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Leadership & Change MGT Module

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56 views65 pages

Leadership & Change MGT Module

Uploaded by

misganawgeto29
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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CHAPTER ONE

1. INTRODUCTION TO LEADERSHIP
An organization has the greatest chance of being successful when all of the employees work toward
achieving its goals. Since leadership involves the exercise of influence by one person over others, the
supervisors/managers is a critical determinant of organizational success. The idea of leadership
irrespective of different terms used as directing, executing, supervising, ordering, commanding, etc. is to
put into effect the decisions, plan and programs, that have previously been worked out for achieving the
goals of the group.

1.1 Leadership Definition

Leadership can be defined in different ways:

Leadership: is the ability to inspire or influence others towards the leader‘s goal.
Leader: is a person who influences a group of people towards the achievement of a goal.
Leadership is a process by which an executive can direct, guide and influence the behavior and
work of others towards accomplishment of specific goals in a given situation. Leadership is the
ability of a manager to induce the subordinates to work with confidence and zeal. Leadership is
the potential to influence behaviour of others. It is also defined as the capacity to influence a
group towards the realization of a goal. Leaders are required to develop future visions, and to
motivate the organizational members to want to achieve the visions.
According to Keith Davis, ―Leadership is the ability to persuade others to seek defined objectives
enthusiastically. It is the human factor which binds a group together and motivates it towards
goals.‖
 Leading is the process of establishing direction and influencing others to follow that direction. It is
the process by which one person influences the thoughts, attitudes, and behaviors of others.
Leaders set a direction for the rest of us; they help us see what lies ahead; they help us visualize
what we might achieve; they encourage us and inspire us. Without leadership a group of human
being quickly degenerates into argument and conflict, because we see things in different ways and
lean toward different solutions. Leadership helps to point us in the same direction and harness our
efforts jointly. Leader‘s ability to get other people to do something significant that might not
otherwise do.
 Leadership is a dynamic relationship based on mutual influence and common purpose between
leaders and collaborators in which both are moved to higher levels of motivation and moral
development as they affect real, intended change. (Kevin Freiberg and Jackie Freiberg, 1996).
 Leadership is the process of influencing employees to work toward the achievement of objectives.

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 Leadership is the process by which a person exerts influence over other people and inspires,
motivates, and directs their activities to help achieve group or organizational goals.
 Leadership is the art or process of influencing people so that they strive willingly and
enthusiastically toward the accomplishment of group goals. Influencing people so that they will
strive willingly and with zeal and confidence toward the achievement of a group goal implies
many things. Enthusiasm affects seriousness, and intensity in the execution of work: confidence
reflects experience and technical ability.
The distinction between leader and leadership is important. The leader is the individual who is able to
exert influence over other people to help achieve group or organizational goals; leadership is the function
or activity this individual performs. Leadership includes/involves many activities in the manner in which
a leader influences actions of subordinates such as:

Leaders apply various forms of influence-from subtle persuasion to more assertiveness- to ensure
that followers have the motivation and role clarity to achieve specified goals.
Leaders also arrange the work environment-such as allocating resources and altering communication
patterns-so that employees can achieve corporate objectives more easily.
Provide meaningful direction.
Motivate workers through meeting their expectation.
Issuing of orders that are clear, complete, and practicable.
Take responsibility for the direction and actions of a team.
Accepting responsibility for mistakes/wrong decisions.
Being flexible: prepared to adapt goals in the light of changing situations.
Characteristics of Leadership

1. It is an inter-personal process in which a manager is into influencing and guiding workers towards
attainment of goals.

2. It denotes a few qualities to be present in a person who includes intelligence, maturity and
personality.

3. It is a group process. It involves two or more people interacting with each other.

4. A leader is involved in shaping and moulding the behaviour of the group towards accomplishment of
organizational goals.

5. Leadership is situation bound. There is no best style of leadership. It all depends upon tackling with
the situations.

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1.2Leadership versus Management

Leadership and management are not the same. People tend to use the terms manager and leader
interchangeably. However, that usage is not correct. Management and leadership are related but different
concepts. Leadership is one of the five management functions (planning, organizing, staffing, leading,
and controlling). Someone can be a manger without being a true leader. There are managers –you may
know of some-who are not leaders because they do not have the ability to influence others. There are also
good leaders who are not managers. The informal leader, an employee group member, is a case in point.
The leader of the work group may emerge informally as the choice of the group. If a manager is able to
influence people to achieve the goals of the organization, without using his or her formal authority to do
so, then the manager is demonstrating leadership.

According to John P.Kotter in his book, A Force for Change: How Leadership Differs from management
(1990), managers must know how to lead as well as manage. Without leading as well as managing,
today‘s organizations face the threat of extinction. Management is the process of setting and achieving the
goals of the organization through the function of management. A manager is hired by the organization
and is given formal authority to direct the activity of others in fulfilling organization goal. Thus, leading
is a major part of a manager‘s job. Yet a manager must also plan, organize, staff, and control. Generally
speaking, leadership deals with the interpersonal aspects of a manager‘s job, whereas planning,
organizing, and controlling deal with the administrative aspects. Leadership deals with change,
inspiration, motivation, and influence. Management deals more with carrying out the organization‘s goals
and maintains equilibrium.

Management produces a degree of predictability and order. Leadership produces change. Kotter believes
that most organizations are under lead and over managed. He sees both strong leadership and strong
management as necessary for optimal organizational effectiveness,

Leadership and management are both important, but they seek to do different things. About 40 years ago
Kurt Lewin put it this way. Every organization structures itself to accomplish its goals in a way that is in
tune with or responsive to its environment. Once the efficiency of the organization is established, people
go about simply maintaining the system, assuming that the environment will stay the same. Management,
then, is the main focus because it keeps the organization going well with little change. But the thing is:
the environment for any organization is always changing. There are always shifts in consumer tastes,
social attitudes, society‘s culture, technology, historic events, and so on. The world is not static as we
assume. Organizations tend not to spot these changes quickly, often because of a "management
orientation" which is focused more on "looking in" instead of "looking out". Over time, the organization
can become less and less in tune with or responsive to its environment, creating more and more
management problems. Times like this require organizations to think more in terms of leadership. Leaders
begin to ask questions like, "What is really going on here? How do we become relevant again? How do
LEADERSHIP AND CHANGE MGMT MODULE Page 3
we fulfill our goals in these new times? What will prompt people to think that what we do is
meaningful?" Leaders seek to bring their organization more in line with the realities of their environment,
which often necessitates changing the very structures, resources and relationships of their organization
which they have worked so long and so hard to manage. And yet, as they do, leaders can bring renewed
vitality to their people.

The key point in differentiating between leadership and management is the idea that employees willingly
follow leaders because they want to, not because they have to. Leaders may not possess the formal power
to reward or sanction performance. However, employees give the leader power by complying with what
he or she requests. On the other hand, managers may have to rely on formal authority to get employees to
accomplish goals.

Managers plan, organize, staff, lead and control. They may or may not be effective in influencing their
subordinates or team members to set and achieve goals. Leaders, on the other hand are involved in single
function of management that is leading. Leadership involves creating and sharing visions, generating
strategies to bring visions to realize. Therefore, leaders and managers are not necessarily the same; it is
mainly leading performs only one aspect of management functions. Mangers can be leader because they
can perform leading function. But may not be effective leaders since they may not have enough ability to
influence others.

In addition to the above explanations, the following table summarizes some of differences between
management and leadership.

MANAGEMENT LEADERSHIP
Requires five functions: planning, organizing, A major part of a manager‘s job
staffing, leading and controlling
Emerge formally. Managers need formal The leader of the work group may emerge
authority to be effective. informally as the choice of the group.
Deals with both the interpersonal and Deals with the interpersonal aspect of a
administrative aspect of a manager‘s job. manager‘s job.
Managers deals more with carrying out the Deals with change, inspiration, motivation and
organization‘s goals and maintain equilibrium influence
Managers may have to rely on formal authority Leaders may not possess the formal power
to get employees to accomplish goals.
Groups are often more loyal to a leader than a Groups are often more loyal to a leader than a
manager manager
Managers focus of system and structures Focus on people
Managers relies on control Leaders inspires trust

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Managers imitates Originates
Accepts the status quo Challenges the status quo
Managers asks how and when Leaders asks what and why
Management Leadership
Follow: day-to-day objectives Formulates long-term objectives
Exhibits: supervisory behaviour leading behaviour
Influence: transactional transformational
Strategies: control Empowering
Status quo: supporter change creator
Success based on: predictability Innovation
Vision: Defines Lives
Strategy: Top-down everyone strategic

1.3What Makes Effective Leadership

Effective leadership is the process of achieving desired results through people‘s willing participation. The
heart of this definition is: desired results (goals), through people, and willing participation-people
willingly follow leaders because they want them.

When leaders are effective, the influence they exert over others helps a group or organization achieve its
performance goals when leaders are ineffective, their influence does not contribute to, and often detracts
from, goal attainment.

Beyond facilitating the attainment of performance goals, effective leadership increases an organization‘s
ability to meet all the contemporary challenges-including the need to obtain a competitive advantage, the
need to foster ethical behavior, and the need to manage a diverse workforce fairly and equitably.

Warren Bennis, who devoted decades to researching leadership issues, concludes that virtually all leaders
of effective groups share four characteristics in common:

1. They provide direction and meaning to the people they are leading. This means they remind
people what is important and why what they are doing makes important difference.
2. They generate trust.
3. They favor action and risk taking. That is, they are proactive and willing to risk failing in order to
succeed.
4. They are surveyors of hope. In both tangible and symbolic ways they reinforce the notion that
success will be attained.
Some of the qualities effective leaders possess are the following:
LEADERSHIP AND CHANGE MGMT MODULE Page 5
Passion: An effective leader is a person with a passion for a cause that is larger than they are. Someone
with a dream and a vision that will better society or at least some portion of it. Without passion, a leader
will not make the necessary courageous and difficult decisions and carry them into action. This is not to
imply that all decisions are of this nature. But you can be sure, some of them will be. The leader without a
passion for a cause will duck.

Holder of Values: Leadership implies values. A leader must have values that are life-giving to society. It
is the only kind of leadership we need. This then also implies values that are embedded in respect for
others. So, often we think of people skills or caring about people as being ―warm and fuzzy.‖ A leader
can be of varying ‗warmth and fuzziness,‖ but a leader has to respect others. You can‘t lead without it.
Otherwise we are back to manipulation. Respect means also that one can deal with diversity a critical
need for a leader in today‘s world probably always has been, although diversity may have been more
subtle in the homogenous societies of the past.

Vision: This is a bit different than passion, but in other ways it isn‘t separable. If one doesn‘t care about a
subject, an issue, a system, and then one won‘t spend the time thinking about how it could or should be
different. Yet, one could have strong feelings about something and not good ideas, particularly if she
didn‘t spend a good deal of time studying the topic. Thus a leader has to have some ideas about change,
about how the future could be different. Vision then is based on two components that leaders also need:
creativity and intellectual drive.

Creativity: One has to try to think out of the box to have good visions and to come up with effective
strategies that will help advance the vision. The need for a sense of humor, It‘s a creative skill that is in
great need by leaders.

Intellectual Drive and Knowledge: A leader has to be a student. In general it is hard for a leader to be
around enough other leaders to pick this up just through discussion. A leader has to be a reader and a
learner.

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Confidence and Humility Combined: While one can have a great vision and good ideas for change, and
even passion for it, if one isn‘t confident, then action will not occur. Without action, there is no change.
Yet, paradoxically, a leader needs to have humility. No matter how creative and bright one is, often the
best ideas and thinking are going to come from someone else. A leader needs to be able to identify that,
have good people around who have these ideas. This takes humility, or at least lack of egocentricity. The
leader is focused on the ends and doesn‘t have to see herself always as the conduit or creator of the
strategy to get to that end.

Communicator: None of the above assets will work for a leader if she can‘t speak or write in a way to
convince others that they should follow along, join the team, and get on board. All the above gets to the
old adage that a leader knows how to do the right thing and a manager knows how to do things right. But
a leader has to be a manager, too.

Planner/Organizer: Someone who can see what needs to be done and help the team plan and organize
the getting it done. Management is getting things done through people. While a writer or other visionary
person may be very influential, even seminal for the cause of change, this is not quite my definition of a
leader. A leader means to me, someone who is taking action, trying to get others to do something they
want to see done.
Ability to understand human behavior. A leader should be able to understand employees needs and
problems so as to make them work with willingness and enthusiasm.
Social skill. An effective leader should and know the strengths and weaknesses of people working with
him/her. If he/she is helpful friendly, encourages other to succeed, and appreciates the group members‘
viewpoints, people will certainly cooperate with him/her and work their / oral best towards the
achievement of the organizational goals.
Teaching ability (being model). The best way to lead is guiding practically. A leader should not be in a
position to push his subordinates from behind.
Readiness to accept responsibility / criticisms and to take appropriate corrective measures – An
effective leader or manager should understand that error is human but repeat is a mistake. What so over a
leader tries to be systematic, mistakes are created but he should be able to take remedial measures and
take control over the situation.
Emotional stability and fairness – The effective leader poses resolutions indiscriminately after
gathering sufficient information and investigating the possible causes. Moreover, he is relatively fuae
from bias and prejudice and takes consistent actions.
Effective leaders are characterised by the followings:
A. Honest: This gives them credibility, resulting in the trust and confidence of their people,
B. Keep their promises and follow through on their commitment.

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C. Consistent: The make sure their actions are consistent with the wishes of the people the
lead.
D. They have clear idea of what others value and what they can do.
E. Admit to their mistakes.
F. Create trusting
G. They help others successful and feel empowered.
H. They don’t push too much.
They encourage members to do more, but know when it is too much.
I. They avoid phrases that cause resentment, reluctance and resistance.
 For instance, instead of saying you have to do something, effective leaders request
or recommend that member that member‘s do something.
1.4 Importance of Leadership for Good Governance and Development
A. Good governance and leadership are inexorably linked.

B. Lack of the one is lack of the other.

C. Leadership is the critical ingredient of good governance.

D. Behind all good leadership is good governance.

E. It is common wisdom that behind every leader are a team that executes the vision and many

followers who support the leader‘s work.


F. Any leader and all teams, organizations and nations succeed in the long run because of the

strategic support and expert oversight they receive that keep them and their organizations on
the right path.
1.5 The Foundation of Leadership
Trust is a belief that someone or something is reliable, good, honest, effective, etc .
What are the key dimensions that underlie the concept of trust? Recent evidence has identified
five.
a. Integrity

b. Competence

c. Consistency

d. Loyalty

e. Openness

1. Integrity refers to honesty & truthfulness.

2. Competence: interpersonal knowledge & skills.

3. Consistency relates to an individual‘s reliability, predictability, and good judgment in handling

situations.
LEADERSHIP AND CHANGE MGMT MODULE Page 8
4. Loyalty is the willingness to protect and save face for another person.

5. Openness. Can you rely on the person to give you the full truth?

Types of Trust
There are three types of trust in organizational relationships: deterrence-based knowledge-based,
and identification-based.
1. Deterrence-Based Trust:
 This form of trust is based on fear of reprisal if the trust is violated.

 Deterrence-based trust will work only to the degree that punishment is possible,

consequences are clear, and the punishment is actually imposed if the trust is violated.
2. Knowledge-Based Trust
 Most organizational relationships are rooted in knowledge-based trust. It exists when you

have adequate information about someone to understand them well enough to be able to
accurately predict their behaviour.
3. Identification-Based Trust
 This is the type of trust that managers ideally seek in teams. Team members are so

comfortable and trusting of each other that they can anticipate each other and freely act in
each other‘s absence.

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CHAPTER TWO

2. LEADERSHIP THEORIES AND STYLES

2.1 LEADERSHIP STYLES

Leadership style is the behavior exhibited by a leader during supervision and working with subordinates.
A manager‘s personal leadership style-that is, the specific ways in which a manager chooses to influence
other people- shapes the way that manager approaches planning, organizing, and controlling. Evidences
suggest that leadership styles vary not only among individuals but also among countries or cultures. There
are different leadership styles.

We can classify leadership as negative and positive. Positive leadership styles give emphasis to praise and
recognition, monetary rewards, increase in security, and addition of responsibility to make the work done
by other people. Negative leadership style on the other hand emphasizes penalties, loss of job, suspension,
and public reprimands/critics.

Based on the extent of sharing decision making authority with subordinates there are four leadership
styles. These are autocratic, democratic, laissez fair and situational. They are commonly known and/or
practiced.

A. Autocratic/directive leadership style


An autocratic leader centralizes power and decision making authority in himself and exercise
complete control over subordinates. Such leader usually shows high concern for the task and low
concern for the people /human aspect/.

The following are the common characteristics of autocratic leaders:

- The leader make the decisions and closely supervises employees;


- Highly conscious of his /her position;
- They are sensitive about their authority; One-way communication;
- They are willing to delegate a very little decision making authority;
- The leader believes that pay is just a reward for working and the only reward that will
motivate employees.
- Orders are issued to be carried out with no questions allowed and no explanations.
Problems of autocratic style: force breeds counter-force: restriction of output, antagonism,
unionism. It impairs group moral and initiative, brings high rate of grievance, absenteeism,
turnover and dissatisfaction.

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Strength of autocratic style: it is useful in certain situations. Some situation may call urgent
action in such situation autocratic leadership may be appropriate. In emergency situations
autocratic leadership style may be effective if the leader is wise.

Effective when . . .
 Time is limited and a call arises for urgent leadership.
 Individuals/group lack skill and knowledge.
 The group does not know each other.
Ineffective when . . .
 Developing a strong sense of team is the goal.
 The group members have some degree of skill/knowledge.
 The group wants an element of spontaneity in its work.
B. Democratic or participative leadership style
Democratic leadership style is characterized by participation of the group and utilization of its
opinions. A manager with this style usually shares decision making authority with the group and
encourages participation and supports the task efforts of subordinates.

In this leadership style, subordinates are involved in making decisions.

Democratic leadership style has the following characteristics:

- Share decision making authority with subordinates;


- A leader appreciate suggestions from subordinates;
- The leader shows high concern for both task and people;
- Leaders are not sensitive about their authority;
- New ideas/change proposed by a group is respected;
- Develops a feeling of responsibility within the group;
- Motivates subordinates with subordinates;
- Generally increases the quality of work and productivity;
- If forced to make a decision alone the leader explains his/her reason to the
group/subordinates.
Effective when . . .
 The situation allows sufficient time.
 The group members have some degree of skill or knowledge.
 The employees know their jobs and want to become part of the team.
Ineffective when . . .
 The group is unmotivated.
 Group members lack skill and knowledge.

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 A high degree of conflict is present.
C. Laissez faire/free-rein/ abdicative leadership style
A laissez faire leader develops a frame work for subordinates in which they can act and leave decision
making authority to the subordinates and remain for consultation. It is a complete delegation of
authority to subordinates so that they must plan, motivate & control and be responsible for their own
actions.

Free-rein leadership style has the following features:

- The leader gives full decision making authority to the group and shows little interest in the
work process or its results;
- Leader exercise little control over the group/ subordinates;
- Individuals may have little interest in their work;
- Morale and team work are generally low.
Free rein leadership style can apply in organizations with highly skilled and well-trained
professional.

Effective when . . .
 A high degree of skill and motivation is shown in your group or when an employee is able to analyse
the situation and determine what needs to be done, as well as how to do it.
 A sense of team exists.
 The situation might call for the leader to be at other places doing other things.
Ineffective when . . .
 A low sense of team/interdependence exists.
 Group members have a low degree of skill and knowledge.
 The group expects to be told what to do.
A good leader uses all three styles, depending on what forces are involved between the followers, the
leader, and the situation.
Bradford and Lippit (1945) have Classified Leaders into Four Types
1. Hard Boiled Autocrat. Here, the person on is a rigid disciplinarian and hand out orders, which he
expects to be obeyed immediately.
2. Benevolent Autocrat. Here, the person dominates all the employees but he himself rarely recognises
his autocracy.
3. Laissez-Faire leaders. Here, the person busies himself with paper work, sets no goals and makes no
decision and generally thinks of himself as a ―good fellow‖
4. Democratic supervision. Here, the decision is made by the group on a shared basis.
D. Situational leadership style
Leaders can utilize the combination of the above three styles depending on the situation.
LEADERSHIP AND CHANGE MGMT MODULE Page 12
The manager need not restrict his choice from among a limited class of style or approaches. The style
a manger chooses may depend upon the following situations;

 Forces in the manager such as his value system, his confidence in subordinates.
 Forces in subordinates and Forces in the situation, example, type of organization, the nature of
the problems, the pressure of time, etc.

2.2 LEADERSHIP THEORIES

2.2.1 GREAT MAN THEORY

The ―belief‖ that great leaders are not made but born with unique characteristics which allow them to
overcome obstacles, and lead their nation successfully.
Are some people born to lead? If we look at the great leaders of the past such as Alexander the great,
Julius Caesar, Napoleon, Queen Elizabeth I, and Abraham Lincoln, we find that they do seem to differ
from ordinary human beings in several aspects.
These leaders are cited as naturally great leaders, born with a set of personal qualities that made them
effective leaders.
 Leaders are born and not made and possess certain traits which were inherited.
 Earlier leadership was considered as a quality associated mostly with the males, and therefore the
theory was named as the great man theory.
But later with the emergence of many great women leaders as well, the theory was recognized as the
great person theory.
The great man theory of leadership states that some people born with the necessary attributes that
set them apart from others and that these traits are responsible for their assuming positions of power
and authority.
Assumptions
Great man theory assumes that the capacity for leadership is inherent-that great leaders are born not made.
These theory often portray great leaders are heroic, mythic and destined to rise to leadership when
needed. This theory believes that, leaders are exceptional people, born with innate qualities, destined to
lead.

The term ―great man‖ was used because leadership was thought of primarily as male quality. The gender
issues were not on the table when the great man theory was proposed. Moreover, most leaders and
researchers were also male, and concerns about andocentric bias were a long way from being realized.

LEADERSHIP AND CHANGE MGMT MODULE Page 13


2.2.2 TRAIT THEORY OF LEADERSHIP

In the 1920‘s and 1930‘s leadership researchers focused on trying to identify the traits that differentiate
leaders from non-leaders. Researchers wanted to identify a set of characteristics, or traits that
distinguished leaders from followers or effective from ineffective leaders. Trait theory claims that people
are born with inherited traits. Some traits are particularly suited to leadership. People who make good
leaders have the right (sufficient) combination of traits.

The people are either born or are made with certain qualities that will make them in leadership roles.

Personality traits that change over the long term (several years) does being put in a leadership position
result in a person developing leadership traits.

Individuals who possess the traits associated with effective leadership may be more likely to become
effective leaders than those who do not.

But many individuals who possess the appropriate traits may never become leaders, and many leaders
who possess them are not effective.

Leadership trait theory assumes that there are distinctive physical and psychological characteristics
accounting for leadership effectiveness. This approach also assumed that a finite number of individual
traits-intellectual, emotional, physical, and other traits- of effective leaders could be found. This
leadership theory focused on ‗what‘ an effective leader is, not on ‗how‘ to effectively lead.

The table below lists the main leadership traits and skills identified by Stogdill in 1974.
Traits Skill

- Clever (intelligent)
- Adaptable to situations -
Persistent - Conceptually skilled

- Alert to social environment - Decisive - Creative

- Ambitious and achievement-orientated - Cooperative - Diplomatic and tactful

- Assertive - Dependable - Fluent in speaking


- Dominant (desire to influence others)
- Knowledgeable about group
- Energetic (high activity level) - Self-confident task

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- Tolerant of stress - Organised (administrative
ability)
- Willing to assume responsibility
- Persuasive

- Socially skilled

Set of traits and characteristics were identified to assist in selecting the right people to become leaders.
The list of traits was to be used as a prerequisite for promotion of candidates to leadership positions. Only
candidates possessing all the identified traits were tobe given leadership positions. The trait approach to
understanding leadership supports the use of tests and interviews in the selection of managers and/or
leaders. The interviewers typically attempt to match the traits and characteristics of the applicant to the
position. For example, most interviewers attempt to evaluate how well the applicant works with people.

Decades of research (beginning in the 1930s) and hundreds of studies indicate that certain personal
characteristics do appear to be associated with effective leadership (see below for a list of these).

o Intelligence: it assumed that leaders generally are lightly more intelligent than the average of their
followers. The leader‘s above-average cognitive ability to process enormous amount of
information. Help leaders understand complex issues and solve problems. Intellectual breadth able
the leader to understand a wide range of areas, rather than having a narrow (and narrow-minded)
area of expertise.
o Inner motivation and achievement drives: leaders have a strong drive to accomplish goals.
When they achieve one thing, they seek out another.
o Supervisory ability: getting the job done through others.
o Emotional stability and composure: calm, confident and predictable, particularly when under
stress.
o Integrity and honesty: helps leaders behave ethically and earn their subordinates trust and
confidence.
o Social traits: such as cooperativeness skill
o Admitting error; owning up to mistakes, rather than putting energy into covering up.
o Good interpersonal skills: able to communicate and persuade others without resort to negative or
coercive tactics.
Shortcoming or Criticisms of Trait Theory: even though traits identified by some studies differentiated
effective leaders from ineffective leaders, research finding are still contradictory for a number of reasons.
These are:

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Not all leaders possess all of the traits identified.
List of potentially important traits is endless. Every year new traits are added to physical, personal
and intelligence characteristics.
No consistent patterns have been found that distinguish effective leaders from the ineffective one.
Difficult to measure traits. How much of a trait a person should have is also confusing question.
All traits are not equally important for all situations. The importance of certain trait depending on
the situation.
In general, traits alone are not the key to understanding leadership effectiveness, however. Some effective
leaders do not possess all of these traits, and some leaders who do possess them are not effective in their
leadership roles. This lack of a consistent relationship between traits and leaders effectiveness led
researchers to shift their attention away from traits and to search for new explanations for effective
leadership. Rather than focusing on what leaders are like (the traits they possess), researchers began
looking at what effective leaders actually do-in other words, at the behaviors that allow effective leaders
to influence their subordinates to achieve group and organizational goals.

2.2.3 BEHAVIORAL LEADERSHIP THEORIES

By the late 1940‘s most leadership research had changed from trait theory and focused on what the leader
did. They attempt to identify the differences in the behavior of effective leaders vs. ineffective leaders.

Behavioral leadership style assumes that there are distinctive styles that effective leaders use
consistently, that is, that good leadership is rooted in behavior. Behavioral theory is a big leap from trait
theory, in that it assumed that leadership capability can be learned, rather than being inherent. There are
no born leaders. Leaders can be trained, and trait that leaders must have can be thought and developed.

2.2.4 CONTINGENCY/SITUATIONAL THEORY

According to situational theories, assume that the appropriate leadership style varies from situation to
situation. Contingency theories do not deny the importance of the leader‘s characteristics or the leader‘s
behavior. Both must be taken into account in the context of the situation.

In this section we discuss some of the most popular contingency leadership theories.
style should be based on certain situations.

We discuss four situational theories below: the Fiedler contingency model, Hersey and Blanchard‘s
situational leadership theory, path-goal theory, and substitutes for leadership.

A. Fiedler's Contingency Model


Fred E. Fiedler was among the first leadership researchers to acknowledge that effective leadership is
contingent on, or depends on, the characteristics of the leader and of the situation. Fiedler‘s contingency

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model helps explain why a manager may be an effective leader in one situation and ineffective in another;
it is also suggests which kinds of managers are likely to be most effective in which situations.

In 1951, Fiedler began to develop the first situational leadership theory. He called the theory
―Contingency theory of Leader Effectiveness.‖ Fiedler believed that one‘s leadership style a reflection of
one‘s personality (trait theory-oriented) and is basically constant. Managers cannot change their style, nor
can they adopt different styles in different kinds of situation. According to Fiedler performance of groups
is dependent on the interaction between leadership style and situational favorableness. If there is no
match, Fiedler recommends that the leader change the situation, rather than the leadership style.

 Determining Leadership Style: Fiedler hypothesized that personal characteristics can influence
leader effectiveness. He used the term leader style to a manager‘s characteristic approach to
leadership and identified two basic leader styles: relationship-oriented and task-oriented. All
managers can be described as having one style or the other.
To determine whether one‘s leadership style is task-oriented or relationship-oriented, the leader
fills in the Least Preferred Coworker (LPC) scales.This is followed by determining the
favorableness of the leader‘s situation.
 Determining Situational Favorableness: situational favorableness refers to the degree to which
a situation enables the leader to exert influence over the followers. Fiedler identified three
situational characteristics that are important determinants of how favorable a situation is for
leading. The three variables, in order of importance are:
1. Leader-member relations: is the relationship good or poor? Do the followers trust, respect,
accept, and have confidence in the leader? Is it a friendly, tension-free situation? Leaders with
good relation have more influence. The better the relations, the more favorable the situation.
2. Task structure: is the task structured or unstructured? Do employees perform routine,
unambiguous, standard tasks that are easily understood? Leaders in a structured situation have
more influence. The more structured the jobs are the more favorable the situation.
3. Position power: is position power strong or weak? Does the leader have the power to assign
work, reward and punish, hire and fire, and give praises and promotions? The leader with
position power has more influence. The more power, the more favorable the situation.

B. LEADERSHIP CONTINUUM
Robert Tannenbaum and Warren Schemdit stated that leadership behavior is on a continuum from
autocrat (or boss-centered) to democrat (or employee centered) leadership. Their model focuses on who
makes the decisions. They identify seven major styles based on the use of boss-centered versus
employee centered. As one moves away from the autocratic extreme, the amount of subordinates
participation and involvement in decision making increases.

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Before selecting one of the seven leadership styles, the user must consider the following three factors, or
variables:

- The manager: what is the leader‘s preferred style, based on experience, expectation, values,
background, knowledge, feeling of security, and confidence in the subordinates?
- The subordinates: what is the subordinates‘ preferred style for the leader, based on
experience, expectation, and son on? Generally, the more willing and able the subordinates
are to participate, the more freedom to participate should be given.
- The situation: what are the environmental considerations, such as the organization‘s size,
structure, climate, goals, and technology? Upper-level managers also influence leadership
styles.
Autocratic/Telling Style: the leader makes the decisions and announces them, expecting subordinates
to carry out without question. In an emergency, a telling style may be most appropriate and would
normally be considered justified by the group (as long as the general climate of that group is
supportive and mature).
Sellingor Persuasive Style: the leader takes the decisions for the group without discussion and
consultation but he believes that people will be better motivated if they are persuaded that the
decisions are good ones. So the leader does a lot of explanations to overcome any possible resistance
and to persuade that the decisions are good.
The selling style would tend to fit situations in which the group leader alone possesses all the
information on which the decision must be based and which at the same time calls for a very high
level of commitment and enthusiasm on the part of group members if the task is to be carried through
successfully.
The leader presents his/her decision and invites subordinates to ask questions about the decision. Here
also the leader makes the decision without discussion and consultation with subordinates.
The leader presents tentative decision subject to change. The leader confers with the group members
after taking decisions and asks their feelings and their suggestion. If the subordinates‘ advices are
appropriate and can enhance the decision, the leader may change his tentative decision.
Consultative style: leader presents problem, gets suggestions, and makes decision. The leader confers
with the group members before taking decision and, in fact, considers their advice and their feelings
when framing decision. The leader may not always accept the subordinates‘ advice but they
(subordinates) are likely to feel that they can have some influence. Under this leadership style the
decision and the full responsibility for it remain with the leader.
The consulting style is likely to be most appropriate when there is time in which to reach a considered
decision and when the information on which the decision needs to be based lies among the members
of the group.
The leader defines the decision limits and asks groups to make decision within the limit.

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Democratic/Joining Style: leader permits subordinates to function within limits defined by leader.
The leader will allow the decision to emerge out of the process of group discussion, instead of
imposing it on the group as its boss. The leader‘s role is that of conference leader, or chair, rather than
that of decision taker.

C. SITUATIONAL LEADERSHIP MODEL


One of the most popular contingency theories is the situational leadership model, developed by Paul
Hersey and Ken Blanchard. The model suggests that effective leaders vary their style with the
maturity/readiness of followers. This model posits that the developmental levels of a leader‘s
subordinates play the greatest role in determine which leadership style is appropriate.

Employee readiness or maturity refers to the employee‘s or work team‘s ability and willingness to
accomplish a specific task and take responsibility for directing his/her/its own behavior. People tend to
have varying degrees of maturity, depending on the specific task, function, or objective that a leader is
attempting to accomplish through their efforts. Ability refers to the extent that the follower‘s has the
skills and knowledge to perform the task without the leader‘s guidance. Willingness refers to the
follower‘s self-motivation and commitments to perform the assigned task.

SLT says that if a follower is unable and unwilling to do a task, the leader needs to give clear and specific
directions (in other words, be highly directive).

If a follower is unable and willing, the leader needs to display high task orientation to compensate for the
follower‘s lack of ability, and high relationship orientation to get the follower to ―buy into‖ the leader‘s
desires (in other words, ―sell‖ the task).

If the follower is able and unwilling, the leader needs to adopt a supportive and participative style.

Finally, if the employee is both able and willing, the leader does not need to do much (in other words, a
laissez-faire approach will work)

For the most part, this model (situational leadership model) takes the two dimensional leadership styles
and the four quadrants, and develops four leadership stylesbased on amount of directive and supportive
behavior provided, which they call telling, selling, participating, and delegating. Hersey and Blanchard
went beyond the behavioral theory by developing a model that tells the leader which style to use in a
given situation.

Telling: telling has high task behavior and low support behavior. The leader provides clear
instructions and specific directions. This style is appropriate when followers‘ readiness/maturity
level is low.

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Selling: it has high task and high supportive behavior. Selling style is appropriate if the
employees‘readiness/maturity level is from moderate to low.
Participating: it has high supportive behavior and low task behavior. It is best matched with a
moderate to high employee readiness/maturity level.
Delegating:it has low task and supportive behavior. This style is best match with high employee
readiness level.

D. Least Preferred co-worker /LPC/ scale


Fiedler also created a Least Preferred co-worker /LPC/ scale: to determine the style of a leader.
LPC: is a questionnaire for a leader that is directed to determining the kind of co-worker a leader would
like to work together.
 “People/relationship/-oriented: - leader will drive some satisfaction out of interpersonal factors and
give more positive feedback.
 High scored
 “Task – oriented”:- Vise versa of the above.
 Low scored
E. Path-Goal Theory
Currently, one of the most respected approaches to leadership is path-goal theory.
Developed by University of Toronto professor Martin Evans in the late 1960s, it was later expanded on
by Robert House (formerly at the University of Toronto, but now at the Wharton School of Business at the
University of Pennsylvania).

Path-Goal Theory is a contingency model of leadership that extracts key elements from the Ohio State
leadership research on initiating structure and consideration and from the expectancy theory of
motivation.

The essence of the theory is that it is the leader‘s job to assist followers attain their goals and to provide
the necessary direction and/or support to ensure that their individual goals are compatible with the overall
goals of the group or organization. The term path-goal derives from the belief that effective leaders both
clarify the path to help their followers achieve their work goals and make the journey along the path
easier by reducing roadblocks and pitfalls.

According to this theory, leaders ―should follow‖ three guidelines to be effective:


 Determine the outcomes subordinates want. These might include good pay, job security, interesting
work, and the autonomy to do one’s job.
 Reward individuals with their desired outcomes when they perform well.

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 Let individuals know what they need to do to receive rewards (that is, the path to the goal), remove
any barriers that would prevent high performance, and express confidence that individuals have the
ability to perform well.
Path-goal theory identifies four leadership behaviours that might be used in different situations to
motivate individuals:
 The directive leader lets followers know what is expected of them, schedules work to be done, and
gives specific guidance as to how to accomplish tasks.
Directive leadership is similar to the ―initiating structure‖ concept described in the Ohio State studies
(Halpin & Winer, 1957) and the ―telling‖ style described in Situational Leadership. It characterizes a
leader who gives followers instructions about their task, including what is expected of them, how it is
to be done, and the timeline for when it should be completed. A directive leader sets clear standards of
performance and makes the rules and regulations clear to followers.
 The supportive leader is friendly and shows concern for the needs of followers.
This behavior is often recommended when individuals are under stress or otherwise show that they need
to be supported.
Supportive leadership resembles the consideration behavior construct that was identified by the Ohio
State studies. Supportive leadership consists of being friendly and approachable as a leader and
includes attending to the well-being and human needs of followers. Leaders using supportive
behaviors go out of their way to make work pleasant for followers. In addition, supportive leaders
treat followers as equals and give them respect for their status.
 The participative leader consults with followers and uses their suggestions before making a
decision.
Participative leadership consists of inviting followers to share in the decision making. A participative
leader consults with followers, obtains their ideas and opinions, and integrates their suggestions into
the decisions about how the group or organization will proceed.
 The achievement-oriented leader sets challenging goals and expects followers to perform at their
highest level.
Achievement-oriented leadership is characterized by a leader who challenges followers to perform
work at the highest level possible. This leader establishes a high standard of excellence for followers
and seeks continuous improvement. In addition to expecting a lot from followers, achievement-
oriented leaders show a high degree of confidence that followers are capable of establishing and
accomplishing challenging goals.

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2.2 CONTEMPORARY THEORY OF LEADERSHIP (TRANSFORMATIONAL,
TRANSACTIONAL AND SERVANT PERSPECTIVE OF LEADERSHIP)

2.2.1 Transformational Leadership

Transformational leadership is a contemporary view of leadership. Transformational leadership is a


leadership perspective that explains how leaders change teams or organizations by creating,
communicating, and modeling a vision for the organization or work unit, and inspiring employees to
strive for that vision. Transformational leader can make subordinates aware of the importance of their
jobs and performance to the organization and aware of their needs for personal growth and that motivates
subordinates to work for the good of the organization.

The focus of transformational leadership is on top-level managers, primarily chief executive officers of
large organizations. Transformational leadership is about change, innovation, and entrepreneurship.
Transformational leaders are agents of change. They develop a vision for the organization or work unit,
inspire and collectively bond employees to that vision, give them a ―can do‖ attitude that makes the vision
achievable.

Some of the characteristics, or traits, of transformational leaders are the following:

- They see themselves as change agents;


- They are encourageous individuals who take risks;
- They believe in people and motivate them;
- They are value-driven;
- They have the ability to deal with complexity, ambiguity, and uncertainty; and
- They are visionaries. These traits are evident during leader-member exchange.
Transformational leaders perform, or take the organization through, three acts, on an ongoing basis.

Act1: Recognizing the Need for Revitalization

The transformational leader recognizes the need to change the organization in order to keep up with the
rapid changes in the environment and to keep ahead of the global competition, which is becoming more
competitive all the time. So transformational leaders are change agents.

Act 2: Creating a New Vision

The transformational leader visualizes the changed organization and motivates people to make it
become a reality. They are visionary leaders. Visions are the most important part of the transformational
leader.

Transformational leaders shape a strategic vision of a realistic and attractive future that bonds employees
together and focuses their energy toward a super-ordinate organizational goal. Strategic vision reflects a

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future for the company or work unit that is ultimately accepted and valued by organizational members. A
vision might originate with the leader, but it is just as likely to emerge from employee, clients, suppliers,
or other constituents. It typically begins as an abstract idea that becomes progressively clearer through
critical events and discussions with staff about strategic and operational plans. Visions are typically
described in a way that distinguishes them from the current situation, yet makes the goal both appealing
and achievable.

Act 3: Institutionalizing the Change

The transformational leader guides people as they make the vision become a reality. To realize the vision
the transformational leader will do the following:

a) Communicating the Vision: transformational leader communicate meaning and elevate the
importance of the visionary goal to employees. Transformational leaders makes subordinates
aware of how important their jobs are for the organization and how necessary it is for them to
perform those jobs as best they can so that the organization can attain its vision and goals.
b) Modeling the Vision: transformational leaders not only talk about the vision; they enact it. They
―walk the talk‖ by stepping outside the executive suite and going things that symbolize the vision.
To succeed as a leader, you need to act consistently with your statements. If you don‘t walk the
talk, you lose your credibility. The greater the consistency between the leader‘s words and actions,
the more employees will believe and follow the leader. Walking the talk also builds employee
trust because trust is partly determined by the consistency of the person‘s actions.
c) Building Commitment to the Vision: transforming a vision into a reality requires employee
commitment. Transformational leaders motivate their subordinates to work for the good of the
organization as a whole. Their words, symbols, and stories build a contagious enthusiasm that
energizes people to adopt the vision as their own. Leaders demonstrate a ―can do‖ attitude by
enacting their vision and staying on course. Their persistence and consistency reflect an image of
honesty, trust, and integrity. Transformational leaders build commitment by involving employees
in the process of shaping the organizations vision.
Transformational leaders also aware their subordinate by telling them growth of the organization
is growth of employees. Transformational leaders make their subordinates aware of their own
need for personal growth, development and accomplishment. Employees make aware of their own
need through numerous workshops and training sessions, empowerment of employees throughout
the company, the development of fast-track career programs, and increase reliance on self-
managed work teams.

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2.2.5.2 Transactional Leadership

Transactional leadership has been contrasted with transformational leadership. The transactional
leadership is based on the principle of ―you do this work for me and I will give this reward to you.‖
Transactional leadership focuses more on middle and first-line managers who help the transformational
leader take their unit through the three acts.

Transactional leader motivates subordinates by rewarding them for high performance and reprimand or
punish low performers. Such mangers use reward and coercive powers to encourage high performance.
They link job performance with valued rewards. Transactional leadership can improve organizational
efficiency.

Features Transactional leadership


 Contingent rewards: Contracts exchange of rewards for effort, promises rewards for good
performance, recognizes accomplishments.
 Management by exception (active): Watches and searches for deviations from rules and standards,
takes corrective action.
 Management by exception (passive): Intervenes only if standards are not met.
 Laissez-faire: Abdicates responsibilities, avoids making decisions.
2.2.5.3 Servant Leadership

Servant leadership emphasizes the leader‘s duty to serve his/her follower. Leadership thus arises out of a
desire to serve rather than a desire to lead. It begins with the natural feeling that one wants to serve first.

The concept of ―servant leadership‖ requires us to encourage others toward a life and career of service
and to assume the position of being the ―servant of the servants.‖

Servant leadership is a very social leadership style. It places the needs of others in high regard. Servant
leaders address the responsibilities and relationships in society, organizations, and companies.

Robert Greenleaf, founder of the Center for Servant Leadership describes it as follows:

―The servant-leader is servant first… It begins with the natural feeling that one wants to serve, to serve
first. Then conscious choice brings one to aspire to lead. He or she is sharply different from the person
who is leader first, perhaps because of the need to assuage an unusual power drive or to acquire material
possessions. For such it will be a later choice to serve – after leadership is established. The leader-first
and the servant-first are two extreme types. Between them there are shadings and blends that are part of
the infinite variety of human nature.

The difference manifest itself in the care taken by the servant-first to make sure that other people‘s
highest priority needs are being served. The best test, and difficult to administer, is: do those served grow
as persons; do they, while being served, become healthier, wiser, freer, more autonomous, more likely
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themselves to become servants? And, what is the effect on the least privileged in society; will they
benefit, or, at least, will they not be further deprived?‖

Characteristics of Servant Leaders are as follows:

―Servant-Leadership is a practical philosophy which supports people who choose to serve first, and then
lead as a way of expanding service to individuals and institutions. Servant-leaders may or may not hold
formal leadership positions. Servant-leadership encourages collaboration, trust, foresight, listening, and
the ethical use of power and empowerment.‖

The emphasis on serving a higher purpose has made this model popular within the religious institutions.

 Listening- they need to listen intently to others.

 Empathy- people need to be accepted & recognized for their special & unique spirits.

 Healing- learning to heal is a powerful force for transformation & integration.

 Foresight- the ability to foresee the likely outcome of a situation.

 Stewardship- assumes first and foremost a commitment to serving the needs of others

 Commitment to the growth of people- servant leaders believe that people have an intrinsic
value beyond their tangible contributions as workers

 Building community- the servant leader focuses on building a community with their team by
demonstrating their own unlimited liability

2.3 Leadership Skills and Competencies


Katz identified three skills; technical, human, and conceptual as the basic personal skills essential for
leadership. Technical skills related to the field, human skills related to communicating with people and
conceptual skills related to setting vision.
Leaders use three types of skills-technical, human and conceptual.
 Technical Skill. It refers to a person‘s knowledge and ability in any type of process or technique.
 As defined by Katz in 1955, ‗Technical skill is knowledge about and proficiency in a specific type of
work or activity. It includes competencies in a specialized area, analytical ability, and the ability to use
appropriate tools and techniques‘. Technical skills play an essential role in producing the actual
products a company is designed to produce. Having appropriate technical skills signify that the person
is competent and knowledgeable with respect to the activities specific to an organization, the
organization‘s rules and standard operating procedures, and the organization‘s products and services.
Examples of Technical Skills: For a Software Company the following skills or knowledge areas can
be considered as technical skills; Knowledge of Unix/Linux Operating System, Java/C++/Perl

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Programming Language, MySQL/Oracle Database Management, XML - Extensible Markup
Language, HTML Skills etc. In an accounting firm, technical skill might include understanding of
generally accepted accounting principles, accounting principles, knowledge of commercial laws,
knowledge of tax laws etc.
Attributes of Technical Skills:
Technical Skills
ill is proficiency, based on specific knowledge, in a

 Human Skill. It is the ability to work effectively with people and to build teamwork.
No leader can escape from human skill.
It is the major part of the leadership behaviour.
Human skills are people skills which enable the leader to work effectively with subordinates, peers,
and superiors. It is the leader's expertise in interacting with others in a way that will enhance the
successful completion of the task at hand. Consequently, leaders with higher levels of interpersonal
skills are better able to adapt their own ideas to other people‘s ideas, especially when this will aid
in achieving organizational goals more quickly and efficiently. These leaders are more sensitive
and empathetic to what motivates others, create an atmosphere of trust for their followers, and take
others‘ needs and motivations into account when deciding what to do to achieve organizational

perspective on issues as well as the openness to hear and appreciate inputs of others on their

Create an atmosphere of trust where employees/followers can feel comfortable and empowered to
all the three levels of management – Lower,
Middle and Senior Examples of Human Skills: Some human skills that are generally considered
important are effective communication (both verbal and written), motivating others and creation of
a positive attitude, development of cooperation and team spirit etc.
 Conceptual Skill.
It is the ability of the leader to coordinate all organizational activities.
It is very important for leader in formulating long-range plans, broad policies and relating the business
enterprise to the industry and economy.
As a leader grows higher in organizational ladder, the expectations from him are to provide strategic
direction, create the vision and motivate the folks to dedicatedly pursue the organizational goals.
These are Conceptual skills that allow the leader to think through and work with ideas. Leaders with
higher levels of conceptual skills are good at thinking through the ideas that form an organization and

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levels of conceptual leadership skills became necessary
Examples of Conceptual Skills: Some conceptual skills that are generally considered important are
creativity, decision making, wing to wing interconnectedness, thinking as a whole, strategic thinking,
problem solving etc.

Leadership Competencies
From a foundation of Values and Ethics, leaders deliver results through strategic thinking, engagement,
and management excellence.

Yukul identified four common areas of competence shared by all leaders.


Management of Attention – The ability to communicate a sense of outcome, goal, or direction that
attracts followers.
Management of Meaning – The ability to create and communicate meaning with clarity and
understanding.
Management of Trust – The ability to be reliable and consistent so people can count on them.
Management of Self – The ability to know one‘s self and to use one‘s skills within limits of strengths and
weaknesses.

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2.4 Good versus Bad Leaders
 After leaving a meeting with a bad leader, you feel exhausted and de-motivated. After leaving a
meeting with a good leader, you feel rejuvenated, motivated, and even inspired.
 Bad leaders set appointments and are late for them or don't show up at all; good leaders are early,
greet you, and respect your time.
 Bad leaders talk down to you; good leaders talk you up.
 Bad leaders put themselves and their emotions above the team; good leaders put themselves last and
the mission and the team first.
 Bad leaders almost never utilize this expression "you have two ears and one mouth listen twice as
much as you speak." Good leaders not only use that expression but live by it.
 Bad leaders think they are the team; good leaders know they are a part of a team.
 Bad leaders develop themselves; good leaders develop other good leaders.

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CHAPTER THREE

CHANGE MANAGEMENT

3.1 MEANING AND IMPLICATION

What is change? What is organizational change? Change means making things different. When an
organization makes things in it different, an organization change is occurred. Thus, Organizational
change is the movement of an organization away from its present state and toward some desired future
state to increase its efficiency and effectiveness. Organizational change is the alteration of an
organization‘s structure, culture, technology, or people.

Organizational success depends on the organization‘s adaptations to environmental changes. Some


organizations cannot change or adopt in response to a changing environment while others can change in
any way that make them more effective.

3.2 FORCES FOR ORGANIZATIONAL CHANGE

Many internal and external changes attack the modern organizations and make change inevitable. Today
organizations are operating in the ever changing environment.

Organizations and their managers need to be able to control their activities and make their operations
routine and predictable. At the same time, however, organizations have to be responsive to the need to
change. A modern manager is change conscious and operates in the constantly changing environment.

In general there are two main forces drive organizations toward change: internal and external forces.

3.2.1 External Forces for Organizational Change

A. Customer demand: customers are more sophisticated and demanding; knowledgeable about their own
needs; customers often change over time. Customers are exerting ever greater pressure on their supplier.
They will no longer accept poor service or low quality.

To be competitive, organizations have to respond more rapidly to customer‘s needs.

Since the early 1980s, in the United States and other developed countries, the dominant force in the seller-
customer relationship has shifted. Sellers no longer have the upper hand; customers do. Customers now
tell suppliers what they want, when they want it, how they want it, and what they will pay. This new
situation is unsetting to companies that have known life only in the mass market.

B. Intense Competition: competition is intensifying, and becoming more global. More organizations are
compelled to attain the standards of quality and cost achieved by the pacemakers in the industry. The
company that could get to market with an acceptable product or service at the best price would get a sale.

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Large companies faced competition from both large and small companies. Small companies are
competing large companies by serving niche market better than larger firms. Today companies are also
working not only to satisfy customers but also to delight them.

C. Technology: Technology changes have increased the rate of speed at which change takes place.
Technology is a commonly used method of increasing productivity to gain competitive leverage. The rate
of technological change is greater today than any time in the past and technological changes are
responsible for changing the nature of jobs performed at all levels in the organization.

D. Reduction of Government Regulations: governments are reducing interference in the market place
and regulating business activities. Government barriers have fallen dramatically in the last years to
further facilitate the globalization of markets and the activities of companies within them. Deregulation,
reduction of trade barriers, privatization, free market economy, economic integration, and other related
issues are the result of reduction of government regulations; and all these factors leads organizations
toward change.

E. Social Change: related to diversity of work force within the organization, cultural changes, education
level, etc.

3.2.2 Internal Forces

a) Changes in the managerial personnel: these changes include the retirement of the old managers,
transfer and promotion of mangers and placement of old and static managers by a more versatile,
dynamic and young lots. Changes also include increasing training of the existing personnel so as to make
them fit to function in their perspective places effectively. With change each manager generally brings
his/her own ideas and the way of working in the organization. So, a change in the managerial personnel
is, thus, a constant pressure for change.

b) Certain deficiencies in the existing system: such as;

Unmanageable span of control;


Lack of coordination between the departments;
Obstacles in communication;
Lack of uniformity in the policies (as you know policies are guidelines for decision making);
Non cooperation between line and staff member, etc.

d) Certain other forces: like changes in machinery, equipment, methods, and procedures, working
standard, changes in authority and responsibility.

3.2.3 The Domino Effect

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Another main source of changes is the change itself. Change has become pervasive and persistent. The
pace of change is extremely fast, that is, what was unthinkable yesterday is routine today. It may emanate
from internal or external sources.

Most of the managers fail to consider the potential domino effects. Such an oversight might lead to the
problems of coordination and control. Before any significant change is made, the possible consequences
of that change must be evaluated and examined to see whether undesirable chain reactions occur.

3.3 PROCESS OF ORGANIZATIONAL CHANGE

To improve efficiency and effectiveness it is vital that mangers develop the skills necessary to manage
change effectively. Most people go from side to side four distinct stages in the change process.

1st Assessing the Need for Change

Change can affect organizational structure, culture, strategies, controlling system, and way of managing.
So, organizations should assess the need for change properly.

Assessing the need for change calls for two important activities:

- Recognize that there are problems that require change. The real problem/s, not the symptom.
- Identify the sources of the problem/s.
2nd Decide On the Change to Make

Decide what the organization‘s ideal future would be. Decide where they would like their
organization to be in the future: decide what kinds of goods and services it should making, what its
business-level strategy should be, how structure should be change and develop strategy.
What can change agents change? Change agents can change the options essentially fall into four
categories: structure, technology, physical setting, and people.
Plan how to attain organization‘s ideal future state.
Identifying sources of resistance for change and how to overcome them.
3rd Implementing the Change

Under this stem the managers introduce and manage the change. The manager should decide whether
change will occur from the top down or from the bottom up.

 Top down change: when the change is required to implement quickly top-down approach is
appropriate. It is revolutionary in nature. The top manger will identify the need for change, decide
what to do, and then move quickly to implement the changes throughout the organization. Usually
mangers use this approach for restructuring and downsizing the organization.

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 Bottom up change: it is more gradual and evolutionary. Top managers consult with middle and
first-line managers about the need for change. Then, over time, managers at all levels work to
develop a detailed plan for change. Such approach is important to overcome resistance.
4th Evaluating the Change

Evaluate how successful the change effort has been in improving organizational performance. Managers
can evaluate change effect using measures such as improvements in market share and profits, in the
ability of managers to meet their goal. We can also use benchmarking-the process of comparing one
company‘s performance on specific dimensions with the high performing organizations.

 One strategy of change is through the adoption of a system approach.

Unfreezing
In Lewin‘s model, unfreezing is the managerial responsibility of preparing a situation for change.
Many changes are never tried or they fail simply because situations are not properly unfrozen to begin
with.
Large systems seem particularly susceptible to what is sometimes called the boiled frog phenomenon.
This refers to the notion that a live frog will immediately jump out when placed in a pan of hot water.

When placed in cold water that is then heated very slowly, however, the frog will stay in the water until
the water boils the frog to death.
Organizations, too, can fall victim to similar circumstances. When managers fail to monitor their
environments, recognize the important trends, or sense the need to change, their organizations may slowly
suffer and lose their competitive edge.
In contrast, the best organizations are led by people who are always on the alert and understand the
importance of “unfreezing” in the change process.
Changing
The changing stage involves taking action to modify a situation by changing things, such as the people,
tasks, structure, or technology of the organization.
Refreezing
The final stage in the planned change process is refreezing.

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It involves evaluating progress and results, and assessing the costs and benefits of the change. And it
allows for modifications to be made in the change to increase its success over time.

3.4 RESISTANCE TO CHANGE

Resistance to change in organizations means employee behavior that block the change process. Change,
no matter how beneficial, is generally resisted and is always difficult to implement. Basically people
resist change for several reasons, and your task as a manager is to try to identify those reasons and
manage them appropriately, to reduce or eliminate the negative effects and to correct misperceptions.

In every change effort there is resistance to change. In spite of the change good ideas, many people will
see them in a different light. They believe that the change is not in their own best interest or the
company‘s. They then act on the belief, doing whatever they can to stop the change from happening. At
the last, they try to make the change as minimal as possible.

Before making changes, mangers should anticipate how employees will react to or resist change.
Resistance to change involves the variables of intensity, source, and focus, and explains why people
resist change. Ken Hultman identifies these three variables as the major variables of resistance to change.

A. Intensity: resistance to change doesn‘t necessary surface in standard ways. Resistance intensity can
be varying from strong to week or somewhere in between. Resistance can be overt, implicit,
immediate, or deferred.
It is easier for management to deal with resistance when it is overt and immediate. For instance, a
change is proposed and employees quickly respond by voicing complaints, engaging a work
slowdown, threatening to go on strike, or the like. The greater challenge is managing resistance that
is implicit or deferred. Implicit resistance efforts are more subtle- loss of loyalty to the organization,
loss of motivation to work, increased errors or mistakes, increased absenteeism due to ―sickness‖ –
and hence more difficult to recognize.
Managers should anticipate the intensity of resistance to change and effectively paln to overcome it.
B. Sources: there are three major sources of resistance: facts, beliefs, and values.
Facts: the facts (statements that identify reality) of change are often circulated through the
grapevine inaccurately. People tend to use facts selectively (i.e. the problem of selective
perception) to prove their point. Facts used correctly help overcome fear of the unknown.
Beliefs: facts can be proved; beliefs cannot. They are subjective. Our beliefs are our opinions that
lead us to think and feel that a change is correct or incorrect, good or bad.
Values: values are what people believe are worth pursuing or doing. Values are accepted
principles. What we value are important us. Values are priorities. Our values meet our needs and
affect our behavior.

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People analyze the facts presented from all sources and determine if they believe the change is of
value to them. When the facts are clear and logical and people believe the change is of value to them,
they tend to have lower resistance to the change.

C. Focus: there are three major focuses of resistance: self, others, and the work environment.
Self: it is natural for people to want to know, ―what‘s in it for me? What will I gain or loss?‖
when the fact of change have a negative effect on an employee‘s economic well-being, such as
lower pay or longer hours without additional compensation, employees tend to resist the
change.
Other: after considering what is in it for them, or when they are not affected by the change,
people tend to consider how the change will affect their friends, peers (peer pressure), and
colleagues. If employees analyze the facts and believe the change will affect others negatively,
they may be resisting the change.
Work environment: the work environment includes the job itself and the physical setting and
the climate. People like to be in control of their environment, and they resist changes that take
away their control. Employees‘ analysis of the facts about the current versus the changed work
environment will affect their resistance to the change.
For analytical purposes, we have categorized them as individual and organizational sources.

Individual Resistance
Individual sources of resistance to change reside in basic human characteristics such as
perceptions, personalities, and needs.
 Habit. To cope with life‘s complexities, we rely on habits or programmed responses. But when
confronted with change, this tendency to respond in our accustomed ways becomes a source of
resistance.
 Security. People with a high need for security are likely to resist change because it threatens
their feelings of safety.
 Economic factors. Changes in job tasks or established work routines can arouse economic fears
if people are concerned that they will not be able to perform the new tasks or routines to their
previous standards, especially when pay is closely tied to productivity.
 Fear of the unknown. Change substitute‘s ambiguity and uncertainty for the known.
This is also referred to as the ―status quo bias,‖ in which individuals assume that their current
state is better than whatever the changed state might be.
 Selective information processing. Individuals are guilty of selectively processing information in
order to keep their perceptions intact. They hear what they want to hear, and they ignore
information that challenges the world they have created.

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Cynicism
In addition to simple resistance to change, employees often feel cynical about the change process,
particularly if they have been through several rounds of change, and nothing appears (to them) to
have changed. Three researchers from Ohio State University identified sources of cynicism in the
change process of a large unionized manufacturing plant. The major elements contributing to the
cynicism were as follows:
 Feeling uninformed about what was happening
 Lack of communication and respect from one‘s manager
 Lack of communication and respect from one‘s union representative
 Lack of opportunity for meaningful participation in decision making
The researchers also found that employees with negative personalities were more likely to be
cynical about change. While organizations might not be able to change an individual‘s
personality, they certainly have the ability to provide greater communication and respect, as well
as opportunities to take part in decision making. The researchers found that cynicism about
change led to such outcomes as lower commitment, less satisfaction, and reduced motivation to
work hard.

Organizational Resistance
Organizations, by their very nature, are conservative. They actively resist change. You do not
have to look far to see evidence of this phenomenon. Government agencies want to continue
doing what they have been doing for years, whether the need for their service changes or remains
the same. Organized religions are deeply entrenched in their history.

Attempts to change church doctrine require great persistence and patience. Educational
institutions, which exist to open minds and challenge established ways of thinking, are
themselves extremely resistant to change. Six major sources of organizational resistance to
change have been identified.
 Structural inertia. Organizations have built-in mechanisms—such as their selection
processes and formal regulations—to produce stability. When an organization is confronted
with change, this structural inertia acts as a counterbalance to sustain stability.

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 Limited focus of change. Organizations are made up of a number of interdependent
subsystems. One cannot be changed without affecting the others. So limited changes in
subsystems tend to be nullified by the larger system.
 Group inertia. Even if individuals want to change their behaviour, group norms may act as a
constraint.
 Threat to expertise. Changes in organizational patterns may threaten the expertise of
specialized groups.
 Threat to established power relationships. Any redistribution of decision-making authority
can threaten long-established power relationships within the organization.
 Threat to established resource allocations. Groups in the organization that control sizable
resources often see change as a threat. They tend to be content with the way things are.

Generally people resist change for a variety of reasons, some of which include:

Maintain the status quo: people like things the way they are now, view the change as an
inconvenience, or don‘t agree that a change is needed,
Uncertainty: people tend to fear the unknown and wonder how the change will affect them,
Learning anxiety: the prospect of learning something new itself produces anxiety, and
Fear: people often fear they may lose their jobs, the friends they work with may change, that they
will not be successful with learning new ways, or that they may lose control over how they do
their jobs.

3.5 MANAGING RESISTANCE TO CHANGE

The major methods managers can use to overcome resistance to change are the following:

Education/Communication: if the employees do not have adequate information or if the


information they have is inaccurate, then it is necessary to educate them about the change, its
process, its working and its results. Communication is the highest priority and first strategy
required for any organizational change. It reduces the restraining forces by keeping employees
informed about what to expect from the change effort.
Communication improves the change process in at least two ways. First, it is the conduit through
which employees typically learn about the driving forces for change. Second, communication
clarifies an otherwise uncertain future. The more corporate leaders communicate their images of
the future, the more easily employees can visualize their own role in that future.
Develop a positive climate for change: develop and maintain good human relations. Because
change and trust are so closely intertwined, the manger‘s first concern should be to develop
mutual trust.
Encourage interest in improvement: continually give employees opportunities to develop new
skills, abilities, and creativity. Constantly look for better ways to do things. Encouraging

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employees to suggest changes and listening to and implementing their ideas are important part of
continuous improvement.
Give facts: get all facts and plan how you will presents them to employees. Clearly state why
change is needed and how it will affect employees positively and negatively.
Involve employees: employees who participate in developing changes are more committed to
them than employees who have changes assigned to them.
Provide support: allow employees to express their feelings in a positive way. Since training is
very important to successful changes, give as much advance notice and training as possible before
the change takes place. Giving thorough training helps reduce learning anxiety and helps
employees realize they can be successful with the change.
Avoid direct confrontation: confrontation tends to make people emotional and more resistant to
change. A subtle approach is preferable to most people.
Negotiation and agreement: buying out active and potential resisters. Negotiation is a form of
exchange, in which the promise of benefits or resources is exchanged for the target person‘s
compliance with influencer‘s request.
Use power: if other strategies are ineffective, leaders rely on forcing people to accept the change.
Participation and involvement
It is difficult for individuals to resist a change decision in which they have participated.
Before making a change, those opposed can be brought into the decision process.
Their involvement can reduce resistance, obtain commitment, and increase the quality of the change
decision.
Facilitation and support
Organizations undergoing change can offer a range of supportive efforts to reduce resistance such as
employee counselling and therapy, new-skills training, or a short paid leave of absence.
• Negotiation and agreement
Exchange something of value for less resistance.
For instance, if the resistance is centred in a few powerful individuals, a specific reward package can be
negotiated that will meet their individual needs.
• Manipulation and co-optation
Manipulation refers to covert influence attempts. Twisting and distorting facts to make them appear more
attractive, withholding undesirable information, and creating false rumours to get employees to accept a
change are all examples of manipulation.
Co-optation is a form of both manipulation and participation.
It seeks to ―buy off‖ the leaders of a resistance group by giving them a key role in the change decision.
Explicit and implicit coercion
Coercion is the application of direct threats or force upon the resisters.

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If the corporate management is determined to close a manufacturing plant should employees not
acquiesce to a pay cut, then coercion would be the label attached to its change tactic.
Other examples of coercion are threats of transfer, loss of promotions, negative performance
evaluations, and poor letters of recommendation.

3.6 PLANNED ORGANIZATIONAL CHANGE

Planned organizational change is the intentional attempt by an organization to alter its status quo (present
position) and move to the desired one. Planned change is an essential element to growth. Planned
changes are made by the organization with the purpose of achieving something that might otherwise be
unattainable, or accomplishable with great difficulty. Through planned changes organizations reach new
frontiers and progress move rapidly toward given set of goals and objectives. Through planned change,
organizations can decide in advance why change is necessary, for what purpose, what to change and how
to achieve the desired change.

3.6.1 Approaches to Manage Planned Organizational Change

There are several popular approaches to managing change. This section introduces five of the leading
approaches to organizational change: Lewin‘s three step model, action research, appreciate inquiry,
parallel learning structures, and lessiers change model.

A. Lewin’s Three Step Change Model


In the early 1950s, Kurt Lewin developed technique, still used today, for changing people‘s behavior,
skilled and attitudes. Lewin argued that successful change in an organization should follow three steps:
unfreezing the status quo, moving to the desired condition, and then refreezing the new change to make it
remains in the desired state.

i) Unfreezing: the focus of this stage is to create the motivation to change. It refers to making
individuals aware individuals (employees) the present behavior is inappropriate, irrelevant and
inadequate. Unfreezing introducing information that shows discrepancies between desired
performance and actual performance. Unfreezing is the first part of the change process
whereby the change agent produces disequilibrium between the driving and restraining forces.
This may occur by increasing the driving forces, reducing restraining forces, or having a
combination of both.
Driving forces push organizations toward a new state of affairs. One side of the Lewin‘s model
represents the driving forces as shown on graph below. Section 3.2 of this handout described some
of the driving forces in the external and internal environment. Restraining forces maintain the
status quo. These restraining forces are commonly called ―resistance to change‖ because they
appear as employee behavior that block the change process.

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ii) Changing: it is the second phase where new learning occurs. Because changes involve
learning, this stage entails providing employees with new information, new behavior model, or
new way of looking at things. This stage shifts the employees‘ behavior to a new level.
Employees learn the new desirable behavior, values, and attitudes.
Structural, task, technological, and people change may take place to reach desirable performance
level.
iii) Refreezing: it occurs when the organization‘s systems and structure are aligned with the
desired behavior. Refreezing enables to remain in the desirable state. The desirable
performance becomes the permanent way of doing things. This is the new status quo.
Refreezing often takes place through reinforcement and support for the new behavior or role.
During this phase individuals internalize the new beliefs, feelings and behavior learned in the
changing phase. That is to say, refreezing focuses on reinforcing the new behaviors usually be
positive result, feeling of accomplishment and/or rewards from others. Supports involve
training the new methods and behaviors until they are learned and then making sure that new
work procedure become permanent.
Action Research Approach

Action research refers to a change process based on systematic collection of data and then selection of a
change action based on what the analyzed data indicates. Action research takes the view that meaningful
change is a combination of action oriented (changing attitude and behavior) and research oriented (testing
theory). Action research approach involves the following processes.

Diagnose need Introduce Evaluate and


for change intervention establish
Establish change Disengage
consultant
consultant’s
and client Determine
relationship Gather data, Implement desired service
effectiveness of
analyze data, and incremental and
change and
decide intervention quantum change
refreeze new
objectives
conditions

Figure 3.4: the action research process

Establish Client-Consultant Relationship: action research usually assumes that change agent
originates outside the system (such as a consultant), so the process begins by forming the client-
consultant relationship. Consultants need to determine the client‘s readiness for change, including
whether people are motivated to participate in the process, are open to meaningful change, and
possess the ability to complete the process. Many change management consultants prefer to adopt
the role of process consultant rather than that of technical expert. Process consultation is a method
of helping them within the system solve their own problems by making them aware of

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organizational process, the consequences of those processes, and the means by which they can be
changed.
Diagnose The Need For Change: action research is a problem-oriented activity that carefully
diagnoses the problem through systematic analysis of the situation. The consultant will gather and
analyze the information about the current system problem though interview, survey of employees,
review records, and soon. The consultant then decides the intervention objectives and actions.
Introduce intervention: this stage in the action research model applies one or more actions to
correct the problem.
Evaluate and stabilize change: this stage need to evaluate the effectiveness of intervention action
against the standard established in the stage. If intervention actions have desired effect, then the
change agent and participants need to stabilize the new conditions. This refers to the refreezing
process.
Action Research refers to a change process based on the systematic collection of data and then selection
of a change action based on what the analyzed data indicate. The importance of this approach is that it
provides a scientific method for managing planned change.
1. Diagnosis. The change agent gathers information about problems, concerns, and needed changes
from members of the organization by asking questions, reviewing records, and listening to the
concerns of employees.
2. Analysis. The change agent organizes the information gathered into primary concerns, problem
areas, and possible actions.
3. Feedback. The change agent shares with employees what has been found during diagnosis and
analysis.
4. The employees, with the help of the change agent, develop action plans for bringing about any
needed change.
5. Action. The employees and the change agent carry out the specific actions to correct the problems
that have been identified.
6. Evaluation. The change agent evaluates the action plan‘s effectiveness, using the data gathered
initially as a benchmark.
B. Lussier’s Change Model
This model consists of five steps:

Step1: Define Change: clearly state what the change is. Decide what to change-is it a task, structure,
technological, or people change? Set the change objectives.

Step 2: Identify Possible Resistance to the Change: determine the intensity, source, and focus of
possible resistance to the change.

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Step 3: Plan The Change: plan the change implementation. Use the appropriate supervisory style for the
situation.

Step 4: Implement Change: This Step Has Three Parts:

- Give facts: give the facts about the change and explain why it is necessary as far in advance of the
change as possible. Explain how the change will affect the employees. Relate the change to their
values.
- Involve employees: use as much employee involvement as you can. But use the appropriate
supervisory style for the situation.
- Provide support: allow employees to express their thoughts and feelings in a positive way.
Answer their questions openly and honestly. Make sure that they receive proper training in how to
implement the changed method.
Step 5: Control The Change: follow up to ensure that the change is implemented, reinforced, and
maintained. Make sure the objective is met. If not, take corrective action. For major changes, be sure to
change performance appraisals to reflect new jobs accurately.

C. Appreciate Inquiry Approach


Appreciate inquiry tries to break out of the problem-solving mentally by framing relationships around the
positive and the possible. It is an organizational change process that directs attention away from the
group‘s own problem and focuses participants on the group‘s potential and positive elements.

Discovery Dreaming Designing Delivering


Identifying the Envisioning Engaging in Dev eloping
best of “what “what might dialogue about objectives
is” be” “what should about “what
be” will be”

Figure 3.5: the appreciative inquiry process

Discovery: identifying the positive elements of the observed events or organization. This might
involve documenting positive customer experiences elsewhere in the organization. Or it might
include interviewing members of another organization to discover its fundamental strengths. As
participants discuss their findings, they shift into the dreaming stage.
Dreaming: participants envision what might be possible in an ideal organization. By directing
their attention to a theoretically ideal organization or situation, participants feel safer revealing
their hopes and aspirations than if they were discussing their own organization or predicament.

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Designing: as participations make their private thoughts public to the group, the process shifts into
the third stage, called designing. Designing involves the process of dialogue , in which
participants listen with selfless receptivity to each other‘s model and assumptions and eventually
form a collective model for thinking within the team. In effect, they create a common image of
what should be. As this model takes shape, group members shift the focus back to their own
situation.
Delivering: participants establish specific objectives and direction for their own organization
based on their model of what will be.
D. Parallel learning structure approach
Parallel learning structures are highly participative arrangements, composed of people from most levels of
the organization who follow the action research model to produce meaningful organizational change.
They are social structures developed alongside the formal hierarchy with the purpose of increasing the
organization‘s learning. Ideally, parallel learning structure participants are sufficiently free from the
constraints of the larger organization so that they can more effectively solve organizational issues.

3.7 STRATEGIES FOR PLANNED ORGANIZATIONAL CHANGE

The general strategies in managing of organizational change are:

1. Create a favorable environment: an environment of trust and shared commitment should be


created by involving staff in decisions and actions, which affect them. Team management, a
cooperative spirit among staff and workers, and a genuine feeling of shared involvement will
create a greater willingness to accept change. a participative style of management and
management y objectives (MBO) are useful approaches.
2. Define a set of goals: they provide a framework to measure the progress. It defines what the
organization wants to accomplish and provide employees with a sense of direction.
3. Establish what cannot be changed: identify the bedrocks that the employees can always depend
on as they work their way through the change process. The ―things that do not change‖ can be
viewed as parameters for the action area, giving individuals the freedom to act within those limits.
4. Create a change plan
5. Move decisively and with speed:
6. Communicate with employees
7. Employee motivation
8. Create favorable organization and methods

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CHAPTER FOUR

TYPES OF CHANGE

4.1. INTRODUCTION
We all approach change in different ways. That‘s partly because of our different personalities and it‘s
partly because of our individual histories. We see the world in different ways and also react to it in
different ways. The whole area of change management is one where these ideas have a particular
relevance and resonance.
If we conceptualize change in a particular way then perhaps we will try to manage it in a way that is
seemingly logical within our reality, whilst leaving no room for the idea that it‘s just our reality or
certainly just one way of looking at the world.
In this chapter we will look at different types of change about how organizations work and tools &
techniques of change.

Major Types of Organizational Change

Typically, the phrase ―organizational change‖ is about a significant change in the organization, such as
reorganization or adding a major new product or service. This is in contrast to smaller changes, such as
adopting a new computer procedure. Organizational change can seem like such a vague phenomena that it
is helpful if you can think of change in terms of various dimensions as described below.

4.2.1 Organization Wide Vs Subsystem Change

Examples of organization-wide change might be a major restructuring, collaboration or ―rightsizing.‖


Usually, organizations must undertake organization-wide change to evolve to a different level in their life
cycle, for example, going from a highly reactive, entrepreneurial organization to one that has a more
stable and planned development. Experts assert that successful organizational change requires a change in
culture – cultural change is another example of organization-wide change.
Examples of a change in a subsystem might include addition or removal of a product or service,
reorganization of a certain department, or implementation of a new process to deliver products or
services.

4.2.2 Transformational Vs Incremental Change

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An example of transformational (or radical, fundamental) change might be changing an organization‘s
structure and culture from the traditional top-down, hierarchical structure to a large amount of self-
directing teams. Another example might be Business Process Re-engineering, which tries to take apart (at
least on paper, at first) the major parts and processes of the organization and then put them back together
in a more optimal fashion. Transformational change is sometimes referred to as quantum change.
Examples of incremental change might include continuous improvement as a quality management process
or implementation of new computer system to increase efficiencies. Many times, organizations
experience incremental change and its leaders do not recognize the change as such.

4.2.3 Remedial Vs Developmental Change

Change can be intended to remedy current situations, for example, to improve the poor performance of a
product or the entire organization, reduce burnout in the workplace, help the organization to become
much more proactive and less reactive, or address large budget deficits. Remedial projects often seem
more focused and urgent because they are addressing a current, major problem. It is often easier to
determine the success of these projects because the problem is solved or not.
Change can also be developmental – to make a successful situation even more successful, for example,
expand the amount of customers served, or duplicate successful products or services.
Developmental projects can seem more general and vague than remedial, depending on how specific
goals are and how important it is for members of the organization to achieve those goals.
Some people might have different perceptions of what is a remedial change versus a developmental
change. They might see that if developmental changes are not made soon, there will be need for remedial
changes. Also, organizations may recognize current remedial issues and then establish a developmental
vision to address the issues. In those situations, projects are still remedial because they were conducted
primarily to address current issues

4.2.4 Unplanned Vs Planned Change

Unplanned change usually occurs because of a major, sudden surprise to the organization, which causes its
members to respond in a highly reactive and disorganized fashion. Unplanned change might occur when the Chief
Executive Officer suddenly leaves the organization, significant public relations problems occur, poor product
performance quickly results in loss of customers, or other disruptive situations arise. •/Eg. MoFED, Elino Famine
expense led to minimize other organizations additional budget./
Planned change occurs when leaders in the organization recognize the need for a major change and proactively
organize a plan to accomplish the change. Planned change occurs with successful implementation of a Strategic
Plan, plan for reorganization, or other implementation of a change of this magnitude. • /Eg. Implementation a plan
of Program budget in Ethiopia by MoFED/

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Note that planned change, even though based on a proactive and well-done plan, often does not occur in a highly
organized fashion. Instead, planned change tends to occur in more of a chaotic and disruptive fashion than expected
by participants.
Managers continually face choices about how best respond to the forces for change. There are several
types of change that managers can adopt to help their organizations achieve desired future states. In
general, types of change fall into two broad categories: evolutionary change and revolutionary change.

4.2.5 Evolutionary Vs Revolutionary Change


Organizational change can occur quickly or slowly.
4.2.5.1 Evolutionary Chang:

Evolutionary change is gradual, incremental, and narrowly focused. Evolutionary change is not dramatic
or sudden but, rather, is a constant attempt to improve, adapt, and adjust strategy and structure
incrementally to accommodate to changes taking place in the environment. ―Evolutionary change
involves setting direction, allocating responsibilities, and establishing reasonable timelines for achieving
objectives. Such improvements might entail utilizing technology in a better way or reorganizing the
work process. Total quality management and organizational development are among the known
evolutionary changes.

4.2.5.1.1. Total quality management

What is quality?

Dictionary has many definitions: ―Essential characteristic,‖ ―Superior,‖ etc.

Some definitions that have gained wide acceptance in various organizations: ―Quality is customer
satisfaction,‖ ―Quality is Fitness for Use.‖

The American National Standards Institute (ANSI) and the American Society for Quality (ASQ) define
quality as: ―Quality is the totality of features and characteristics of a product or service that bears on its
ability to satisfy given needs.‖

Why Quality?

Reasons for quality becoming a cardinal priority for most organizations:

 Competition – Today‘s market demand high quality products at low cost. Having `high quality‘
reputation is not enough! Internal cost of maintaining the reputation should be less.
 Changing customer – The new customer is not only commanding priority based on volume but is
more demanding about the ―quality system.‖
 Changing product mix – The shift from low volume, high price to high volume, low price have
resulted in a need to reduce the internal cost of poor quality.

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 Product complexity – As systems have become more complex, the reliability requirements for
suppliers of components have become more stringent.
 Higher levels of customer satisfaction – higher customers‘ expectations are getting spawned by
increasing competition.

Overview of Total Quality Management (TQM:

TQM: An integrated effort designed to improve quality performance at every level of the organization.

Now-a-days, customers demand products/services with greater durability and reliability at the most
economic price. This forces producers to strictly follow quality procedures right from design till shipment
and installation of the products. So that goal of any competitive industry is to provide a product or service
at the most economical costs, ensuring full customer satisfaction. This can be achieved through Total
Quality Management (TQM), because, quality is not a technical function, but a systemic process
extending throughout all phases of the business, e.g., marketing, design, development, engineering,
purchasing, production/operations.

As per Feigebaum, ―Total Quality Management is an effective system of integrating the quality
development, quality maintenance and quality improvement efforts of various groups in an organization
so as to enable marketing, engineering, production and service at the most economical levels which allow
for full customer satisfaction‖.

Benefits of TQM:

The benefits of TQM can be classified into the following two categories:

 Customer satisfaction oriented benefits.


 Economic improvements oriented benefits.

Customer satisfaction oriented benefits: The benefits under this category are listed below:

 Improvement in product quality.


 Improvement in product design.
 Improvement in production flow.
 Improvement in employee morale and quality consciousness.
 Improvement of product service.
 Improvement in market place acceptance.

Economic improvements oriented benefits: The benefits under this category are as follows:

 Reductions in operating costs.


 Reductions in operating losses.
 Reductions in field service costs.
 Reductions in liability exposure.

Total quality management (TQM) or kaizen is a management technique that focuses on finding the ways
to continuously make incremental improvements to work procedures that drive down cost and drive up
quality of organization‘s products or services. TQM is a comprehensive, organization-wide effort to
improve the quality of products and services, applicable to all organizations

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TQM focuses on improving the quality of an organization‘s products and stresses that all of an
organization‘s value-chain activities should be directed toward this goal. Value-chain is the coordinated
series or sequence of functional activities necessary to transform inputs such as new product concepts,
raw materials, component parts, or professional skills into the finished goods or services customers‘ value
and want to buy. Each functional activity along the chain adds value to the product when it lowers costs
or gives the product differentiated qualities.

TQM requires the cooperation of managers in every function of an organization, and across functions, if it
is to be succeeded. The following steps are necessary for mangers to implement a successful TQM
program.

Build organizational commitment to quality.


Focus on customers: TQM see customers as the starting point. It requires:
i) To identify what customers want from the good or service that the company provides;
ii) To identify what the company actually provides to customers;
iii) To identify the gap that exists between what customers want and what they actually get (the
quality gap); and
iv) To formulate a plan for closing the quality gap.
Find ways to measure quality: TQM requires the development of a measuring system that
managers can use to evaluate quality.
Set goals and create incentives: once a measure has been devised, mangers‘ next step is to set a
challenging quality goal and to create incentives for reaching that goal. Such as reducing
consumers‘ complaints by 50%, six-sigma, and so on. Regarding incentives- give bonus and
promotional opportunities for contributions and goal attainment.
Solicit input from employees: create an environment in which employees will not be afraid to
report problems or recommend improvements. Quality circle is the one among the mechanism.
Quality circles –group of employees who meet regularly to discuss ways to increase quality-are
often created to achieve this goal.
Identify defects and trace them to their sources: identify defects in the work process, trace
those defects back to their source, find out why occurred, and make corrections so that they do not
occur again.
Design for ease of production: designing product that have fewer parts or finding ways to
simplify providing a service should be linked to fewer defects or customer complaints. Because
the more steps required assembling a product or providing a service, the more opportunities there
are for making a mistake.
Break down barriers between functions: successful implementation of TQM requires
substantial cooperation between the different value-chain functions.

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4.2.5.2 Revolutionary Change
Revolutionary change is a rapid, dramatic, and broadly focused change. It involves a bold attempt to
quickly find new ways to be effective. Organizations faced with dramatic, unexpected changes in the
environment (for example, a new technological breakthrough) or with an impending disaster resulting
from mismanagement, an organization might need to act quickly and decisively.

Revolutionary change is a radical shift in ways of doing things, new goals, and new structure for the
organization. Reengineering, restructuring, and quantum innovation are the three important instruments
for revolutionary change.

4.2.5.2.1 Business Process Reengineering


Business process reengineering (BPR) is the fundamental rethinking and radical redesign of business
process to achieve dramatic improvements in critical, contemporary measures of performance, such as
cost, quality, service, and speed. BPR is a form of organizational improvement.

BPR is given force by the thinking that old ways of organizing work are no longer appropriate for
a competitive business environment

There are four key words in this definition. These are:

Fundamental Rethinking: ask basic questions about the company and how they operate. Like:
- Why do we do what we do?
- Why do we do it the way we do it?

Make people to look at the tacit rules and assumptions that underlie the way they conduct their
business. Often the rules turn to be obsolete, erroneous, or inappropriate.

Radical redesign: reengineering is about throwing the already existing system away and starting
with a clean slate and redesign how you do your work. Thus, reengineering is about business
reinvention not business improvement or modification.
Dramatic improvement: it is about achieving quantum performance growth. Reengineering is
not making marginal improvements to the business.
Business process: process is the core of the reengineering. Process is an organized group of
related activities that together create value to customers. It is about how work is done.

Why Reengineer?

The three Cs – customers, competition, and change- have created a new world for business, and it is
becoming increasingly apparent that organizations designed to operate in one environment cannot be
fixed to work well in another. These three forces, separately and in combination, are driving today‘s

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companies deeper and deeper into territory that most of their executives and managers find
frightening unfamiliar.

A) Customers: customers have become much more sophisticated and demanding; much more
knowledgeable about their own needs; and are exerting ever greater pressure on their suppliers.
B) Competition: now, the competition is strong and many different in kind.
C) Change: whether in geopolitical realities, technology, or customer preferences, the pace of change
is extremely fast, that is, what was unthinkable yesterday is routine today.

Comparison of BPR and TQM

Aspects TQM BPR

Level of change Incremental Dramatic and Radical

Starting points Exiting process Clean slate

Frequency of change Continuous One-time

Time required Long Short

Risk Moderate High

Participation Bottom-up Top-down

Typical scope Narrow, within functions Broad, cross functional

Who need BPR?

The experience shows that there are three kinds of companies/organizations that have to undertake
reengineering.

First: companies that find themselves in deep trouble. E.g. costs are higher than business sales and
competitors; customers are dissatisfied about the product/services the company offer and openly rail
against it, etc. these companies have no choice, no time.

Second: organizations that are not yet in trouble, but whose management has the foresight to see
trouble coming. Even though they are in healthy financial condition –attractive profitability level-, but
management see that new competitors entering the market, changing, customers characteristics
changing regularly, change in economic development, the technological development, etc.

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Third: organizations in peak condition. They have no discernible difficulty, either now or in the
horizon, but their management is ambitious and aggressive. They need reengineering as an
opportunity to further their lead over their competition, to keep their position.

What is not reengineering:

The following are some of the misconceptions about the nature of reengineering.

Reengineering is not downsizing: downsizing means getting rid of people and jobs to improve short
term financial results. Reengineering is about rethinking work from the ground up in order to
eliminate work that is not necessary and to find better ways of doing work. Reengineering eliminates
unnecessary work, not jobs or people. Reengineering may or may not affect the number of people
employed.
Reengineering is not restructuring: reengineering is centered on how work is done. While
restructuring focuses on how an organization is structured around an organizational chart or business
unit.

 Restructuring or downsizing has relevance with reducing capacity to meet current, lower
demand as well reduce size to match the demand at time of fewer markets.
 reengineering mean doing more with less
 Downsizing reduce costs by getting rid of people and jobs,
 reengineering reducing cost by eliminating non value-adding activities
Reengineering is not automation: reengineering focus is the customer not automation or
computerization. Automation is a reengineering tool to help you provide value to customers. So, first
reengineer, and then automate.
 Reengineering is innovation, creating new system of work.
 Automation is fixing the existing system to work faster.
Reengineering is not outsourcing: the purpose of outsourcing is driven by the theory that groups
outside the organization can perform some operations more efficiently. However, reengineering
makes no such assumption. It simply determines what work needs to be done and finds the best way
to accomplish it.

Stages to Reengineering:

There are numerous methodologies being proposed, but all share common elements. Typically the
reengineering project takes the form of several discrete phases. However, the following four stages are the
most common ones.

Phase One: Preparation For Change/Planning Stages/

Reengineering in this phase requires the following:

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Assessing the preconditions for change: fundamental changes in an organization typically requires
the following conditions:
- There must be real pain, either current or anticipated;
- Senior leader must articulate the pain in a way that does not blame the staff for the problems;
- Senior leadership must be actively involved, not just lend verbal support.
Leadership commitment: the process of reengineering, the most important issue that comes first is
the issues of leadership. As reengineering follows top-down change, leadership is required right from
the beginning. Strong, committed, executive leadership is the absolute since essential condition for
reengineering.
Identifying the business process: identifying business process is one of the difficult tasks in
reengineering effort.
- The first step and perspectives the leader and organization pursue when identifying the
business processes is to start from the mission of the organization that determines its very
existence.
- And then we must start from the outcome and think of the process backward.
- Once processes are identified the next step is choosing the processes to be reengineered. Since
organization cannot reengineer all of its process all together at a time. The following are the
major criterion of choosing this process:
Dysfunctional-processes: that are broken and in the deepest trouble;
Important processes: that are the greatest impact on the company‘s customer and
highest link to its mission; and
Feasibility: are most susceptible to successful redesign at the moment.
Forming organizational structure: the key roles to be filled during redesign project include:
a) Design team: the design team redesigns the way work is done. It takes the current (as-is) process,
analyzes it, and comes up with a fundamentally new design.
b) Team leader or facilitator: is the leader of the designing team.
c) Subject matter experts (czar): they are not on the design team, but they are familiar with the
process being redesigned and provide specific skill and expertise not available on the team.
Subject matter experts are invited to work with the team for a period of time.
d) Steering team: it is made up of senior people who have major responsibilities for leading the
organization. This team doesn‘t do the redesign work; rather it oversees all redesign effort.
e) Process owner: is the person with the responsibility and authority to manage the newly designed
process. The process owner is a coach and advocate for the process, overseeing and measuring its
performance over time and helping to redesign it as needed.
Preparing TOR (terms of reference): the leader with his core staff should have over all plan and
direction of reengineering. Reengineering teams with their process owners should prepare TOR that

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guides their operation. It shall cover all the study, the redesign process and up to implementation
stages.
The TOR should explicitly specify:
- The objective of the reengineering project,
- Methodology of reengineering, and
- Have concrete action plan indicating what to do, when, how and by whom.

Phase Two: Understanding the Current Business Process (As-Is)

Once the process has been identified and selected in phase one, the next step understands, not analyzing,
these process. The goal of understanding the existing business process is to get a high level view of the
existing process in order to produce superior business process from a clean sheet of paper.

In this stage, the reengineering team should be able to:

To understand the customers‘ need with the processes output.


Show where the process begins and ends,
Describe the specific inputs and outcomes of the process.
Map the current process-gives a picture of how work flows through the organization. It is very
helpful in viewing the existing process. Produces an accurate picture of the process and its current
performance i.e. baseline of the current performance. Shows how the ―end-to-end‖ process
actually works.
Map the current process helps to identify steps, costs, and cycle time; look for bottlenecks and
identify current assumptions.
Show sub-process (if there is): when a process is too large or complex to compute, sub-process is
needed. Each sub-process converts inputs into outputs (if it is the last, it has an outcome), and has
its own process owner. Each core and support process may or may not have sub process.

Phase Three: Redesigning the Business Process

The key issues of the third stage are:

o Establish the desired outcomes: there are several steps involved to start at the end with the desired
outcomes. These are:
 Identify the key customers and/or stakeholders: the design team begins by
brainstorming a list of external and internal customers/stakeholders.
 Choose a way of learning about customers/stakeholders‘ needs and expectations.
 Interview or survey customers/stakeholders to determine desired outcomes.

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 Compare and analyzed data from customers/stakeholders, synthesizing desired
outcomes. Compare the customers/stakeholders requirement with the current
performance or benchmarked performance.
 Decide whether you are ready to move on to the next design step.

Now it‘s time to focus more specifically on the future. You need to take the desired outcomes you have
identified and translate them into concrete goals. And these goals need to be so high that they force the
design team to become innovative, to get out of the box. Such goals are called ―starched objectives.‖

o Setting stretched objectives: stretch objectives reach far beyond what process currently produces.
Stretched objectives are another name for performance measures. They are usually (but not
necessarily) stated in quantitative terms and should always be stated in a concrete way that is easily
measured.
Stretched objective should be related to the customers‘ problems because its purpose is to solve the
problems of the customers in the process. As a guideline, stretched objectives should require
performance improvements of 50 percent or more.
Here are the sub-steps involved in creating stretched objectives:
i) Review customers/stakeholders needs and expectation.
ii) Identify the needs and expectations that form the foundations of stretch objectives.
iii) Brainstorm possible stretched objectives: they can come from
 Benchmarking the same processes performed by leading organizations.
 Customer and stakeholders requests and preferences.
 The organization‘s its own best performance of the process.
iv) Decide whether you are ready to move on to the next design step
o Breaking old assumptions
o Design from clean sheet: note that the task of redesigning does not have specific formal or
mechanical procedures. The purpose of designing the new process from a clean sheet is to help the
team come up with ideas that lead to a dramatically improved process. It‘s difficult if not impossible
to make a fundamental change if we start with our current process firmly fixed in our minds and ask
ourselves how to improve it. Generating alternative ideas from designing team, benchmarking, and
generating wacko ideas are some of the mechanisms to develop breakthrough ideas.

Phase Four: Successful Implementation and Building Process Centered Organization

At this stage, implementing the new process design and installing new form of organization i.e. the
business system diamond will be realized. The business system diamond shows the features of new form
of reengineered organization. It illustrates that reengineering is making systematic organizational change
(a paradigm shift). It is not a fragmented change. In reengineered organization the four aspects shown on
the figure are interrelating.

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Effective implementation of the newly redesigned process requires the following:

Prepare implementation plan: it should be developed that spells out the work that needs to be done
with time frames, milestones, training, workforce issues, decision points, resource allocation, etc.
Pilot testing: it is an effective tool that allows the organization to
Evaluate the soundness of the proposed process in actual practice
Identify and correct trouble spot or problems with the new process
Refine performance measures and generate support for full scale implementation from
employees, outside stakeholders, public, etc.
Adjust goals and develop improvement plan
Implement and monitor the progress

Basic characteristics and common feature of BPR

a) Several jobs are combined into one

b)Workers make decisions

c) The steps in process are performed in a natural order :-in reengineered process, work

sequenced in terms of what needs to follow what

d) Non value adding activities and hand offs in the process are eliminated

e) Processes have multiple versions

What causes BPR projects to fail? (Pitfalls in BPR):


 Inadequate funding
 Insufficient management commitment/support
 Poor project leaders
 Inadequate feasibility evaluation
 Resistance to process change
 Failure to focus on most process re-design and dwelling on improving the existing process.
 Quitting too early or declaring victory too soon.

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CHAPTER FIVE

CONFLICT AND CONFLICT MANAGEMENT

5.1 Introduction

Conflict is being taken as an inevitable aspect of modern life. For any organizations to perform
effectively, interdependent individuals and groups must establish working relationships across
organizational boundaries, between individuals and among groups.
Individuals or groups may depend on one another for information, assistance or coordinated action. Such
interdependence may foster cooperation or conflict. It is worth repeating here that the conflict-free
company has never existed and never will exist. Antagonisms, tensions, aggressions, stereotypes, negative
attitudes and the frustrations of perceived conflicting needs will always be present wherever men are
forced to live and work together. Therefore, this unit gives you highlights about nature of conflict, its
sources, and its management/resolution styles and so on.

5.2 Meaning and Nature of Conflict

Conflict is a process in which one party perceives that its interest are being opposed or negatively affected
by another party.

In organizations, a conflict exits whenever two or more parties are in disagreement. Conflict is inherent in
an organization system, and as the work force becomes more diverse, conflict can increase.

Conflict is defined as an incompatibility of goals or values between two or more parties in a relationship,
combined with attempts to control each other and antagonistic feelings toward each other. The
incompatibility or difference may exist in reality or may only be perceived by the parties involved.
Nonetheless, the opposing actions and the hostile emotions are very real hallmarks of human conflict.

Conflict has the potential for either a great deal of destruction or much creativity and positive social
change (Kriesberg, 1998). Therefore, it is essential to understand the basic processes of conflict so that we
can work to maximize productive outcomes and minimize destructive ones. Conflict occurs between
people in all kinds of human relationships and in all social settings. Because of the wide range of potential
differences among people, the absence of conflict usually signals the absence of meaningful interaction.
Conflict by itself is neither good nor bad. However, the manner in which conflict is handled determines
whether it is constructive or destructive (Deutsch & Coleman, 2000).

Conflict has the potential for either a great deal of destruction or much creativity and positive social
change. However, people often think of conflict as fighting and view it as disruptive. Conflict, however,

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can be beneficial. A balance of conflict is essential to all organizations. Too little or too much conflict is
usually a sign of management‘s unwillingness or inability to adapt to a diversified environment.

The question today is not whether conflict is good or bad rather, how to manage conflict to benefit the
organization. Therefore, it is essential to understand the basic processes of conflict so that we can work to
maximize productive outcomes and minimize destructive ones.

5.3 Sources of Conflict in Organization

Some of the conditions that cause conflict in organizational setting are:

A. Incompatible Goals: a common source of conflict is goal incompatibility. Goal incompatibility


occurs when personal or work goals seem to interfere with another person‘s or department‘s goals.
B. Different Values And Beliefs: incompatibility in any of life, ideologies-the preferences, principles
and practices which people believe. Cultural diversity, and different backgrounds and experiences
makes indifferent to understand or accept the beliefs and values that other people hold toward
organizational decisions and events.
C. Power conflict occurs when each party wishes to maintain or maximize the amount of influence that
it exerts in the relationship and the social setting. It is impossible for one party to be stronger without
the other being weaker, at least in terms of direct influence over each other. Thus, a power struggle
ensues which usually ends in a victory and defeat, or in a ―stand-off‖ with a continuing state of
tension. Power conflicts can occur between individuals, between groups or between nations, whenever
one or both parties choose to take a power approach to the relationship. Power also enters into all
conflict since the parties are attempting to control each other.
D. Task Interdependence: conflict tends to increase with the level of task interdependence. Task
interdependence exists when team members must share common inputs to their individual tasks, need
to interact in the process of executing their work, or receive outcomes (such as rewards) that are partly
de3termined by the performance of others. The higher the level of task interdependence, the greater
the risk of conflict, because there is a greater chance that each side will disrupt or interfere with the
other side‘s goals.
E. Unclear job boundaries: unclear line of responsibility within an organization can be a source for
conflict.
F. Scarce resources/economic conflict: scarce resources generate conflict because scarcity motivates
people to compete with others who also need those resources to achieve their objectives.
G. Communication problem: conflicts often occur due to lack of opportunity, ability, or motivation to
communicate effectively. When two parties lack the opportunity to communicate, they tend to use
stereotypes to explain past behaviors and anticipate future actions. Some people lack the necessary
skills to communicate in a diplomatic, non confrontational manner.

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5.4 Conflict Outcomes

Positive Outcomes of Conflict

 Increased motivation and creativity.


 Healthy interactions/involvement stimulated.
 Number of identified alternatives increased.
 Increased understanding of others.
 People forced to clarify ideas more effectively.
 Feelings aired out.
 Opportunity to change bothers some things.

Negative Outcomes of Conflict

 Decreased productivity.
 Relevant information not being shared.
 Unpleasant emotional experiences.
 Environmental stress.
 Excessive consumption of time.
 Decision-making process disrupted.
 Poor work relationships.
 Misallocation of resources.
 Impaired organizational commitments.

5.4 Levels of Conflict

It is possible to identify four types of conflict that might occur in organizations. Conflict can occur on
several levels in an organization. These are:

1st: Intrapersonal Conflict: conflict between an individual‘s values, goals, and needs are intrapersonal
conflicts. Intrapersonal conflicts arise when acting in accordance with one value, goal, or need makes it
impossible to fulfill some other value, goal, or need.

Types of intrapersonal conflicts are:

- Approach-approach conflict occurs when a person has to make a choice between two equally
attractive alternatives. For example, employed parents routinely experienced approach-approach
conflicts between their dual roles of parent and employee.
- Avoidance –avoidance conflict occurs when a person has to make a choice between two equally
unattractive alternatives. For example, chief executive officer may decide between to decrease
employees‘ salary or to fire few employees to stay in the market.

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- Approach-avoidance conflict occurs when a person has to make a choice among a set of options
that have good and bad outcomes. For example, many employees face this conflict between the
desire for career success and the desire for more personal time.

2nd Interpersonal Conflict: occurs when two people have incompatible needs, goals, or approaches in
their relationship. Interpersonal conflict is likely occurring when individuals are competing for the same
resources, such as promotions, work facilities, or work assignments. Interpersonal conflict is also likely in
groups that are heterogeneous. Heterogeneous could be either diversity of the work force or people
representing different functions (for example cross functional team).

3rd Inter Group Conflicts: are conflicts between two or more groups in the same organization.
Intergroup conflict occurs when there are differences in values, goals, or needs between two or more
groups in the organization. Competition for scarce resources is a common source of intergroup conflict.

Intergroup conflicts in organizations also often arise between line employees and staff employees. Line
and staff conflict is conflict arising from the role and perceptual differences between the two groups.

Intergroup conflicts occur for four reasons:

- The groups are interdependent;


- The groups have different goals;
- The groups perceptions are different;
- The groups share the common resources; and
- The organization increasingly needs specialists.

In general intergroup conflicts are common in organizations.

4th Inter-Organizational Conflicts: are conflicts between two or more organizations. An example of
inter-organizational conflict is corporate takeover attempt whereby one organization tries to take control
over another organization. Such conflict may also arise because of competition and controlling resources
among organizations.

5.5 Conflict Stimulation

The current view is that in certain circumstances there can be benefits in stimulating a degree of conflict
within an organization. Conflict is important especially if the conflict in the organization is too low.

The following are the some of the conflict techniques:

Stimulating competition: it is probably the list risky strategy to stimulate conflict. Many
organizations may have measures of this type in place. A fairly common one is the use of
incentives, such as awards, and bonuses for outstanding performance.

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Communication: this is the more risky way of stimulating competition. The tactics here is using
ambiguous or threatening messages to increase conflict levels.
Changing organizational structure: this is another measure that contains pronounced risks. The
following changes can stimulate conflict in the organization: altering rules and regulations,
increasing interdependence, and making similar structural changes can disrupt the status quo in
the organization. A healthy degree of competition between subunits can encourage innovation and
improved performance.
Bringing in outside person: if someone with different background values and attitudes is
imported, that the person will be a source of inspiration to current employees and pull them out of
their contentment or complacency.

5.6 Conflict Management Styles/Conflict Resolution

Conflict situations are an important aspect of the workplace. A conflict is a situation when the interests,
needs, goals or values of involved parties interfere with one another. A conflict is a common phenomenon
in the workplace. Different stakeholders may have different priorities; conflicts may involve team
members, departments, projects, organization and client, boss and subordinate, organization needs vs.
personal needs. Often, a conflict is a result of perception. Is conflict a bad thing? Not necessarily. Often, a
conflict presents opportunities for improvement. Therefore, it is important to understand (and apply)
various conflict resolution techniques.

Some people enter a conflict with a win-win orientation while others have a win-lose orientation.

Win-win orientation: is the belief that the parties will find a mutually beneficial solution to their
disagreement. Win-win orientation is a systematic attempt to maximize the goals of both parties.
Win-lose orientation: they adopt the belief that conflicting parties are drawing from a fixed pie,
so the more one party receives, the less the other party will receive. Conflict tends to escalate
when the parties develop win-loss orientation because they rely on more assertive influence tactics
to gain advantage. A win-loss orientation may occasionally be appropriate when the conflict really
is over a fixed resource, but few organizational conflicts are due to perfectly opposing interests
with fixed resources.
Lose-lose orientation: both parties loss due to the conflict.

Adopting a win-win or win-lose orientation influences our conflict management style, that is, how we act
toward the other person.

Problem solving: It is also known as problem confronting or win-win (collaboration). Problem solving
tries to find a mutually beneficial solution for both parties. Information sharing is an important feature of
this style because both parties collaborate to identify common ground and potential solutions that satisfy
both (or all) of them. Collaboration involves an attempt to work with the other person to find a win-win

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solution to the problem in hand - the one that most satisfies the concerns of both parties. The win-win
approach sees conflict resolution as an opportunity to come to a mutually beneficial result. It includes
identifying the underlying concerns of the opponents and finding an alternative which meets each
party's concerns.

Examples of when collaborating may be appropriate:

 When consensus and commitment of other parties is important


 In a collaborative environment
 When it is required to address the interests of multiple stakeholders
 When a high level of trust is present
 When a long-term relationship is important
 When you need to work through hard feelings, animosity, etc
 When you don't want to have full responsibility

Possible advantages of collaborating:

 Leads to solving the actual problem


 Leads to a win-win outcome
 Reinforces mutual trust and respect
 Builds a foundation for effective collaboration in the future
 Shared responsibility of the outcome
 You earn the reputation of a good negotiator

For parties involved, the outcome of the conflict resolution is less stressful (however, the process of
finding and establishing a win-win solution may be very involved – see the caveats below)

Some caveats/warnings of collaborating:

 Requires a commitment from all parties to look for a mutually acceptable solution
 May require more effort and more time than some other methods. A win-win solution may not be
evident
 For the same reason, collaborating may not be practical when timing is crucial and a quick
solution or fast response is required

Once one or more parties lose their trust in an opponent, the relationship falls back to other methods of
conflict resolution. Therefore, all involved parties must continue collaborative efforts to maintain a
collaborative relationship

Withdrawing: It is also known as avoiding. Avoiding tries to smooth over or avoid conflict
situations altogether. It represents a low concern for both self and the other party; in other words,

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avoiders try to suppress thinking about the conflict. For example, some employees will arrange
their work area or tasks to minimize interaction with certain co-workers.

This is when a person does not pursue her/his own concerns or those of the opponent. He/she does not
address the conflict, sidesteps, postpones or simply withdraws.

Examples of when withdrawing may be appropriate:

 When the issue is trivial and not worth the effort


 When more important issues are pressing, and you don't have time to deal with it
 In situations where postponing the response is beneficial to you, for example –
 When it is not the right time or place to confront the issue
 When you need time to think and collect information before you act (e.g. if you are unprepared or
taken by surprise)
 When you see no chance of getting your concerns met or you would have to put forth
unreasonable efforts
 When you would have to deal with hostility
 When you are unable to handle the conflict (e.g. if you are too emotionally involved or others can
handle it better)

Possible advantages of withdrawing:

 When the opponent is forcing / attempts aggression, you may choose to withdraw and postpone
your response until you are in a more favorable circumstance for you to push back
 Withdrawing is a low stress approach when the conflict is short
 Gives the ability/time to focus on more important or more urgent issues instead
 Gives you time to better prepare and collect information before you act

Some caveats/warnings of withdrawing:

 May lead to weakening or losing your position; not acting may be interpreted as an agreement.
Using withdrawing strategies without negatively affecting your own position requires certain skill
and experience
 When multiple parties are involved, withdrawing may negatively affect your relationship with a
party that expects your action

Forcing: It is also known as competing. Forcing tries to win the conflict at the other‘s expense. This
style, which has the strongest win-lose orientation, relies on some of the ―hard‖ influence tactics to get
one‘s own way.

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An individual firmly pursues his or her own concerns despite the resistance of the other person. This may
involve pushing one viewpoint at the expense of another or maintaining firm resistance to another
person‘s actions.

Examples of when forcing may be appropriate:

 In certain situations when all other, less forceful methods, don‘t work or are ineffective
 When you need to stand up for your own rights, resist aggression and pressure
 When a quick resolution is required and using force is justified (e.g. in a life-threatening situation,
to stop an aggression)
 As a last resort to resolve a long-lasting conflict

Possible advantages of forcing:

 May provide a quick resolution to a conflict


 Increases self-esteem and draws respect when firm resistance or actions were a response to an
aggression or hostility

Some caveats/warnings of forcing:

 May negatively affect your relationship with the opponent in the long run
 May cause the opponent to react in the same way, even if the opponent did not intend to be
forceful originally
 Cannot take advantage of the strong sides of the other side‘s position
 Taking this approach may require a lot of energy and be exhausting to some individuals

Smoothing/Yielding: yielding involves giving in completely to the other side‘s wishes, or at least
cooperating with little or no attention to your own interests. This style involves making unilateral
concessions and unconditional promises, as well as offering help with no expectation of reciprocal help.

It is also known as accommodating. Smoothing is accommodating the concerns of other people first of
all, rather than one's own concerns.

Examples of when smoothing may be appropriate:

 When it is important to provide a temporary relief from the conflict or buy time until you are in a
better position to respond/push back
 When the issue is not as important to you as it is to the other person
 When you accept that you are wrong
 When you have no choice or when continued competition would be detrimental

Possible advantages of smoothing:

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 In some cases smoothing will help to protect more important interests while giving up on some
less important ones
 Gives an opportunity to reassess the situation from a different angle

Some caveats/warnings of smoothing:

 There is a risk to be abused, i.e. the opponent may constantly try to take advantage of your
tendency toward smoothing/accommodating. Therefore it is important to keep the right balance
and this requires some skill.
 May negatively affect your confidence in your ability to respond to an aggressive opponent
 It makes it more difficult to transition to a win-win solution in the future
 Some of your supporters may not like your smoothing response and be turned off

Compromising: It involves looking for a position in which your losses are offset by equally valued gains.
Compromising looks for an expedient and mutually acceptable solution which partially satisfies both
parties.

It involves matching the other party‘s concessions, making conditional promises or threats, and actively
searching for a middle ground between the interests of the two parties.

Examples of when compromise may be appropriate:

 When the goals are moderately important and not worth the use of more assertive or more
involving approaches, such as forcing or collaborating
 To reach temporary settlement on complex issues
 To reach expedient solutions on important issues
 As a first step when the involved parties do not know each other well or haven‘t yet developed a
high level of mutual trust
 When collaboration or forcing do not work

Possible advantages of compromise:

 Faster issue resolution. Compromising may be more practical when time is a factor
 Can provide a temporary solution while still looking for a win-win solution
 Lowers the levels of tension and stress resulting from the conflict

Some caveats/warnings of using compromise:

 May result in a situation when both parties are not satisfied with the outcome (a lose-lose
situation)
 Does not contribute to building trust in the long run
 May require close monitoring and control to ensure the agreements are met

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TIPS FOR MANAGING AND RESOLVING CONFLICT
Managing and resolving conflict requires emotional maturity, self control, and empathy. It can be tricky,
frustrating, and even frightening. You can ensure that the process is as positive as possible by sticking to
the following conflict resolution guidelines:
 Make the relationship your priority: Maintaining and strengthening the relationship, rather
than ―winning‖ the argument, should always be your first priority. Be respectful of the other
person and his or her viewpoint.
 Focus on the present. If you‘re holding on to old hurts and resentments, your ability to see the
reality of the current situation will be impaired. Rather than looking to the past and assigning
blame, focus on what you can do in the here and now to solve the problem.
 Pick your battles. Conflicts can be draining, so it‘s important to consider whether the issue is
really worthy of your time and energy. Maybe you don't want to surrender a parking space if
you‘ve been circling for 15 minutes. But if there are dozens of spots, arguing over a single space
isn‘t worth it.
 Be willing to forgive. Resolving conflict is impossible if you‘re unwilling or unable to forgive.
Resolution lies in releasing the urge to punish, which can never compensate for our losses and
only adds to our injury by further depleting and draining our lives.
 Know when to let something go. If you can‘t come to an agreement, agree to disagree. It takes
two people to keep an argument going. If a conflict is going nowhere, you can choose to
disengage and move on.
 Fair fighting: Ground rules
 Remain calm: Try not to overreact to difficult situations. By remaining calm it will be more
likely that others will consider your viewpoint.
 Express feelings in words, not actions: Telling someone directly and honestly how you feel can
be a very powerful form of communication. If you start to feel so angry or upset that you feel you
may lose control, take a "time out" and do something to help yourself feel steadier.
 Be specific about what is bothering you: Vague complaints are hard to work on.
 Deal with only one issue at a time: Don't introduce other topics until each is fully discussed.
This avoids the "kitchen sink" effect where people throw in all their complaints while not
allowing anything to be resolved.
 No "hitting below the belt: Attacking areas of personal sensitivity creates an atmosphere of
distrust, anger, and vulnerability.
 Avoid accusations: Accusations will cause others to defend themselves. Instead, talk about how
someone's actions made you feel
 Don't generalize: Avoid words like "never" or "always." Such generalizations are usually
inaccurate and will heighten tensions.

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 Avoid "make believe: Exaggerating or inventing a complaint or your feelings about it will
prevent the real issues from surfacing. Stick with the facts and your honest feelings.
 Don't stockpile: Storing up lots of grievances and hurt feelings over time is counterproductive.
It's almost impossible to deal with numerous old problems for which interpretations may differ.
Try to deal with problems as they arise.
 Avoid clamming up: When one person becomes silent and stops responding to the other,
frustration and anger can result. Positive results can only be attained with two way
communication.

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