the freedom to make choices about schedule,
procedures, and solving work related problems. Managers encourage their employees to
participate in work related decisions. Now managers are going considerably further by
allowing employees’ full control of their work.
6) Stimulating Innovation and Change: employees can be the impetus for innovation &
change or they can be a major stumbling block. The challenge for the manger is to stimulate
employees’ creativity and tolerance for change. Today’s successful organizations must foster
innovation and master the art of change or they will become candidates for extinction.
Victory will go to those organizations that maintain their flexibility, continually improve
their quality and beat their competition to the market place with a constant stream of
innovative products and services.
7) Coping with Temporariness: managers have always been concerned with change. What is
different nowadays is the length of time between change implementations. They are required
to deal with flexibility, spontaneity, and unpredictability. Managing today would be more
accurately described as long periods of ongoing change, interrupted occasionally by short
periods of stability. The world that most managers and employees face today is one of
permanent temporariness. Workers need to continually update their knowledge and skills to
perform new job requirements.

8) Declining Employee Loyalty: corporate employees used to believe their employers would
reward their loyalty and good work with job security, generous benefits, and pay increases.
But in response to global competition, unfriendly takeovers, leveraged buyouts, and the like,
corporations began to discard traditional policies on job security, seniority, and
compensation. On the other hand, these changes have resulted in a sharp decline in employee
loyalty. An important challenge for managers would be to devise ways to motivate workers
who feel less committed to their employers while maintaining global competitiveness.
To sum up, since all the above activities are performed by managers, 21 st century’s managers’
function is very challenging and difficult.
1.9. Organization as a System
It is very helpful to think of an organization as a system of interdependent parts that interact with
one another and that also must interact with the broader world within which the organization
exists.The systems view of organizations emphasizes the key interdependences that organization
must manage within themselves organizations must trade off the interdependencies among
people, tasks, technology, and structure in order to perform their transformation processes
effectively and efficiently. Organizations must also recognize their interdependence with the
broader environments within which they exist. Failure to recognize and manage these key
interdependencies can leads to rapid decline and ultimately to the demise of the entire
organization.Within the organization we see that people employ technology in performing the
tasks that they are responsible for, while the structure of the organizations eves as a basis for
coordinating all their different activities. The systems view emphasizes the interdependence of
each these elements within the organization, as indicated by the arrows in figure below. Each
element within the organization depends upon all the other elements, if the organization as a
whole is to function effectively.
The other key aspect of the systems view of organization is its emphasis on the interaction
between the organization and its broader environment. Organizations do not exist in a vacuum
but instead are influenced by the social, economic, political and cultural environments within
which they operate. Organizations are dependent up on their environments in two key ways.
First, the organizations require inputs from the environment it is to operate. These inputs can
take the form of people, raw materials, money, ideas, and so on. If an organization cannot attract
the inputs it requires from the environment in order to function, it will rapidly decline and go out
of existence. The organization itself can be thought of as performing certain transformation
processes on its inputs in order to create outputs in the form of products or service.
This brings us to the second key way in which the organization is dependent upon its
environment. If people outside the organization do not want to buy the products or services
provided by the organization, (i.e. the outputs of the organization) it will very quickly go out of
existence.
1.10. Ethics and Organizational Behavior
Ethics are the principles and values an individual uses to govern his activities and decisions. In
an organization, a code of ethics is a set of principles that guide the organization in its programs,
policies, and decisions for the business. The ethical philosophy an organization uses to conduct
business can affect the reputation, productivity, and bottom line of the business.
Moral values such as respect, honesty, fairness, and responsibility are important constructs of
ethics. Thus, ethics include the fundamental ground rules and organizations give an informed
choice to the employees to understand whether something is right or wrong and then take
decisions making the right choice.Therefore, Ethics is the framework of values for moral

behavior. It is a social glue to ensure that an organized society prospers and everybody’s interest
is served.The role of ethics in organizational behavior underlies many of the keys to success and
sustainability by creating a set of rules and guidelines that promote safety, trust, and
responsibility in the workplace.
Leadership Ethics
The ethics that leaders in an organization use to manage employees may have an effect on the
morale and loyalty of workers. When leaders have high ethical standards, it encourages workers
in the organization to meet that same level. Ethical leadership also enhances the company’s
reputation in the financial market and community. A solid reputation for ethics and integrity in
the community may improve the company’s business.
Employee Ethics
Ethical behavior among workers in an organization ensures that employees complete work with
honesty and integrity. Employees who use ethics to guide their behavior adhere to employee
policies and rules while striving to meet the goals of the organization. Ethical employees also
meet standards for quality in their work, which can enhance the company’s reputation for quality
products and service.
Generally, Leaders and employees adhering to a code of ethics create an ethical organizational
culture. The leaders of a business may create an ethical culture by exhibiting the type of behavior
they would like to see in employees. The organization can reinforce ethical behavior by
rewarding employees who exhibit the values and integrity that coincides with the company code
of ethics and disciplining those who make the wrong choices.For individuals, the role of ethics in
organizational behavior helps ensure that each person is treated fairly and maintains personal
responsibility. Ensuring that each person earns a fair market wage based on his effort,
experience, and performance is one example of an ethical guideline that greatly affects
individuals. In general, if an employee feels that he is treated fairly and can trust his co-workers
and superiors, loyalty, and thus productivity may rise.
In addition to maintaining internal behavioral standards, part of the role of ethics in
organizational behavior is to ensure that the organization is behaving positively in the
community at large. If a company engages in behavior that damages the community, the
consequence will often filter down into the organization itself.
CHAPTER TWO
FOUNDATION OF INDIVIDUAL BEHAVIOR AND LEARNING IN AN
ORGANIZATION
Learning Objectives:
After completing the study of this chapter, you should be able to
 understand the foundations of individual behavior
 comprehend what perception is and identify those factors that allow a stimuli to be
perceived or not
 realize the major factors that may distort our perception on others and appreciate their role
in individual as well as organizational life
 have a clear understanding about the concepts of attitude, personality and learning
2.1.Perception
2.1.1. Definition of perception
Perception is defined as “a process by which individuals organize and interpret their sensory
impressions in order to give meaning to their environment (Robbins)”.

 What one perceives may be different from objective reality. A person coming late on duty
may be perceived as casual and tardy while there may be social problems faced by him.
 There is often disagreement among the individuals in the organization in relation to pay and
allowances, administrative back up, policies and procedures and the place of work itself. An
individual who displays a positive attitude may perceive above factors as good and
conducive to work environment while the others may consider them inadequate. Employees
also compare themselves on job assignment.
 It would often be observed that the manager is rated differently by his subordinates because
of the different perception of the individual about the manager.
Sensation and perception are complex phenomenon. Perception is outcome of sensation and is
much broader in its nature. Perception involves observing data, selecting, and organizing the data
based on sensory reflects and interpreting the same as per personality attributes of the perceiver.
That is why no two individuals can perceive an employee in the same manner, for one he may be
efficient while for the other he may be perceived as useless. Understanding perceptual process
helps managers to know better why people perceive things as they do differently, and to better
deal with such differences and minimize some distortions that occur.
2.1.2. Perceptual Process
Attention &
Environmental Selection Organization Interpretation Personal
stimuli Perceiver Classification Beliefs meaning & Behavior
Perceived Figure-ground Values intentions
Fig: 2.1. The perceptual
Setting process –Closure Attitudes
from stimuli to behavior
2.1.3. Factors Influencing Perception
There are a number of factors operate to shape & sometimes to distort perception. These factors
mainly reside the perceiver, the target, and the situation.
A)Perceiver: When an individual looks at the object and attempts to interpret the same, what he
or she sees it is largely influenced by the personal characteristics.
Attitude:Perception is a matter of attitude that can be positive or negative. Some workers would
feel and perceive that the prevailing working conditions in the organizations are congenial for
work and it contributes positively while for others it would be inadequate and demand
improvement.This is indicative of positive and negative attitude patterns.
Motive:is another factor that plays an important role in perception. Motive is nothing but
unsatisfied needs. This exerts considerable influence on perception. Boss who is insecure
perceives subordinate who does well as threat to his position. Personal insecurity is a threat to
personal survival in a job especially if one is frequently transferred.
Interest:is persons liking for a particular thing in an individual. May be some people get
attracted to eyes of a girl because he has interest in the eyes while other person may be interested
in hair style, therefore different person (perceiver) will perceive a girl based on perceivers’
interest. It has also been observed in the work places that workers would display interest as per
their liking. Students in the class when preoccupied are not attentive in the class.
Experience:also plays an important role in perception. Just as interest narrows down one’s
perception so does past experience. In contrast past experience nullifies an object interest for
example, subsequent visit to a historic place. Object or events that have not been experienced
before are more noticeable and creates an interest for example, a female manager.

Expectations:can distort one’s perception in what one sees and what one expects to see. For
example power hungry police officer to be strict regardless of his actual traits.
B)The Target:Objects, events that are similar to each other tend to group together and have a
tendency of perceiving them as common group. Physical and time proximity also leads us to
perceiving a situation in a different form than actual reality. Soldiers in identical uniform and
their uprightness is perceived as being strict, ruthless and tough, on the contrary they are sober,
soft and very delicate at heart.
1. Intensity: this principle states that the more intense the external stimuli, the more likely it is
to be perceived. A loud noise, strong odor, or bright light will be noticed more than a soft
sound, weak odor, or dim light. Advertisers use intensity to gain the consumers’ attention.
2. Size: this principle states that the larger the object, the more likely it will be perceived. The
largest machine sticks out when personnel view a factory floor.
3. Contrast: states that the external stimuli that stands out against the background or that are
not what people are expecting will receive attention.
4. Repetition: as to this principle, a repeated external stimulus is more attention getting than a
single one. Thus, a worker will generally ‘hear’ better when directions are given more than
once.
5. Motion: people will pay more attention to moving objects in their field of vision than they
will to stationary objects.
6. Novelty and Familiarity: this principle states the novel and familiar external situations can
serve as an attention getter. New objects or events in familiar setting or familiar objects or
events in a new setting will draw the attention of the perceiver.
C) The Situation:Change in situation leads to incorrect perception about a person. Time is one
factor, which influences the perception. Time is related to work setting and social setting. What
is important to remember is the perception should be done in a correct manner not to be led due
to work setting or social setting and that the situation is not allowed to perceive wrongly. An
object can be identified by its size, shade, shape, sound it makes and background. It can be
distinguished based on its movement. In darkness it may be identified by its silhouette, for
example caravan moving on skyline at the dawn.
2.1.4. Attribution Theory of Perception
In day-to-day life, we come across people with whom we interact. Motives, intentions, belief and
attitude of people have an impact as to how they behave. It has been seen that our perception
about the people is greatly influenced by the assumption we make about a person and not by
reality. There are two factors, which has an impact on human behavior. Firstis internally caused
behavior – refers to internal factors on which individual has a full control, secondly the
externally caused behavior refers to the behavior which has been caused due to external factors
and that the individual has no control over it.
Attribution theory suggest that when we evaluate human behavior, it is either internally
caused or it is caused due to external factors as explained above. The determination however
depends on the following three factors depicted in the following figure.
Observation Interpretation Attribution of cause
High External
Distinctiveness
Organizational Behavior, Teaching Material:Low Internal
C.I Kassahun T.Benti Page 15
High External
(A) Distinctiveness: Let us for evaluation purposes take an example of X worker coming late for
duty. When we carry out interpretation there are two factors, one whether arriving late is usual or
unusual behavior. If it is usual, it is attributed to internal factor on which X has full control.
When the behavior is unusual then it can be attributed to external factors. In the former situation
individual could be counseled appropriately.In the later situation, the external factors cannot be
corrected. If the external factors are high, then late coming should not be attributed to the
individual behavior.
(B) Consensus: This factor refers to group behavior. If the entire group taking the same route
came late on duty, the causation is attributed to external factors. But by some chance if X only
was late then the causation would be internal.
(C) Consistency: If the behavior of Mr. X is consistence that is if he is consistently coming late
then attribution should be to internal factors. In such cases there is a high internal causation. If X
came late once in a while the causation would be low and attributed to external factors. More
consistence the behavior, the more the observer is inclined to attribute it to internal causes. It has
been seen that we have the tendency to under estimate the influence of external factors and
overestimate the influence of internal factors or personal factors while carrying out perception.
This phenomenon is called the fundamental attribution error.
2.1.5. Common Errors While Judging Others
1. Selective Perception:People selectively interpret what they see based on their attitude,
interest, background and experience. In an organization so many things keep happening but
different people will perceive one fact differently based on individuals selectivity in perceiving
which is generally based on his past experience and attitude towards work. It is important that
when we read others, we make a mistake reading with speed and putting seal of what has been
selectively seen by a perceiver. For correct perception an individual must be observed, studied,
tried and later perceived without an individual bias.
2. Halo Effect:Halo effect refers to judging an individual based on single characteristics,
such as intellectual ability, sociability, and appearance. This type of perception is quite common
in any organization, which is called halo effect in perceiving an individual or situation. A rater
may rate a subordinate based on dominance of a single trait of the subordinate. The halo effect
has been very frequently noticed in performance appraisal.
3. Projection:You assume a person based on your own traits not what he actually possesses.
If you were hard working and dependable you would expect others to be so. If a person projects
the above characteristics in his dealings he is rated high or perceived in a different way than what
he actually is. It is commonly found that subordinates do or exhibit the same behavior as desired
by the boss.
4. Contrast Effect:We do not evaluate a person in isolation. Our reaction to one person is
relative to the other. During selection process, interviewer selects a particular person for a
particular job not because he fulfills all requirements but he is generally selected in relation to
the other candidates. Individual selected may be academically, skill wise, experience wise better
than those not selected. So it is a comparative or contrast phenomenon of perception. We
generally hear, people say that Mr. X presentation was good thereby meaning it was better in
relation to other people who would have made presentations in a particular session.

5. Stereotyping:In order to simplify matters, we often tend to classify people and events into
already known categories or groups, For example we generally perceive man as executive and
woman as secretary even if the situation may be different. For police person, it is generally
believed that they are generally tough and law abiding which may not be true. In reality this may
not be true. Similarly we attach positive attribute to judges, professors and doctors and negative
attributes to school dropouts, addicts although they may not be really so.
2.2. ATTITUDE
2.2.1. Definition of Attitude
According to G.W. Allport, “Attitude is a mental state of readiness organized through
experience, exerting a directive or dynamic influence upon individual’s response to all objects
and situations with which it is related.”
Krech and Crutchfield defined “attitude as an enduring organization of motivational, emotional,
perceptual and cognitive processes with respect to some aspect of the individual’s world”
In effect attitude is used in a generic sense, as to what people perceive, feel and express their
views about a situation, object or other people. Attitude cannot be seen, but the behavior can be
seen as an expression of attitude.
2.2.2. Components of Attitude
(a)Cognitive component:Cognitive component of attitude is related to value statement. It
consists of belief, thoughts, values and other information that an individual may possess or
has faith in. Maya is not hard working or Mina is hard working.
(b)Affective component:Affective component of attitude is related to person’s feelings about
another person, which may be positive, negative or neutral. I do not like Maya because she is
not hard working, or I like Mina because she is hard working.It is an expression of feelings about
a person, object or a situation.
(c)Behavioral component:Behavioral component of attitude is related to impact of various
situations or objects that lead to individual’s behavior based on cognitive and affective
components. I do not like Maya because she is not hard working is an affective component, I
therefore would like to disassociate myself with her, is a behavioral component and therefore I
would avoid Maya. Development of favorable attitude and good relationship with Mina is but
natural. Individual’s favorable behavior is an outcome of the fact that Mina is hard working.
Cognitive and affective components are bases for such behavior.
2.2.3. Sources of Attitudes
1)Social learning:Attitudes like values are acquired from parents, teachers, and peer group
members. We are born with certain genetic predispositions. Then, in our early years, we begin
modeling out attitudes after those we admire, respect, or maybe even fear. We observe the way
family and friends behave, and we shape out attitudes and behavior to align with theirs. People
also imitate the attitudes of popular individuals and those they admire and respect.
2) Personal experience: you may develop your attitude through continuous exercise of a
particular situation. For example if you find the president of DADU as collaborative, your
department head respective, security polices friendly and cafeteria waiters kind, you will have a
positive attitude for DADU because what you experienced is positive.
3) Association: you may also attain your new attitude by associating the new attitude creative
object with an old attitude creative object. For example, if your OB teacher is threatening and
cruel, you may have a negative attitude even towards other teachers because you may tend to
associate the behavior of your teachers.
2.2.4.Formation of Attitude

Attitude is formed due tovarious factors. This means we have different attitudes since there are
various factors that influence us to bend our mind towards a particular situation or object.
1. Economic factors: our attitude towards an object may depend on our economic status. For
example, we usually assume that marriage, power and being famous is for rich persons and
we develop negative attitude for such entities.
2. Family factors:Most of the times we act and behave like our families because all our
childhood life was depend on our families.
3. Social factor:our attitude may also depend on the value, tradition and norms of the society
where we live. For example we Ethiopians and western countries have no similar attitude for
religion, modernization and culture. That is why Ethiopians living abroad act like westerns.
4. Political factors:the political stability, behavior of political leaders has also an influence on
our attitude.
5. Psychological factors:human mind is a setup of personal values, beliefs and cognitive
thinking. Accordingly a person has personal perception which influences his/her attitude.
2.2.5. Types of Attitude
Job satisfaction: Job satisfaction is related to general attitude towards the job. A person having a
high level of satisfaction will generally hold a positive attitude while dissatisfied people will
generally display negative attitude towards life. When we talk about attitude, we generally speak
about job satisfaction because they are inter-related in organizational behavior.
Job involvement:Job involvement refers to the degree to which a person identifies himself
(psychologically) with his job, actively participates and considers his perceived performance
level important to self-worth (Robbins). High level of involvement indicates that the individual
cares for his job, which has an impact on high productivity.
Organizational commitment:Organizational commitment refers to degree to which an
employee identifies himself with the organizational goals and wishes to maintain membership in
the organization. He wants to “belong” to the organization and take an active part in its
functioning. Absenting or resigning from the job versus job satisfaction is a predictor of
organizational commitment. The concept has been very popular in the recent times.
Organizational commitment depends upon degree to which the workers enjoy autonomy and
freedom of action while performing.
2.2.6.Attitude and Consistency
As stated earlier that the attitude of an individual is not visible but is reflected through his
behavior as a mirror of his attitude. It is seen that people seek consistency among their attitudes
or between attitude and behavior. They seek to reconcile their attitudes and align their attitudes
with behavior so that it is rational and consistent. If there is inconsistency between attitude and
behavior, outside forces act upon an individual, which leads to attaining of equilibrium state,
thus consistency is achieved.
Cognitive Dissonance Theory
The theory proposed in 1950s seeks to explain linkage between attitudes and behavior. We have
often observed workers saying that working conditions in an organization are poor. Does it mean
that if the working conditions were improved the workers will achieve higher productivity? It is
a difficult question to answer, because there is in-consistency between working conditions and its
impact on changing of attitude of workers in relation to productivity. Festinger explains that
dissonance is inconsistency, and cognitive dissonance refers to any inconsistency or
incompatibility that an individual might perceive between two or more attitudes, and attitude and
behavior.

He further argues that

(a) Any form of inconsistency is uncomfortable and individual attempts to reduce dissonance or
discomfort.
(b) Individual tries to reduce dissonance to achieve stable state of behavior. For example non-
payment of tax (behavior) while recommending payment and displaying honesty towards social
obligation (attitude)
Reduction of dissonance
Reduction of dissonance depends upon following three factors.
(a) Importance of the issue, element or situation.If elements creating dissonance are
unimportant, the pressure to correct behavior will be low. For example to prevent pollution (non-
use of polythine bags) is not so important for an individual.
Therefore, though prevention of pollution is important but individual rarely show the concern
and keep using plotline bags in day-to-day Life. On the other hand train driver, though does not
want to run the train at odd hours of night but he has to make the living and hence he runs the
train (behavior) in spite of the high degree of dissonance because it is related to high degree of
rewards.
(b) Degree of influence individual believes he has on issue, element or situation.If one
perceives that the dissonance is uncontrollable then one is less likely to change the attitude.
Attitude change is a matter of conviction. It is voluntary in nature. In such situation (because it is
from within) the pressure to change the attitude is more to reduce the state of discomfort. For
example voluntary disclosure of Income Tax scheme (VDIS) introduced by the government. If
an individual wants to reduce dissonance (tension of being caught if not paid) and if the degree
of influence is high, then the pressure to reduce dissonance will be high and therefore individual
will disclose his income (behavior).
(c) Reward that may be associated to the dissonance. Rewards influence the degree to which
individuals are motivated to reduce dissonance. If high rewards are associated with dissonance
(discomforts) then individual will reduce tension, which is inherent in dissonance. A reward acts
as positive attitude change agent and further achieves consistency in human behavior. VDIS is a
scheme where government had asked people to disclose their income and that it would not ask
the individuals about its source. The scheme therefore attempted to reduce dissonance that led to
heavy deposits in the banks.
2.3. PERSONALITY
2.3.1. Definitions of personality
Personality is a very complex and multidimensional construct of a human being. No common
definition of personality has so far been arrived at. Personality is a dynamic organization within
an individual of those psychological systems that determines his unique adjustment with the
environment. It is a sum total of ways in which an individual reacts and interacts with
others.
Personality is a stable set of characteristics and tendencies that determine those commonalities
and differences in the psychological behavior (thoughts, feelings, and actions) of people that
have continuity in time and that may not be easily understood as the sole result of the social and
biological pressures of the moment.
2.3.2.Determinants of Personality
Personality is determined by heredity, environment (culture) and situation under which an
individual works.
Heredity

Heredity is transmitted through genes, which determine hormone balance, which later determine
physique and subsequently the personality. Heredity refers to acquiring from parents certain
biological, physical and psychological commonalities, which are further reflected in physical
stature, facial attractiveness, sex, temperament, muscle composition and even reflect. They often
decide energy level. These factors have a deciding influence on how a person in an organization
would display his reactions in a particular situation.
Nature of health and psychological makeup that an individual enjoys can be traced from the traits
his parents possessed. Parents prominently pass on shyness, fear and distress to the next
generation.
Environment
Every individual is born and brought up in a particular environment. Environment leaves an
imprint on the personality of an individual. It is commonly seen that a doctor’s son preferring his
father’s profession and a child of a soldier enters into Defense Services.
More advanced the socio-economic conditions of the society more would the children be forward
thinking. Environment should be viewed from the point of view of norms, ethics and value that
are observed and the attitude displayed by the social group. The cultural background is important
to evaluate personality.
In childhood, a parent, uncles, aunts and even neighbor’s behavior is copied by a child.It is
therefore necessary to display an ideal behavior on the part of all the adults who come in direct
contact with the children. Family moulds character of children through role models re-
enforcements, rewards and punishments. Other influences like first born and later born child will
have different personality traits. First-born child would generally be commanding. Female child
would be more responsive and pass on sobering effect on younger brothers/sisters.
Situation
Individual has to interact with number of problems in a given situation, which does not remain
constant. It is subject to change and hence fluid in nature. There is therefore a need to recognize
the person-situation interaction. It can be social learning activity of personality. Thus personality
is situational; the uniqueness of each situation and any measure of personality must be examined.
Personalities therefore mean how people affect others, how they understand and view
themselves, pattern of personality traits and person situation interaction. When an individual
goes to temple he would be sober, generally put on plain clothes and bow. When the same
individual goes for interview he would be armed with knowledge of the organization.
The Big 5 model (Five Basic Personality Dimensions)
The Big 5 model is a widely accepted five factor model of personality. It is a unifying
framework. The factors help people observe and understand an individual’s style and differences.
Each factor represents one aspect of individual’s personality and style and has important
implications for job performance (both to individual & team). Let us see individually.
Extroversion describes someone who is sociable, talkative, and assertive.
Agreeablenessdescribes someone who is good natured, cooperative and trustingand refers
to individuals’ propensity to defer to others.
Conscientiousness describes someone who is responsible, dependable, persistent and
achievement-oriented. It is a measure of reliability.
Emotional stability describes someone as calm, enthusiastic, and secure. It taps a person’s
ability to withstand stress.

Openness to experience describes someone in terms of imaginativeness, artistic

sensitivity, and intellectualism. It addresses one’s range of interests & fascination with
novelty.
2.3.3. Major personality attributes influencing OB
There are specific personality attributes that are relevant and powerful predictors (indicators) of
behavior in organizations. The common ones are:
1. Locus of control
Locus of controlis the dimension of personality that explains the degree to which people believe
they are in control of their own fate, rather than external forces, they determine their own lives
i.e. describes individuals who believe that they control what happens to them.
Some people believe that they are in control of their own destiny where as others see themselves
as pawns of fate, believing that what happens to them in their lives is due to luck or chance.
Hence the first types are internals and the second ones are externals.
Internals are people who believe they control the events and consequences that affect their lives,
i.e. see themselves as masters of their own fate and not simply lucky. I.e. those who believe that
they control their destinies whereas Externals are people who believe that what happens is
caused by fate, lack, or other external forces. I.e. who see their lives as being controlled by
outside force.
Researchers have found important behavioral differences between internals and externals.
o Internals display greater work innovation
o Internals have stronger expectations that effort leads to performance
o Internals exhibit higher performance on tasks involving learning or problem solving, when
performance leads to valued rewards
o There is strong relationship between job satisfaction and performance for internals than for
externals
o Internals obtain higher salaries and greater salary increase than externals
o Externals tend to be more anxious than internals.
2. Machiavellianism
Machiavellianism, named after Niccole Machiavelli, is a personality attribute that describes the
extent to which a person manipulates others for personal gain. It is describing the degree to
which an individual is pragmatic, maintains emotional distance, and believes that ends can be
justifying means.The concept refers to rational, pragmatic approaches to situations and emotional
distance from subordinates. High Machiavelli performs better in loosely structured situations and
when they interact face to face with others.
3. Self –esteem (SE)
Self – esteem (SE) is individual’s degree of liking or disliking of themselves. People differ in
the degree to which they like or dislike themselves. It is a judgment one makes about one’s own
worth; and directly related to expectations for success. People with high esteem tend to like
themselves, have high expectation for success and feel confident they can achieve their goals.
Those with low self-esteem lack confidence, and look to others for praise and reinforcement.
4. Self-monitoring
Self-monitoring has recently received increased attention in organizational literature. A
personality trait measures / refers an individual’s ability to adjust behavior to external
situational factors.Individuals high in self-monitoring show considerable ability to adjust &
adapt their behavior to external situational factors. They are highly sensitive to external cues and
can behave differently in different situations.

5. Risk taking
People differ in their willingness to take chances. Risk taking/ risk propensity refers to a
person’s willingness to take chances of risks, or a person’s willingness to take risks. People
with high propensity for risk make decisions faster and are willing to take the chances. Risk-
aversive people are more cautious, make decisions more carefully, and try to minimize risk.High
risk taking managers made more rapid decision and used less information in making their
choices than did the low risk-taking mangers (interestingly, the decision accuracy was the same
for both group).
6. Dogmatism
Dogmatism refers to the degree of flexibility or rigidity of person’s views. Those high in
dogmatism tend to be rigid and closed. They often view the world as threatening and cling their
beliefs. People lows in dogmatism are more open-minded and respective to considering views
that differ from their own cling.
7. Authoritarianism
Authoritarianism is the degree to which a person behaves that status and power difference
are appropriate in the organization. People high in authoritarianism tend to be autocratic and
demanding with subordinate but are likely to accept orders and directions from superiors without
questions. High authoritarian type could not fit well in organizations that require flexibility and
quick changes or sensitive to people and cooperative behavior. They would fit in highly
structured organization that values conformity (traditionalism).
2.3.4. Types of Personality
Do you know any people who are excessively competitive and always seem to be experiencing a
chronic sense of time urgency? If so it’s a good bet these people have a type a personality. A
type ‘A’ individual is “aggressively involved in a chronic, incessant struggle to achieve more and
more in less and less time, and it required to do so, against the opposing efforts of other things or
other persons.
Type A’s
1. Are always moving, walking, and eating rapidly;
2. Feel impatient with the rate at which most events take place;
3. Strive to think or do two or more things simultaneously;
4. Cannot cope with leisure time; and
5. Are obsessed with numbers, measuring their success in terms of how much of everything
there acquire.
In contrast to the Type ‘A’ personality is the Type ‘B’, who is exactly opposite. Type B’s are
“rarely harried by the desire to obtain a wildly increasing number of things or participate in an
endless growing series of events in an ever decreasing amount of time.
Type B’s
1. Never suffer from a sense of time urgency with its accompanying impatience.
2. Feel no need to display or discuss either their achievements or accomplishments unless such
exposure is demanded by the situation;
3. Play for fun and relaxation, rather than to exhibit their superiority at any cost; and
4. Can relax without guilt
2.3.5. Matching Personalities and Jobs
This concern with matching the job requirements with personality characteristics is best
articulated in John Holland’s personality-job fit theory. The theory is based on the notion of fit
between an individual’s personality characteristics and his or her occupational environment.

Holland presents six personality types and proposes that satisfaction and the propensity to leave a
job depend on the degree to which individuals successfully match their personalities to a
congruent occupational environment.
The theory argues that satisfaction is highest and turnover lowest where personality and
occupation are in agreement. Social individuals should be in social jobs, conventional people in
conventional jobs, and so forth. A realistic person in a realistic job is in a more congruent
situation than is a realistic person in an investigative job. A realistic person in a social job is in
the most incongruent situation possible.
The key points of this model are:
1. There do appear to be intrinsic differences in personality among individual;
2. There are different types of jobs, and
3. People in job environments congruent with their personality types may be more satisfied and
less likely to resign their jobvoluntarily than those with incongruent jobs.
2.4. Learning
Learning is an important psychological process that-determines human behavior.
Learning can be defined as “relatively permanent change in behavior that occurs as a result
of experience or reinforced practice". There are four important points in the definition of
learning:
1. Learning involves a change in behavior, though this change is not necessarily an
improvement over previous behavior. Learning generally has the connotation of improved
behavior, but bad habits, prejudices, stereotypes, and work restrictions are also learned.
2. The, behavioral change must be relatively permanent. Any temporary change in behavior is
not a part of learning.
3. The behavioral change must be based on some form of practice or experience.
4. The practice or experience must be reinforced in order to facilitate learning to occur.
2.4.1. Theories of Learning
1) Classical Conditioning Theory
Classical conditioning can be defined as a process in which a formerly neutral stimulus when
paired with an unconditional stimulus becomes a conditioned stimulus that illicit a conditioned
response (Luthans).
The work of the famous Russian physiologist Ivan Pavlov demonstrated the classical
conditioning process. When Pavlov presented a piece of meat to the dog in the experiment,
Pavlov noticed a great deal of salivation. He termed the food an unconditioned stimulus and the
salivation an unconditioned response. When the dog saw the meat, it salivated. On the other
hand, when Pavlov merely rang a bell, the dog did not salivate. Pavlov subsequently introduced
the sound of a bell each time the meat was given to the dog. The dog eventually learned to
salivate in response to the ringing of the-bell-even when there was no meat. Pavlov had
conditioned the dog to respond to a learned stimulus. Thorndike called this the "law of exercise"
which states that behavior can be learned by repetitive association between a stimulus and a
response.
Classical conditioning has a limited value in the study of organizational behavior. As
pointed out by Skinner, classical conditioning represents an insignificant part of total human
learning. Classical conditioning is passive. Something happens and we react in a specific or

particular fashion. It is elicited in response to a specific, identifiable event. As such it explains

simple and reflexive behaviors. However, behavior of people in organizations is emitted rather
than elicited, and it is voluntary rather than reflexive.
2) Operant Conditioning Theory
An operant is defined as a behavior that produces effects. Operant conditioning, basically a
product of Skinnerian psychology, suggests that individuals emit responses that are either not
rewarded or are punished. Operant conditioning is a voluntary behavior and it is determined,
maintained and controlled by its consequences.
Operant conditioning is a powerful tool for managing people in organizations. Most behaviors in
organizations are learned, controlled and altered by the consequences; i.e. operant behaviors.
Management can use the operant conditioning process successfully to control and influence the
behavior of employees by manipulating its reward system. This theory suggests four types of
reinforcement strategies that can be employed by managers to influence the behavior of the
employees. Let us discuss in detail as follows.
Types of Reinforcement
A) Positive Reinforcement
Positive reinforcement strengthens and increases behavior by the presentation of a desirable
consequence (reward). In other words, a positive reinforce is a reward that follows behavior and
is capable of increasing the frequency of that behavior. There are two types of positive:
reinforces: primary and secondary. Primary reinforcers such as food, water and sex are of
biological importance and have effects, which arc independent of past experiences. For instance,
a primary reinforcer like food satisfies hunger need and reinforced food-producing behavior.
Secondary reinforcers like job advancement, recognition, praise and esteem result from previous
association with a primary reinforcer. Primary reinforcers must be learned. In order to apply
reinforcement procedures successfully, management must select reinforcers that are sufficiently
powerful and durable.
B) Negative Reinforcement
The threat of punishment is known as negative reinforcement. Negative reinforcers also serve to
strengthen desired behavior responses leading to their removal or termination.
C) Extinction
Extinction is an effective method of controlling undesirable behavior. It refers to non-
reinforcement. It is based on the principle that if a response is not reinforced, it will
eventually disappear. Extinction is a behavioral strategy that does not promote desirable
behaviors but can help to reduce undesirable behaviors.
D) Punishment
Punishment is a control device employed in organizations to discourage and reduce annoying
behaviors of employees.
3) Cognitive Theory: Cognitive Approach
Edward Tolman was recognized as pioneer of Cognitive Theory. The theory consists of
relationship between environmental (cognitive) cues and expectations. He used white rat
in his psychological experiment of Cognitive theory. He found that the rat could run through
critical path with particular intention of getting food (goal/objective). In the experiment,
Tolman established certain choice points where expectations were established. The rat
learned cognitive cues at various choice points, which would raise its expectation to move
forward to the objective (food). Thus the rat turned to acquire food, based on relationship
of Cues and Reward or expectations. This theory was later applied on human resources
where incentives were related to higher performance.

4) Social Learning: behavioral approach

Social learning approach is a behavioral approach. The approach basically deals with
learning process based on direct observation and the experience. It is achieved while
interacting with individuals. In social learning people observe, alter, and even construct
a particular environment to fit in the social behavioral pattern. Individuals learn a great
deal from watching attractive models and they copy their behaviour and display the same.
Children copy the behaviour of their parents, adults, and copy cinema actors/actresses in
various styles. Social learning is practiced in organizations by observing various cultural,
and social practices. This phenomenon is distinctly visible in defense services where cadets
opt for a particular regiment based on the performance of their instructors (role model). In
industrial organizations leader must display a role model so that subordinates copy the
style of functioning. An appropriate behaviour can be predicted that would contribute
towards achieving higher individual satisfaction level and organizational goals. The
influence of model is central to the theory of Social Learning.
CHAPTER THREE
FOUNDATION OF GROUP BEHAVIOR
3.1. Defining Group
A group is "an organized system of two or more individuals who are interrelated so that the
system performs some function, has a standard set of role relationships among its members, and
has a set of norms that regulate the function of the group and each of its members. There are two
important features to this definition.
First, groups have a function—they serve a purpose. People do not simply come together.
People come together to accomplish something. Second, groups have structure. Groups must be
organized to pursue their functions effectively. Some groups, such as task forces, have formal
structures. These groups exist as legitimate, documented subunits of larger organizations. Their
structures exist on paper in the form of charters or handbooks. Other groups, such as study
groups, are informal. These groups exist only in the minds of their members, who may know the
group's structure only implicitly.In either case, there must be rules that govern the conduct of
group members.Each member of the group must have tasks or duties to perform in the service of
the group's function, or the group may find that there are too many cooks in the kitchen.
3.2. Types of Groups
Work groups can be formal or informal. Formal work groups are established to achieve
organizational goals. Managers form a product quality committee to handle health and safety
concerns in a manufacturing organization. Informal work groups emerge naturally when group
members perceive that a group can achieve goals or meet their needs. Coworkers eat lunch each
day to satisfy needs for affiliation and friendship.Formal work groups include command groups,
task forces, teams, and self-managed work teams.
1. Formal Group
Formal group is designated work group defined by the organizational structure.
It is collection of employees who work together to contribute towards achievement of
organizational objective. Formal groups are formed based on the work and human resources
required by skill, knowledge and experience to achieve organizational task. In a manufacturing
unit, the organizational task is sub divided into groups and teams. Each group is composed of
various members based on the human resource requirement. The members of the group report to
a designated leader. They interact with each other on official level. For example:

A) Command Group: It is formed to carry out a specific task. There is a leader in a group who
is also designated by the organization. He receives orders from his superior and reports to him
about group activities and performance. A command group is a collection of subordinates who
report to the same supervisor. Command groups are based on formal reporting relationships and
often consist of departments.
B) Task group:A task group is made up of individuals from across the functional areas. They
work together to complete a job/task. Task group boundaries are not limited to its hierarchical
superior. Once the task is complete the group members fall back to their respective parent
groups/units.
C) Committee: The other form of formal group is committee. It can be of permanent or
temporary nature. Planning committee, finance committees are of permanent nature, they keep
working all along and have a designated authority to control the work. There are temporary
committees, which are formed to accomplish a one-time works like committees formed at district
levels to issue identity cards to citizens. They are formed for specific work and disbanded once
they have completed their work.
2. Informal Groups
Informal groups are groups that are not formally organized in the work system to get the job
done but develop on their own randomly at workplaces because of common interest and mutual
liking of the group members. For example members of production department, body
manufacturing department, HR department members and few individual from finance dept may
form a friendship group. This development takes place because of the interaction they have with
each other during the official work. Members from within one group or members from different
departments or even an organization can form an informal group.Informal groups can be:
1. Interest Groups: are people may or may not be aligned into common command or task
groups who may affiliate to attain a specific objective with which each is concerned. For
example, employees who band together to have their vacation schedule altered, to support a peer
who has been fired, or to seek increased fringe benefits represent the formation of a united body
to further their characteristics, that is the formation of interest groups.
2. Friendship Groups: groups often develop because the individual members have one or more
common characteristics. We call this formation friendship group.
The features of Informal includes
(a) Informal groups are formed by various members themselves, it has no official sanctity.
(b) These groups are formed based on commonality of culture, religious function, liking for each
other and common interests.
(c) Their contribution for success of formal group is immense if properly handled by official
authority.
(d) These groups evolve their own structure, elect their own leaders and have followers.
They work based on group norms, social norms and code of conduct.
(e) They represent the human side of an organization.
(f) The group exists without any rigid rules. Their common interest is bond for existence.
The Nature of Teams
In the management literature, the term team is often used interchangeably with the term group;
however, we would like to make a distinction. Earlier we defined a group as two or more
individuals who have come together to perform a function; they represent individual efforts
coordinated within an existing system. In contrast, although a team is also a group, in a team the

members are mutually accountable for the product or service they produce or provide. Teams
provide details on what makes a group a team. The following Table illustrates some of the
differences between teams and groups.
Teams Groups
Shared authority and responsibility Limited sharing of authority and
responsibility
All members share leadership Leadership rests with one or a few individuals
Individual and team accountability Individual accountability
Shared results and rewards Modest sharing of results and awards
High degree of self-direction Limited self-direction
Members work together to produce results Results are produced by individual effort
Types of Teams
There are hundreds of types of teams. Among the most common are work teams, parallel teams,
project teams, and management teams.
Parallel Teams: Parallel teams literally work parallel to the organization, performing problem-
solving and improvement-oriented tasks that the regular organization is not equipped or
structured to handle. Often referred to as task forces or quality improvement teams, parallel
teams include people from across functions or work units. They typically have limited authority
and can make recommendations only to individuals higher in the organizational hierarchy.
Project Teams: Project teams exist for relatively short periods of time for the purpose of
producing a one-time product or service. Often, project teams consist of individuals from
different and diverse disciplines or functions so as to increase the range of specialized knowledge
and, consequently, chance of success. In developing a new product, for example, team members
might include operations specialists, financial analysts, and engineers. Once the product is
produced, team members either return to their original unit or move on to a new project.
Management Teams: Management teams coordinate collective output by managing and
providing direction to the interdependent subunits they are responsible for. In a car
manufacturing facility, for example, such a team would manage the production of an entire car.
At the top of the organization, the executive management team manages the firm's overall
performance and provides strategic direction. In increasingly complex and rapidly changing
environments, top management teams (TMTs) are becoming common. Among their strengths are
the members' extensive experience and expertise and their willingness to share in the
responsibility for the success of the organization.
3.3. Why Do People Join Groups?

What are individuals hoping to obtain through groups that they could not obtain alone?
Means: One important reason why people come together and form groups (and join those groups
into organizations) is that groups can be an important means to accomplishing desired outcomes.
In particular, groups can enhance individual effectiveness and efficiency. Groups enable
individuals to pool their resources and increase their individual productivity by taking advantage
of economies of scale.
Ends: Individuals also join groups because group interactions can be desirable outcomes (or
ends) in and of themselves. A student may join a study group to improve his or her grades, but

the interaction of the study group also provides an intimate social circle with which to
commiserate when the demands of the classroom become overwhelming. Group interaction itself
provides important rewards.
There is no single reason why individuals join groups. Since most people belong to a number of
groups, it is obvious that different groups provide different benefits to their members. The
reasons people join groups fall into two general categories, group membership as means and
group membership as ends. Group formation has certain objectives. The purpose behind group
formation may be task achievement, problem solving, proximity or other socio-psychological
requirements. It is based on activities, interactions and sentiments. The most popular reasons
among others why people join a group are the following:
a)Physical (proximity) reasons: workers placed together in similar jobs as result of their
increased interaction form a group. The most basic theory explaining affiliation is propinquity
which means individuals affiliate with one another because of spatial or geographical proximity.
According to this theory, students sitting next to one another in class are more likely to form into
a group than students sitting at opposite ends of the room. In an organization, employees who
work in same area of the plant or office or managers with offices close to one another would
more probably from into groups than would those who are not physically located together.
b)Economic reasons: work groups form because individuals believe that they can derive more
economic benefits from their jobs if they are in groups.
c)Socio Psychological reasons: workers are motivated to form work groups to satisfy their
security and social needs. People in groups feel more secured and such social interaction also
helps them feel important. People cooperate with members of the group on social as well as
economic grounds to reach satisfactory levels.
d)Security: by joining a group individuals can reduce the insecurity of standing alone. People
feel stronger, have fewer self-doubts, and are more resistant to threats when they are part of a
group.
e) Status: inclusion in a group that is viewed as important by others provides recognition and
status for its members.
f) Self-esteem: groups can provide people with feelings of self-worth. That is, in addition to
conveying status to those outside the group, membership can also give increased feelings for its
members.
g)Affiliation: groups can fulfill social needs. People enjoy the regular interaction that comes
with group membership.
h) Power: what cannot be achieved individually often becomes possible through group action.
There is power in groups.
i) Goal achievement: there are times when it takes more than one person to accomplish a
particular task-there is a need to pool talents, knowledge, or power in order to get a job
completed. In such cases management relies on formal groups. In any organization, task
accomplishment is the reason for which different groups such as an engineering group,
marketing groups, foremen’s groups and others are formed for achieving certain stated goals.
3.4. Stages of Group Development

Groups do not form over nights. They go through various common stages of development. The
process of developing from a group of strangers to a unit of cohesive, well-coordinated team
requires time and a great deal of interaction among group members. Groups usually follow the
following stages of development.

1.Forming: forming stage is characterized by a great deal of uncertainty

about the group’s purpose, structure, and leadership. Members test each other to determine what types of
behaviors are acceptable. This stage is complete when members have begun to think of themselves as part
of a group. When groups first come together, the members must get acquainted as well as
determine the basis for group membership. Forming includes learning the traits and strengths of
each member as well as what distinguishes a member from a nonmember. As the group comes
together communication will be guarded and members are reluctant to express their true attitudes
and feelings. This stage is trying out stage in which each person attempts to find out as much as
possible about the rest of the group without exposing much of his/her self.
2. Storming:at this stage, the group members begin to communicate more openly with each
other. Member’s individual goals or personal agendas are expected to be revealed. It is
characterized by intra- group conflict – members accept the existence of the group but resist the
constraints the group imposes on individuality. Further, there is conflict over who will control
the group. Members storm their views. They put forth their views forcibly with strength, and this
evidences interpersonal conflicts. Many problems are brought to the group for discussion and
solution. Many conflicting views are expressed. When this stage is complete, there will be a relatively
clear hierarchy of leadership within the group.
3.Norming: close relationship and cohesivenesscharacterize this stage. The group establishes the
norms and patterns of work under which it will operate. Disagreements and conflicts are
resolved; group achieves unity, consensus about who holds the power and understanding of the
role of members. This norming stage is complete when the group structure solidifies and the
group has assimilated a common set of expectations of what defines correct member
behavior.There is now a strong sense of group identity and camaraderie. This norming stage is complete
when the group structure solidifies and the group has assimilated a common set of expectations of what
defines correct member behavior.
4.Performing: the structure at this point is fully functional and accepted. Members enjoy
belonging to the group and develop synergy. A strong sense of group identity and a
companionship is developed. Group energy has moved from getting to know and understand
each other to performing the task at hand. Here the group dominates the individuals; group
norms have now been established to control individual behavior and the social structure of the
group is now firmly established. The group begins to function and moves toward accomplishing
its objectives.
5.Adjourning: for permanent work groups performing is the last stage in their development.
However, for temporary committees, teams, task forces, and similar groups that have a limited
task to perform, there is an adjourning stage. Adjourning can take place even before completing
the task, due to misunderstandings, and storming. In this stage the group prepares to
disbandment. High task performance is no longer their propriety. Instead, attention is directed
toward wrapping up activities. Responses of group members vary in this stage. Some may be
happy of the group’s accomplishment while others may be depressed due to the loss of
friendships gained during the work group’s life.
3.5. Obstacle to Team/Group Productivity
The more complex the task, the more it is non-routine and requires a range of skills, the more
important group process becomes. People can be more productive when working in groups than
when working alone, if the obstacles to group productivity are avoided.The social facilitation
effect can either enhance group productivity (synergy) or restrict it (process loss):

Lack of Synergy: Synergyis a biological term referring to an action of two or more

substances that result in an effect that is more than the mere summation of the individual
substances; the whole is more than the sum of its parts (i.e. 2 + 2 = 5).
The performance of simple, routine tasks tends to be speeded up and improved by the
presence of other people (synergy
Process lossis the difference between what is actually produced by a group and what could
have been produced by the group when you consider its inputs (2 + 2 = 3).When tasks are
complex and require closer attention, the presence of other people will hurt performance
(process loss)
Process Lossesoccurs because of：
• Production blocking occurs when people get in each other’s way as they try to perform a
task
• Group-maintenance roles must be filled in order to smooth group relations, but these
roles divert time and effort from producing and thus cause process loss
Social loafingor free riding occurs when a group member decides to loaf, hoping that
someone else will pick up the slack (usually occurs when group rewards are shared equally,
without regard to individual performance)
In groups, individual performance is difficult to identify. There is a strong potential for social
loafing, the tendency to exert less effort in a group than in individual works. Social loafing can
impact work-group effectiveness. Social loafing occurs for two reasons:
Individuals in a group think that they will not receive positive outcomes for performing at
high level.
Individuals think that their own efforts are unimportant or not needed.
Social loafing occurs because workers feel that high-level performance goes unrewarded. This
occurs because individual performance goes unidentified, and low-level performance goes
unpunished. Motivation theories suggest that performance is high when outcomes are based on
individual performance. Workers in a group believe that their efforts are unimportant and that
others can do the work.
Social loafing results in performance below the group potential. Lack of motivation makes some
workers exert less effort than if they worked individually. Social loafing by one leads to reduced
effort by others.
Sucker effect occurs when members, not inclined to social loafing, reduce efforts because
they refuse to become the “ suck ers” of social loafers. This reflects the equity theory of
motivation; inequity leads to restoring equity by changing inputs or outcomes.
Ways to Reduce Social Loafing
Managers can reduce or eliminate social loafing by making individual contributions to a
group identifiable so that individual performance can be evaluated and appropriate outcomes
delivered.
Group members can complete peer evaluations, or the level of group supervision can
increase.
When individual performance cannot be separated, managers can make each individual feel
that contribution to the group is valuable.
A manager can remind each member of unique contributions and indicate when group
success or failure hinges on individual efforts. Managers can remind members that their
selection hinged on their unique contributions.

Keeping the group as small as possible reduces social loafing. If process losses increase with
group size, managers should reduce size by dividing the work into two groups. Group
members will no longer perceive their efforts as unidentifiable or unnecessary.
3.6. The Behavior of Group Interaction (How groups control their members?)
In order for any group (formal or informal. command group or self-managed work team, large or
small, homogeneous or heterogeneous) to accomplish its goals, the group must control-that is,
influence and regulate-its members' behavior. Controlling members' behavior is crucial whether
a group is charged with writing superior computer programs, providing excellent customer
service, raising quality levels, or cutting costs. Effective groups are groups that control their
members' behavior and channel it in the right direction. Three mechanisms through which group,
control their members' behavior are Roles, Rules, and Norms.
From a means perspective, groups are useful only if the interaction of group members produces
something greater than the sum of all the individuals' efforts.
RULES: Group rules can be formal or informal. Formal policies are explicitly agreed upon by
the group members and may even be written downfor example, how often or at what time of day
the group will meet. These well known rules specify in writing who may talk and when and how
disagreements will be settled by discussion and vote. Group rules can also be informal. Informal,
unstated rules that govern and regulate group behavior are called norms. Some groups have
norms about what is appropriate to wear to meetings. Often, they have norms about lateness or
absence.
Some groups also have norms prohibiting criticism of group decisions to "outsiders"—people
who are not members of the group.
ROLES: Whereas rules delineate the proper behaviors of all members in a group, roles define
the set of behaviors appropriate to particular positionsoccupied by specific individuals. Roles
also specify authority relationships, including who in the group has the right to call meetings, set
agendas, and assign tasks to group members. Roles allow us to know what we should be doing
and what to expect from others. Like rules, the roles that structure the interaction of group
members can be formal or informal.In work organizations, formal roles are specified by job
descriptions. Some role assignments evolve during group development as particular strengths
and talents of group members are revealed. Most groups have at least two leadership roles: a
task leader (who focuses on getting the group's goals accomplished) and a socio-emotional
(relations-oriented) leader (who focuses on maintaining harmony and good working relationships
within the group). Roles are specific to particular positions within particular groups. An
important component of most roles is status.
Norms: Group Norms are set of beliefs, feelings, and attitude commonly shared by group
members. These are also referred to as rules of standards of behavior that apply to group
members.These are prescriptions of behavior accepted and determined by the group. As per the
Handbook of Industrial and Organizational Psychology, the Norm is defined as “acceptable
standards of behavior that are shared by the group members.”
All groups have established norms, that is - norms tell members what they ‘ought’ and ‘ought
not’ to do a thing under certain circumstances. From an individual stand point, they tell what is
expected of them in certain situations. When agreed to and accepted by the group, norms act as a
means of influencing the behavior of group members with a minimum of external control. Norms
differ among groups, communities and societies, but they all have them.
Types of Norms

Norms may differ from organization to organization, nature of work and the location.
Following norms are generally found and practiced by all the organizations.
(a)Performance Norms: Performance standard is set by the individual worker and approved by
the superiors. These are general norms, industry standards prevailing in a particular type of
industry and restricted to geographical limits. All the individuals are expected to fulfill their task
within the stipulated time.
(b)Appearance Norms: Appearance norms are related to dress code and code of conduct in the
organization. In good organization dress while on work, dress for sports function or for dinner
are laid down. In defense services such norms are inbuilt in the organizational culture. As
regards to code of conduct, an individual is expected to be loyal and display total dedication to
the organization he serves. A group norm is a very powerful tool for high productivity and
maintenance of peaceful relationship among the fellow workers.
(c)Behavior Norms: Guidelines for general behavior are issued by the management so that all
the employees display behavior in an identical manner. These guidelines may cover various
aspects relating to the work. This may include time management, punctuality, salutation,
showing respect to the views of other member’s behavior while on shop floor and level of
professionalism that an individual should possess.
These norms eventually take the form of organization culture and are very useful for bringing
down the conflict or stress level among the group members
Group/Team Cohesiveness
Cohesion: Cohesiveness defines the degree of closeness that the members feel with the group. It
identifies the strength of the members’ desires to remain in the group and degree of
commitment to the group. Cohesiveness of the group is reflected to the extent of unity
displayed by the group members and adherence to the group norms. It is “WE” feeling displayed
by the members of the group. Cohesion can be achieved when there is a feeling of attraction and
adherence to group norms.
Cohesiveness of a group can produce miracles in the organization if group objectives and
organizational objectives are complementary to each-other. If they differ then the group
cohesiveness can be disastrous for the organization. It is therefore important for a manager to use
group cohesiveness to the best advantage of the organization by identifying group member goals
and aligning the same with organizational goals.
Causes of group (Team) cohesiveness
What makes teams cohesive? The main factors influencing team cohesiveness are shown in
figure below.
For most part, these factors reflect the individual’s identity with the group and beliefs about how
team membership will fulfill personal needs.
 Togetherness/ Member interaction

It is a natural tendency that people want to remain together when they interact they know each
other better and are attracted by their nature and behavior pattern. People share their happiness
and hardships and a bond of togetherness is formed. In organizational setting, people on the same
floor, department, residing in the same colony, bus stoop friendship are attracted to each-other
because of their close proximity. It will invariably be found that the people who are closely

associated by virtue of even seating arrangement in the work-place share their views and display
more cohesiveness than those who are located away.
 Group/Team Size
In a large group, it is not possible for the individual to communicate with each other hence there
is likelihood of large group being less cohesive than the small group. In work environment small
group is more effective. If a group is large, there is also a possibility of formation of small sub
groups within a large group. This will lead to delusions of group norms and power politics within
the sub group, which is not desirable. Another interesting factor about group cohesion is the sex,
whether the group composes of all male members or female members. Studies showed that if all
members were of the same sex then small group had better cohesion than large ones (Robbins
stephon).
 Entry Norms
There are organizations whose membership is difficult to obtain. There are also clubs which are
reserved for exclusive members of a particular background like Defense Services Officers club.
Joining of such group elevates the status, position and members feel a sense of pride and
accomplishment because the membership of such clubs is exclusive. At times, there is also a
long waiting list to join such groups. More exclusive the group more cohesive it will be. More
difficult to get entry, more cohesive the group would be.
 Threat and Challenges/External Competition
Every group has its own objectives. It has been experimented that whenever there is a threat to
disturb the group norm or group objective, group members get more united to protect the group
objective from the party threatening the same. It will be noticed that external threat brings higher
degree of cohesion to the group. In the fast moving world today, the importance of group has
increased many folds. Employees have sacrificed their perks and privileges to ensure higher
productivity by adhering to group norms. For example employees in a well organized industry
work beyond specified time to achieve group goals. Meeting higher challenges brings personal
satisfaction to group members and higher level cohesiveness to the group they are part of.
 Degree of participation in group Activities
Participation in group activities is important as it leads to more frequent interaction between
group members. Successes in group activities also bring cohesiveness as each of the participants
feels that he has been the contributor for achievement of group goals. For example, participating
in sports team, and achieving the victory.
 Attitude and Value
“Birds of the same feather flock together”. Group members having identical attitude and high
level of value system will behave themselves identically and promote group norms and achieve
Cohesiveness. In such situation decision making and implementation of group task is
comparatively easy. Conflict situations are avoided and a smooth sailing is achieved. Interest of
the group is well protected due to cohesiveness of the group.
 Conformity
Members in the organization want to belong to a group for various reasons. First they want to
belong to a group to fulfill the need of social security. The second reason is the conformity to
group decisions in conflicting and confusing situation as a best bet. Conformity with group
norms and group decision provide an individual enough emotional strength to cope up with
organization stress.There are some individuals who have dominant ego factor, may not accept
group decisions, and therefore refuse to accept conformity. These individuals are called
deviants. Such non-conformist has strong individual views and independent opinion on a

particular issue. They can survive as group members for being non-conformist. They are
subsequently isolated from the other members of the group.
 Groupthink
Groupthink is a phenomenon in which the norms for consensus override the realistic appraisal of
alternative course of action (Robbins OB 2000). Groupthink is a situation when all the members
of a group are aligned to each other in the group and blindly abide by the group decisions. No
external pressure is applied. In the process it has been seen that poor decision are made by the
group as no one resist the decision, groupthink phenomenon is bad for group decision making
because group members don’t take decision based on rationality, non use of available data, and
over estimation about ability. Too much of group cohesion is dangerous for equality decisions.
3.7. Increasing team/group productivity

To achieve group cohesiveness which has a significant impact on group or team productivity the
following suggestion are made (J L Gbson and J M Lvancevich)
(a) Small group have better Cohesiveness.
(b) Encourage unilateral acceptance of group goals.
(c) Time spent by members for group activities should be increased.
(d) Increase status of group and group members.
(e) Create an environment of perceived difficulty in attaining group membership.
(f) Competition with other groups.
(g) Introduce reward systems.
(h) Physical isolation of group increases cohesiveness.
3.8. Implication for performance and satisfaction (Relationship between Cohesiveness,
Performance Norms and Productivity)
Study of cohesiveness is important because it has an impact on productivity of the organization.
Performance norms are those work and behavior related activities that have been accepted as
norm like Cooperation, Quality of output, interpersonal behavior etc. A cohesive group will be
more productive than a less cohesive group. If cohesiveness is high and performance norms are
low, productivity will be low thereby establishing the superiority of performance norms. If
cohesiveness is low and performance norms are high, productivity will increase. When
performance norms and Cohesiveness is low, productivity will fall.

CHAPTER FOUR - MOTIVATION CONCEPTS AND THEIR APPLICATIONS

4.1. What is motivation?
4.2. Features of Motivations
4.3. Importance of Motivation
4.4. Early Theories of Motivation
4.5. Contemporary theories of motivation
4.6. Implication of motivation for performance and satisfaction
4.7. Managerial Approaches for Improving Motivation
CHAPTER 4
CONCEPTSAND APPLICATIONS OF MOTIVATION
Chapter Objectives:
After completing the study of this chapter, you should be able to:
 Understand the basic concepts of motivation
 be familiar with the various theories of motivation
 be ready to apply the different motivational factors in your organization and in your daily
life
4.1. What is motivation?
The term motivation is derived from the Latin word ‘mover’ meaning ‘tomove’. Motivation is
one of the key ingredients in employee performance & productivity. People won’t get the job
done without motivation, even when they have clear work objectives, the right skills, and a
supportive work environment,
Definition
Motivation isa psychological process that arouses and directs an individualtowards goal
achieving behavior. It account for an individual’s intensity, directionandpersistence of effort
toward attaining a goal. This definition has 3 key elements such as intensity, direction and
persistence.
Motivated people are willing to exert a particular level of efforts (intensity) for a certain amount
of time (persistence) toward a particular goal (direction).Intensity is concerned with how hard a
person tries.
Robbins defines motivation as the willingness to exert high level of efforts toward organizational
goals, conditioned by the effort’s ability to satisfy an individual’s need
Motivation refers to the forces within a person that affect his/her direction, intensity, and
persistence of voluntary behavior. It is the result of the interaction of the individual and the
situation. Individuals differ in their basic motivational drive. What motivated individuals vary
among individuals and situations.
Motivation energizes a person’s work. In essence, motivation governs behavior selection,
direction, and level of effort. In motivation, Needs produce motives which leads to the
accomplishment of goals and needs are caused because of deficiencies, either physical or
psychological. Physical needs are the need for food, shelter, clothing, etc., and psychological
needs are feeling of security, acceptance by the society, love and respect of friends, etc.

People have different needs that direct their behavior. Needs depend on the personal
circumstances and the outside events. Needs cause people to seek out experiences that enrich
their lives, and also trigger behavior to avoid threatening conditions and feelings of deprivations
A person who is motivated will work harder, is more effective in his work, has initiative and is
more innovative than a person who is not motivated.
Several theories have evolved to explain different facets of motivation. Motivation theorists talk
about intrinsic motivators and extrinsic motivators.
Intrinsic Motivators come from the person’s internal desire to do something, motivated by such
things as interest, challenge and personal satisfaction, whereasextrinsic motivators are motivation
that comes from outside the person and include such things as pay, bonuses, and other tangible
rewards.
4.2. Features of motivation
a. Motivation is a psychological phenomenon:It is the inner desire of an individual to
accomplish something more. The very deficiency forces him to undertake certain amount of
work.
b. Motivation is a continuous process:Since need is a continuous phenomenon, if one need is
satisfied the other need emerges and so does individual propels to work and thus the
continuous chain is created.
c. Motivation is caused due to anticipated perceived value from an action:perceived value
is the probability or the expectancy of achieving a goal.
d. Caused by unsatisfied needs:A person remains disturbed till they are satisfied. This
disturbance or tension causes disequilibria in human behavior.
e. Motivation is forpositive outcomes:It refers to incentives offered by the organization to
achieve efficiency. Incentive can be monetary like increase in pay, allowance and payment of
bonus-payment for additional or overtime work. It can be non-monetary like issuing of
certificates for excellence, awards, recognition, and status.
4.3. Importance of motivation
a. High level of performance:it is the duty of every manager to ensure that the employees have
a high degree of motivation. He/she should offer monetary and non-monetary incentives.
Highly motivated workers would be regular for work and have a sense of belonging for the
organization. Performance level will be high, quality of product will be improved, and
wastage will be minimum.
b. Low employee turnover and absenteeism:Employee turnover and absenteeism is caused
due to low level of motivation. When dissatisfaction is increased employees do not enjoy the
work assigned to them. Therefore there is a tendency of absenteeism. The workers hunt for
an alternative job and leave the organization whenever they get an opportunity. High level of
absenteeism causes low level of production, wastages, poor quality and disruption in
production schedules. Increased turnover is disastrous for any organization as it puts strain on
financial position of the organization due to additional recruitment, selection, training and
development.
c. Acceptance of organization change:Management must continuously scan the external and
the internal environment. There has been a great impact of social change and technology
evolution on the motivation level of employees. Management must ensure that the changes
are introduced in the organization and its benefits explained to the employees so that there is
no resistance to change and organizational growth is achieved.

d. Organizational image:Employees are the mirrors of any organization. Managers must lay
down high performance standards coupled with high monetary and non-monetary rewards.
Training and development programs should be regularly organized and employee skill
improved. It will also reduce employee turnover and better employee will look forward to
join the organization.
4.4. Theories of Motivation
Motivation theories are the foundations of employee motivation. They fall into two main
categories such as early theories and contemporary theories.
4.4.1. Early theories of motivation
1. Maslow’s Needs Hierarchy Theory
2. Herzberg’s motivation Hygiene theory, and
3. McGregor’s theory x and theory y
1. Abraham Maslow’s Needs Hierarchy Theory
The most well-known theory of motivation is Abraham Maslow’s hierarchy of needs. He stated
that human beings have five types of needs and these needs are hierarchal in nature and only one
need dominates at any one point of time. Once the strongest need is satisfied then the second
need emerges as being the strongest need and human behavior is regulated in process of
achieving satisfaction in series of need requirements.
Abraham Maslow’s needs hierarchy theory is one of the earliest &best-known content theories
that explain why people have different needs at different times. Maslow identified five basic
categories of human needs and placed them in a hierarchy.
Self-actualization
Esteem
Social
Security
Physiological
Fig: Mallow’s Hierarchy of need’s theory
1. Physiological: Includes hunger, thirst, shelter, and other bodily needs
2. Safety: Includes security and protection from physical and emotional harm
3. Social: Includes affection, belongingness, acceptance, and friendship
4. Esteem: Includes internal esteem factors such as self-respect, autonomy, and achievement;
and external esteem factors such as status, recognition, and attention
5. Self-actualization: The drive to become what one is capable of becoming; includesgrowth,
achieving one’s potential, and self-fulfillment.
A satisfied need is no longer a need. Once that need is satisfied, the next level need becomes
stronger. As to Maslow, behavior is primarily motivated by the lowest unsatisfied need at the
time. As the person satisfies the lower level need, the next higher need in the hierarchy becomes
the primary motivator.This is known as the satisfaction-progression process.
Critics of Maslow’s Hierarchy of Needs Theory
Maslow has laid down that individual has a particular pattern and hierarchy of needs which may
not be true. There are individuals who have devoted their entire life towards fulfillment of self
actualization without having satisfied physical, safety or even social needs. To some people
esteem need may be more important than social need. Level of need satisfaction generally differs
from person to person hence the theory cannot be universally applied.

For some people social need may be dominant as compared to physical need or safety need. On
the other hand a worker who is a sole income earner for the whole family may feel job security
as his most dominant need. It is therefore fair to state that we may not find the needs in the given
order and that the strength of a particular need is situation based. Other studies reported that
needs vary according to a person’s career stage, the size of the organization and even
geographical location. Culture is also important when the hierarchy of needs is examined.
2. Herzberg’s motivation— hygiene theory (Two factor theory)
Frederick Herzberg develops motivator-hygiene theory
A. Motivational Factors
They are intrinsic in nature and help increase one’s output.These factors have positive effect on
morale, productivity, and job satisfaction and overall efficiency of the organization.They are
used to improve job satisfaction. These factors include achievement, recognition, work itself,
advancement and responsibility. When these factors are available there is high satisfaction and
strong motivation. When these factors are not available there is high dissatisfaction.
B. Maintenance Factors:
These factors are also called hygiene factors or dissatisfies.When these factors are present they
do not motivate in a strong way, but when they absent they dissatisfies a lot. Hygiene factors are
sources of job dissatisfaction. Therefore they do not contribute towards motivation. These factors
are related more to the environment in which people work than to the nature of the work itself.
These factors include company policy and administration, supervision, interpersonal relationship
with superiors, interpersonal relationship with peers, salary, job security, personal life, working
condition, status.
3. McGregor’s theory X and theory Y
Douglas McGregor introduced theory X and theory Y which are opposite to each other.
Theory X
The average human being dislikes work.
People would be passive therefore management must persuade, reward and punish the
worker to achieve the desired result.
Workers lacks ambition, dislike responsibility, prefers to be lead/directed.
An individual is self-centered and indifferent to organizational needs
By nature people resists change
The manager will have to structure, control and closely supervise employees
Most people must be closely controlled and often coerced to achieve organizational
objectives
Theory Y
The average human being does not inherently dislike work.
Workers seek direction and exercise self-control. They dislikes punishment
The average human being learns under proper condition. they accepts/seeks responsibility
People can be self-directed and creative at work
4.4.2. Contemporary theories of motivation
1. Alderfer’s ERG Theory
2. McClelland’s theory of learned Needs.
3. Expectancy theory
4. Equity theory &
5. Goal-setting theory
1. Alderfer’s ERG Theory

Clayton AlderferDevelop ERG theory to overcome the problems with Maslow’s needs hierarchy
theory. He further studies on Maslow’s theory of need hierarchy and he identified three basic
needs of human being against five needs of Maslow. It Groups human needs into three broad
categories arranged in a hierarchy existence (E), relatedness (R) &growth (G).
a. Existence need- related to provision of basic material requirement of human being and is
related to Maslow’s physiological and safety needs.
b. Relatedness need- related to desire of an individual to maintain interpersonal
relationships. It is related to Maslow’s social and external component of esteem needs i.e.,
status, recognition and attention.
c. Growth need- is an intrinsic desire for personal development. It is related to intrinsic
component of esteem need like advancement, self-respect, autonomy, achievement and self-
actualization need.
ERG theory is motivation theory in which people progress to the next higher needs when a lower
one is fulfilled, and regress to the lower need if unable to fulfill a higher need. All the needs need
not be in rigid stepwise progression. Any need may be stronger and individual is forced to fulfill
that need. More than one need may be operative at any one time. A person can, for instance,
be working on growth even though existence or relatedness needs are unsatisfied; or all three
need categories could be operating at the same time.
ERG theory also contains a frustration-regression dimension. Maslow argued that an
individual would stay at a certain need level until that need was satisfied. ERG theory counters
by noting that when a higher-order need level is frustrated, the individual’s desire to increase a
lower-level need takes place. Inability to satisfy a need for social interaction, for instance, might
increase the desire for more money or better working conditions. So frustration can lead to a
regression to a lower need.
2. McClelland’s theory of learned needs
The models described so far look at the individual’s primary or instinctive needs and their
relative importance in life. But there are secondary needs or drives, i.e. learned needs that are
learned and reinforced through childhood learning, parental styles, and social norms. Several
learned needs can motivate us at the same time.
David McClelland studied 3 secondary needs considered important sources of motivation.
a.Need for achievement
b. Need for affiliation, and
c.Need for power
A. Need For Achievement
Need for achievement concerns issues of excellence, completion, challenging goals, persistence,
and overcoming difficulties. A person with a high need for achievement is one who seeks
excellence in performance, enjoys difficult and challenging goals, and is persevering and
competitive in work activities. McClelland found that people with a high need for achievement
perform better than those with a moderate or low need for achievement
People with moderate and low needs for achievement will be satisfied with less challenging
goals, lower levels of excellence, and less persistence in the face of difficulty. However, these
same people may have high needs for power or affiliation.
B. Need For Power
The need for power is concerned with making an impact on others, the desire to influence others,
the urge to change people or events, and desire to make a difference in life.

Social and hierarchical statuses are important considerations for people with a high need for
power. The more they are able to rise to the top of their organizations, the greater is their ability
to exercise power, influence, and control so as to make an impact.
C. Need For Affiliation
The need for affiliation is concerned with establishing and maintaining warm, close, intimate
relationships with other people. People with a high need for affiliation are motivated to express
their emotions and feelings to others while expecting other people to do the same in return.
3. Vroom’sExpectancy theory
He believes that employee is motivated to exert high level of efforts when he believes that efforts
will lead to good performance and therefore organizational rewards that will satisfy achievement
of personal goals.
 Efforts-performance relationship. Exerting a given amount of efforts will lead to
performance.
 Performance-reward/outcome relationship. Performing a particular level will lead to
attainment of desired outcome.
 Reward/outcome- personal goal relationship. The degree to which an organizational
reward will satisfy individual needs and goals. Refers to the anticipated satisfaction or
dissatisfaction that an individual feels toward an outcome.
Expectancy theory is a process motivation theory based on the idea that work effort is directed
towards behaviors that people believe will lead to desired out comes. Through experience, we
develop expectations about whether job performance and work behaviors lead to particular
outcomes. Finally, we naturally direct our effort toward outcomes that help us fulfill our needs.
Employee motivation is influenced by all three components of the expectancy theory model. If
any component weakens, motivation weakens.Expectancy theory of Motivation
EffortPerformance Reward Goal achievement
4. Equity Theory
Equity Theory explains how people develop perception of fairness in the distribution and
exchanging of resources. And also explains what employees are motivated to do when they feel
inequitably treated, i.e. perceived inequity motivate employees to complain and try to change the
source of the previous inequity.
Equity theory has four main elements:-
1. Outcome/ input ratio
2. Compression other
3. Equity evaluation and
4. Consequence of inequity
Outcome /Input Ratio
Inputs include skills, efforts, experiences, amount of time worked, performance result and other
employee contributions to the organization. And Outcomes are the things employees receive
from the organization in exchanging for the inputs, such as pay, promotions, recognition, or an
office with a window.
Both inputs and outcomes are weighed by their importance to the individual. These weights vary
from one person to the next. People value outcomes differently because they have different
needs.
Comparison with Others
Equity theory states that we compare our situation with others. The comparison other in a
particular situation may be another person, group of people, or even you in the past and also it

may be someone in the same job, another job, or another organization. Most of the time we
compare ourselves with others who are nearby in similar positions, and with similar
backgrounds. It is easier to get information about co-workers than people working elsewhere.
Equity evaluation
We form equity evaluation after identifying our outcome/input ratio and comparing this with the
comparison others ratio, e.g. if you are assigned to a project with another student in your class,
and both of you get the same project grade whether one of you contributes more than the other
this means that your outcomes are the same as the other students outcome’s. But in the equity
condition, both of you contribute the same effort and value to the project i.e. you and the
comparison other have the same outcome / input ratio.
You Other
EquityOutcomes =Outcomes
Inputs Inputs
NegativeOutcomes<Outcomes
Inequity InputsInputs
PositiveInequityOutcomes>Outcomes
InputsInputs
Consequences of inequity
Employees are motivated to reduce or eliminate their feelings of inequity by correcting the
inequitable situation.
There are 6 possible ways (strategies) to reduce feelings of inequity such as:
1. Changing inputs: Under-rewarded workers tend to reduce their effort and performance if
these outcomes don’t affect paycheck. Overpaid workers some times (but not very often)
increase their input by working harder and producing more.
2. Changing outcomes: People with under-rewarded inequity might ask for more desired out
comes, such as pay increase. If this does not work, some are motivated to join a labor union and
demand these changes at the bargaining table. Individuals paid on a piece-rate basis can increase
their pay by producing a higher quantity of units of lower quality.
3. Changing perception: Employee may distort input and out comes to restore equity
feelings. Over rewarded employee typically follow this strategy because it’s easier to increase
their perceived inputs (seniority, knowledge, etc.) than to ask for less pay. e.g. “I used to think I
worked at a moderate pace but now I realize that I work a lot harder than everyone else.”
4. Leaving the field: Some people try to reduce inequity feeling by getting away from the
inequitable situation. Thus, equity theory explains some instances of employee turnover and job
transfer. This also explains why an under-rewarded employee might take more of work even
though he or she is not paid for this absenteeism.
5. Acting on the comparison of other: Equity is sometimes by changing the comparison
other’s inputs or outcomes. e.g. “Abebe’s job is not as desirable as I previously thought it was.”
6. Changing the comparison other: If we can’t seem to alter the outcome/input ratio through
other means, we might eventually replace the comparison other with someone having a more
comparable outcome/input ratio. e.g. I may not make as much as my brother, but I am doing a lot
better than my Dad when he was my age

5. Goal setting theory

This theory states that specific and difficult goals lead to higher performance. Goals tell an
employee what needs to be done and how much effort will need to be expended. More to the
point, we can say that specific goals increase performance; that difficult goals when accepted
result in higher performance than do easy goals; and that feedback leads to higher performance
than does non feedback. Specific hard goals produce a higher level of output than does the
generalized goal of “do your best.” The specificity of the goal itself acts as an internal stimulus.
If factors like ability and acceptance of the goals are held constant, we can also state that the
more difficult the goal, the higher will be the level of performance. However, it is logical to
assume that easier goals are more likely to be accepted.
Goal setting theory presupposes that an individual is committed to the goal that is, determined
not to lower or abandon the goal. This is most likely to occur when goals are made public, when
the individual has an internal locus of control, and when the goals are self set rather than
assigned. Self- efficacy refers to an individual’s belief that he/she is capable of performing a
task. The higher your efficacy, the more confidence you have in your ability to succeed in a task.
Characteristics of effective goals
A goal setting is more complex than simply telling someone to ‘do your best’. OB scholars
identified 5 conditions that are necessary to maximize task effort and performance.
Specific goals: Employee put more effort in to task when they work toward specific goals than
“do your best” targets.
Result-oriented goals: Result-oriented goals improve work performance more than the process-
oriented goals. A result-oriented goal is one that directly refers to the person’s job performance,
such as the number of customers served per hour.
Challenging goals: Employees tend to have moreintense and persistent work when they have
challenging rather than easy goals. Challenging goals also fulfill a person’s need for achievement
or growth needs when the goal is achieved.
Goal commitment: of course there are limits to challenging goals. At some point, a goal
becomes difficult and those employees are no longer committed to achieving it. At that point,
work effort falls.
Participation in goal formation: Another way to build or maintain commitment to goals is to
ensure that employee is involved in the goal setting process. Participation in goal formation tends
to increase goal commitment because employees take ownership of the goal,
compared to the goal that is merely assigned by supervisor.
Goal feedback: Feedback also an essential ingredient in motivation process because our growth
needs cannot be satisfied unless we receive information on.

CHAPTER FIVE - MANAGEMENT OF ORGANIZATIONAL CONFLICT

5.1. Definition of conflict
5.2. Functional Vs dysfunctional conflict
5.3 Nature of conflict in an organization
5.4. Cause of conflict in organizations
5.5. Conflict management strategies
CHAPTER FIVE
MANAGEMENT OF ORGANIZATIONL CONFLICT
Upon the completion of this chapter, you are expected to
 realize what conflict is all about and its nature
 identify the approaches to conflict
 know the different levels of conflict
 elucidate the sources of conflict and conflict outcomes
 become aware of how conflict can be managed
 recognize the methods through which interpersonal relations can be managed
5.1. Meaning and Nature of Conflict

According to Robbins, conflict can be defined as situations that begin when one party perceives that
another party has negatively affected or is about to negatively affect something that the first party cares
about. This definition is broad. It describes that point in any ongoing activity when an interaction crosses
over to become an inter-party conflict. It encompasses a wide range of conflicts that people experience in
organizations-incompatibility of goals, differences over interpretations of facts, disagreements based on
behavioral expectations, and the like. Additional commonalities in the definitions are opposition or
incompatibility and some form of interaction. Conflict must be perceived by the parties to it; whether or

not a conflict exists is a perception issue. If no one is aware of a conflict, then it is generally agreed no
conflict exists.
It can also be defined as all oppositions or antagonistic interactions by a person or a group. Mishra
stated that Conflict is the incompatibility of goals and differences or disagreements over a fact.
Conflict arises when an interpersonal relationships which is expected to be productive, cooperative, and
satisfying does not fulfill the expectations.
\ 5.2. Approaches to Conflict
Conflict in management has attracted significant attention because managers devote much of their time to
conflict management. One school of thought has argued that conflict must be avoided because it refers to
malfunctioning within the group. Another school considers that conflict is natural and inevitable where
human behavior is involved, while the third group believes that conflict is a positive force in
organizations, as it helps effective performance. These approaches to conflict are known respectively as
the traditional approach, human relation approach and interactional approach.
A) Traditional Approach: The traditional approach believes conflicts are violent and destructive. It is
viewed as a negative instrument of performance. Conflict is the outcome of the malfunctioning of an
organization such as poor communication, lack of trust, failure of the management to meet the aspirations
of employees and so on. The causes of conflict are revealed to avoid the conflict, because conflict
avoidance increases performance.
The view that all conflict is bad certainly offers a simple approach to looking at the behavior of people
who create conflict. Since all conflict is to be avoided, we need merely direct our attention to the causes
of conflict and correct these malfunctioning in order to improve group and organizational performance.
B) Human Relations Approach: The human relations approach argued that conflict was a natural
occurrence in all groups and organizations. Since conflict is inevitable, this approach advocated
acceptance of conflict. They rationalized its existence. It cannot be eliminated, and there are even
times when conflict may benefit a group’s performance. Conflict has to be used by management for its
positive results.
C) TheInteractionism Approach: this approach encourages conflicts for converting them into force of
innovation. Employees are encouraged to express their views so that the reasons for differences are
brought to the surface. Employees are developed to understand their viewpoints so that they can improve
themselves. They should be self-critical and creative for improving their respective performance. This
approach believes that minimum level of conflict is essential for performance, as some conflicts are
helpful for performance. These are known as functional conflicts because they are constructive and are
essential part of an organization. On the other hand, there are dysfunctional conflicts which hinder the
performance of an organization
5.3. Levels of Conflict
Conflict arises at different level. They are viewed accordingly for resolution. Intra individual conflict,
interpersonal conflict, inter-group, and organizational conflicts are discussed in this section separately.
a) Intrapersonal Conflict
Employees are expected to perform their respective roles. However, in reality, employees having different
needs and roles are unable to cooperate with the management. There are positive and negative aspects of
goal compatibility, which causes conflicts. Due to this incompatibility, employees enter in to conflict
with themselves. Intra-individual conflicts arise due to frustration, goals and roles.
 Conflict Due to Frustration: frustration occurs when expectations are not fulfilled. There are
several barriers to achievement of desired goals. These barriers create frustration. Employees react to the

barriers and resort to aggression, withdrawal, fixation and compromise techniques. The expectation arises
out of a need deficiency. When employees feel the need, they develop drives to achieve the goal after
overcoming the barriers. The drive to achieve goals is reduced by barriers which may be overt and covert.
Overt barriers are outward and physical. Covert barriers are inward and mental. The employees resort to
defense mechanisms for reducing the impacts of barriers. First, they blame the barriers and abuse them
for non-achievement of the goal. Secondly, they withdraw from the barriers and abuse them for non-
achievement of the goal. Thirdly, they fix the goal and try again to attain the goal. Fourthly, they
compromise with the situation if they are unable to achieve the goals, and satisfy themselves with
whatever is achieved.
 Goal incompatibility: employees face intra-individual conflicts on the account of goal
incompatibility. Frustration arises when a single motive is blocked before the goal is achieved; and in
goal conflicts, two or more motives are blocked in the process. Goal conflicts are witnessed in approach-
approach conflicts, approach-avoidance conflicts, and avoidance-avoidance conflicts. The approach-
approach conflicts are related to two or more positive but exclusive goals. The choice between two goals
becomes more difficult and hence causes goal conflict. Approach-avoidance conflict here both positive
and negative characteristics are observed. Individuals are sometimes motivated to achieve the goal and at
other times they are motivated to avoid the goal. When this happens, employees are anxious to take
corrective decisions. Internal conflict and stress are visible in such cases. The avoidance-avoidance
conflict reveals two or more negative but mutually exclusive goals. It is easily resolved. People may leave
the organization if they are unable to get adequate salary. It is an example of avoidance conflict.
 Role conflicts: role ambiguity is another cause of intra individual conflict. People play their
respective roles in an organization as per their status and cadre. An employee has to also perform
different roles outside the organization as father, son, teacher, friend, and so on. Considering the different
roles to be played in and outside an organization, it becomes for an employee to perform all the roles
successfully. Conflicts are bound to arise. Organizational roles are more important than multiple
individual roles in organizational behavior.
b) Interpersonal Conflicts
Interpersonal conflict is visible in organization and group behavior, as employees have to act and react
with other employees. The interdependence causes interpersonal conflict. Interpersonal conflict is
analyzed under three sub parts, viz. transactional analysis, Johari window and results of interpersonal
conflict.
Transactional Analysis: it refers to people’s interaction with reference to social transactions. This
analysis provides a better understanding of how people react with one another while communicating and
behaving in society.
Johari window:it pints out interpersonal styles and possible interpersonal conflict situations. It helps to
solve conflicts through feedback, disclosure, self-perception, and late strategies. Accordingly,
subordinates should be encouraged to provide feedback. Feedback is the willingness of others to open and
frank to provide fair and correct feedback. Disclosure is related to the extent to which a leader willingly
shares his feelings with others. The subordinates should be looked at from their viewpoints. Only then,
can the manager really understand them and have theyunderstood his feelings. Self-perception of the
manager means that whether he knows himself as well as he enters the public and private arena. Late
strategies if anything has gone wrong, the manager has to set things right. Mere regret and feeling of sorry
for the mistake cannot cure the problem. He should try to avoid errors in the future. It is never too late to
amend the situation.
Results of interpersonal conflict
Results of interpersonal conflictmay be lose-lose, win-lose or win-win

1) Lose- lose: Under this strategy, both parties lose and this may take several forms. A middle path is
taken to resolve conflicts where both parties lose to a certain extent. Arbitrators or judges are
appointed to resolve the problem, where both the parties suffer.
2) Win-lose: here two parties are fighting to achieve success, but only one of them can win while the
other loses the struggle. For example, a manager may be successful in suppressing the employees’
demand or the employees will be successful in getting their demand addressed resulting in loss of
money by the organization.
3) Win-win: both the conflicting parties win the battle. No one is the loser. Creativity, productivity, and
profitability are increased by mutual agreement. The manager asks striking employees to raise
productivity for getting more bonuses, for which they are on strike.Example, Role set. Many
interpersonal conflicts are due to overlapping and ambiguous role sets. Rearranging of overlapping
and interlocking role sets is crucial for resolving conflicting problems
C)Organizational conflict
Organizational conflicts include intra-individual, inter-group conflicts and structural conflicts.
Multiple organs such as production, marketing, fiancé, personnel, subordinate-supervisor relations,
and customer’s expectations create problems and conflicts.
5.4. Sources of conflict
The major sources of conflicts, discussed under three levels above, among others are:
1. Competition for limited resources: Resources of an organization are finite. As a result there are
times when groups or individuals in an organization fight for resources. The greater the scarcity of
resources, the greater the potential for conflict.
2. Work flow relationship: When group’s performance is dependent on another group or if
interdependence allows one group gain at another’s expense, opposing sources are stimulated.
3. Communication problems: May arise because all groups may not have the same information or may
not have adequate information or information overload. Supervisors should consider the status, education
and experience of subordinates while communicating with them, for their proper understanding or
instructions. Poor communication leads to conflicts while open and frank communication reduces it.
Insufficient exchange of information, noise in the communication channel and semantic difficulty arises
as the result of differences in training, selective perception, in values, and attitudes.
4. Overlapping or unclear boundaries. If which activities or resources are allocated to whom is not
clearly delineated, it can lead to conflict the parties working around the overlapping responsibilities/
authorities.
5. Unclear authority structure: people may not know how far their authority extends.
6. Unreasonable or unclear procedures or rules: When rules and regulations are stipulated in
ambiguous manner, conflict may arise.
7. Collective decision making: The greater the number of people participating in a decision, the greater
the potential for conflict as group members may have different background, level of information,
experience and the like. They can view the thing upon which decision is to be made from different
perspective.
5.5. Conflict Outcomes
Conflict outcomes may be either functional, in that the conflict results in an improvement in the group’s
performance, or dysfunctional, in that it hinders group performance.

1. Functional outcomes
It is hard to visualize a situation where open or violent aggression could be functional.
However, there are a number of instances where it is possible to envision how low or moderate levels of
conflict could improve the effectiveness of a group. Generally, conflict is constructive when it stimulates
creativity and innovation, improves the quality of decisions and encourages interest among group
members, provides the medium through which problems can aired and tensions released, and fosters
environment of self-evaluation and change. The evidence suggests that conflict can improve the quality of
decision making by allowing all points, particularly the ones that are unusual or held by a majority, to be
weighted in important decisions. Conflict is an antidote for groupthink. Conflict challenges the status quo
and therefore, furthers the creation of new ideas, promotes reassessment of group goals and activities, and
increases the probability that the group will respond to change.
Not only do better and more innovative decisions result from situations where there is conflict, but
evidence indicates that conflict can be positively related to productivity. It was demonstrated that, among
established groups, performance tended to improve more when there was conflict among members than
when there was fairly close agreement. The investigators observed that when groups analyzed decisions
that had been made by the individual members of that group, the average improvement among the high
conflict groups was 73% greater than was that of those groups characterized by low conflict conditions.
Generally speaking, groups composed of members with different interests tend to produce higher quality
solutions to a variety of problems than do homogeneous groups.
Basic positive outcomes of conflict include:
 The energy level of individuals or groups increases with conflict.
 Group cohesion increases – external threats tend to cause a group to pull together as a unit.
 Blind faith is replaced by logical understanding
 Minorities views are given due attention
 Inactive decisions are revealed due to conflict
2. Dysfunctional outcomes
The destructive consequences of conflict on a group or organization’s performance are generally well
known. Uncontrolled opposition breeds discontent which acts to dissolve commonalities, and eventually
leads to the destruction of the group.
The more undesirable consequences of conflict are:
 Decline in communication between conflicting parties
 Reduction in group cohesiveness
 Subordination of group goals to the primacy of infighting between members.
 Delay in decision making which need to be done urgently
 Common links are broken and destructive ideas crop up
 Hostility and aggression development which disrupts harmony and peace among groups from the
organization’s point of view.
 Over conformity to group demands – members of a group faced with outside threats may over
conform to the group demands.
 At the extreme, conflict can bring group functioning to halt and potentially threaten the group’s
survival.

 Conflicts increase employee turnover, decrease employee satisfaction and increases

inefficiencies of work units.
To conclude, the two extremes of conflict (too little and too much) are dysfunctional whereas the
optimum level of conflict is functional. Therefore, managers should strive to maintain optimum level of
conflict in their organizations. Evidence indicates that the type of group activity is significant factor for
determining functionality. The more non routine the tasks of a group are, the greater the probability that
internal conflict will be constructive. Groups that are required to tackle problems demanding new and
novel approaches- as research, advertising and other professional activities- will benefit more from
conflict than will groups performing highly routine activities.
5.6. Conflict Management
In this sub section, three important issues, that is, analysis of the conflict situation, conflict stimulation,
and conflict resolution are discussed as tools of conflict management.
1. Analysis of the conflict situation
A viable strategy for conflict management begins with an analysis of the conflict situations and then
moving to the development of strategy options. Management can analyze a conflict situation by
identifying:
 The conflicting parties – the conflict may be between individuals, between individuals and groups,
or between departments.
 The source of conflict – competition, personal difference, inadequate communication and the like.
 The level of conflict – the situation may be at a stage where the manager must deal with it
immediately or the conflict may be at a moderate level of intensity.
2. Conflict stimulation
We can stimulate conflict by employing the following mechanisms:
 Competition: At times, a manager may wish to increase the level of conflict and competition in work
situations. For instance, a conflict between new individuals and existing employees may result in new
approaches or methods of work. A conflict raised from restructuring an organization may bring about
better way of doing a task. Encouraging competition by offering bonuses, incentive pay and citation of
outstanding performance may lead to productive conflicts as groups struggle to out do each other.
 Bringing outsiders: - adding employees to a group whose back grounds, values, attitudes or
managerial styles differ from those of present members can be adopted as means of stimulating conflict to
its functional level.
 Restructuring the organization: realigning work groups, altering rules and regulations, increasing
interdependence and making similar structural changes to disrupt the status quo is also used to further
conflict with in or among individuals/groups.
3. Conflict Resolution
Managers as well as other individuals who are in charge of resolving conflicts that arise in their
organizations or units can employ one or more of the following tools towards their target. The situation,
the parties involved in conflict, its cause, and extent highly determines which technique ought to be used
at a time.
a) Dominance and suppression: they create a win- lose situation in which the loser is forced to give
way. Usually ends up disappointing and breeds hostile environment.

b) Avoidance: this strategy calls for a manager to withdraw or ignore the conflict. Letting the
participants resolve it themselves.
c) Smoothing: In this strategy, an obliging person neglects his/ her own concern to satisfy the concern
of the other party. This option involves playing down differences while emphasizing commonalities.
d) Compromise: With compromise,each party is required to give up something of value in order to
get another thing. Each party moves to find a middle ground. There is no clear winner or loser, rather
there is a willingness to share the object of the conflict and accept a solution that provides incomplete
satisfaction for both parties concerned.
e) Collaboration: here the manager promotes mutual problem solving by both parties. It is a situation
where each parties to a conflict desire to satisfy fully the concern of all parties.
f) Confrontation: if this option is used, conflicting parties are forced to verbalize their positions and
disagreements. The objective is to identify a reason to favor one solution or another and thus resolve the
conflict.
g) Accommodation: Use accommodations when you find you are wrong, and to allow a better
position to be heard, to learn and to show that you are responsible.
h) Negotiation: negotiation can be defined as a process in which two or more parties exchange goods or
services and attempt to agree on the exchange rate of for them. Negotiation permits the interactions of
almost everyone in groups and organizations. It occurs when two or more parties- either individuals or
groups- discuss specific proposals in order to find out a mutually acceptable agreement.
For example, when organizations use it to solve internal disputes (between labor and management) and
external conflict (when dealing with customers or suppliers)
5.7 Managing Interpersonal Relations
A manager can effectively manage interpersonal relations by devising things such as:
 establishing rules and regulations, hierarchy, planning specific goals to be attained,
 assigning task forces to solve a particular problem,
 naming permanent teams to handle frequently occurring problems and
 Creating interacting departments to integrate tasks between two or more departments.
 designing liaison roles to facilitate communication between two independent work units
CHAPTER SIX - STRESS MANAGEMENT

6.1. What is stress

6.2. Understanding sources of stress and its consequences

6.3. Effects of Stress
6.4. Stress management strategies
6.5. Implications for performance and satisfaction
CHAPTER SIX
JOB STRESS AND ITS MANAGEMENT
Chapter objectives
After you complete this chapter, you are required to
 Define the term stress
 Identify the sources and symptoms of stress
 Demonstrate stress management strategies
 Evaluate the impact of job stress on productivity
6.1. What is Stress?
Hans Selye, a medical researcher first used the term “Stress” to describe the body’s biological
response mechanism which means “the nonspecific response of the body to any demand”.
He views that stress is the spice of life, the absence of stress is death, which is usually considered
to be negative and caused due to something bad. Thus stress refers to distress/PAIN/SORROW.
Ivancevich and Matterson define stress as “the interaction of the individual with the
environment”
Beehr and Newman, stress is a condition arising from the interaction of people and their jobs
and characterized by changes within people that force them to deviate from their normal
functioning.
John M. Ivancevich and Michael T. Matterson have defined stress as

“adoptive response, mediated by individual characteristics and/ or psychological processes,
which are a consequence of any external action, situation or event that places special physical
and/or psychological demands upon a person”.
 Stress is a dynamic/FORCEFULL /ENERGETIC condition in which a person is faced

with lot of constraints while functioning in the organization.
 Stress causes discomfort, which leads to disequilibrium in the individual’s mind set.
 Stress is not always negative in nature.
 Stress is also a source of inspiration/MOTIVATION/ENCOURAGEMENT.
 When there is a stress for any work it leads to higher performance.
 When stress is gravest, it reduces employee productivity.
 Stress is caused due to external factors, situations or events WHICH may include social
setting, work ethics in the organization, leadership styles, availability of resources,
workload, level of technology and the work environment.
 These have adverse impact on the individual characteristics and psychological processes.
The internal factors that are affected are psychological in nature and include emotions, ego
state, attitude, perception, motivational factors, need and demographics.
[Stress should not be confused with anxiety or nervous tension and damaging.

They occur as regular features in many cases and have no long – lasting impact on the
working capacities of the employees.
Mishra (2003) has appropriately explained that anxiety may remain purely psychological and
may not cause any physical impact. Similarly, only physical impacts will not be stress unless it
is felt by the mind and heart. The psychological and physical impacts are visible in the form of
stress. Anxiety is the cause of stress but not stress itself.]
6.2. Understanding sources of stress
Organization, Group and individual have impact on the performance of a job. Environment also
effects adversely on the efficiency of the individual. The common sources of job stresses are:
1. Environment Factors
There are innumerable environmental factors that have caused a great deal of work stress on the
employees.
Ivancevich and Matterson have identified societal, economic, financial, cultural, familial and
technological factors which have tremendous influence on mental health of the employees.
Societal factors have forced both husband and wife to do the job to maintain a high level of life
style. Government, NGOs and other voluntary organizations have introduced various schemes
for the welfare of the people. Though the life span in general has increased but the immunity in
the body has decreased to a great level and large number of people are suffering from various
disease caused by work stress. Environmental stressors includes:
 Economic uncertainties of the business cycle
 Political uncertainties of political systems
 Technological uncertainties of technical innovations
 Terrorism in threats to physical safety and security
 Family demands and obligation
 Race, caste, creed, ethnic identity etc. cause adverse effect on individuals
2. Organizational Stressors
Organizational stressors can be classified into mission statement, strategies, policies,
organizational structure and design, reporting channels, communication, various processes,
systems and last but not the least the working conditions.
Organization mission and subsequent departmental goals have a long lasting impact on the
employees. Over ambitions goals leave employees more stretched for attaining the same.
Good organizational policies, procedures, rules, regulations keep employees in high spirit.
On the contrary, adhockism, inadequate compensation, rigid rules, ambiguous
organizational policies and faulty job design cause tremendous amount of stress. Job related
policies must be sound and updated.
Pressures created by other employees.
Lack of social support from colleagues and poor interpersonal relationships can cause
considerable stress, especially among employees with a high social need.
Excessive rules and an employee’s lack of opportunity to participate in decisions that affect
him or her are examples of structural variables that might be potential sources of stress.
The supervisory style of the organization’s managers. Some managers create a culture
characterized by tension, fear, and anxiety.
The more interdependence between an employee’s tasks and the tasks of others is, the
greater the potential for stress.
Autonomy, on the other hand, tends to lessen stress.

Jobs in which temperatures, noise, or other working conditions are dangerous or undesirable
can increase anxiety.
Pressures placed on an employee as a function of the particular role he or she plays in the
organization.
Task design should include job autonomy, task variety so that employee derives pleasure
while at work.
Work place, and work environment are two very important factors. Poor hygiene in work
place, inadequate space, light, lack of physical security at work place are stressors.
Stress is caused by inadequate support from subordinates, conflicting job requirements,
inadequate and poor performance measurement, and lack of empowerment.
Job Security: The prospect of losing job, especially when an employee is the sole bread
earner for the entire family is very stressful. Another reason for job related stress is
promotion or enhancement of appointment. A person must have a job commensurate with
his qualification. Promotion must be related to efficiency and due care should be exercised
in this regard.
Relocation: - Relocation is related to transfer of a person to a different place. The fear of
working at new location with different people itself is stressful. Unpredictability about new
working environment and creating new relationship cause anxiety. Transfer also creates
problems for family members. It may be admission in schools, adjustment to social
environment, house and may even be language
3. Group Stressors
Hawthorne studies have established the impact of group cohesiveness, group norms and
importance of group objective for attainment of organizational goals. Lack of cohesiveness
creates conflict. Employees must be given full opportunities to develop themselves. People join
group for social security that should be provided. Managers must ensure that job well done is
recognized, omission on this account creates stress like situation in the minds of the
employees.Employee morale must be kept high to avoid group stress.
4. Individual Stressors
 Personal life and events of official life cannot be separated.
 Events of marriage, divorce, death in the family
 Personal life difficulties
 Family and personal relationships
 Family Economic and financial problems
 Personality
Symptoms of Stress
Stress shows itself in a number of ways—physiological, psychological, and behavioral
symptoms.
1. Physiological
Changes in metabolism, increased heart and breathing rates, raised blood pressure, headaches,
and potential of heart attacks.
2. Psychological
Job-related dissatisfaction, tension, anxiety, irritability, boredom, and procrastination.
3. Behavioral symptoms
Changes in productivity, absenteeism, job turnover, changes in eating habits, increased smoking
or consumption of alcohol, rapid speech, fidgeting, and sleep disorders.

Stress-Performance Relationship
a. The logic underlying that low to moderate levels of stress stimulate the body and increase its
ability to react.
b. Individuals then often perform their tasks better, more intensely, or more rapidly.
c. But too much stress places unattainable demands or constraints on a person, which result in
lower performance.
d. Even moderate levels of stress can have a negative influence on performance over the long
term as the continued intensity of the stress wears down the individual and saps his/her energy
resources.
6.3. Stress Management Strategies
“Stress Management Procedures for helping people cope with or reduce stress already being
experienced”.High or low levels of stress sustained over long periods of time, can lead to
reduced employee performance and, thus, require action by management.
1. Individual approaches:
Effective individual strategies include implementing time management techniques, increasing
physical exercise, relaxation training, and expanding the social support network.
• Practicing time management principles such as:
A. Define objective for self
B. Making daily lists of activities to be accomplished
C. Prioritizing activities by importance and urgency
D. Scheduling activities according to the priorities set
E. Knowing your daily cycle and handling the most demanding parts of your job duringthe
high part of your cycle when you are most alert and productive
Noncompetitive physical exercise has long been recommended as a way to deal with excessive
Stress levels.Individuals can teach themselves to reduce tension through relaxation techniques
such as meditation, hypnosis, and biofeedback.Support such as Having friends, family, or work
colleagues to talk to provide an outlet for excessive stress.
2. Organizational approaches
Strategies that management might want to consider include:
 Improved personnel selection and job placement
 Organizational goals must be in realms of achievement. Too much high goals not only put
the employees under undue stress but also creates unhealthy work environment.
 Organizational polices should be clearly defined with particular reference to training and
development, promotion, leave, wages and salary administration, discipline, incentives, etc.
 Authority and responsibility must be clearly defined by setting up reporting channels.
Principle of unity of command should be adhered to.
 The Role Analysis Technique helps both the manager and the employee to analyze the
requirements and expectations from the job. Breaking-down the job into various components
clarifies the role of the job for the entire system. This also helps to eliminate reduction of
work and thus lowering down the stress level.
 Organizational structure, redesigning of jobs and improved communication reduces stress.
 Management must create a healthy working environment.
 Nothing discourages employees as bad developmental programs.
 Employees must be empowered.
 Use of realistic goal setting, redesigning of jobs
 Increased employee involvement

 Improved organizational communication

 Job relocation assistance is offered to employees who are transferred, by finding alternative
employment for the spouses of the transferred employees and getting admissions in schools
for their children in the new place.
6.4. Implications for performance and satisfaction
Frustration: Frustration is a form of behavior which occurs when a person is prevented from
achieving a goal or objective. It refers to obstruction or impediment to goal oriented
behavior. Frustration is caused
Firstly due to delay in getting advancement or recognition through a promotion is insight. One
even gets frustrated waiting for someone to meet at a scheduled time and date.
Secondly, it is caused bynone availability of various resources.
A faculty member may not be able to carry out research work because he is over burdened with
other responsibilities. He may get frustrated due to non – availability of time resource.
The third cause of frustration is non-attainment of goal. For example failure in the examination,
non-attainment of production or sales target, failure to get promotion are some of the causes of
frustration which are manifested in stress.
Anxiety: Is a feeling of inability and helplessness in formulating appropriate responses for
dealing with the anticipated negative outcome(Jit.S.Chandan). It occurs when a decision has
to be made but the outcome of the decision could have positive as well as negative
consequences. Anxiety also occurs when there is situation when one does not know as to
what is right. For example, an employee is serving in an organization for over ten years and
fully satisfied with the organizational culture but asked to move on promotion to a different
organization and to a faraway place.
Burnout: Burnout is a type of existential crisis in which work is no longer a meaningful
function.Workers who experience burnout may no longer view their job as meaningful.
They feel work as tedious, redundant, and insignificant. They experience total fatigue which may
show itself in the form of boredom, depression and a powerful sense of alienation.
Morely and Katherine (1982) in their work on the subject have identified the pattern of behavior
burned out executives. They concluded that predictable behavior is as under:
(A) tendency to balance others in the organization for their burnout.
(b) To complain bitterly about aspects of work which in the past were not areas of concern?
(c) To miss work because of non-specific and increasingly prevalent illness.
(d) To daydream and sleep on the job.
(e) To be last to come and the first to leave.
(f) To bicker with co-workers or appear uncooperative and to become increasingly isolated from
others.
Organizational Productivity
When executive are not able to meet organizational objective due to external environmental
factors like shortage of raw material, government rules, market demand etc., they experience a
burnout. They feel a sense of helplessness. Burnout may also be noticed where there is a strict
bureaucratic way of doing things and very little scope for exploitation of personal skills,
innovation and creativity.

CHAPTER SEVEN
ORGANIZATIONAL CULTURE AND DIVERSITY
7.1. Definition of Organizational Culture
The shared values, principles, traditions, and ways of doing things that influence the way
organizational members act. These shared beliefs, values and norms help employees develop a
sense of group identity.
First, culture is a perception፡ it’s not something that can be physically touched or seen, but
employees perceive it on the basis of what they experience within the organization.
Second, organizational culture is descriptive፡ it’s concerned with how members perceive the
culture and describes it, not with whether they like it.
Robbins asserts that organizational culture is a dynamic system of shared meaning held by
members that distinguishes the organization from other organizations. This system of shared
meaning is a set of key characteristics that the organization values such as beliefs, philosophies,
experiences, habits, expectations, norms and behaviors that give an organization its distinctive
characters.
Edgar Schein defines organizational culture as a pattern of basic assumptions-invented,
discovered, or developed by a given group as it learns to cope with its problems of external
adaptation and internal integration-that has worked well enough to be considered valuable and,
therefore, to be taught to new members as the correct way to perceive, think, and feel in relation
to those problems.
J. Martin emphasizes the different perspective of culture as: when individuals come into contact
with the organization, they come into contact with dress norms, stories people tell about what
goes on, the organization’s formal rules and procedures, its formal codes of behavior, rituals,
tasks, pay systems, jargon, and jokes only understood by insiders, and so on. These elements are
some of the discernible features of organizational culture.When cultural members interpret the
meanings of these manifestations, their perceptions, memories, beliefs, experiences and values
will vary, so interpretations will differ-even of the same phenomenon. The patterns or
configurations of these interpretations and the ways they are enacted constitute organizational
culture.
Organizational culture is quite complex. Although there are a number of problems and
disagreements associated with the conceptualization of organizational culture, most definitions
recognize the importance of shared norms and values that guide organizational members’
behavior.
The following seven primary characteristics, in aggregate, capture the essence of organization’s
culture.
1. Innovation and risk taking: the degree to which employees are encouraged to be
innovative and take risk
2. Attention to detail: the degree to which employees are expected to exhibit precision
analysis, and attention to detail.
3. Outcome orientation: the degree to which management focuses on results or outcomes
rather than on the techniques and processes used to achieve these outcomes.
4. People orientation: the degree to which management decisions take into consideration the
effect of outcomes on people within the organization
5. Team orientation: the degree to which work activities are organized around teams rather
than individuals.

6. Aggressiveness: the degree to which people are aggressive and competitive, rather than
easygoing
7. Stability: the degree to which the organization’s activities emphasize maintaining the
status in contrast to growth
Appraising the organization on these seven characteristics, then, gives a composite picture of the
organization’s culture. This picture becomes the basis for feelings of shared understanding that
members have about the organization, how things are done in it, and the way members are
supposed to behave. Note that none of the above characteristics by themselves represent the
culture of an organization. However, collectively they can reflect the organizational culture and
organizational culture is concerned with how employees perceive the above characteristics, not
whether they like them or not.
In nut shell, organizational culture defines what is important to the organization, the way
decisions are made, the methods of communication, the degree of structure, the freedom to
function independently and how people should behave and the like.
Finally, even though individuals may have different backgrounds or work at different
organizational levels, they tend to describe the organization’s culture in similar terms. That’s the
shared aspect of culture.Organizational culture has common properties does not mean, however,
that there cannot be subcultures within any given culture. Most large organizations have a
dominant culture and numerous sets of subcultures.
Dominant culture፡ expresses the core values that are shared by a majority of the organization’s
members.
Subcultures፡ Mini- cultures within an organization, typically defined by department
designations and geographical separation.
When thinking and actions of employees are institutionalized, an organizational culture is
deemed to have taken birth.
Organizational culture is not inborn. It has to be invented and later developed over a period of
time. It enables employees to perform within the framework of the organization’s culture.
Environment plays a dominant role in developing the culture and so does demographic factors.
That is why we generally refer to Ethiopian culture or Indian culture.
Value system is the corner stone of the organization culture. It promotes standardization in
various systems and sub-systems, which reduce role conflict to a great extent. It promotes
communication that improves productivity and job satisfaction. Organization culture promotes
equality and work culture.
The corporate culture “consists of norms, values and unwritten rules of conduct of an
organization as well as management styles, priorities, belief and interpersonal behaviors
that prevail. Together they create climate that influences how well people communicate,
plan and make decisions”
Organizational culture originates from the founders of the organization based on value system
held by them. It is further passed on, down the line. Organizational culture is also a function of
the nature of work and goals of the organization. It is visible from the organizational structure.
Centralized command and control, strict hierarchy and fixed communication are indicative of
formal culture with little freedom of action and with scant attention to innovation and creativity.
While decentralized work culture will promote autonomy that will lead to greater job
satisfaction.
Manifestations of Culture
Culture is disclosed through the following manifestations:

1. Statements of principle: written expressions of basic principles help control the

organization’s conduct
2. Slogans:are phrases or sayings clearly expressing a key organization value Example,
Customer is a king!
3. Ceremonies: presentation of awards to high performers as an example of reinforcing
company values
4. Organizational climate: the quality of the work environment experienced by employees
7.2. Functions of Organizational Culture
This function of culture helps employees understand why the organization does, what it does and
how it intends to accomplish its long-term goals.
(a)It gives members an organizational identity: Sharing norms, values and perceptions gives
people a sense of togetherness that helps promote a feeling of common purpose. Culture provides
shared pattern of cognitive perceptions or understanding about the values or beliefs held by the
organization. This enables the organizational members how to think and behave as expected of
them.
(b)It facilitates collective commitment. The common purpose that grows out of shared culture
tends to elicit strong commitment from all those who accept the culture as their own. It provides
shared – pattern of feelings to the organizational members to make them know what they are
expected to value and feel.
(c) It promotes systems stability. By encouraging a shared sense of identity and commitment,
culture encourages lasting integration and cooperation among the members of an organization. It
enhances social stability by holding the organizational members together by providing them
appropriate standards for which the members should stand for.
(d)It shapes behavior by helping members make sense of their surroundings.An
organization culture serves as a source of shared meaning that explains why things occur the way
they do. Organizational culture is not fully visible but felt. At less visible level culture reflects
the value shared by organizational members.
(e)It provides a boundary: Culture creates distinction between one organization and the other.
Such boundary – defining helps identify members and non-members of the organization. Culture
facilitates the generation of commitment to something larger them one’s individual self-interest.
It serves as a control mechanism that guides and shapes the attitude and behavior of
organizational members.
(f) It helps organizational members stick to conformity and expected mode of behavior:
Culture ensures that everyone thinks and behaves in a prescribed manner.
7.3. Characteristics of a Healthy Organizational Climate
The integration of organizational goals and personal goals;
The most appropriate organization structure based on the demands of the socio technical
system;
Democratic functioning of the organization with full opportunities for participation;
justice in treatment with equitable HRM and employment relations policies and practices;
mutual trust, consideration and support among different levels of the organization;
the open discussion of conflict with an attempt to avoid confrontation;
managerial behavior and styles of leadership appropriate to the particular work situations;
acceptance of the psychological contract between the individual and the organization;
recognition of people’s needs and expectations at work and individual differences and
attributes;

Equitable systems of rewards based on positive recognition;

Concern for the quality of working life and job design;
Opportunities for personal development and career progression;
a sense of identity with, and loyalty to, the organization and a feeling of being a valued and
important member
7.4. Creating and Sustaining Organizational Culture
An organization’s culture does not pop out of thin air. Once established, it rarely fades away.
What factors influence the creation of culture? What reinforces and sustains these forces once
they are in place?
An organization’s current customs, traditions and general way of doing things are largely due to
what it has done before and the degree of success it has had with those endeavors. The founders
of an organization traditionally have a major impact on that organization’s early culture. They
have a vision of what the organization should be. They are unconstrained by previous customs or
ideologies. The small size that typically characterizes new organization further facilitates the
founders’ imposition of their vision on all organizational members.
Once a culture is in place, practices within the organization act to maintain it by giving
employees a set of similar experiences.Generally, managers and employees play a great role in
creating organizational culture.
Manages help develop culture by:
1. Identifying values
2. Defining the company’s mission
3. Determining the amount of individual autonomy and the degree to which people work
separately or in groups.
4. Structuring the work in accordance with the values
5. Developing reward systems that reinforce values and
6. Creating methods of socialization that will bring new workers inside the culture and
reinforce the culture for existing workers.
Employees contribute to develop culture by:
 The extent to which they accept and adapt to it
 By shaping the organization’s norms and values
 By forming sub cultures
Three forces which play particularly important role in sustaining culture are selection practices,
the actions of top management, and socialization processes.
1) Selection: the explicit goal of the selection process is to identify and hire individuals who
have the knowledge, skills and abilities to perform their jobs successfully. The final decision
as to who- from among selected candidates-is hired will be significantly influenced by the
decision makers’ judgment of how well the candidate will fit into the organization. This
attempt to ensure a proper match, results in the hiring of people who have values essentially
consistent with those of the organization. Additionally, the selection process provides
information to applicants about the organization. If candidates perceive a mismatch between
their values and that of the organization, they can self-select themselves out from the
applicant pool. In this way, the selection process sustains the organization’s culture by
selecting out those individuals who might attack or undermine its core values.
2) Top management: the actions of top management also have a major impact on the
organization’s culture. Through what they say and how they behave, senior executives
establish norms that filter down through the organization. For instance, whether risk taking is

desirable; how much freedom managers should give their subordinates; what is appropriate
dress; and what actions are rewarding?
3) Socialization: refers to the process that adapts employees to the organization’s culture.
No matter how good a job the organization does in selection, new employees are not fully
aware or informed on the organization’s culture. Because they are unfamiliar with the
organization’s culture, new employees are potentially likely to disturb the customs that are in
place. The organization, therefore, needs to help new employees adapt to its culture. This
adaptation process is called socialization.
7.5. Learning Culture
Mishra emphasizes that culture is learnt in the form of instructions, stores, rituals, language and
normal symbols. The learning process starts from childhood and continues through the rest of
one’s life.
1) Instructions: parents are the basic elements of culture. Children are given certain
instructions which are followed by them. The new appointed employees are like newly
born children of an organization. They are given certain instructions that are followed
by them.
2) Stories: parents and peers tell stories of outstanding personalities. Children try to
transfer them into practice. An organization also tells stories of successful businessmen
who have come up from the lowest rung of their life to the highest place in society.
Such stories influence newcomers to adapt what they are told.
3) Rituals: are important factors for inculcating culture. Birth celebration, naming
ceremonies, and marriage functions are living examples of the formation of culture.
Similarly, the formation of an organization performs several rituals or familiarities. The
top management with a high vision and mission makes high predictable rituals in an
organization.
4) Language: the organizational culture has a language basis. Language carries culture as
its literature is full of cultural facts and fictions. Culture and sub culture are developed
with an organization.
5) Material symbols: an organization learns culture through the behavioral pattern of its
employees. Openness and equality help cultural development. Employee’s behavior in
private life also influences the culture of an organization. Their jogging, swimming,
dances and drama have important bearings of culture in an organization.
7.6. Diversity
Diversity in the realm of OB has traditionally emphasized the difference among people in a
group or organization (age, gender, race, religion etc). Now that the demographic projections of a
few years ago have become a reality (the work force is older and has an increasing percentage of
women and racial/ethnic minorities), there is an emerging perspective on diversity as an all
inclusive mixture of differences and similarities.
One of the most important and broad based challenges currently facing U.S. organizations is
adapting to people who are different. The term we use for describing this challenge is work force
diversity. Workforce diversity means that organizations are becoming heterogeneous in terms of
gender, race and ethnicity. But the term encompasses anyone who varies from the so – called
norm. But we now recognize that employees don’t set aside their cultural values and lifestyle
preferences when they come to work. The challenge for organizations, therefore, is to make
themselves more accommodating to diverse groups of people by addressing their different style,

family needs, and work styles. The melting pot assumption is being replaced by one that
recognizes and values differences.
Guidelines for Managing Cultural Diversity
• Organization members must:
– Recognize and value a variety of opinion and insight.
– Recognize the learning opportunities and challenges presented by the expression of different
perspectives.
• The organizational culture must:
– Foster high performance expectations for everyone.
– Stimulate personal development.
– Encourage openness.
– Make workers feel valued.
• The organization must have:
– A well-articulated and widely understood mission
Effects of Organizational Culture on Employee Behavior and Performance
Allows employees to understand the firm’s history and current approach.
Fosters commitment to corporate philosophy and values.
Serves as a control mechanism for employee behaviors.
Certain cultural types may produce greater effectiveness and productivity.
7.7. Globalization and People at Work
Besides information technology, the other major environmental context impacting organizational
behavior is globalization. The advances made in information technology aspects have made the
world a smaller place. This has led to a borderless world – one big global market place.
The implications of this globalization for organization behavior are profound and direct.
Globalization affects a manager’s people skills in at least two ways. First, if you are a manager
you are increasingly likely to find yourself in a foreign assignment. You will be transferred to
your employer’s operating division or subsidiary in another country. Once there, you will have to
manage a work force that is likely to be very different in needs, want, aspiration, attitudes and
culture from the ones you were used to back home. Second, even in your own country, you are
going to find yourself working with bosses, peers, and subordinates who were born and raised to
different culture. What motivates you may not motivate them. While your style of
communication may be straightforward and open, they may find this style uncomfortable and
threatening. This suggests that if you are going to be able to work effectively with these people,
you will need to understand their culture, how it has shaped them, and learns to adapt you
management style to these differences.

CHAPTER EIGHT
POWER AND POLITICS IN AN ORGANIZATION
At the end of this chapter, you will be in the position to:
 Define and differentiate power and politics
 Identify the different bases and sources of power
 Capitalize the role of power in group coalition
8.1. Definition of Power
Power is derived from the official position held by an individual in an organization. AsRosa
BethKantar says, “Power is the ability to get things done.” Those in power are able to marshal
their resources in a way that helps them achieve their goals. They are able to be effective in their
jobs and earn the respect of others. Having power as resource can help you gain support,
information, supplies—everything and anything that is needed to be productive in your job.
Power is a tool and resource, a means as an end while politics represents tactics used by
employees to use to manipulate power in organizational setting. Leaders use power as a means of
attaining group goals. Leader use power to ensure compliance of job assigned to them. Power is
also used to control various activities of individuals and groups
Politics is a process whereby power is acquired and used to influence behavior of others. It is
endemic to every organization. People form groups, camps or cliques when they play politics.
People playing politics for power where ethics, moral values, organizational goals are of little
concern. Dalton identified following six areas where politics was being played actively.
 Pressure for economy
 Co-operation of officially powerless experts with their administrative superior line and staff-
relationship.
 The conflict between labor and management for interpreting agreements.
 Uncertainly about standards and strategies of promotion.
 Difficulty in linking reward with productivity
 Practicality of policies
Dalton observed that various type of alliances tend to develop among individuals; these alliances
may be vertical, horizontal or mixed and are prime means of acquiring influence. This
phenomenon of acquiring and exercising power seriously changes the command and control
system in the organization. It forces to deviate from the established norm and process.
Terminologies
 Power

– The capacity that A has to influence the behavior of B so that B acts in accordance
with A’s wishes
– Mostly, it is the ability to do something
 Authority –the right to do or to enforce others to do/not to do
 Politics- is the process/ way or tactic used to acquire authority
 Dependency
– B’s relationship to A when A possesses something that B requires
– The greater B's dependence, the more power A has
8.2. Contrasting leadership and power
What differences are there between the two terms? Leaders use power as a means of attaining
group goals. Leaders achieve goals, and power is the means of facilitating their achievement. To
sum up:
• Leaders use power as a means of attaining group goals.
• Leaders achieve goals, and power is a means of facilitating their achievement.
• Power does not require goal compatibility, merely dependence.
• Leadership, on the other hand, requires some congruence between the goals of the leader and
those being led.
• Leadership focuses on the downward influence on one’s followers.
• Leadership research, for the most part, emphasizes style.
 Power does not minimize the importance of lateral and upward influence patterns.
Leadership
– Focuses on goal achievement
– Requires goal compatibility with followers
– Focuses influence downward
 Research Focus
– Leadership styles and relationships with followers
Power
– Used as a means for achieving goals
– Requires follower dependency
– Used to gain lateral and upward influence
 Research Focus
– Power tactics for gaining compliance
8.3. Bases and sources of Power
Bases of Power
French and Raven (1959) and Raven (1965) have put forward following six bases of power.
(a)Rewards: this power source derives from the person’s control over resources, for example
power to control human resources, pay and promotion. The greater perceived value of each
rewards, the greater the power. These rewards can be extrinsic in nature with tangible values as
well as intrinsic such as praise or recognition.
(b)Coercive: the power to punish or reward the power to threaten and to use one’s position to
force others to take action. It reflects the extent to which a manager can deny desired rewards or
administer punishment to control other people. For example a threat to meet given targets
otherwise there would be reduction in salary.
(c)Legitimate: the power which is exercised in accordance with organizational rules. This is a
power which is exercised with the authority of organization. Power derives from our cultural

system of rights, obligations and duties, whereby position is accepted by people, i.e. right of
private property.
(d)Referent: this depends on charisma or personal attraction of the individual. Interpersonal skill
and emotional support from others are the sources of power for a person. The stronger the
association,the stronger the power. For example MahatmaGandhi, people believed in his
ideology.
(e) Expert: power which derives from knowledge. Sometimes called sapient authority, this is
power based on an acknowledgement of others expertise e.g. physician.
Line, Staff, & Functional Relationships
Three distinct types of authority are evident in business organizations, that is, line, staff &
functional.
1. Line authority: enables managers to tell subordinates what to perform. Both line and staff
managers have line authority over their subordinates. Line authority may be defined as those
in the organization directly responsible for achieving goals.
2. Staff authority: people in staff position assist and advise line managers. They relieve some
of the line mangers’ burdens by giving them the information they need to make operational
decisions. People in these positions have the authority to offer advice and make
recommendations.
3. Functional authority: is exercised over people or activities in other departments. Usually
limited in scope and duration, it is exercised one level below the person who has it. The
safety director may be given functional authority over people who work under the production
supervisor when it comes to establish safety procedures for instance.
Sources of Power (Organizational Based)
1. Knowledge as power: Information Technology has taken a big leap in the last two decades.
Information is necessary for top management to take decisions. Information is vital to carry out
various operations in the business environment. Thus a person or a group holding information
becomes more powerful than their counter part. Flow of information is necessary for
continuous production or service operations. Persons who are in position to control the flow of
information wield enormous power to influence the behavior of others.
2. Resource as power: Resources are necessary for any organization. While material or tangible
resources can be procured easily, it is the availability of these resources, at right time, at right
place in a required quality and at a competitive price. Any person having monopoly over scares
resources wield power. When project is required to be started, it is government agencies which
delay the project for want of various resources, like power, water, etc. Human Resources are
critical. Any person having direct or indirect control over making skilled persons available holds
power. Organization cannot survive without adequate availability of various resources.
3. Decision making as power: Decision making as power in organization rests with the head of
the organization. Decision making is delegated to departmental heads depending upon the nature
of work, ability of the departmental heads and the trust enjoyed by them. Decision making is one
of the most important processes of management.
Decisions are influenced, may be by subordinates, peers, friends or even family members who
are psychologically close to decision maker. Therefore, both a person having decision making
authority and a person who can influence decision making have power in the organization.
Hiring a close relative, purchases in the organization, client selections etc. are day to day events
in the organization which, indicate the power centers.
4. Power Centers: There exist people in the organization who desire to be stronger.

They also want people dependent on them. Specialists, people with special powers deliberately
delay decisions or hold resources so that they become more demanding.Power centers exist in
various departments. It may in form of reservoir of power.
4. Dependency: Strength of power depends upon degree of dependency. Greater the
dependency on the power holder greater influence will the power holder exercised over his
subordinates. All managers have two dimensional power bases. One is the power generated
by the organizational authority and the second, the personal power by virtue of personality.
8.4. Power in group coalitions
Coalitions: Clusters of individuals who temporarily come together to achieve a specific purpose
A coalition is a collection of individuals who have banded together, thereby combining their
individual sources of power. As the members of the Tragi alliance found in the hit television
show Survivor, coalitions are the secret to power in organizations. When you join a coalition,
your individual power is increased by the power of the others in the group. If you have one vote
in an election, you cannot elect anyone on your own. But if you can gather together a large group
of voters (each with one vote), those voters can decide who gets elected.
Coalitions represent a form of power sharing and, consequently, joining one incurs some costs.
Then it would be more than just your one voice; then your voice would have the strength of
numbers behind it. One of the problems with this strategy, of course, is that finding other
managers who want exactly what you want may be difficult. Under these conditions, you could
form a compromise coalition.
Likewise, in a compromise coalition, all the members of the coalition are interested in the same
issues, but they don't all get exactly what they want. The members of the coalition compromise
on what each wants to make sure that the coalition gets something for its effort. Members in a
group
 Seek to maximize their size to attain influence
 Seek a broad and diverse constituency for support of their objectives
 Occur more frequently in organizations with high task and resource inter-dependencies
 Occur more frequently if tasks are standardized and routine
CHAPTER NINE
ORGANIZATIONAL STRUCTURE AND DESIGN
9.1. Overview of Organizational Structure and Design
Robbins asserts that organizational structure and design are important factors that influence the behavior
of individuals and groups that comprise the organization. Through the design of the structure,
management establishes expectations for what individuals and groups will do to achieve the
organization’s purposes. Managers achieve coordinated efforts through the design of a structure of tasks

and authority relationships. Design in this context implies that managers make a conscious effort to
predetermine the way employees do their work. Structure refers to relatively stable relationships and
processes of the organization. Organizational structure is considered by many to be the anatomy of the
organization providing a foundation within which the organization functions. Thus, the structure of an
organization similar to the anatomy of a living organism can be viewed as a framework. The idea of
structure as a framework focuses on the differentiation of positions, formulation of rules, and
regulations, and prescriptions of authority. Therefore, the purpose of structure is to regulate or at least to
reduce uncertainty in the behavior of individual employees.
Organizations are purposive and goal oriented, so it follows that the structure of organizations also
is purposive and goal oriented. Our concept of organizational structure takes into account the existence of
purposes and goals and our attitude is that management should think of structure in terms of its
contributions to organizational effectiveness, even though the exact nature of the relationship between
structure and effectiveness is inherently difficult to know.
9.2 Objectives of Organizational Structure and Design
Managers design an organizational structure in order to achieve the following objectives among others:
1. Create new institution for new organization
2. Responding to changes: for an organization to stay adaptive, it must respond to changes in the
environment, technology and customer’s needs as well as to changes that emerge from the
organizations revolutionary development.
3. Integrating new elements: as organizations grow and respond to changes they add new positions and
departments to deal with factors in the external environment or with new strategic needs.
4. Coordinate the components: simply placing a department in a structure is not enough. Managers
need to find a way to tie all the departments to ensure coordination and collaboration across the
department. If this objective is not accomplished, the departments may not work together whether
through reporting relationships, team or task forces, work groups. Departments must collaborate so as
to avoid conflicts and problems.
9.3Types ofOrganizational Structure and Design
The outcome of organizational design decisions is the framework or structure of the organization. In this
section we briefly examine two general organizational design models that have had significant impact on
management theory and practice. While there is a little uniformity in the terms used to designate the
models, we refer to them as mechanistic and organic.
9.3.1Mechanistic Organizational Structure
The term mechanistic describes organizations that function in a machine like manner to accomplish the
organization’s goals in a highly efficient manner. Mechanistic organizations emphasize the importance of
achieving high levels of production and efficiency through the use of extensive rules and procedures,
centralized authority and high specialization.
It is characterized by the following assumptions:
1. Activities are specialized into clearly defined jobs and tasks
2. Persons of higher rank typically have greater knowledge of the problem facing the organization than
those at lower levels. Unresolved problems are thus passed up the hierarchy.
3. Standardized policies, procedures and rules guide much of the decision making in the organization.
4. Rewards are chiefly obtained through obedience to instructions from superiors.
The mechanistic model achieves high levels of efficiency due to its structural characteristics. It is highly
complex because of its emphasis on specialization of labor, it is highly centralized because of its
emphasis on authority and accountability; and it is highly formalized because of its emphasis on function
as the primary basis of departmentalization.
9.3.2 Organic Organizational Structure
The organic model of organizational design stands in sharp contrast to the mechanistic organizational
structure model. The organizational characteristics and practices that underline the organic model are

distinctly different from those that underlie the mechanistic model. The most distinctive differences
between the two models result from thedifferent effectiveness criteria that each seek to maximize. While
the mechanistic model seeks to maximize efficiency and production, the organic model seeks to
maximize flexibility and adaptability.
The organic structure is characterized by the following assumptions:
1. There is a de-emphasis on job descriptions and specialization.
Persons become involved in problem solving when they have the knowledge and skill that will help solve
the problem.
2. It is not assumed that persons holding higher positions are necessarily better informed than those at
lower levels are.
3. Horizontal and lateral organizational relationships are given much more attention as vertical
relationships
4. Status and rank differences are de-emphasized
5. The formal structure of the organization is less permanent and more changeable.
The organic organization is flexible and adaptable to changing environmental demands because its design
encourages greater utilization of the human potential. Managers are encouraged to adopt practices that tap
the full range of human motivations through job design which stresses personal growth and responsibility.
Decision making, control, and goal setting processes are decentralized, not simply down the chain
command. These practices are intended to implement a basic assumption of organic model which states
that an organization will be effective to the extent that its structure allows to ensure the maximum
probability that in all interactions and in all relationships with the organization, each member in light of
his background, values decisions and expectations will view the experiences as supportive and one which
builds and maintains a sense of personal worth and importance. An organizational design that provides
individuals with this sense of personal worth and motivation and that facilitates flexibility and
adaptability would have the following characteristics:
 It would be relatively simple because of its de-emphasis on specialization and its emphasis on
increasing job range.
 It would be relatively decentralized because of its emphasis on delegation of authority and increasing
job depth.
 It would be relatively in formalized because of its emphasis on product and customer as basis for
departmentalization.
9.4 Factors that Affect Organizational Design
The major factors that have been identified as causes or determinants of an organization’s design are:
1. Strategy: an organization’s structure is a means to help management achieve its objectives. Since
objectives are derived from the organizations overall strategy, it is only logical that strategy and structure
should be closely linked. More specifically, structure should follow strategy. If management makes
significant changes in its organization’s strategy, the structure will need to be modified to accomplish and
support this change. Most current strategy frameworks focus on three strategic options, that is,
innovation, cost minimization and imitation & the structural design that works best with each. An
innovation strategy does not mean a strategy merely for simple or unique innovations; rather it is a
strategy that emphasizes the introduction of major products and services. An organization pursuing a cost
minimization strategy controls costs, refrains from incurring unnecessary innovation or marketing
expenses and cuts in the prices in selling basic products. Organizations following an imitation strategy try
to capitalize on the best of both of the previous strategies. They seek to minimize risk and maximize
opportunity for profit. Their strategy is to move into new products or new markets only after viability has
been proven by innovators. They take the successful ideas of innovators and copy them.
2. Size of the organization: a quick glance at organizations we deal with regularly in our lives
would lead most of us to conclude that size would have some bearing on an organization’s structure.
Considerable evidence supports the idea that an organization’s size significantly affects its structure.

Large organizations those typically employing 2000 or more employees tend to have more specialization,
more departmentalization, more vertical level and more rules and regulations than do small organizations.
3. Technology: this term refers to how an organization transfers its inputs in to outputs. Every
organization has at least one technology for converting financial, human and physical resources in to
products or services. Although the relationship between technology and structure is not overwhelmingly
strong, we find that routine tasks are associated with taller and more departmentalized structure. The
relationship between technology and formalization, however, is stronger. Studies consistently show
routineness to be associated with the presence of rule manuals, job descriptions and other formalized
documentation.
Finally, there has been found to be an interesting relationship between technology and centralization. It
seems logical that routine technologies would be associated with a centralized structure, whereasnon
routine technologies, which rely more heavily on the knowledge of specialists, would be characterized by
delegated decision authority.
4. Environment: an organization’s environment is composed of those institutions or forces that are
outside the organization and potentially affect the organization’s performance. These typically include
suppliers, customers, competitors, government regulatory agencies, public pressure groups and the like.
Some organizations face relatively static environment-few forces in their environment are changing.
There are for example, no new competitors, no new technological breakthroughs by current competitors,
or little pressure by public. Other organizations face very dynamic environment-rapidly changing
government regulations, new competitors, difficulties in acquiring raw materials, continuously changing
product preferences by customers and the like. Static environments create significantly less uncertainty
for managers than do dynamic ones.
5. Characteristics of personnel: not everyone responds in the same way to organizational
rules, policies, procedures and control methods. One reason is that young workers who have been raised
in more affluent conditions than their elders are usually less willing to be subjected to bureaucratic rules.
For these people more flexible designs are needed. Conversely, older employees tend to accept
restrictions more willingly. Professional and experienced employees tend to work more effectively under
democratic rule. They want more freedom to make decisions and lose supervision as compared with
unqualified employees.
6. Age of the organization: the longer an organization operates, the more formalized it is likely
to become. With age come standardized systems, procedures, and regulations. Therefore, older
organizations have characteristic of mechanistic structure whereas new or young organizations tend to
have organic structure.
9.5Guidelines for Organizational Structure and Design

Organizational structure is the differentiation of functions to facilitate the achievement of goals. Jobs are
differentiated according to the nature and specialization of the jobs. The major guidelines among others
for organizational structure and design are:
1. There should be clear definition of the duties and responsibilities of personnel employed in the
organization.
2. The structure must be directed towards promoting effective working at all level is of management.
3. Adequate decentralization of decision making through the delegation of responsibilities
4. Clear lines of responsibility linking the chief executive to the various points of decisions or
operations.
5. The span of responsibility of a manager should be limited to a reasonable number of subordinates
6. The structure should make accountable each manager in every level for his/her actions and the actions
of his/her subordinates
7. The organizational structure should define the policies, procedures and rules that guide the activities
and relationship of people in the organization.

9.6 Steps in the Structure Designing Process

The following steps need to be followed while designing an organizational structure.
1. Reviewing plans and objectives
2. Determining work activities that are necessary to accomplish the objectives
3. Classifying and grouping activities into manageable work units-departments
4. Assigning work and delegating authority to accomplish the task
5. Designing a hierarchy relationship to determine the vertical and horizontal operating relationships
of the organization as a whole
9.7 Departmentalization
The process of defining the activities and authority of jobs is analytical that is, the total task of the
organization is broken down into successively smaller ones. But the management must combine the
divided tasks into groups or departments. The crucial managerial consideration when creating
departments is the determination of the basis for grouping jobs. These bases are termed as
departmentalization bases and some of the most widely used ones are described below.
9.7.1 Functional Departmentalization
Managers can combine jobs according to the functions of the organization. Every organization must
undertake certain activities in order to do its work, and these necessary activities are the organization’s
functions. The necessary functions of a manufacturing firm include products, marketing, finance,
accounting and personnel activities necessary to create, produce, and sell a product. Departmentalization
by function can be used in all types of organizations. Only the functions change to reflect the
organization’s objectives and activities. The major advantage of this type of grouping is obtaining
efficiencies from putting like specialists together. Functional departmentalization seeks to achieve
economies of scale by placing people with common skills and orientation in to common units.
An organization that has divided its operations among various functional units can adopt the following
type of structure.
Top Level Management
Production Marketing Research Human Resource Finance

Figure 6.2 Functional Departmentalization Management
&Development
9.7.2. Product Departmentalization
Many large and diversified companies group jobs on the basis of product where all jobs associated with
producing and selling a product or a product line are placed under the direction of one manager. As a firm
grows by increasing the number of products it markets, it is difficult to coordinate the various functional
departments, and it becomes advantageous to establish product unit. This form of organization allows
personnel to develop total expertise in researching, manufacturing, and distributing a product line.
Centralization of the authority, responsibility, and accountability in a specific product department allows
top management to coordinate actions. The major advantage of this type of grouping is increased
accountability for product performance, since all activities related to a specific product are under the
direction of a single manager. If an organization’s activities are services rather than product related, each
service would be autonomously grouped.
An organization which is engaged in the manufacturing of five different product types can frame its
structure as depicted below.

Product A Product B Product C Product D Product E

Figure 6.3 Product Departmentalization
9.7.3. Geographic Departmentalization
Another commonly adopted method for departmentalization is to establish groups on the basis of
geographic area. The logic is that all activities in a given region should be assigned to one manager who
would be in charge of all operations in that particular geographical area. In large organizations territorial
arrangements are advantageous because physical dispersion of activities makes centralized coordination
difficult. Territorial departmentalization provides a training ground for managerial personnel. The
companies are able to place managers in territories and then assess their progress in that geographical
region. The experience that managers acquire in a territory away from head quarters provides valuable
insights about how products and or services are accepted in the field. A firm which undertakes its
operation in various parts of a country or region may frame its structure as follows.
North Branch South branch East Branch West Branch

Figure 6.4 Geographic Departmentalization
9.7.4. Matrix Departmentalization

Essentially the matrix departmentalization combines the two forms of departmentalization; functional and
product. The strength of functional departmentalization lies in putting like specialists together, while it
allows the pooling and sharing of specialized resources across products. Its major disadvantage is the
difficulty of coordinating the tasks of diverse functional specialists so that their activities are completed
on time and with in budget.
Product departmentalization on the contrary, has exactly the opposite benefits and disadvantages. It
facilitates coordination among specialists to achieve on time completion and meet budget targets.
Therefore, the matrix attempts to gain the strengths of both while avoiding their weakness. The most
obvious structural characteristic of the matrix is that it breaks the unity of command concept. Employees
in the matrix have two bosses-their functional department manager and their product manager. Therefore,
matrix has a dual chain of command. The strength of matrix departmentalization lies in its ability to
facilitate coordination when the organization has a multiplicity of complex and interdependent activities.
Still another advantage of matrix is it facilitates the efficient allocation specialists. The major
disadvantages of the matrix lie in the confusion it creates, its propensity to foster power struggles and the
stress it places on individuals.
9.7.5. Team Organizations
Teams have become an extremely popular means around which to organize work activities. When
management uses teams as its central coordination device, you have a team structure. The primary
characteristics of the team structure are that it breaks down departmental barriers and decentralizes
decision making to the level of the work team. Team structure also requires employees to be generalists
as well as specialists. In smaller organizations the team structure can define the entire organization.
Particularly among larger organizations the team structure complements what is typically a bureaucracy.
This allows the organization to achieve the efficiency of bureaucracy’s standardization while gaining the
flexibility that teams provide.
9.8. Basic Terminologies in organizational structure and design

1. Chain of command
Is an unbroken line of authority that extends from the top of the organization to the lowest level and
clarifies who reports to whom? It answers for employees questions such as “who do I go to if I have a
problem?” and” whom am I responsible to?” Authority refers to the rights inherent in a managerial
position to give orders and expects the orders to be obeyed. To facilitate coordination, each managerial
position is given a place in the chain of commands; and each managerial position is given a degree of
authority in order to meet his/her responsibilities. The unity of command principle helps preserve the
concept of an unbroken line of authority. It states that a person should have one and only one superior to
whom he/she is directly responsible. The concept of chain of command, authority, and unity of command
have substantially less relevance today because of advancements in computer technology and the trend
toward empowering employees.
2. Span of Control
How may subordinates can a manager effectively and efficiently direct? This question of span of control
is important because to a large degree it determines the number of levels and managers an organization
has. All things being equal, the wider or larger the span, the more efficient the organization will be. Wide
span of control are consistent with recent efforts by companies to reduce costs, cut overhead, speedup
decisions, increase flexibility, get closer to customers and empower employees.
3. Centralization and Decentralization

In some organizations, top managers make all the decisions. Lower level managers merely carryout top
managements’ directions. At the other extremes, are organizations where decision making is pushed down
to those mangers that are closer to the action. The former organizations are highly centralized, the latter
are decentralized. The term centralization refers to the degree to which decision making is concentrated at
a single point in the organization. In contrast, the more that lower level personnel provides input or are
actually given the discretion to make decisions, the more decentralization is there.
4. Delegation
Delegation means to delegate or grant authority to the subordinates to reach the peak of achievement. A
superior sets goals and tells his subordinates what he wants to get accomplished. He decides what to do
and how to do it. The subordinates while performing their respective jobs are given some power so that
they perform effectively. Delegation is pressure or a push on the men, so that work is performed as per
the schedule. Delegation becomes essential because superiors have no sufficient time to perform all the
work effectively and efficiently. They are responsible for the ultimate results which are achieved by
specialists. Generally, superiors are not as specialized as the subordinates are. Superiors are unable to
perform the total work efficiently. If they delegate the work to their subordinates, quality work will be
performed as the subordinates are specialized in different fields. The talents and abilities of subordinates
will be developed through delegation. Managers decide how much authority is to be delegated to each job
and each job holder. As we have noted authority refers to the right of individuals to make decisions
without approval by higher management and to exact obedience from others.

Ob Ch1-9 Kassahun

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Ob Ch1-9 Kassahun

Uploaded by

Copyright:

Available Formats

Dandi Boru College Shambu Campus Management Department

Organizational Behavior, Teaching Material: C.I Kassahun T.Benti Page 1

Organizational Behavior, Teaching Material: C.I Kassahun T.Benti Page 2

Organizational Behavior, Teaching Material: C.I Kassahun T.Benti Page 3

2. Neo Classical Approach

Organizational Behavior, Teaching Material: C.I Kassahun T.Benti Page 4

3. Behavioral Management Theory

Organizational Behavior, Teaching Material: C.I Kassahun T.Benti Page 5

Organizational Behavior, Teaching Material: C.I Kassahun T.Benti Page 6

This level of analysis draws in particular on theories from social psychology.

Effective organizational behavior management process attempts to organize quantitative and

Organizational Behavior, Teaching Material: C.I Kassahun T.Benti Page 7

Organizational Behavior, Teaching Material: C.I Kassahun T.Benti Page 8

1.6. Characteristics of Organizational Behavior

1. Organizations are composed of individual and groups.

Organizational Behavior, Teaching Material: C.I Kassahun T.Benti Page 9

Political science has contributed to the field of Organizational behavior. Stability of

Organizational Behavior, Teaching Material: C.I Kassahun T.Benti Page 10

Organizational Behavior, Teaching Material: C.I Kassahun T.Benti Page 11

Organizational Behavior, Teaching Material: C.I Kassahun T.Benti Page 12

Organizational Behavior, Teaching Material: C.I Kassahun T.Benti Page 13

Organizational Behavior, Teaching Material: C.I Kassahun T.Benti Page 14

Observation Interpretation Attribution of cause

Organizational Behavior, Teaching Material: C.I Kassahun T.Benti Page 16

Organizational Behavior, Teaching Material: C.I Kassahun T.Benti Page 17

Organizational Behavior, Teaching Material: C.I Kassahun T.Benti Page 18

He further argues that

Organizational Behavior, Teaching Material: C.I Kassahun T.Benti Page 19

Organizational Behavior, Teaching Material: C.I Kassahun T.Benti Page 20

Openness to experience describes someone in terms of imaginativeness, artistic

Organizational Behavior, Teaching Material: C.I Kassahun T.Benti Page 21

Organizational Behavior, Teaching Material: C.I Kassahun T.Benti Page 22

Organizational Behavior, Teaching Material: C.I Kassahun T.Benti Page 23

particular fashion. It is elicited in response to a specific, identifiable event. As such it explains

Organizational Behavior, Teaching Material: C.I Kassahun T.Benti Page 24

4) Social Learning: behavioral approach

Organizational Behavior, Teaching Material: C.I Kassahun T.Benti Page 25

Organizational Behavior, Teaching Material: C.I Kassahun T.Benti Page 26

3.3. Why Do People Join Groups?

Organizational Behavior, Teaching Material: C.I Kassahun T.Benti Page 27

3.4. Stages of Group Development

Organizational Behavior, Teaching Material: C.I Kassahun T.Benti Page 28

1.Forming: forming stage is characterized by a great deal of uncertainty

Organizational Behavior, Teaching Material: C.I Kassahun T.Benti Page 29

Lack of Synergy: Synergyis a biological term referring to an action of two or more

Organizational Behavior, Teaching Material: C.I Kassahun T.Benti Page 30

Organizational Behavior, Teaching Material: C.I Kassahun T.Benti Page 31

 Togetherness/ Member interaction

Organizational Behavior, Teaching Material: C.I Kassahun T.Benti Page 32

Organizational Behavior, Teaching Material: C.I Kassahun T.Benti Page 33

3.7. Increasing team/group productivity

Organizational Behavior, Teaching Material: C.I Kassahun T.Benti Page 34

CHAPTER FOUR - MOTIVATION CONCEPTS AND THEIR APPLICATIONS

Organizational Behavior, Teaching Material: C.I Kassahun T.Benti Page 35

Organizational Behavior, Teaching Material: C.I Kassahun T.Benti Page 36

Organizational Behavior, Teaching Material: C.I Kassahun T.Benti Page 37

Organizational Behavior, Teaching Material: C.I Kassahun T.Benti Page 38

Organizational Behavior, Teaching Material: C.I Kassahun T.Benti Page 39

Organizational Behavior, Teaching Material: C.I Kassahun T.Benti Page 40

Organizational Behavior, Teaching Material: C.I Kassahun T.Benti Page 41

5. Goal setting theory

Organizational Behavior, Teaching Material: C.I Kassahun T.Benti Page 42

CHAPTER FIVE - MANAGEMENT OF ORGANIZATIONAL CONFLICT

5.1. Meaning and Nature of Conflict