Dilla University College of Business & Economics: Organizational Behaviour

DILLA UNIVERSITY
COLLEGE OF BUSINESS &

ECONOMICS
ORGANIZATIONAL BEHAVIOUR
By: Tamru Y. (PhD)

COURSE CONTENTS
CH. Introduction to OB
CH.2. Foundations of Individual Behavior
CH.3. Foundations of Group Behavior
CH.4. Motivation Concepts & Applications
CH.5. Leadership & Leadership Styles
CH.6. Conflict Management
CH.7. Stress Management
CH.8. Organizational Design & Structure
CH.9. Organizational Culture
By: Tamru Y. (PhD)
CHAPTER ONE
Meaning of OB
• An organization is a consciously coordinated
social unit, made up of a group of people, who
work together on common goals on a relatively
continuous basis. Example of organizations are
Manufacturing and service firms, schools,
hospitals, churches, military units, retail stores,
police departments, volunteer organizations.
• Stephen P Robins defines “Organizational behavior
as a systematic study of the actions and attitudes that
people exhibit within organizations.”
By: Tamru Y. (PhD)
OB
• Because the organizations studied are often
business organizations, OB is frequently applied to
address workplace issues such as absenteeism,
turnover, productivity, motivation, working in
groups, and job satisfaction.
• OB is a field of study that investigates how
individuals, groups, and structure affect and are
affected by behavior within organizations. Behavior
refers to what people do in the organization, how
they perform, and what their attitudes are.
By: Tamru Y. (PhD)

The Three Basic Units of Analysis in Organizational
Behavior
1. Individual level of Analysis: At the individual

level, managers and employees need to learn how to
work with people who may be different from
themselves in a variety of dimensions, including
personality, perception, values, and attitudes.
• Individuals also have different levels of job
satisfaction and motivation, and these affect how
managers manage employees (chat, drug and alcohol
dependencies).
By: Tamru Y. (PhD)
Cont…
2. Group Level Analysis: The behaviour of people in groups
is more than the sum total of all the individuals acting in their
own way. People’s behaviour when they are in a group differs
from their behaviour when they are alone.
• Few people work entirely alone, and some organizations make
widespread use of teams. Therefore, most individuals interact with
others during the workday. This can lead to a need for greater
interpersonal skills. The workplace is also made up of people from a
variety of backgrounds. Thus, learning how to work with
people from different cultures has become more
important.
By: Tamru Y. (PhD)

Challenges of in group work
• Working with others: needs interpersonal skill. All
employees have different communication skill.
• Workforce diversity: The mix of people in organizations in
terms of gender, race, ethnicity, disability, sexual orientation,
and age, and demographic characteristics such as education
and socio-economic status. A diverse workforce includes
Asians Indian, American… working in a group.
By: Tamru Y. (PhD)

Cont…
• Workforce diversity has important implications for

management practice. Managers need to shift their
philosophy from treating everyone alike to
recognizing differences. They need to respond to
those differences in ways that will ensure employee
retention and greater productivity, while at the same
time not discriminating against certain groups. This
shift includes, for instance, providing diversity
training and revising benefit programs to be more
“family-friendly.”
By: Tamru Y. (PhD)
3. Organizational Level
• At this level of analysis, organizational behavior
involves the study of topics such as
organizational culture, organizational structure,
cultural diversity, inter-organizational
cooperation and conflict, change, technology,
and external environmental forces.
• Organizational culture refers to a system of
shared meaning held by members that
distinguishes the organization from other
organizations.
By: Tamru Y. (PhD)
1.3. Managers and OB
All managers perform five management functions-
• Planning,
• Organizing,
• Staffing
• Leading/directing
• Controlling.
By: Tamru Y. (PhD)

Planning
• Planning is the primary function of management.
Nothing can be preformed with out planning. In the
business world, the organization should achieve the
objectives.
• In order to achieve objective, the organization plans
what is to be done, when it is to be done, how it is to
be done, and by whom it is to be done.
• As George R.Terry pointed out planning is a
constructive reviewing of future needs so that present
actions can be adjusted in view of the established goal.
By: Tamru Y. (PhD)
Organizing
• Organizing as a management functions is concerned
with (1) assembling the resources necessary to
achieve the organization’s objectives and (2)
establishing the activity- authority relationship of the
organization. It is function dealing about building
the framework (Skeleton) of the future organization
to achieve objective.
• The activities necessary to achieve the objectives are
grouped in to working divisions, department, or
other identifiable units and primarily by grouping
similar and related duties.
By: Tamru Y. (PhD)
Staffing
• Staffing is concerned with locating prospective
employees to fill the jobs created by the organizing
process.
• It involves the recruitment, selection, development,
and retention employees with appropriate
qualification for positions created. It is one of the
most important duties of managers because
successes of organization depend on the quality of
its employees.
By: Tamru Y. (PhD)

Leading /Directing
• Directing is aimed at getting the members of
t he organization to move in the direction
that will achieve its objectives.
• Leadership is the heart and soul of
management.
• To be effective leaders/managers need
understand individual and group behavior,
techniques of motivation, and effective styles
of leadership.
By: Tamru Y. (PhD)
Controlling
• Controlling deals with establishing standards for
performance, against established standards, to
determine when problems do exist, and to solve the
problems that occur as quickly and effectively as
possible, controlling depends on accurate, reliable
and enforceable standards and on monitoring
performances by people, machines, and processes.
The best control assure that work is performed to
standards as planned.
By: Tamru Y. (PhD)

Managerial roles
• In the late 1960’s Henery Mintizberg concluded that managers
perform ten different highly inter related roles or sets of behaviors
attributable to their jobs.
1. Interpersonal Roles: - all managers are required to perform duties
that are ceremonial and symbolic in nature.
• Figurehead- symbolic head –All managers are required to perform duties
that are ceremonial and symbolic in nature. The manager represents the
organization at the ceremonial and symbolic functions.
• Leader- This role includes hiring, training, motivating, and disciplining
employees.
• Liaison- manager interacts with peers outside of the organization such as
clients, government officials, customers, and suppliers. When that sales manager
has contacts with other sales executives through a marketing trade association, he
or she has an outside liaison relationship.
By: Tamru Y. (PhD)
2. Information Roles: - all managers receive and distribute
information in an organization.
• Monitor/nerve center/- A manager seeks information to detect problems
of opportunities, build general knowledge about the work situation, and make
necessary changes. While much of this information comes from formal
mechanisms such as reports, news media, and public forecasts, more comes from
informal conversations with both organizational members and those external to
the organization, since managers gather information, they must evaluate and
decide whether to use this information.
• Disseminator-transmits information received from outsiders or from other
subordinates to concerned parties (inside organization). e.g. forwarding mail in to
organization for informational purposes.
• Spokesperson- transmitting and sharing relevant information with outsiders
by representing the organization. e.g. an organization’s plans, actions, policies,
and the like
By: Tamru Y. (PhD)

3. Decisional Roles: - all managers are required to make
decisions.
• Entrepreneurship- the management acts as the initiator and
designer or changes with in the work group to improve organization
position/performance.
• Disturbance handler- engaged in resolving conflicts. conflicts
among individuals, international difficulties between one unit and
another, and conflicts over resource losses, breaking of contracts by
customers, strikes by labor and bankruptcy of major suppliers.
• Resource allocator- allocates various resources in an efficient
manner
• Negotiator- dealing with other parties representing the organization
By: Tamru Y. (PhD)
Management skills
• 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:-
• Technical skill:- the ability to apply specialized knowledge
or expertise/ability to perform specialized tasks.
• Human skill: - the ability to work with other people, or
ability to understand and motivate other people.
• Conceptual skill:-the mental ability to analyze and diagnose
complex situations.
By: Tamru Y. (PhD)

Contributing Discipline of OB
• Psychology
• Emotions
• Perception
• Attitude measurement
• Employee selection, work design, work stress
• Etc
By: Tamru Y. (PhD)

• 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.
By: Tamru Y. (PhD)
• Social psychology: 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 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.
By: Tamru Y. (PhD)

1.6. Management and OB in the 21st c.
• Early management theories have influenced a number of modern
management theories. Namely:
1. Management science and Operations Research, which
emphasizes the use of computers and mathematical models
in organizational decision making;
2. Systems Theory, which looks at the organization and its
environment in totality;
3. Contingency Theory, which takes a situational (rather
than a one-best-way) view of organizational structure and
managerial activity; and
4. the growing influence of organizational behavior (OB),
which has, for many, become almost synonymous with
management
By: Tamru Y. (PhD)
System Theory…
• As researchers began to focus on the interaction
between the structural (mechanistic) and behavioral
(organic) dimensions of organizations and the
influence of the external environment, the concept
of a business firm as a system began to dominate
organizational theory.
• According to this perspective, an organization is
conceptualized as a system composed of subunits
or subsystems that continually interact with and are
mutually dependent on each other.
By: Tamru Y. (PhD)
• Actions that occur within one part of the system not only
affect that particular unit (department, section, group, etc.)
but can have a “ripple effect” through other organizational
subsystems as well. The implication of Systems Theory,
therefore, is that things do not simply happen, but rather
they evolve from multiple pressures and can entail multiple
outcomes.
By: Tamru Y. (PhD)

Types of system
• Open system-interact tot the outside environment

• Closed system-not interacted to the outside env’t
By: Tamru Y. (PhD)

CHAPTER TWO
FOUNDATION OF INDIVIDUAL BEHAVIOR AND
LEARNING IN AN ORGANIZATION
• Individual Difference: Every person is unique because of
combination of many factors, including demographics,
physical, psychological, and behavioral differences. These are
at the core of who we are. As soon as a child is born, he/she
is exposed to a variety of environmental forces.
By: Tamru Y. (PhD)

Cont…
• Johan Ivancevich and Michael Matteson have identified
major factors influencing individual difference in behavioral
pattern as:
• Perception
• Attitudes
• Personality and
• Learning.
By: Tamru Y. (PhD)

• Perception: is the process of noticing and making sense of
an information.
• Perception is the unique way in which each person sees,
organizes and interprets things based on their background
of individual differences. Each person reacts not to an
objective world, but to a world judged in terms of his/her
own beliefs, values and expectations
• Perception is the process by which individuals select,
organize, and interpret their sensory impressions in order
to give meaning to their environment.
By: Tamru Y. (PhD)

Perception
• However, what we perceive can be substantially different
from objective reality.
• Why is perception important in the study of
organizational behavior (OB)? Simply because people’s
behavior is based on their perception of what reality is, not
on reality itself. The world as it is perceived is the world that is
behaviorally important
By: Tamru Y. (PhD)

Visual perception
By: Tamru Y. (PhD)

Which one is in the middle bigger?
By: Tamru Y. (PhD)

FACTORS INFLUENCING PERCEPTION
1. The Perceiver
When an individual (“the perceiver”) looks at something
(“the target”) and tries to interpret what he or she sees, that
interpretation is heavily influenced by the perceiver’s
personal characteristics. Have you ever bought a new car and
then suddenly noticed a large number of cars like yours on
the road? It’s unlikely that everyone else has suddenly
bought the same model. Rather, your own purchase has
influenced your perception so that you are now more likely
to notice the other cars.
• Therefore, the perceivers Attitudes, motives, Interests,
Experience and Expectations are major factors that affect
our perception.
By: Tamru Y. (PhD)
• 2. The Target: A target’s characteristics can affect what is
perceived. Loud people are more likely to be noticed in a
group than are quiet ones. So, too, are extremely attractive or
unattractive individuals. Novelty, motion, sound, size, and
other attributes of a target shape the way we see it.
• Because targets are not looked at in isolation, the
relationship of a target to its background influences
perception. Objects that are close to each other will tend to
be perceived together rather than separately. Events that are
close in time may also be seen as related, even if they are
not.
By: Tamru Y. (PhD)

3. The Situation
• The context in which we see objects or events is important.
Elements in the surrounding environment influence our
perceptions. For instance, it might be entirely appropriate to
wear shorts and T-shirts in a social setting, but not
appropriate in a work setting.
• Eg 2 . At a nightclub on Saturday night, you may not notice a
young guest dressed a unique cloth. Yet that same person come to
your Monday morning management class would certainly catch your
attention (and that of the rest of the class). Neither the perceiver
nor the target has changed between Saturday night and Monday
morning, but the situation is different.
By: Tamru Y. (PhD)

Summary
Target/per
The ceived
situation Perception •Novelty
•Time • Motion
• Work setting • Sounds
• Social setting • Size
• Background
• Proximity
•The
perceiver
•Attitudes
• Motives
• Interests
By: Tamru Y. (PhD)
• Experience
• Expectations
Perception errors
• It’s difficult to perceive and interpret what others do.

As a result, we develop shortcuts to make this task
more manageable. These shortcuts are often very
helpful—they allow us to make accurate perceptions
quickly and provide valid information for making
predictions. However, they are not foolproof. They
can and do get us into trouble
By: Tamru Y. (PhD)

Some of the errors that distort the perception process
include
1. selective perception: People’s selective interpretation of what
they see based on their interests, background, experience, and
attitudes .
• Selective perception also allows us to “speed read” others, but we
may draw inaccurate pictures as a result. Because we see what we
want to see, we can make unwarranted conclusions about an
ambiguous situation.
• Suppose there is a rumour going around the office that your
company’s sales are down and that large layoffs may be coming
soon. If a senior executive from head office makes a routine visit
around this time, it might be interpreted as management’s first
step in identifying which people to lay off. In reality, such an
action might be the furthest thing from the senior executive’s
mind.
By: Tamru Y. (PhD)
2. The halo effect: When we draw a general
impression about an individual on the basis of a
single characteristic, such as intelligence, likeability,
or appearance, a halo effect is operating . It occurs
when one attribute of a person or situation is used
to develop an overall impression of the individual or
situation.
• Halo effect is common in our every day life. when
meeting a new person, for example, a pleasant smile
can lead to a positive first impression of an overall
“warm” or “honest” person.
By: Tamru Y. (PhD)

3. Contrast effects: The concept that our reaction to one
person is often influenced by other people we have recently
encountered.
• For instance, a manager interviews job candidates from a pool of
applicants. The evaluation of a candidate can be affected by his or
her place in the interview schedule. The candidate is likely to receive
a better evaluation if interviewed after a mediocre applicant, and a
worse evaluation if interviewed after a strong applicant.
4. Projection: Attributing one’s own characteristics to other
people.
• For instance, if you want challenge and responsibility in your job,
you assume that others want the same. Or you are honest and
trustworthy, so you take it for granted that other people are equally
honest and trustworthy.
By: Tamru Y. (PhD)
5. Stereotyping/prototype: Judging someone on the
basis of one’s perception of the group to which that
person belongs. It is generalization based on a group
characteristics.
• For example, believing that women are more
cooperative than men, or men are more assertive
(self confident) than women, is a stereotype.
Stereotypes may be positive, negative, or neutral.
By: Tamru Y. (PhD)

6. Prejudice
• Prejudice is an unfounded/groundless/ dislike of a person or
group based on their belonging to a particular stereotyped
group. For instance, an individual may dislike people of a
particular religion, or state that she does not want to work with
someone of a particular ethnicity. Prejudice can lead to
negative consequences in the workplace and, in particular, to
discrimination.
• For instance, an individual of a particular ethnic group might
be passed over for a management position because of the
belief that employees might not see that person as a good
manager
By: Tamru Y. (PhD)

Values and Attitudes
• Values refer to stable life goals that people have, reflecting
what is most important to them.
• Values are established throughout one’s life as a result of the
accumulating life experiences and tend to be relatively stable.
• When people sorrows, we have a good habit i.e. value
By: Tamru Y. (PhD)

Types of values
• Terminal values: Goals that individuals would like to achieve
during their lifetimes. These are the goals that individuals would
like to achieve during their lifetime, such as a comfortable life, or
happiness, inner harmony (free from inner conflict). Or Terminal
values refer to end states people desire in life, such as leading a
prosperous life and a world at peace.
• Instrumental values: Preferable ways of behaving such as being
courageous or helpful(working for the welfare of others), Honest
(sincere, truthful)
• Ethical values: Ethics is the study of moral values or principles
that guide our behavior and inform us whether actions are right or
wrong. Thus ethical values are related to moral judgments about
right and wrong.
By: Tamru Y. (PhD)
Attitudes
• Attitudes are positive or negative feelings about objects,
people, or events. When I say “I like my job,” I am
expressing my attitude to work.
• Attitudes are evaluative statements—either favorable or
unfavorable—about objects, people, or events
By: Tamru Y. (PhD)

Attitudes
A persistent tendency to feel and behave in a favorable or
unfavorable way toward a specific person, object, or idea.
By: Tamru Y. (PhD)

Essential Elements of Attitudes
Cognitive
Affective Behavioral
By: Tamru Y. (PhD)
Cognitive component
The opinion or belief segment of an
attitude.
Attitudes The perception of one’s capacity for
Evaluative knowledge and thinking skills in something. Eg
statements or My pay is low
judgments
concerning objects, Affective Component
people, or events. The emotional or feeling segment of an
attitude. positive or negative feeling
toward something. Eg I am angry, while
my pay is low
Behavioral Component
An intention to behave in a certain way
toward someone or something.
Eg “I’m going to look for another job that
By: Tamru Y. (PhD) pays better.”
Types of attitude
• A person can have thousands of attitudes, but organizational
behaviour focuses our attention on a limited number of job-
related attitudes.
• These job-related attitudes tap positive or negative
evaluations that employees hold about aspects of their work
environment.
By: Tamru Y. (PhD)

1. Job Satisfaction
• The term job satisfaction refers to an individual’s general
attitude toward his or her job.
• A person with a high level of job satisfaction holds positive
attitudes toward the job, while a person who is dissatisfied
with his or her job holds negative attitudes toward the job.
Determines of Job Satisfaction
An extensive review of the literature indicates that the more
important factors conducive to job satisfaction are
• Mentally challenging work,
• Equitable rewards, supportive working conditions, and
• Supportive colleagues
• Good personality job fit
•By: Tamru
Individuals
Y. (PhD)
genetic disposition/nature
Job Satisfaction and Individual Productivity
• The evidence suggests that the link between an individual’s
job satisfaction and his or her productivity is very slightly
positive.
• It turns out the productivity can be affected as much by
external conditions as it is by job satisfaction
• The relationship between job satisfaction and productivity is
stronger when the employee’s behaviour is not controlled by
outside factors
By: Tamru Y. (PhD)

Job Satisfaction and Organizational Productivity
• The link between job satisfaction and productivity
is much stronger when we look not at individuals,
but at the organization as a whole.
• When satisfaction and productivity data are
gathered for the organization as a whole, rather
than at the individual level, we find that
organizations with more-satisfied employees tend
to be more effective than organizations with less-
satisfied employees
By: Tamru Y. (PhD)

• Job Satisfaction and Organizational Citizenship
Behavior
• we defined organizational citizenship behavior (OCB) as
discretionary behaviour that is not part of an employee’s
formal job requirements and is not usually rewarded, but that
nevertheless promotes the effective functioning of the
organization.
By: Tamru Y. (PhD)

2. Organizational Commitment
• Organizational commitment is defined as a state in which
an employee identifies with a particular organization and its
goals, and wishes to maintain membership in the
organization.
• Professor John Meyer at the University of Western Ontario
and his colleagues have identified and developed measures
for three types of commitment:
• Affective commitment. It is employee's positive emotional attachment to
the organization. An individual’s relationship to the organization: his or her
emotional attachment to, identification with, and involvement in the
organization. It is the desire component of organizational
commitment.
By: Tamru Y. (PhD)

• Normative commitment. The obligation an individual feels to
staying with the organization. These feelings may derive from a
strain on an individual before and after joining an
organization. For example, the organization may have invested
resources in training an employee who then feels a 'moral'
obligation to put forth effort on the job and stay with the
organization to 'repay the debt.
• Continuance commitment. An individual’s calculation that it is
in his or her best interest to stay with the organization based on
the perceived costs of leaving the organization. An individual
may commit to the organization because he/she perceives a
high cost of losing organizational membership. Things like
economic costs (such as pension accruals) and social costs
(friendship ties with co-workers) would be costs of losing
organizational membership
By: Tamru Y. (PhD)
PERSONALITY
• personality as the stable patterns of behavior and

consistent internal states that determine how an
individual reacts to and interacts with others. It is most
often described in terms of measurable traits that a
person exhibits.
By: Tamru Y. (PhD)

Personality Determinants
1. Heredity: refers to those factors that were determined at conception.
Physical stature, facial attractiveness, gender, muscle
composition and reflexes, energy level, and biological
rhythms are characteristics that are generally considered to
be either completely or largely influenced by your parents’
biological, physiological, and inherent psychological
makeup.
2. Family Factors: The family factors are also important in
determining personality of an individual. Eg the
socialization process influence the personality
By: Tamru Y. (PhD)

• 3. Environmental Factors: Environmental factors are
those, which exists in and around the individual. They are
social and cultural factors.
• Culture determines human decision-making, attitudes,
independence: dependence, soberness: aggression,
competition, co-operation and shyness.
• There are two vital aspects of culture. Firstly, conformity by
the individual and secondly, acceptance by the larger group.
Culture establishes norms, values and attitudes, which are
enforced by different social groups
By: Tamru Y. (PhD)

Personality Traits
• It is enduring characteristics that describe an individual’s
behavior.
• Popular characteristics include shy, aggressive, submissive,
lazy, ambitious, loyal, and timid/shy/ nervous /
By: Tamru Y. (PhD)

Determinants of personality traits
• Big five personality
• The most widely accepted model of personality is the five-factor
model of personality— more typically called the “Big Five.”
By: Tamru Y. (PhD)

• Extraversion is the degree to which a person is outgoing,
talkative, and sociable, and enjoys being in social situations.
One of the established findings is that they tend to be
effective in jobs involving sales. Moreover, they tend to be
effective as managers and they demonstrate inspirational
leadership behaviors.
• Agreeableness. is the degree to which a person is nice,
tolerant, sensitive, trusting, kind, and warm. In other words,
people who are high in agreeableness are likeable people
who get along with others
By: Tamru Y. (PhD)

• Conscientiousness. This dimension is a measure of a person’s
reliability. It refers to the degree to which a person is organized,
systematic, punctual, achievement oriented, and
dependable/loyal/. Conscientiousness is the one personality trait
that uniformly predicts how high a person’s performance will
be, across a variety of occupations and jobs
• This is not a surprise, because in addition to their high
performance, conscientious people have higher levels of
motivation to perform, lower levels of turnover, lower levels
of absenteeism, and higher levels of safety performance at work.
• it seems that conscientiousness is a good trait to have for
entrepreneurs. Highly conscientious people are more likely to
start their own business compared to those who are not
conscientious, and their firms have longer survival rates
By: Tamru Y. (PhD)

• Emotional stability. This dimension taps a person’s ability to
survive stress. People high on emotional stability are calm, self-
confident, and secure.
• Openness is the degree to which a person is curious
/interested/questioning/, original/unique/innovative/,
intellectual, creative, and open to new ideas. People high in
openness seem to thrive in situations that require being
flexible and learning new things. They are highly motivated to
learn new skills, and they do well in training settings.
By: Tamru Y. (PhD)

Type A personality
• Type A personality: A personality with aggressive
involvement in a chronic, continual struggle to achieve more
and more in less and less time and, if necessary, against the
opposing efforts of other things or other people.
• Type As
• Are always moving, walking, and eating rapidly
• Feel impatient with the rate at which most events take place
• Strive to think or do two or more things at once
• Cannot cope with leisure time
• Are obsessed/fanatical/ with numbers, measuring their success in terms of how
many or how much of everything they acquire
By: Tamru Y. (PhD)
• In contrast to the Type A personality is the Type B, who is
exactly the opposite.
Type Bs
• Never suffer from a sense of time urgency with its
accompanying impatience
• Feel no need to display or discuss either their achievements
or accomplishments unless such exposure is demanded by the
situation
• Play for fun and relaxation, rather than to exhibit their
superiority at any cost
By: Tamru Y. (PhD)

Locus of Control
Locus control refers to the degree to which people believe
they are in control of their own fates.
• Some people believe that they are in control of their own
destinies/luck/. Other people see themselves as pawns of
fate, believing that what happens to them in their lives is
due to luck or chance.
• The first type, those who believe that they control their
destinies, have been labelled internals, whereas the latter,
who see their lives as being controlled by outside
forces, have been called externals.
By: Tamru Y. (PhD)

• Individuals with an internal locus of control are more likely
to problem solve when they encounter an obstacle while
trying to achieve a goal. Individuals with an external locus
of control are more likely to see the obstacle as caused by
outside forces, and they will not necessarily know what to do
in the face of that obstacle.
By: Tamru Y. (PhD)

Self-Esteem
• People differ in the degree to which they like or dislike
themselves. This trait is called self-esteem. For example,
self-esteem is directly related to expectations for success.
High SEs believe that they have the ability to succeed at
work. Individuals with high self-esteem will take more risks
in job selection and are more likely to choose unconventional
jobs than are people with low self-esteem. High SEs also
tend to emphasize the positive when confronted with failure.
• The most generalizable finding on self-esteem is that low
SEs are more easily influenced by external factors than are
high SEs.
By: Tamru Y. (PhD)

Self-Monitoring
Some people are better able to pay attention to the external
environment and respond accordingly, a characteristic
known as self-monitoring. Individuals high in self-
monitoring show considerable ability to adjust and adapt
their behaviour to the situations they are in. They are highly
sensitive to external cues and can behave differently in
different situations.
By: Tamru Y. (PhD)

Emotional Intelligence
• Emotional intelligence is a person’s ability to
understand their own emotions, the emotions of
others, and to act appropriately using these
emotions.
• Emotional intelligence never stops growing.
Because we are always evolving as people, EQ is
something that must be nurtured.
By: Tamru Y. (PhD)

Personal Benefits of Emotional Intelligence
• •Greater career success
• •Stronger personal relationships
• •Increased optimism and confidence
• •Better health
By: Tamru Y. (PhD)

Professional Benefits of Emotional
Intelligence
• Effective leadership skills
• Improved communication
• Less workplace conflict
• Better problem solving skills
• Increased likelihood of promotion
By: Tamru Y. (PhD)

The Four Essential Competencies of Emotional
Intelligence
• A. Self-Awareness
• B. Self-Management
A& B are Relate to Ourselves
• C. Social Awareness
• D. Relationship Management
C & D are Relate to Others
By: Tamru Y. (PhD)

A. SELF AWARENESS
• “If you understand your own feelings you get a really

great handle on how you’re going to interact and
perform with others…
• So one of the first starting points is, ‘what’s going on
inside of me?’”
By: Tamru Y. (PhD)

Self-Awareness Competencies
• Emotional self awareness: Reading one’s own

emotions and recognizing their impact: using “gut-
sense” to guide decisions.
• Accurate self assessment: Knowing one’s
strengths and limits.
• Self confidence: Having a sound sense of one’s
self- worth and capabilities.
By: Tamru Y. (PhD)

Self awareness
• Intrapersonal skills (ability to understand and apply

personal emotional
• Self regard
• Emotional self awareness
• Assertiveness
• Independence
• Self actualization
By: Tamru Y. (PhD)
B. SELF MANAGEMENT
• Self-Management Competencies:
• • Emotional Self Control: Keeping disruptive emotions and
impulses under control.
• •Transparency: Displaying honesty, integrity, and trustworthiness.
• •Adaptability: Demonstrating flexibility in adapting to changing
situations or overcoming obstacles.
• •Achievement: Having the drive to improve performance to meet
inner standards of excellence.
• •Initiative: Being ready to act and to seize opportunities.
•Optimism: Seeing the “up side” in events
By: Tamru Y. (PhD)

• “If people will stop for a moment and put
themselves in another person’s shoes… it will help
them modify their own behavior. It will help them
develop relationships with those people.”
By: Tamru Y. (PhD)

SELF MANAGEMENT
• Interpersonal skills (people skills)

• Stress management
• Stress tolerance
• Impulse control
By: Tamru Y. (PhD)

C. SOCIAL AWARENESS
• Social Awareness Competencies:

• These Capabilities determine how we manage
relationships
• • Empathy: Sensing others’ emotions,
understanding their perspectives, and taking active
interest in their concerns. • Organizational awareness:
Reading the current, decision networks, and politics
at the organizational levels. • Service: Recognizing
and meeting follower, clients, or customer needs.
By: Tamru Y. (PhD)
Social awareness
• Interpersonal skills (people skills)

• A. Empathy
• B. Social responsibility
By: Tamru Y. (PhD)

D. RELATIONSHIP
MANAGEMENT
• Relationship Management Relationship Management
Competencies: Competencies:
• Inspirational leadership: Guiding and motivating with a
compelling vision.
• Influence: Using a range of tactics for persuasion.
• Developing others: Bolstering others’ abilities through
• feedback and guidance.
• Charge catalyst: Initiating, managing, and leading in a
• new direction.
By: Tamru Y. (PhD)
• Conflict management: Resolving disagreements.
• Building bonds: Cultivating and maintaining a web
of relationships.
• Teamwork and collaboration: Fostering
cooperation and team building.
By: Tamru Y. (PhD)

Creating Effective Relationships
• Employ all your emotional competencies –

awareness, management, social awareness – to:
• Influence and persuade others.
• Build consensus and support for team goals.
• Motivate and inspire yourself and others to achieve
those goals.
By: Tamru Y. (PhD)
IQ vs EI
• IQ (thinking) Measure of an individual’s personal

information bank
• Memory, vocabulary and visual motor skills
• IQ is set and peaks at age 17
• Remains constant through adulthood
By: Tamru Y. (PhD)

• EQ
• Not fixed
• Can be improved throughout life
IQ
• Established by mid-teens
• Can’t increase
• Predicts only 10% – 20% of life success
• 90% of the success of outstanding leaders is attributable to

emotional intelligence (EQ), which is twice as important than
intellectual intelligence (IQ).
By: Tamru Y. (PhD)

Components of Emotional Quotient
• Intrapersonal – Self-regard, emotional self awareness,

independence, self-actualization.
• Interpersonal – Empathy, social responsibility,
interpersonal relationships.
• Adaptability –Reality-testing, flexibility, problem-solving.
• Stress management – Stress tolerance, impulse control
• General Mood – Optimism, happiness
By: Tamru Y. (PhD)

Characteristics of emotional
intelligence people
❖Knowing one’s feelings
❖ Managing emotions & feelings appropriately
❖Able to motivate self
❖ Ability to persist in
❖ Ability to control impulses & delay gratification
❖ Ability to empathize with others
❖ Capacity to HOPE Social competencies
By: Tamru Y. (PhD)
CHAPTER THREE
FOUNDATION OF GROUP BEHAVIOR
• Defining and classifying team and/or group
• Team: A small number of people who work closely
together toward a common objective and are accountable
to one another. A team is “a small number of people
with complementary skills who are committed to a
common purpose.”
• The group: Two or more people with a common
relationship. Thus a group could be co-workers or people
meeting for lunch or standing at the bus stop. Unlike
teams, groups do not necessarily engage in collective
work that requires interdependent effort.
By: Tamru Y. (PhD)
Classified Group
• Groups can be either formal or informal.
• By formal groups, we mean those defined by the
organization’s structure, with designated work
assignments establishing tasks
• In formal groups, the behaviors that one should
engage in are stipulated by and directed toward
organizational goals.
• In contrast, informal groups are alliances that are
neither formally structured nor organizationally
determined.
By: Tamru Y. (PhD)
• It’s possible to Sub Classify Groups as
o Command,
o Task,
o Interest, Or
o Friendship Groups
oA command group: It is determined by the
organization chart. It is composed of the
subordinates who report directly to a given
manager.
By: Tamru Y. (PhD)

o Task groups (Standing Committees). It represent those
working together to complete a job task. However, a task
group’s boundaries are not limited to its immediate
hierarchical superior. It can cross command relationships. It
should be noted that all command groups are also task
groups.
o Interest group. Those working together to attain a specific
objective with which each is concerned. Employees who
band together to support a peer who has been fired, or to
seek improved working conditions represent the formation
of a united body to further their common interest.
o Friendship groups. Those brought together because they
share one or more characteristics. Social alliances, which
frequently extend out-side the work situation, can be based
on similar age or ethnic heritage etc.
By: Tamru Y. (PhD)
Why do people form and/or join teams/groups?
• There is no a single reason why individuals join

groups.
• They join to satisfy their psychological needs like
interest, attitude, personality, perception etc; social
needs like social class, caste, religion etc; security
issues like sudden death, termination, suspension
etc; economic needs like incentives and benefits;
cultural factors and proximity, interaction, interest,
influence etc
By: Tamru Y. (PhD)

Stages in Group Development
• There are five development stages for a given
group: Forming, storming, norming, Performing and
adjourning
❖Forming Stage. Members try to know each
other and establish a common understanding,
clarify group goals and determine appropriate
behavior with in the group. This stage is
complete when members feel they are truly the
member of the group. It is characterized by a
great deal of uncertainty about the group’s
purpose, structure, and leadership.
By: Tamru Y. (PhD)
• Storming Stage. It is characterized by intra-group conflict. As
the group members attempt to organize for the task, conflict
inevitably results in their personal relations. Individuals have to
bend and mold their feelings, ideas, attitudes, and beliefs to suit
the group organization. Because of "fear of exposure" or "fear of
failure," there will be an increased desire for structural clarification
and commitment.
• Questions will arise about who is going to be responsible for what,
what the rules are, what the reward system is, and what criteria for
evaluation are. These reflect conflicts over leadership, structure,
power, and authority.
• There may be wide swings/move back and forth/ in members’
behavior based on emerging issues of competition and hostilities.
Because of the discomfort generated during this stage, some
members may remain completely silent while others attempt to
dominate.
By: Tamru Y. (PhD)
• Norming stage. characterized by close relationships and
cohesiveness. Many groups resolve the interpersonal
conflict and reach the third stage, in which close
relationships develop and the group demonstrates
cohesiveness.
• When members begin to know-and identify with-one
another, the level of trust in their personal relations
contributes to the development of group cohesion
• Performing Stage. The structure at this point is fully
functional and accepted. Group energy has moved from
getting to know and understand each other to performing
the task at hand. They are ready to tackle all types of group
tasks. At this stage the real work of the group gets
accomplished.
By: Tamru Y. (PhD)
• Adjourning Stage. 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. In this stage, the group prepares for its
disbandment.
By: Tamru Y. (PhD)

• Obstacles of team/group productivity/
• Poor Planning
• Poor Leadership
• Poor Training
• Poor Attitude
• Poor relationship Among Team Members
• Poor Recognition and Rewards Programs
By: Tamru Y. (PhD)

Increasing Team/group productivity
1. Share, Support, And Succeed Together
• It’s important for staff members to recognize expectations,
understand the company culture and goals, and have a chance
to contribute to them. With the support of management or
company leaders, employees can feel empowered to
contribute to the bigger picture in the company through their
individual efforts
By: Tamru Y. (PhD)

• Set Attainable Goals
• Just because you have goals doesn’t make them attainable! If you
have too many goals and too little time, or don’t give your staff
the tools they need to accomplish them, you’re setting them up for
failure
• Collaborate
• Sometimes the best projects come from putting your heads
together. By encouraging collaboration within your staff, you give
people with different perspectives and skill sets an opportunity to
think creatively and challenge themselves. Collaborative work
complements productivity because everyone holds themselves to a
higher standard to accomplish more, better work
By: Tamru Y. (PhD)

• Make Time For Team Bonding
• While working collaboratively helps develop a team, bonding over
something funny or having down-time at things like team lunches
breaks down the barriers that allow your employees to feel
comfortable at work. If you have a team that can laugh together,
they can be productive together.
• Group Decision Making
• Decision making is the process of choosing a course of action from
among alternatives.
• Advantages of Group Decision Making
• Greater knowledge base for problem solving.
• Greater number of approaches available to a problem.
• Group allows increased participation of people.
• Better understanding of final decision
By: Tamru Y. (PhD)
• Disadvantages of Group Decision Making
• More time consuming.
• A social pressure to conform.
• Dominate nature of a member
By: Tamru Y. (PhD)

Decision making conditions
Decision making under

• Certainty
• Risk
• Uncertainty
By: Tamru Y. (PhD)

CHAPTER 4
MOTIVATION CONCEPTS AND THEIR
APPLICATIONS
• Motivation is defined as the willingness to exert high levels
of effort toward organizational goals, conditioned by the
effort’s ability to satisfy some individual need.
• According to Dalton E. Mc Farland Motivation refers to the
way in which urges, drives, desires, aspirations, strivings or
needs, direct, control or explain the behavior of human
being.
• Motivators: Motivators are stimulants that drive/force/
individual into action. they are related to physical and
psychological aspects of human behavior.
By: Tamru Y. (PhD)
Hierarchy of Needs Theory
• Physiological Needs: - Basic needs such as food, water, clothing,
shelter, sleep etc. these are primary needs for sustaining human life
itself. Until these needs are satisfied to the extent necessary to sustain
life these needs remain the motivating force.
• Security or safety needs: - these needs include, to be free from
physical danger, fear of losing job, property, food, clothing, or shelter. It
is a need of securing primary needs.
• Love and Social needs: - After the needs of the body and security are
satisfied then a scene of belonging and acceptance becomes prominent
in motivating behavior. These needs are, love, friend ship, social
interaction ( e.g. Love of Neighbor).
• Esteem Needs : - this is the need to attain recognition, felling if self-
worth and self-confidence, prestige.
• Self-actualization needs: this last need is the need to develop fully and
realize one’s capacities and potentials to the fullest extent possible. At
his level the person seeks challenging work assignments, and is creative,
independent, etc.
By: Tamru Y. (PhD)
Theory X and Theory Y
Theory x
• Employees inherently dislike work and, whenever
possible, will attempt to avoid it.
• Since employees dislike work, they must be coerced,
controlled, or threatened with punishment to achieve
goals.
• Employees will avoid responsibilities and seek formal
direction whenever possible.
• Most workers place security above all other factors
associated with work and will display little ambition.
By: Tamru Y. (PhD)

Theory “Y”
• Employees can view work as being as natural as rest or play.
• People will exercise self-direction and self-control if they are
committed to the objectives.
• The average person can learn to accept, even seek,
responsibility.
By: Tamru Y. (PhD)

Motivation-Hygiene Theory
• The motivation-hygiene theory was proposed by psychologist
Frederick Herzberg. Herzberg investigated the question
“What do people want from their jobs?
• Two factor theory
• Motivational Factors:
• Achievement
• Advancement
• Possibility of Growth
• Recognition.
• Work Itself
• Responsibility
By: Tamru Y. (PhD)

Maintenance Factors:
• There are some job conditions which operate primarily to
dissatisfy employees when these conditions are absent. These
factors are also called hygiene factors.
• When these factors are present they do not motivate in a strong
way, when absent they dissatisfy. That is why these factors are
called dissatisfiers. These factors are:
❖ Company Policy and administration.
❖ Technical supervision.
❖ Interpersonal relationship with superiors/subordinates.
❖ Interpersonal relationship with peers.
❖ Salary.
❖ Job security.
❖ Personal Life.
❖ Working condition.
❖ Status.
By: Tamru Y. (PhD)
Contemporary Theories of Motivation
1. ERG Theory: A revised-need hierarchy theory that

emphasizes the core needs of existence, relatedness, and
growth.
• The existence group is concerned with our basic material
existence requirements.
• The relatedness group is concerned with our desire for
maintaining important interpersonal relationships.
• the growth group is concerned with our intrinsic desire for
personal development.
By: Tamru Y. (PhD)

2. McClelland’s Theory of needs
• Need for achievement: The drive to excel, to
achieve in relation to a set of standards, to strive
to succeed.
• Need for power: The need to make others
behave in a way that they would not have
behaved otherwise.
• Need for affiliation: The desire for friendly and
close interpersonal relationships.
By: Tamru Y. (PhD)

3. Goal-Setting Theory
• Goal is “what an individual is trying to
accomplish; it is the object or aim of an
action.”Goals tell an employee what needs to be
done and how much effort will need to be
expended.
• How Does Goal Setting Motivate?
o Goals direct attention. Goals indicate where individuals
should direct their efforts when they are choosing among
things to do.
By: Tamru Y. (PhD)

o Goals regulate effort. Goals suggest how much effort an
individual should put into a given task. For instance, if
earning a high mark in accounting is more important to
you than earning a high mark in organizational behavior
(OB), you will likely put more effort into studying
accounting.
o Goals increase persistence. Persistence represents the effort
spent on a task over time. When people keep goals in
mind, they will work hard on them, even in the face of
obstacles.
o Goals encourage the development of strategies and
action plans. Once goals are set, individuals can develop
plans for achieving those goals.
By: Tamru Y. (PhD)

4. Equity theory
• Individuals compare their job inputs and
outcomes with those of others and then respond so
as to eliminate any inequities.
• Expectancy Theory
• expectancy theory says that an employee will be
motivated to exert a high level of effort when he or she
believes the following:
• That the effort will lead to good performance
By: Tamru Y. (PhD)

• That good performance will lead to organizational rewards, such as a
bonus, a salary increase, or a promotion
• That the rewards will satisfy his or her personal goals
• The theory, therefore, focuses on the three relationships (expectancy,
instrumentality, and valence)
Effort-Performance Relationship
• Expectancy: The belief that effort is related to performance. It
refers to the individual’s perception of how probable it is that
exerting a given amount of effort will lead to good performance.
By: Tamru Y. (PhD)

Performance-Rewards Relationship
• The performance-rewards relationship is
commonly called instrumentality. It refers to the
individual’s perception of whether performing at a
particular level will lead to the attainment of a
desired outcome.
• Instrumentality ranges from –1 to +1.
• A negative instrumentality indicates that high performance
reduces the chances of getting the desired outcome.
• An instrumentality of 0 indicates that there is no relationship
between performance and receiving the desired outcome.
By: Tamru Y. (PhD)
Rewards–Personal Goals Relationship
• Valence: The value or importance an individual places on a
reward. It refers to the degree to which organizational rewards
satisfy an individual’s personal goals or needs and the
attractiveness of those potential rewards for the individual.
By: Tamru Y. (PhD)

Implication of motivation for
performance & satisfaction
• Several studies shows that if employees are
motivated , then they can perform well.
• It is also true that a motivated employee is satisfied in
his/her job.
By: Tamru Y. (PhD)

Chapter Five
Leadership and Leadership Styles
Leadership - what is it?
“influencing people so that they will strive willingly towards
the achievement of group goals” 1
1 Koontz, H. and C. O’Donnell. “Management: A System of Contingency Analysis of

Managerial Functions”. McGraw-Hill, New York, 1976.
By: Tamru Y. (PhD)

Leadership Theories
• What makes an effective leader?
• What differentiates an effective leader?
• Trait theories: sought personal characteristics that distinguish
leaders Leaders are born
• Behavioral theories: propose that specific behaviors differentiate
leaders from non-leaders Leaders are made
• Contingency theories: attempt to isolate critical situational factors
that affect leadership effectiveness. Take into account situational
variables such as leader-member relations, task structure, position
power.
• The most recent theories de-emphasize theoretical complexity.
By: Tamru Y. (PhD)
Trait Theory
• Gender and leadership
o Men and women differ in the type of leadership roles
they assume in work groups: men display more task
leadership and women exhibit more social leadership
o Leadership styles vary by gender: women are more
democratic and men are more autocratic and directive
o Female and male leaders are equally effective
o Men are perceived as more effective than women when
the job is defined in masculine terms, and women are
more effective than men in roles defined in less masculine
terms
By: Tamru Y. (PhD)
Behavioral Styles Theory
• Ohio State Studies identified two critical dimensions of
leader behavior.
1. Consideration: creating mutual respect and trust with followers
2. Initiating Structure: organizing and defining what group members
should be doing
• University of Michigan Studies identified two leadership
styles that were similar to the Ohio State studies
- one style was employee centered and the other was job centered
• Blake and Mouton’s Managerial Grid represents seven
leadership styles found by crossing concern for production and
concern for people
• Research shows that there is not one best style of
leadership. The effectiveness of a particular leadership
style depends on the situation at hand.
By: Tamru Y. (PhD)
Behavioral Theories of Leadership
• University of Michigan studies
• Job-centered leadership style
• A leadership behavioral style that emphasizes
employee tasks and the methods used to accomplish
them
• Employee-centered leadership style
• A leadership behavioral style that emphasizes
employees’ personal needs and the development of
interpersonal relationships
By: Tamru Y. (PhD)

Ohio State University Studies
• Consideration
• A leadership behavioral style demonstrated by leaders who
express friendship, develop mutual trust and respect, and
have strong interpersonal relationships with subordinates
• Initiating structure
• A leadership behavioral style demonstrated by leaders who
establish well-defined interpersonal relationships with
patterns of organization and communication, define
procedures, and delineate/define/ their relationships with
subordinates
By: Tamru Y. (PhD)
The Managerial Grid
• Concern for people
• One of the two dimensions of leadership behavior
of the managerial grid; similar to the behavioral styles
of consideration and employee-centered leadership
• Concern for production
• One of the two dimensions of leadership behavior
of the managerial grid; similar to the behavioral styles
of initiating structure and job-centered leadership
By: Tamru Y. (PhD)

By: Tamru Y. (PhD)
.
Contingency Theories of Leadership
• Fiedler’s contingency theory of leadership
effectiveness
• Leader effectiveness depends on the interaction of
• Leader’s behavioral style
• Favorableness of the leadership situation
• Leader style measured by the LPC (least preferred
coworker) scale
• Situational favorableness assessed by three factors
(i.e. Leader-member relations, Task structure & Position
power)
By: Tamru Y. (PhD)
Fiedler’s Contingency Theory of Leadership Effectiveness
• Leader style
• Esteem for the Least Preferred Co-worker (Bipolar adjectives scale)
Cooperative ___:___:___:___:___:___:___:___ Uncooperative

8 7 6 5 4 3 2 1
Friendly ___:___:___:___:___:___:___:___ Unfriendly

8 7 6 5 4 3 2 1
– Low LPC score

⚫ Negative adjectives
⚫ Task-oriented leader (task achievement needs first)
– High LPC score
⚫ More positive adjectives
⚫ Relationship-oriented leader (interpersonal relationship needs first)
By: Tamru Y. (PhD)
Fiedler’s Contingency Theory of Leadership Effectiveness
• Situation favorableness measured by three situational
characteristics
• Leader-member relations
• Amount of respect subordinates have for the leader
• Task structure
• Degree to which tasks are simplified and easy for followers to
understand
• Position power
• Degree to which the leader can reward, punish, promote or demote
employees in the group
By: Tamru Y. (PhD)

Transactional Leadership
• The concept of Transactional Leadership is akin to the views
of scientific management (early twentieth century), which
assumes that employees can only be motivated by rewards
and punishment.
• The leader’s own interests and those of the organization are
put ahead of everything else.
• Transactional Leadership uses the exchange principle.
• In exchange for good and satisfactory work within the
agreed time, the manager gives the employee a reward for
their performance. This reward can be translated into extra
pay, bonuses or working overtime.
By: Tamru Y. (PhD)
Components of Transactional leadership
• Contingent Rewards: Transactional leaders link the goal to

rewards, clarify expectations, provide necessary resources,
set mutually agreed upon goals, and provide various kinds of
rewards for successful performance.
• They set SMART (specific, measurable, attainable, realistic, and
timely) goals for their subordinates.
• Active Management by Exception:- Transactional leaders
actively monitor the work of their subordinates, watch for
deviations from rules and standards and taking corrective
action to prevent mistakes.
By: Tamru Y. (PhD)

• Passive Management by Exception: Transactional
leaders intervene only when standards are not met or
when the performance is not as per the expectations.
They may even use punishment as a response to
unacceptable performance.
• Laissez-faire: The leader provides an environment
where the subordinates get many opportunities to
make decisions.
• The leader himself abdicates responsibilities and
avoids making decisions and therefore the group
often lacks direction.
By: Tamru Y. (PhD)
Transformational Leadership
• Transformational leaders
• Motivate followers to
• Do more than expected (organizational vision and
outcomes)
• Continuously develop and grow
• Increase their level of self-confidence
• Place the interests of the team or organization before
their own
• Display charisma
• Intellectually stimulate their subordinates
• Provide individual consideration of subordinates
By: Tamru Y. (PhD)
Transformational Leadership Factors The Four I’s
• Idealized Influence- describes leaders who act as
strong role models for followers. Followers identify
with these leaders and want very much to
emulate/imitate/follow/ them. This is basically the
capacity of the leader to be a moral and positive role
model to their followers
• Inspirational Motivation- leaders who communicate
high expectations to followers and inspire them through
motivation to become committed to and a part of the
shared vision
• Intellectual Stimulation- leadership that stimulates
followers to be creative and innovative and to
challenge their own beliefs and values as well as those of
the leader
• Individual consideration- leaders who provide a
supportive climate in which they listen carefully to the
individual needs of the followers
By: Tamru Y. (PhD)
Charismatic Leadership
Charismatic Leadership: emphasizes symbolic leader
behavior that transforms employees to pursue
organizational goals over self-interests
Charismatic Leaders
- use visionary and inspirational messages
- rely on non-verbal communication
- appeal to ideological values
- attempt to intellectually stimulate employees
- display confidence in self and followers
- set high performance expectations
By: Tamru Y. (PhD)
Similarities and Differences between Charismatic and
Transformational Leadership
• There are a number of similarities between charismatic and
transformational leadership. For example, the transformational
leader is typically charismatic as well. The primary dissimilarity is
the basic focus of these two leadership styles.
• For example, the basic focus of the transformational leader is
transforming the organization and the followers during the process,
while the charismatic leader could be quite satisfied with the status
quo.
• Transformational leadership involves the use of charisma; however,
transformational leaders are well-known for leading groups and teams
that perform excellently.
• In addition, they are noted for their ability to identify and foster
leadership capacity in the followers.
• They also devise methods of assisting the organization or group to
innovate and change.
By: Tamru Y. (PhD)
How important is a leader?
• In most cases, people will perform at about 60% of

their potential with no leadership at all
• Thus, an additional 40% can be realized if effective
leadership is available
By: Tamru Y. (PhD)

capability
utilization
Contribution due to leadership

ability of manager 40%
Default contribution due to

need for a job, peer pressure, etc. 60%
By: Tamru Y. (PhD)

Differences b/w leadership & management
Leadership Management
• Based on influence • Based on authority
• An informal designation • A formally
• Leading people designated/selected/
position
• Vision
• Managing work
• Personal charisma
• Objectives
• etc
• Formal authority
• Etc
By: Tamru Y. (PhD)
CHAPTER SIX
CONFLICT MANAGEMENT
• LEARNING OBJECTIVES
1. Define conflict.
2. Understand different types of conflict.
3. Address whether conflict is always negative
• What is conflict? Conflict is a process that involves

people disagreeing.
By: Tamru Y. (PhD)
Types of conflict
• Intrapersonal Conflict: Arises within a person.
For example, when you’re uncertain about what is
expected or wanted, or you have a sense of being
inadequate to perform a task, you are experiencing
intrapersonal conflict. Intrapersonal conflict can
arise because of differences in roles.
• Interpersonal conflict: is among individuals
such as coworkers, a manager and an employee
By: Tamru Y. (PhD)

• Intergroup conflict: is conflict that takes place among
different groups.
• Types of groups may include different departments or
divisions in a company, and employee union and
management, or competing companies that supply the same
customers.
• Departments may conflict over budget allocations; unions
and management may disagree over work rules; suppliers may
conflict with each other on the quality of parts. Merging two
groups together can lead to friction between the groups.
By: Tamru Y. (PhD)

Functional Vs Dysfunctional conflict
• Conflict that supports the goals of the group and improves its
performance.
• Surprisingly, a moderate amount of conflict can actually be a healthy
(and necessary) part of organizational life. Amason, A. C. (1996).
• Task conflict can be good in certain circumstances, such as in the
early stages of decision making, because it stimulates creativity.
However, it can interfere with complex tasks in the long run.
• Conflict can be dysfunctional if it paralyzes an organization, leads to
less than optimal performance, or, in the worst case, leads to
workplace violence.
• If it hinders the performance of the group, it is dysfunctional
conflict
By: Tamru Y. (PhD)
• Cognitive conflict, which is task-oriented and occurs
because of differences in perspectives and judgments, can
often result in identifying potential solutions to problems.
Thus it would be regarded as functional conflict.
• Affective conflict, which is emotional and aimed at a person
rather than an issue, tends to be dysfunctional conflict.
By: Tamru Y. (PhD)

Causes of conflict
By: Tamru Y. (PhD)

• Organizational structure: if a company uses a matrix
structure as its organizational form, it will have decisional
conflict built in, because the structure specifies that each
manager report to two bosses.
• Task Interdependence: Different business units are
reliant up on one another. Another cause of conflict is
task interdependence; that is, when accomplishment of
your goal requires reliance on others to perform their
tasks.
• For example, if you’re tasked with creating advertising for your product,
you’re dependent on the creative team to design the words and layout, the
photographer or videographer to create the visuals, the media buyer to
purchase the advertising space, and so on. The completion of your goal
(airing
By: Tamru or publishing your ad) is dependent on others.
Y. (PhD)
• Incompatible Goals: Sometimes conflict arises when two
parties think that their goals are mutually
exclusive/contradictory/.
• Goal attainment by one group may reduce the level of goal
attainment by the other groups. This might be horizontal
differentiation and task specialization. Eg the conflict between
line and staff departments, sales and transport dep’t.
By: Tamru Y. (PhD)

Outcomes of Conflict
• Positive outcomes include the following:
• Consideration of a broader range of ideas, resulting in a
better, stronger idea
• Surfacing of assumptions that may be inaccurate
• Increased participation and creativity
• Clarification of individual views that build learning
By: Tamru Y. (PhD)

Negative outcomes include the following
• Increased stress and anxiety among individuals,

which decreases productivity and satisfaction
• Feelings of being defeated and demeaned, which
lowers individuals’ morale and may increase turnover
• A climate of mistrust, which hinders the teamwork
and cooperation necessary to get work done
By: Tamru Y. (PhD)

Ways to manage conflict
• Change the Structure
• Change the Composition of the Team: If the conflict is
between team members, the easiest solution may be to change the
composition of the team, separating the personalities that were at
odds
• Consider Majority Rule: Sometimes a group conflict can be
resolved through majority rule. That is, group members take a
vote, and the idea with the most votes is the one that gets
implemented.
• Problem Solve: is a common approach to resolving conflict. In
problem-solving mode, the individuals or groups in conflict are
asked to focus on the problem, not on each other, and to
uncover the root cause of the problem.
By: Tamru Y. (PhD)
Conflict-Handling Styles/intentions/
By: Tamru Y. (PhD)

By: Tamru Y. (PhD)
1. Collaborating :it attempts to find a solution that will meet the
needs of all parties. Rather than trying to find a middle ground
solution, you would aim for a solution that actually satisfies
everyone and ends up being a win-win situation..
• In collaborating , the parties intend to solve a problem by
clarifying differences rather than by accommodating various points of
view. If you attempt to find a win–win solution that allows both parties’
goals to be completely achieved, that’s collaborating.
2. Avoiding: A person may recognize a conflict exists and want to
withdraw from or suppress it.
• An avoiding style completely evades/escape/ the conflict. You would
neither pursue your beliefs nor those of the others involved. Simply, you
would continuously postpone or completely dodge/evade/ the conflict
whenever it comes up.
• This style could be appropriate to use when the conflict seems trivial,
you don't have the time or need more time to think, you feel as though
you have no chance of winning, or you're afraid of being met with
resentment/anger/.
By: Tamru Y. (PhD)
3. Accommodating
• An accommodating style forsake/leaves/ your own needs or
desires in exchange for those of others. You would be
putting the concerns of others before your own. This style
usually takes place when you either simply give in or are
persuaded to give in.
• This style could be appropriate to use when you care less
about the issue than the others, want to keep the peace, feel
as though you are in the wrong, or feel like you have no
choice but to agree to the other point-of-view. Eg if u
encounter an angry customer.
By: Tamru Y. (PhD)

4. Compromising: A compromising style attempts to find a solution
that will at least partially please all parties. You would work to
find a middle ground between all the needs, which would typically
leave people unsatisfied or satisfied to a certain extent.
• This style could be appropriate to use when it's more important to reach a
solution than for the solution to be great, a deadline is rapidly
approaching, or you need a temporary solution for the moment.
5. Competing :A competing style takes a firm stance/position/ and
refuses to see the perspectives of the other parties. You would keep
pushing your viewpoint at others or keep rejecting their ideas until
you get your way.
• This style could be appropriate when you have to stand up for your
rights or morals, need to make a quick decision and force others to get
on board, need to end a long-term conflict, or have to prevent a terrible,
opposing decision from being made.
• When one person seeks to satisfy his or her own interests, regardless of
the impact on the other parties to the conflict, that person is competing
. You
By: Tamru compete when you place a bet that only one person can win.
Y. (PhD)
STRESS
• It is not the strongest of the species that survives, nor the most
intelligent, but the one most responsive to change.
—Charles Darwin
By: Tamru Y. (PhD)

CHAPTER SEVEN
STRESS MANAGEMENT
• What is stress?
• Stress is the feeling of being under too much mental or
emotional pressure. Pressure turns into stress when you feel
unable to cope. People have different ways of reacting
to stress, so a situation that feels stressful to one person may
be motivating to someone else.
• Stress is defined by psychologists as the body’s reaction to a
change that requires a physical, mental, or emotional
adjustment or response.
• Stress is an inevitable feature of life. It is the force that gets us
out of bed in the morning, motivates us at the gym, and
inspires us to work.
By: Tamru Y. (PhD)

Stress
• State of tension that arises when you experience
demands from your environment or from inside
yourself
Can be a real OR perceived threat
OR
By: Tamru Y. (PhD)
Stress Happens!!
• Stress is a normal part of life, especially during
changes in life:
• Childhood • Injury
• Moving
• Adolescence
• Death of a loved one
• Young adult
• Divorce
• Marriage • Retirement
• Parenthood • Pregnancy
• middle age • Beginning or ending formal
schooling
• aging
To test the stress in you life due to life events go to:
http://www.stresstoughness.com/lifeevents.htm
By: Tamru Y. (PhD)
Our Body’s Design
• Our bodies are uniquely designed to handle stress.
• When presented with a threatening situation it is our
most basic survival instinct to either:
• Engage in a fight
• Or run for our lives
• This is what is known
as the “fight or flight”
response
By: Tamru Y. (PhD)

During Fight or Flight
• Adrenaline is secreted from the kidneys
• Cortisol (a hormone) is released providing
bursts of energy
• The heart suddenly beats faster
• Breathe rate and blood pressure increase
• Blood sugar is released into the bloodstream
• Hearing and sight are enhanced
• Digestive system and urine production slow to
divert blood to more critical areas, such as the
brain and muscles
By: Tamru Y. (PhD)

It makes us able to fight or run, BUT…
• It is rarely necessary AND…
• Has some side effects that deteriorate our health
• increased blood pressure
• Decreased immune function
• Several important functions of the body are interrupted
By: Tamru Y. (PhD)

Over time this can result in:
• Headaches • Difficulty thinking clearly
• Asthma • Depression
• Hypertension • Anxiety
• Ulcers • Drug abuse
• Low back pain • Mental illness
• Heart disease • Higher risk for suicide
• Stroke
• Addictive disorder
• Upper respiratory
infections
By: Tamru Y. (PhD)
Workplace stressors
• Stressors are events or contexts that cause a stress reaction by
elevating levels of adrenaline and forcing a physical or mental
response.
• Understanding what can potentially cause stress can help avoid
negative consequences. Now we will examine the major
stressors in the workplace.
• A major category of workplace stressors are role demands.
• Role Demands: relate to pressures placed on a person as a function of
the particular role he or she plays in the organization
By: Tamru Y. (PhD)

• Role ambiguity: refers to vagueness in relation to what our
responsibilities are. If you have started a new job and felt
unclear about what you were expected to do, you have
experienced role ambiguity
• Role conflict: refers to facing contradictory demands at
work. For example, your manager may want you to increase
customer satisfaction and cut costs, while you feel that
satisfying customers inevitably increases costs.
• Role overload: is defined as having insufficient time and
resources to complete a job.
By: Tamru Y. (PhD)

What can we do to prevent this?
• Fix the fixable

• Accept the inevitable
• Protect yourself from the physical affects
By: Tamru Y. (PhD)

Some stressors can be avoided?
• If traffic stresses you out, take the bus
• If you get anxious about your carpet

being stained, install tile flooring
By: Tamru Y. (PhD)

Many stressors can be avoided.
• When you think about stress as something that
can effect your health, it may encourage you to
take drastic measures
• Many are questioning whether “having it all” is
worth the effort
• Changing jobs
• Spending the holidays with only the immediate family
• BUT…every decision has consequences which in turn
may cause more stress
Could you simplify your life?
By: Tamru Y. (PhD)
You can’t avoid life
• Life is filled with unpredictable ups and
downs that will inevitably promote stress
• One suggestion is to change your interpretation of the situation
for example.
• Consider the following scenario:
• You are driving on a busy highway and Someone cuts right in
front of you then slows down
• How do you interpret this situation??
By: Tamru Y. (PhD)

Response??
If you said:
• “I would probably Yell, ‘IDIOT!’ at the top of my lungs.”
OR
• “I would be irritated and likely have negative thoughts
about the driver.”
Than you have just initiated the “Flight or Flight” response.

• Your heart is beating faster, sugar is filling your veins and in the
next several hours your immune system will function a little less
efficiently
By: Tamru Y. (PhD)
Positive Interpretation??
If you said:
• “That person must not have been paying attention, we all make
mistakes.”
Or
• “I’ll be glad when I can pass, but it is no big deal.”
Or
• “I am glad that I am not in a hurry.”
Then you are stopping the stress response before

it even starts
By: Tamru Y. (PhD)
To stay positive it may help to:
Consider that we are all human and flawed
• Try to think of adults as children who happened to be grown
up. We are less likely to judge and feel angry when a child
makes a mistake. Why?
• Consider that it is possible that you do not have all the
information to make a decision about the person or situation.
• For example…
By: Tamru Y. (PhD)

More information
• What if you found out that the person who cut
you off in traffic was rushing to the hospital to visit
his mother. And he just received a beep on his
pager with the message “911.” It is possible that
his mother had just passed away. He was
slowing down because he was distracted by the
news.
• How does this change your interpretation?

By: Tamru Y. (PhD)
Also
• Tell yourself that it may not be a bad thing that this bad
thing is happening right now.
• At the very least you can learn something from the experience
that can help you or others
• This situation may have prevented you or someone else from
having to deal with one that was even worse
• Example: You will never know how many people who have cut
you off may have saved you from being in a life-threatening
collision.
By: Tamru Y. (PhD)

Another way to “accept the inevitable”
• Stress inoculation or preparing yourself for
potentially stressful events ahead of time.
• Example:
• If you know you have to face the boss with information that
may cause a conflict, you may practice sharing this
information with a spouse, with friends, or even in front of a
video camera.
• This can reduce or even eliminate the stress
response from the actual event.
By: Tamru Y. (PhD)

Protect Yourself
• Whether it is a stressor that you can change
or one you cannot it is imperative that you
practice techniques that prevent the stress
response from taking over your body.
• Several techniques can be used to decrease

your bodies response to stress
By: Tamru Y. (PhD)

Exercise
Exercise boosts endorphins
which in turn can
• Put us in a better mood
• Give us more energy
• Reduces anger
• Improves mental alertness
By: Tamru Y. (PhD)

Deep Breathing
• Breath in deeply and slowly.
• Focus on the air moving in your nose, down
your neck into your chest and feel your belly
push out. Hold your breath for a few seconds.
• Now exhale slowly. First feel your belly
contract in towards your spine, then feel the
air move through the chest, up the neck, and
through your mouth.
• Visualize stress leaving your body
By: Tamru Y. (PhD)
Meditation
• Close your eyes and mental follow the air in
and out of your body. As you exhale mentally
repeat a soothing word like “Peace”
Or
• Visualize a peaceful scene
• Do this for 5 to 30 minutes
By: Tamru Y. (PhD)

Progressive Muscle Relaxation
• While sitting or lying down, tense the muscles
of your feet (curling your toes) as hard as you
can.
• Then relax them.
• Do this once or twice for each part of the body
• Continue this process for each muscle group
all the way up your body until you reach your
head.
• When finished remain relaxed for a few
minutes
By: Tamru Y. (PhD)
Stretching
• Several stretches can be done at your desk
• Tilt head to the left and hold
• Tilt head to right and hold
• Reach arms over the head
and interlace fingers
For information of stretches that can be done at

your desk or for the head and neck click on the
stretching girl
By: Tamru Y. (PhD)
Get a Massage from yourself or from a professional
Self-Massage
• Sit with your shoulders relaxed
• Use your right hand to massage you left
shoulder and neck, working your way up to the
scalp
• Repeat with left hand for right shoulder
By: Tamru Y. (PhD)

Laugh!!
• Find ways to add laughter in your life

• Buy tapes of comedians you like and listen to them
during your commute or whenever you need a boost.
• Read joke books or funny books
• Watch your favorite comedy on television
• Buy movies that are sure to make you laugh
• Don’t take yourself too seriously
By: Tamru Y. (PhD)

CHAPTER EIGHT
ORGANIZATIONAL DESIGN AND
STRUCTURE
• Organizational Design: Design in an organization is much
the same as for buildings, clothing and vehicles -- it's a plan.
When a company's leaders develop plans for how their
company should function or would perform better, they
undertake the business of organizational design.
• Designs are expressed through an organizational chart,
• Organizational charts- are diagrams of the organizational
structure showing the functions, departments or position of
the organization and how they are related. It is a graphic
representation of organizational structure.
By: Tamru Y. (PhD)
• Organizational Structure: Organizational
structure is the skeleton of an organization. It is an
expression of who is performing the various
functions and tasks of a company and how these
people relate to one another.
• Organizational structure encompasses a list of the
various job positions, titles and duties of a business,
and the reporting structure or chain of command
among them. Structure is a statement of the current
state of affairs, not the ideals, intentions or
betterment of organizations
By: Tamru Y. (PhD)
Elements of organizational design
• An organizational structure defines how job tasks are
formally divided, grouped and coordinated. There are six key
elements that managers need to address when they design
their organization's structure.
• These are; Work Specialization; Departmentalization;
Chain of command; Span of Control; Centralization and
decentralization and Formalization
By: Tamru Y. (PhD)

• 1. Work Specialization. It is the degree to which tasks in the
organization are subdivided into separate jobs. Work can be
performed more efficiently if employees are allowed to
specialize. The essence of work specialization is that rather
than an entire job being done by one individual, it is broken
down into a number of steps, each step being completed by a
separate individual who is highly skilled or specialized in doing
that part or task.
• 2. Departmentalization. This is the basis by which jobs are
grouped together. It helps to bring together common tasks
and thus these tasks can be coordinated successfully. There
are different bases of departmentalization. these are:
By: Tamru Y. (PhD)

• Departmentalization by Functions. This grouping tasks as accounting,
marketing, personnel, purchasing etc. It can be used in all types of
organization. It helps to achieve economies of scale by placing people
with common skills and orientation into common units. An Example of a
Pharmaceutical Company With Functional Departments:
By: Tamru Y. (PhD)

• Departmentalization by Product. This is grouping of tasks
based on the nature or type of product produced or service
rendered. It helps to increase accountability for all product or
service performance, since all activities related to specific
product or service are under the direction and supervision of
a single manager. An Example of a Pharmaceutical Company
With Product Departments
By: Tamru Y. (PhD)

• Departmentalization by Geography or Territory. This
works when an organization have scattered customers over a
large geographic area and have similar needs based on their
location.
By: Tamru Y. (PhD)

• Departmentalization by Process. This is usually used in
manufacturing organizations that involves many steps to
produce one product. For instance Metals Aluminum tubing
plant may be departmentalized as casts; press; tubing;
finishing & inspecting; packing and shipping. Each process
requires different skills and offers a basis for homogeneous
categorizing of activities.
By: Tamru Y. (PhD)

• Departmentalization by customers. It is the proving of
enterprise activities based on customer interests companies
that must provide special services to different groups set up
departments by types of customers, using by customer’s
departmentation.
• An airlines company may make departments for traveling
agency, government, government passengers, tourists and
other customers
By: Tamru Y. (PhD)

• 3 . Chain of Command. It is unbroken line of
authority that extends from the top of the organization
to the lowest echelon or stratum and clarifies who
reports to whom. It answers questions for employees
such as "To whom do I go if I have a problem?" and
"To whom I am responsible?“
• Two basic concepts in chain of command are authority
and Unity of command.
• Authority – is the formal and legitimate right of a manager to
make decisions, give orders and allocate resources. Authority is
delegated
• 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.
By: Tamru Y. (PhD)
• 4. Span of Control. This refers to the number of
subordinates a manger can efficiently and effectively directs
and supervise.
• Span of Management – the number of subordinates who
report to a particular manager.
• A wide span of management exists when a manager directly
supervises a very large number of employees.
• A narrow span of management exists when a manager directly
supervises only a few subordinates.
By: Tamru Y. (PhD)

Span of Management
By: Tamru Y. (PhD)

5. Centralization versus decentralization
• Centralization – is a philosophy of organization and
management that focuses on systematically retaining
authority in the hands of higher level managers.
• Decentralization – a philosophy of organization and
management that focuses on systematically delegating
authority through out the organization to middle and lower
level managers, it is one. Management’s operating philosophy
determines where authority resides. Management can decide
either to concentrate authority for decision making in the
hands of one or a few or to force it down the organization
structure in to the hands of many.
By: Tamru Y. (PhD)

6. Formalization. Formalization is the extent to which policies,
procedures, job descriptions, and rules are written and explicitly
articulated. In other words, formalized structures are those in
which there are many written rules and regulations.
• These structures control employee behavior using written
rules, and employees have little autonomy to make decisions
on a case-by-case basis.
• Formalization makes employee behavior more predictable.
Whenever a problem at work arises, employees know to turn
to a handbook or a procedure guideline
By: Tamru Y. (PhD)

Model of Organizational Design
• There are two major models that are used to conceptualize
various types of organizational design. These are:
❖Mechanistic Model and
❖Organic Model
• Mechanistic Model: This is a structure characterized by
extensive departmentalization, high formalization, a limited
information network and centralization (little participation by
low level members in decision making). Thus, it is generally
synonymous with the bureaucracy.
By: Tamru Y. (PhD)

• Mechanistic organizations are characterized by high
specialization; rigid departmentalization; clear chain
of command; narrow span of control; centralization
and high formalization. Mechanistic structures are
similar to bureaucracies, as they are highly
formalized and centralized.
• Communication tends to follow formal channels,
and employees are given specific job descriptions
delineating their roles and responsibilities.
Mechanistic organizations are often rigid and resist
change,
By: Tamru Y. (PhD)
• The Organic Model. It is a structure that is flat and
characterized by using cross-hierarchical and cross functional
teams; free flow of information; wide span of control;
decentralization and low formalization.
• Organic structures are flexible, decentralized structures with
low levels of formalization.
• Communication lines are more fluid and flexible. Employee
job descriptions are broader, and employees are asked to
perform duties based on the specific needs of the
organization at the time as well as their own expertise levels.
By: Tamru Y. (PhD)

Job design
• Job Design/work design/task design/. It is the
specifications of contents, methods and relationship of jobs in
order to satisfy technological and organizational requirements
of jobs. It is making components and sub components of job
clear, so that employees understand the job wholly.
• The jobs are designed to involve innovation, empowerment,
autonomy and team work. Thus job design as a quality of
work life is concerned with the product, process, tools,
techniques, design, plan layout, work measurement, standard
operating procedure, human processes, machine interaction
and other activities related to job performance.
By: Tamru Y. (PhD)

Job design
• Job Design has the following importance
• clarifies the tasks and roles
• removes overlapping responsibilities
• allows proper placement of employees
• allows operational control over work performance and results
• allows incorporation of environmental changes in the job
• provides flexibility
• inculcates wok motivation
• leads to better quality of work life of employees relieves stress
and improves performance and organizational effectiveness
By: Tamru Y. (PhD)
• It is also possible to re-design the job. Job Re-design refers
to redesigning jobs based on feedback. It is reallocation of
jobs to achieve congruence of goals of individual and
organization. In practice it must respect the principle of
matching job to employees' interest, job and employees' skills,
assigning routine and simple jobs for those less skilled ones
and challenging jobs for those who are achievement oriented.
By: Tamru Y. (PhD)

JOB RE-DESIGN
• There are various techniques of job re-design. These are:
• Job Enrichment. This is vertical expansion of job. It is
increasing employees' freedom and independence and
responsibility. Management can motivate self driven
employees by assigning additional responsibility. by doing
this employees feel like their work has meaning and
important to the company. They are more challenging to
employee and have less repetitive work.
• It increases quality and productivity; enhance motivation and
job satisfaction; develop additional skills, enhance creativity,
increase in pay and perquisites; decrease absenteeism and
turnover, allow optimum use of human energy etc.
By: Tamru Y. (PhD)

• Job Enlargement. It refers to making the job with a variety
of tasks. It upgrades less challenging or oversimplified task
and tasks that lack diversity. It is important for reduction of
the level of boredom, utilization of skills, increase quality and
efficiency, job enjoyment, and getting feedback.
• Job Rotation. This refers to the periodical shifting of an
employee from the existing job to another job at the same
level of skill requirements. It is also known as cross training. It
is important to reduce boredom, to have better diversification,
to face greater challenge, to enhance adaptability to change
and to increase motivation and job satisfaction. However, it is
also criticized by high cost of training, greater disruptions in
social contacts, high cost of monitoring and controlling,
incurring costs associated with errors etc.
By: Tamru Y. (PhD)
• Job Reengineering.(BPR). Michael Hammer defined it as
the fundamental rethinking and radical redesign of business
processes by application of variety of tools and techniques
focusing on related customer oriented core business process
to achieve dramatic improvements in critical and
contemporary measures of performance such as cost, quality,
service and speed.
By: Tamru Y. (PhD)

Organizational change
• Organizational change is the movement of an organization
from one state of affairs to another. Organizational change
can take many forms. It may involve a change in a
company’s structure, strategy, policies, procedures,
technology, or culture.
• The change may be planned years in advance or may be
forced upon an organization because of a shift in the
environment.
• Organizational change can be radical and alter the way an
organization operates, or it may be incremental and slowly
change the way things are done. In any case, regardless of
the type, change involves letting go of the old ways in which
work is done and adjusting to the new ways.
By: Tamru Y. (PhD)
Why change
• Workforce demography
• Workforce Demographics: Organizations change in response to
changes in their environment. One of the current changes is in the
demographics of the workforce. Organizational change is often a
response to changes in the environment. Organizations may realize that
as the workforce gets older the types of benefits they prefer may change.
Work arrangements such as flexible work hours and job sharing may
become more popular as employees remain in the workforce even after
retirement.
• As the workforce rapidly ages, it also becomes possible that employees
who are unhappy with their current work situation will choose to retire,
resulting in a sudden loss of valuable knowledge and expertise on the
part of organizations. Therefore, organizations will have to devise
strategies to retain these employees and plan for their retirement. Finally,
a critical issue is finding ways of dealing with age-related stereotypes,
which act as barriers in the retention of these employees.
By: Tamru Y. (PhD)
• Technology: Sometimes change is motivated by rapid
developments in technology.
• Globalization: Globalization is another threat and opportunity
for organizations, depending on their ability to adapt to it.
Organizations are finding that it is often cheaper to produce
goods and deliver services in some countries compared to
others.
• This led many companies to utilize manufacturing facilities
overseas, with China as a popular destination. For a while,
knowledge work was thought to be safe from outsourcing, but
now we are also seeing many service operations moved to
places with cheaper wages. For example, many companies
have outsourced software development to India, with Indian
companies such as Wipro Ltd. and Infosys Technologies Ltd.
emerging as global giants.
By: Tamru Y. (PhD)
• Market Conditions: Changes in the market conditions may also
create changes as companies struggle to adjust. For example,
as of this writing, the airline industry in the United States is
undergoing serious changes. Demand for air travel was
affected after the September 11 terrorist attacks. Also, the
widespread use of the Internet to book plane travels made
it possible to compare airline prices much more efficiently
and easily, encouraging airlines to compete primarily based
on cost.
• Organizational Growth: It is natural for once small start-
up companies to grow if they are successful. Those that
succeed often evolve into large, complex organizations over
time.
By: Tamru Y. (PhD)

• Poor Performance: Change is more likely to happen if the
company is performing poorly and if there is a perceived
threat from the environment. In fact, poorly performing
companies often find it easier to change compared to
successful companies
By: Tamru Y. (PhD)

Resistance to Change
•
• It is known that change is necessary. It happens in every

organization with no exception. People resist change for
many reasons. Some of the reasons why employee resist
change are stated as follows:
• Disrupted Habits: People often resist change for the
simple reason that change disrupts our habits.
• Personality: Some people are more resistant to change
than others. Research shows that people who have a
positive self-concept are better at coping with change,
probably because those who have high self-esteem may
feel that whatever the changes are, they are likely to adjust
to it well and be successful in the new system.
By: Tamru Y. (PhD)
• People with a more positive self-concept and those who are
more optimistic may also view change as an opportunity to
shine as opposed to a threat that is overwhelming. Finally,
risk tolerance is another predictor of how resistant someone
will be to stress. For people who are risk avoidant, the
possibility of a change in technology or structure may be
more threatening.
By: Tamru Y. (PhD)

• Feelings of Uncertainty: Change inevitably brings feelings
of uncertainty. You have just heard that your company is
merging with another. What would be your reaction? Such
change is often turbulent, and it is often unclear what is going
to happen to each individual. Some positions may be
eliminated. Some people may see a change in their job
duties. Things can get better—or they may get worse. The
feeling that the future is unclear is enough to create stress for
people, because it leads to a sense of lost control.
By: Tamru Y. (PhD)

• Fear of Failure: People also resist change when they feel
that their performance may be affected under the new
system. People who are experts in their jobs may be less than
welcoming of the changes, because they may be unsure
whether their success would last under the new system.
Studies show that people who feel that they can perform
well under the new system are more likely to be committed
to the proposed change, while those who have lower
confidence in their ability to perform after changes are less
committed.
• Perceived Loss of Power: One other reason why people
may resist change is that change may affect their power and
influence in the organization
By: Tamru Y. (PhD)
• Changing an organization is often essential for a company to
remain competitive. Failure to change may influence the
ability of a company to survive. Yet, employees do not
always welcome changes in methods.
• According to a survey conducted by the Society for Human
Resource Management (SHRM), resistance to change is one
of the top two reasons why change efforts fail.
By: Tamru Y. (PhD)

Ranges of resistance to change
By: Tamru Y. (PhD)

Ranges of resistance to change
• Active resistance is the most negative reaction to a proposed
change attempt. Those who engage in active resistance may
sabotage the change effort and be outspoken objectors to the new
procedures.
• Passive resistance involves being disturbed by changes without
necessarily voicing these opinions. Instead, passive resisters may
quietly dislike the change, feel stressed and unhappy, and even
look for an alternative job without necessarily bringing their point
to the attention of decision makers.
• Compliance, on the other hand, involves going along with
proposed changes with little enthusiasm.
• Enthusiastic supports are defenders of the new way and actually
encourage others around them to give support to the change
effort as well.
By: Tamru Y. (PhD)
Process of change
• One of the most useful frameworks on how do you plan,
organize, and execute change effectively in organizations is
Kurt Lewin’s (1951) three-stage model of planned change as
it is depicted below
By: Tamru Y. (PhD)

• Unfreezing Prior to Change
• Many change efforts fail because people are
insufficiently prepared for change. When employees are
not prepared, they are more likely to resist the change
effort and less likely to effectively function under the
new system. What can organizations do prior to change
to prepare employees?
• Executing Change
• The second stage of Lewin’s three-step change model is
executing change. At this stage, the organization
implements the planned changes on technology,
structure, culture, or procedures. The specifics of how
change should be executed will depend on the type of
change
By: Tamru Y. (PhD)
• Refreezing
• After the change is implemented, the long-term success
of a change effort depends on whether change becomes
part of the company’s culture. In other words, the
revised ways of thinking, behaving, and performing
should become routine
By: Tamru Y. (PhD)

CHAPTER NINE
ORGANIZATIONAL CULTURE
• Culture is the soul of the organization—the beliefs and
values, and how they are manifested.
• Organizational culture refers to a system of shared
assumptions, values, and beliefs that show employees what is
appropriate and inappropriate behavior. These values
have a strong influence on employee behavior as well as
organizational performance
• Organizational culture: The pattern of shared values,
beliefs, and assumptions considered appropriate for thinking
and acting within an organization
By: Tamru Y. (PhD)
Culture’s Functions
Culture performs a number of functions within an
organization
• It has a boundary-defining role because it creates
distinction between one organization and others
• It conveys a sense of identity to organization members.
• It helps create commitment to something larger than an
individual’s self-interest.
• It enhances stability; it is the social glue that helps hold the
organization together by providing appropriate standards
for what employees should say and do.
• It serves as a control mechanism that guides and shapes
the attitudes and behaviour of employees, and helps them
make sense of the organization.
By: Tamru Y. (PhD)
Types of Cultures
• Dominant/Strong culture: are cultures where the
organization’s core values are both intensely held and widely
shared. The more the members who accept the core values
and the greater their commitment to those values, the
stronger the culture is.
• Weak culture
• Constructive culture
• Entrepreneurial culture
By: Tamru Y. (PhD)

Characteristics of organizational culture
• Innovation and risk-taking. The degree to which employees are encouraged to be
innovative and take risks.
• Attention to detail. The degree to which employees are expected to work with
precision/accuracy/, analysis, and attention to detail.
• Outcome orientation. The degree to which management focuses on results, or
outcomes, rather than on the techniques and processes used to achieve
these outcomes.
• People orientation. The degree to which management decisions take into
consideration the effect of outcomes on people within the organization.
• Team orientation. The degree to which work activities are organized around
teams rather than individuals.
• Aggressiveness. The degree to which people are aggressive and competitive rather
than easygoing and supportive.
• Stability. The degree to which organizational activities emphasize maintaining the
status quo in contrast to growth.
By: Tamru Y. (PhD)
Cultural Diversity
• What is cultural diversity? Cultural diversity refers to
having a variety of cultures or human societies within a
specific region.
• cultural diversity in the workplace refers to ethic variety and
cultural differences among employees of the same company.
• Many people mistakenly use such phrases as “American
culture,” “white culture,” or “Western culture,” as if such
large, common, and homogenous cultures exist in the United
States today.
• These people fail to acknowledge the presence of cultural
diversity, or the presence of multiple cultures and cultural
differences within a society.
By: Tamru Y. (PhD)
• In every culture there are basic standards for social
interaction such as personal space distance, eye contact,
amount of body language displayed in public, negotiating
style, etc.
• In America, we stand about eighteen inches apart when
engaged in normal conversation; prefer very direct eye
contact; are pretty demonstrative with body language and
negotiate very directly always asking the other party for their
“bottom line”.
• In other cultures they may stand closer or farther than we are
comfortable, may view direct eye contact as rude, be more or
less open to displaying body language and negotiate more
indirectly
By: Tamru Y. (PhD)

THE END
By: Tamru Y. (PhD)

Dilla University College of Business & Economics: Organizational Behaviour

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Dilla University College of Business & Economics: Organizational Behaviour

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DILLA UNIVERSITY

COLLEGE OF BUSINESS &

By: Tamru Y. (PhD)

By: Tamru Y. (PhD)

1. Individual level of Analysis: At the individual

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• Workforce diversity has important implications for

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• Open system-interact tot the outside environment

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• It’s difficult to perceive and interpret what others do.

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• personality as the stable patterns of behavior and

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• “If you understand your own feelings you get a really

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• Emotional self awareness: Reading one’s own

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• Intrapersonal skills (ability to understand and apply

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Cooperative _:_:_:_:_:_:_:_ Uncooperative

Friendly _:_:_:_:_:_:_:_ Unfriendly