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Organizational Behavior

 ICMR March 2004. All rights reserved.

No part of this publication may be reproduced, stored in a retrieval system,


used in a spreadsheet, or transmitted in any form or by any means –
electronic, mechanical, photocopying or otherwise – without prior
permission in writing from ICFAI Center for Management Research.

Ref. No. OB/A – 032K4 37

For any clarification regarding this book, the students may please write to ICMR giving the above reference
number for this book including chapter number and page number.

While every possible care has been taken in typesetting and printing this book, ICMR welcomes suggestions
from students for improvement in future editions. Please use the Courseware Feedback Form available at
www.icmrindia.org
Chapter 1

History and Evolution of


Management Thought
In this chapter we will discuss:
 Early Approaches to Management
 Classical Approach
 Behavioral Approach
 Quantitative Approach
 Modern Approaches to Management
 Emerging Approaches in Management Thought
Organizational Behavior

Table 1.1: Major Classification of Management Approaches and their


Contributors
Major Classification of Management Approaches Major Contributors
Classical approach Scientific management Frederick W. Taylor,
Frank and Lillian Gilbreth
and Henry Gantt
Bureaucratic management Max Weber
Administrative management Henri Fayol
Behavioral approach Group influences Mary Parker Follet
Hawthorne studies Elton Mayo
Maslow’s needs theory Abraham Maslow
Theory X and Theory Y Douglas McGregor
Model I versus Model II Chris Argyris
values
Quantitative Management science -
approach
Operations management -
Management information -
system
Modern approaches The Systems Theory -
Contingency Theory -
Emerging approaches: Theory William Ouchi
Z and Quality management

According to one school of thought, history has no relevance to the problems faced by
managers today. Some are also of the opinion that management theory is too abstract to
be of any practical use. However, both theory and history are indispensable tools for
managing contemporary organizations.
Like most modern disciplines, contemporary management thought has its foundations
in the history of management and the many significant contributions of theorists and
practitioners. A theory is a conceptual framework for organizing knowledge that
provides a blueprint for various courses of action. Hence, an awareness and
understanding of important historical developments and theories propounded by early
thinkers is important for today’s managers.
In this chapter, we first take a look at the early approaches to management. We then
focus on four well-established schools of management thought (see Table 1.1): (i) the
classical approach; (ii) the behavioral approach; (iii) the quantitative approach and (iv)
the modern approaches to management. Finally, some emerging approaches in
management thought are discussed.

EARLY APPROACHES TO MANAGEMENT

The Industrial Revolution, which began in Europe in the mid-1700s, was the starting
point for the development of management concepts and theories. The rapid growth in
the number of factories during this period and the need to coordinate the efforts of

2
History and Evolution of Management Thought

large number of people in the production process necessitated the development of


management theories and principles. Many theorists and practitioners in the mid- and
late 1800s (preclassical period) contributed valuable ideas that laid the foundation for
subsequent, broader inquiries into the nature of management. Five principal
contributors can be identified in this early period of development of management
thought: Robert Owen, Charles Babbage, Andrew Ure, Charles Dupin, and Henry
Robinson Towne (see Table 1.2).

Table 1.2: Preclassical Contributors to Management Thought


Name Period Contribution
Robert Owen 1771-1858 Proposed legislative reforms to improve working conditions
of labor
Charles Babbage 1792-1871 Advocated the concept of ‘division of labor’; devised a
profit-sharing plan which led to the modern-day Scanlon
Plan
Andrew Ure 1778-1857
Advocated the study of management
Charles Dupin 1784-1873
Henry R. Towne 1844-1924 Emphasized the need to consider management as a separate
field of study and the importance of business skills for
running a business.

Robert Owen: Human Resource Management Pioneer


Robert Owen (1771-1858) was a successful British entrepreneur in the early 19th
century. He was one of the earliest management thinkers to realize the significance of
human resources. He believed that workers’ performance was influenced by the
environment in which they worked. He proposed legislative reform that would limit
the number of working hours and restrict the use of child labor. At his own factories,
he introduced a standard working day of 10½ hours and refused to employ children
under the age of ten. Owen’s proposals were opposed by his business partners and
were considered radical (child labor and long working hours were common practices
during this era). He tried to improve the living conditions of his employees by ensuring
basic amenities like better streets, houses, sanitation and setting up an educational
establishment in New Lanark.
Owen recommended the use of a “silent monitor” to openly rate an employee’s work
on a daily basis. Blocks of wood were painted in four different colors, with each color
signifying a certain level of accomplishment. Depending on the productivity of the
employee, blocks of appropriate color were then attached to each machine in the
factory. Owen believed that these open ratings instilled pride and encouraged healthy
competition. Publicizing of sales and production figures by many modern
organizations is based on the same psychological principle.
Owen wanted other manufacturers to share his concern for improving workers’
working and living conditions. He argued that a manager’s best investment was in his
workers. Though Owen’s ideas were not accepted by his contemporaries, they laid the
groundwork for the human relations movement. Owen is also considered a forerunner
of the behavioral school because of his concern for human welfare.

3
Organizational Behavior

Charles Babbage: Inventor and Management Scientist


British professor of Mathematics, Charles Babbage (1792-1871) is widely known as
the “father of modern computing.” He was a pioneer not only in the field of computing
but also in the field of management. His major contributions to the field of computing
were the world’s first mechanical calculator and an “analytical engine” (which was a
forerunner of the modern computer). The problems he encountered while carrying out
his projects led him to search for new ways of doing things. His desire to improve
processes led to many contributions to management theory.
Babbage was an advocate of the concept of division of labor. He was impressed by the
idea of work specialization, or the degree to which work is divided into various tasks.
He believed that each factory operation should be thoroughly understood so that the
necessary skill involved in each operation could be isolated. Each worker could then be
trained in one specific skill and made responsible only for that part of the operation. He
observed that work specialization could apply not only to physical work but also
mental work. Babbage felt that work specialization would reduce training time and
improve (through constant repetition of each operation) the skills and efficiency of
workers. The concept of the assembly line, in which each worker is responsible for a
different repetitive task, is based on Babbage’s ideas.
Babbage believed that the interests of employees and management were closely linked.
He therefore devised a profit-sharing plan under which bonuses were given for useful
suggestions contributed by employees and wages were based on the profits generated
by the factory. His employee incentive techniques are used even today. The modern-
day Scanlon Plan, under which workers offer suggestions to improve productivity and
then share the resulting profits, is based on Babbage’s ideas.

Andrew Ure and Charles Dupin: Management Education Pioneers


Andrew Ure (1778-1857) and Charles Dupin (1784-1873) were the early proponents of
the study of management. Ure was a British academician and Dupin, a French
engineer. Ure, who taught at Glasgow University, published The Philosophy of
Manufacturing, in which he explained the various principles and concepts of
manufacturing. In 1819, Dupin was appointed as a management professor in Paris,
which marked the beginning of an illustrious career. His writings, well-known
throughout France, may have influenced Henri Fayol’s contributions to the theory of
management.

Henry Robinson Towne (1844-1924)


Henry R. Towne, President of the Yale and Towne manufacturing company and a
mechanical engineer, realized that good business skills were essential for running a
business. He emphasized the need to consider management as a separate field of
systematic study on the same level as engineering. In a paper, “The Engineer as an
Economist,” presented in 1886, Towne suggested that management be studied as a
science and that principles be developed that could be used across various management
situations. Frederick W. Taylor, who attended the presentation, was influenced by
Towne’s ideas. Subsequently, Taylor developed the principles of scientific
management.

Assessing Preclassical Contributions


Preclassical theorists generally tried to find solutions to contemporary managerial
problems. The early pioneers, with their technical backgrounds, did not regard
management as a separate field of study. However, their ideas did lay the foundation
for the management theorists of the 1900s.

4
History and Evolution of Management Thought

Table 1.3: A Brief Overview of Classical Theories


Approach Rationale Focus

Scientific management One best way to do each job Job level

Administrative principles One best way to put an Organizational level


organization together
Bureaucratic organization Rational and impersonal Organizational level
organizational arrangements
Adapted from”Evolution of Management Thought”
<http://www.biz.colostate.edu/faculty/dennism/Management-Evolution.html>

CLASSICAL APPROACH
Classical management thought can be divided into three separate schools: scientific
management, administrative theory and bureaucratic management. Classical theorists
formulated principles for setting up and managing organizations. These views are
labeled “classical” because they form the foundation for the field of management
thought. The major contributors to the three schools of management thought –
scientific management, administrative theory and bureaucratic management – are
Frederick W. Taylor, Henry Fayol and Max Weber respectively. Table 1.3 gives a brief
overview of the classical theories in management thought.

Scientific Management
Scientific management became increasingly popular in the early 1900s. In the early
19th century, scientific management was defined as “that kind of management which
conducts a business or affairs by standards established, by facts or truths gained
through systematic observation, experiment, or reasoning.” In other words, it is a
classical management approach that emphasizes the scientific study of work methods
to improve the efficiency of the workers. Some of the earliest advocates of scientific
management were Frederick W. Taylor (1856-1915), Frank Gilbreth (1868-1924),
Lillian Gilbreth (1878-1972), and Henry Gantt (1861-1919).
Frederick Winslow Taylor
Frederick Winslow Taylor took up Henry Towne’s challenge to develop principles of
scientific management. Taylor, considered “father of scientific management”, wrote
The Principles of Scientific Management in 1911. An engineer and inventor, Taylor
first began to experiment with new managerial concepts in 1878 while employed at the
Midvale Steel Co. At Midvale, his rise from laborer to chief engineer within 6 years
gave him the opportunity to tackle a grave issue faced by the organization – the
soldiering problem. ‘Soldiering’ refers to the practice of employees deliberately
working at a pace slower than their capabilities. According to Taylor, workers indulge
in soldiering for three main reasons:
i. Workers feared that if they increased their productivity, other workers would lose
their jobs.
ii. Faulty wage systems employed by the organization encouraged them to work at a
slow pace.
iii. Outdated methods of working handed down from generation to generation led to a
great deal of wasted efforts.

5
Organizational Behavior

Table 1.4: Four Steps in Scientific Management


Step Description
Step 1 Develop a science for each element of the job to replace old rule of thumb methods.
Step 2 Scientifically select employees and then train them to do the job as described in Step 1.
Step 3 Supervise employees to make sure they follow the prescribed methods for performing
their jobs.
Step 4 Continue to plan the work but use workers to actually get the work done.
Adapted from “Management Theory” Management Principles and Practice II,
<http://jeeves.commerce.adelaide.edu.au/courses/mpp2/slides/Management_theory.pdf>

Taylor felt that the soldiering problem could be eliminated by developing a science of
management (the four steps in scientific management outlined in Table 1.4). This
approach involved using scientific methods to determine how a task should be done
instead of depending on the previous experiences of the concerned worker.

Exhibit 1.1
Scientific Management – A Critique
Scientific management focuses primarily on the work to be done. At the heart of scientific
management is the organized study of work, the analysis of work into its simplest elements and
systematic improvement of worker’s performance of each of these elements. Scientific management
can be described as a systematic philosophy of worker and work.
Scientific management, in spite of the hype that it created has not completely succeeded in solving
the problem of managing worker and work. In the words of Peter F. Drucker, “Scientific
management has two blind spots – one engineering and one philosophical.” The first blind spot is
the belief that since work has to be divided into the simplest constituent motions, it should also be
arranged as a series of individual motions – each motion being carried out by an individual worker.
It is quite correct to state that work should be analyzed by the motions that constitute it. But it is an
erroneous view that by confining the work to an individual operation, one can do the work in a
much better fashion. For the human resource to be used productively, the individual operations must
be analyzed, studied and improved and jobs be formed out of these operations which utilize a
worker’s specific talents.
The second blind spot of scientific management is “the divorce of planning from doing.” Work
becomes more effective and productive if it involves a good amount of planning. It would be absurd
to say that the planner and the doer should be two different persons just because planning and doing
have been separated in work analysis. Planning and doing are the separate parts of the same job. No
work can be performed effectively unless it includes both these elements. As Drucker very aptly
says, “Advocating the divorce of the two is like demanding that swallowing food and digesting it be
carried out in two separate bodies.”
The two blind spots of scientific management help us understand why its application is met with
resistance from the workers. As a worker is taught individual motions, he acquires habit and
experience rather than knowledge and understanding. As the emphasis is placed on the doing
aspect, bringing in change would cause the workers to feel insecure. Scientific management does
not take into consideration the fact that change is inevitable and one of the major functions of an
organization is to bring about change.
Adapted from Peter F. Drucker, The Practice of Management (New York: Harper Business, 1986)
280-286.

In essence, scientific management as propounded by Taylor emphasizes:


i. Need for developing a scientific way of performing each job.
ii. Training and preparing workers to perform that particular job.

6
History and Evolution of Management Thought

iii. Establishing harmonious relations between management and workers so that the
job is performed in the desired way.
The two major managerial practices that emerged from Taylor’s approach to
management are the piece-rate incentive system and the time-and-motion study.
Piece-rate incentive system
Taylor felt that the wage system was one of the major reasons for soldiering. To
resolve this problem, he advocated the use of a piece-rate incentive system. The aim of
this system was to reward the worker who produced the maximum output. Under this
system, a worker who met the established standards of performance would earn the
basic wage rate set by management. If the worker’s output exceeded the set target, his
wages would increase proportionately. The piece-rate system, according to Taylor,
would motivate workers to produce more and thus help the organization perform
better.
Time-and-motion study
Taylor tried to determine the best way to perform each and every job. To do so, he
introduced a method called “time-and-motion” study. In a “time-and-motion” study,
jobs are broken down into various small tasks or motions and unnecessary motions are
removed to find out the best way of doing a job. Then each part of the job is studied to
find out the expected amount of goods that can be produced each day. The objective of
a time-and-motion analysis is to ascertain a simpler, easier and better way of
performing a work or job.

Exhibit 1.2
Frederick W. Taylor – The Prophet of Efficiency
Frederick W. Taylor rose from the rank of an apprentice to that of a Chief Engineer at Midvale Steel
in a short span of six years. Taylor’s approach to efficiency was similar to that of a scientist – he
observed, measured and recorded the most trivial tasks. He believed that no matter how easy a task
seems, one needs to study it systematically to find the “one best way” to do that task.
Taylor observed at Bethlehem Steel that each worker performed a variable amount of work
depending on his ability. He also noted that workers brought their own shovels to work and they
used the same shovel for materials of different relative weights, like iron ore and ash. By analyzing
carefully, Taylor determined that the optimum weight for shoveling was 21 pounds. He then
suggested the use of shovels of different sizes for different classes of materials, thereby ensuring
that the weight of the material being shoveled was around 21 pounds. By implementing Taylor’s
plans of use of shovels of different sizes, the average amount shoveled was increased from 16 to 59
tons.
As a result of these changes, productivity improved and the company’s costs decreased despite an
increase in the wages of workers. Thus, scientific management with its emphasis on measurement
and analysis embodied the principle of efficiency. Behind the concept of Scientific management is a
simple maxim: “Never assume that the best way of to do something is the way it has always been
done.”
Adapted from Joan Magretta and Nan Stone, What Management Is (New York: Free Press, 2002)
24-27 and Kathryn M. Bartol and David C. Martin, Management, 3rd edition, (USA: Irwin
McGraw-Hill, 1998) 41-42.
Frank and Lillian Gilbreth
After Taylor, Frank and Lillian Gilbreth made numerous contributions to the concept
of scientific management. Frank Gilbreth (1868-1924) is considered the “father of
motion study.” Lillian Gilbreth (1878-1972) was associated with the research
pertaining to motion studies. Motion study involves finding out the best sequence and
minimum number of motions needed to complete a task. Frank and Lillian Gilbreth
7
Organizational Behavior

were mainly involved in exploring new ways for eliminating unnecessary motions and
reducing work fatigue.
The Gilbreths devised a classification scheme to label seventeen basic hand motions –
such as “search,” “select,” “position,” and “hold” – which they used to study tasks in a
number of industries. These 17 motions, which they called therbligs (Gilbreth spelled
backward with the‘t’ and ‘h’ transposed), allowed them to analyze the exact elements
of a worker’s hand movements. Frank Gilbreth also developed the micromotion study.
A motion picture camera and a clock marked off in hundredths of seconds was used to
study motions made by workers as they performed their tasks. He is best known for his
experiments in reducing the number of motions in bricklaying. By carefully analyzing
the bricklayer’s job, he was able to reduce the motions involved in bricklaying from 18
½ to 4. Using his approach, workers increased the number of bricks laid per day from
1000 to 2700 (per hour it went up from 120 to 350 bricks) without exerting themselves.
Lillian’s doctoral thesis (published in the early 1900s as The Psychology of
Management) was one of the earliest works which applied the findings of psychology
to the management of organizations. She had great interest in the human implications
of scientific management and focused her attention on designing methods for
improving the efficiency of workers. She continued her innovative work even after
Frank’s death in 1924, and became a professor of management at Purdue University.
Lillian was the first woman to gain eminence as a major contributor to the

Figure 1.1 Gantt scheduling chart

Week Number
JOB
1 2 3 4 5 6 7 8

Current date

Scheduled activity time

Time for Nonproductive


activity
Actual progress

8
History and Evolution of Management Thought

development of management as a science. In recognition of her contributions to


scientific management, she received twenty-two honorary degrees.
Henry Laurence Gantt
Henry L. Gantt (1861-1919) was a close associate of Taylor at Midvale and Bethlehem
Steel. Gantt later became an independent consultant and made several contributions to
the field of management. He is probably best remembered for his work on the task-
and-bonus system and the Gantt chart. Under Gantt’s incentive plan, if the worker
completed the work fast, i.e. in less than the standard time, he received a bonus. He
also introduced an incentive plan for foremen, who would be paid a bonus for every
worker who reached the daily standard. If all the workers under a foreman reached the
daily standard, he would receive an extra bonus. Gantt felt that this system would
motivate foremen to train workers to perform their tasks efficiently.
The Gantt Chart (see Figure 1.1) is still used today by many organizations. It is a
simple chart that compares actual and planned performances. The Gantt chart was the
first simple visual device to maintain production control. The chart indicates the
progress of production in terms of time rather than quantity. Along the horizontal axis
of the chart, time, work scheduled and work completed are shown. The vertical axis
identifies the individuals and machines assigned to these work schedules. The Gantt
chart in Figure 1.1 compares a firm’s scheduled output and expected completion dates
to what was actually produced during the year. Gantt’s charting procedures were
precursors of today’s program evaluation and review techniques.
Limitations of scientific management
Scientific management has provided many valuable insights in the development of
management thought. In spite of the numerous contributions it made, there are a few
limitations of scientific management. They are:
 The principles of scientific management revolve round problems at the operational
level and do not focus on the management of an organization from a manager’s
point of view. These principles focus on the solutions of problems from an
engineering point of view.
 The proponents of scientific management were of the opinion that people were
“rational” and were motivated primarily by the desire for material gain. Taylor and
his followers overlooked the social needs of workers and overemphasized their
economic and physical needs.
 Scientific management theorists also ignored the human desire for job satisfaction.
Since workers are more likely to go on strike over factors like working conditions
and job content (the job itself) rather than salary, principles of scientific
management, which were based on the “rational worker” model, became
increasingly ineffective.

Administrative Theory
While the proponents of scientific management developed principles that could help
workers perform their tasks more efficiently, another classical theory – the
administrative management theory – focused on principles that could be used by
managers to coordinate the internal activities of organizations. The most prominent of
the administrative theorists was Henri Fayol.

Henri Fayol
French industrialist Henri Fayol (1841-1925), a prominent European management
theorist, developed a general theory of management. Fayol believed that “with
scientific forecasting and proper methods of management, satisfactory results were
inevitable.” Fayol was unknown to American managers and scholars until his most

9
Organizational Behavior

important work, General and Industrial Management, was translated into English in
1949. Many of the managerial concepts that we take for granted today were first
articulated by Fayol.
According to Fayol, the business operations of an organization could be divided into
six activities (See Figure 1.2)

Figure 1.2: Business Operations of an Organization

Business

Technical Commercial Financial Security Accounting Managerial


Activities Activities Activities Activities Activities Activities
Producing Buying Search for Protecting Maintaining Planning
and Selling and optimal employees balance Organizing
manufacturi Exchange of use of and property sheets Commanding
ng products goods and capital Compiling Coordinating
services statistics Controlling

Technical – Producing and manufacturing products.


Commercial – Buying, selling and exchange.
Financial – Search for and optimal use of capital.
Security – Protecting employees and property.
Accounting – Recording and taking stock of costs, profits, and liabilities,
maintaining balance sheets, and compiling statistics.
Managerial – Planning, organizing, commanding, coordinating and
controlling.
Fayol focused on the last activity, managerial activity. Within this, he identified five
major functions: planning, organizing, commanding, coordinating and controlling.
Fayol’s five management functions are clearly similar to the modern management
functions – planning, organizing, staffing, leading and controlling. Fayol’s concept of
management forms the cornerstone of contemporary management theory.
Fayol outlined fourteen principles of management:
1. Division of work: Work specialization results in improving efficiency of
operations. The concept of division of work can be applied to both managerial and
technical functions.
2. Authority and responsibility: Authority is defined as “the right to give orders and
the power to exact obedience.” Authority can be formal or personal. Formal
authority is derived from one’s official position and personal authority is derived
from factors like intelligence and experience. Authority and responsibility go
hand-in-hand. When a manager exercises authority, he should be held responsible
for getting the work done in the desired manner.

10
History and Evolution of Management Thought

3. Discipline: Discipline is vital for running an organization smoothly. It involves


obedience to authority, adherence to rules, respect for superiors and dedication to
one’s job.
4. Unity of command: Each employee should receive orders or instructions from one
superior only.
5. Unity of direction: Activities should be organized in such a way that they all come
under one plan and are supervised by only one person.
6. Subordination of the individual interest to the general interest: Individual interests
should not take precedence over the goals of the organization.
7. Remuneration: The compensation paid to employees should be fair and based on
factors like business conditions, cost of living, productivity of employees and the
ability of the firm to pay.
8. Centralization: Depending on the situation, an organization should adopt a
centralized or decentralized approach to make optimum use of its personnel.
9. Scalar chain: This refers to the chain of authority that extends from the top to the
bottom of an organization. The scalar chain defines the communication path in an
organization.
10. Order: This refers to both material and social order in organizations. Material
order indicates that everything is kept in the right place to facilitate the smooth
coordination of work activities. Similarly, social order implies that the right person
is placed in the right job (this is achieved by having a proper selection procedure
in the organization).
11. Equity: All employees should be treated fairly. A manager should treat all
employees in the same manner without prejudice.
12. Stability of tenure of personnel: A high labor turnover should be prevented and
managers should motivate their employees to do a better job.
13. Initiative: Employees should be encouraged to give suggestions and develop new
and better work practices.
14. Espirit de corps: This means “a sense of union.” Management must inculcate a
team spirit in its employees.

Bureaucratic Management
Bureaucratic management, one of the schools of classical management, emphasizes the
need for organizations to function on a rational basis. Weber (1864-1920), a
contemporary of Fayol, was one of the major contributors to this school of thought. He
observed that nepotism (hiring of relatives regardless of their competence) was
prevalent in most organizations. Weber felt that nepotism was grossly unjust and
hindered the progress of individuals. He therefore identified the characteristics of an
ideal bureaucracy to show how large organizations should be run. The term
“bureaucracy” (derived from the German buro, meaning office) referred to
organizations that operated on a rational basis. According to Weber, “a bureaucracy is
a highly structured, formalized, and impersonal organization.” In other words, it is a
formal organization structure with a set of rules and regulations. The characteristics of
Weber’s ideal bureaucratic structure are outlined in Table 1.5. These characteristics
would exist to a greater degree in “ideal” organizations and to a lesser degree in other,
less perfect organizations.

11
Organizational Behavior

Table 1.5: Major Characteristics of Weber’s Ideal Bureaucracy

Characteristic Description
Work specialization The duties and responsibilities of all the employees are clearly defined. Jobs are
and division of divided into tasks and subtasks. Each employee is given a particular task to
labor perform repeatedly so that he acquires expertise in that task.
Abstract rules and The rules and regulations that are to be followed by employees are well defined
regulations to instill discipline in them and to ensure that they work in a co-coordinated
manner to achieve the goals of the organization.
Impersonality of Managers make rational decisions and judgments based purely on facts. They
managers try to be immune to feelings like affection, enthusiasm, hatred and passion so as
to remain unattached and unbiased towards their subordinates.
Hierarchy of The activities of employees at each level are monitored by employees at higher
organization levels. Subordinates do not take any decision on their own and always look up
structure to their superiors for approval of their ideas and opinions.

The term “bureaucracy” is sometimes used to denote red tapism and too many rules.
However, the bureaucratic characteristics of organizations outlined by Weber have
certain advantages. They help remove ambiguities and inefficiencies that characterize
many organizations. In addition, they undermine the culture of patronage that he saw in
many organizations.

Limitations of bureaucratic management and administrative theory


Scholars who emphasized the human approach to management criticized classical
theorists on several grounds. They felt that the management principles propounded by
the classical theorists were not universally applicable to today’s complex
organizations. Moreover, some of Fayol’s principles, like that of specialization, were
frequently in conflict with the principle of unity of command.
Weber’s concept of bureaucracy is not as popular today as it was when it was first
proposed. The principal characteristics of bureaucracy – strict division of labor,
adherence to formal rules and regulations, and impersonal application of rules and
controls – destroy individual creativity and the flexibility to respond to complex
changes in the global environment.
Classical theorists ignored important aspects of organizational behavior. They did not
deal with the problems of leadership, motivation, power or informal relations. They
stressed productivity above other aspects of management. They also failed to consider
the impact of the external and internal environment upon employee behavior in
organizations.

BEHAVIORAL APPROACH
The behavioral school of management emphasized what the classical theorists ignored
– the human element. While classical theorists viewed the organization from a
production point of view, the behavioral theorists viewed it from the individual’s point
of view. The behavioral approach to management emphasized individual attitudes and
behaviors and group processes, and recognized the significance of behavioral processes
in the workplace. Table 1.6 gives an overview of the key contributions to management
theory by the behavioral management school of thought.

12
History and Evolution of Management Thought

Table 1.6: Contributions of Behavioral Thinkers to Management Thought


Name Period Contribution
Mary Parker Follet 1868-1933 Emphasized group influence and advocated the concept of
‘power sharing’ and integration
Elton Mayo 1880-1949 Laid the foundation for the Human Relations Movement;
recognized the influence of group and workplace culture on job
performance
Abraham Maslow 1908-1970 Advocated that humans are essentially motivated by a hierarchy
of needs
Douglas McGregor 1906-1964 Differentiated employees and managers into Theory X and
Theory Y personalities
Chris Argyris - Classified organizations based on the employees’ set of values

Mary Parker Follet: Focusing on Group Influences


Mary Parker Follet (1868-1933) made important contributions to the field of human
resource management. Though Follet worked during the scientific management era,
she understood the significance of the human element in organizations. She gave much
more importance to the functioning of groups in the workplace than did classical
theorists. Follet argued that organizational participants were influenced by the groups
within which they worked.
Follet recognized the critical role managers play in bringing about the kind of
constructive change that enables organizations to function. She suggested that
organizations function on the principle of “power with” rather than “power over.”
Power, according to Follet, was the ability to influence and bring about a change. She
argued that power should not be based on hierarchy; instead, it should be based on
cooperation and should involve both superiors and subordinates. In other words, she
advocated ‘power sharing.’
Figure 1.3: Actual versus Expected Results for the Experimental and
Control Groups in one of the Hawthorne Illumination Studies

High
Experimental group (actual)
Control group (actual)*
Control group (expected)*
Productivity

Experimental group (expected)

Low

Low Amount of Light Reduction High

* Lighting remained at the same level in the control group

Source: Kathryn M Bartol and David C. Martin, Management, 3rd edition (USA: Irwin
McGraw-Hill, 1998) 49.

13
Organizational Behavior

Exhibit 1.3
Limitations of Human Relations Approach
Human relations theory recognizes the significance of human resources. This theory believes that
each individual is unique and the attitude and behavior of an employee determines the way he or she
works. This theory is against the view that people respond automatically to monetary stimulus.
Human relations theory was one of the greatest advances in management, yet, it did not succeed in
establishing new concepts.
The limitations of the Human Relations theory are:
 The Human Relations theorists are of the opinion that by removing fear, people would perform
effectively. This view attacked the assumption that workers can be motivated to work only
through fear. The Human Relations approach made a significant contribution at a time when it
was generally being assumed that workers have to be coerced to work. Yet, this approach has
very little to say about positive motivation. The positive motivation aspect has been generalized
by the Human Relations theorists.
 Human Relations theory does not provide enough focus on work. It emphasizes more on
interpersonal relations and on “the informal group.” Consequently, this approach assumes that a
worker’s attitudes, behavior and effectiveness is predominantly determined by his relation with
his fellow-workers and not by the kind of work he does.
 Human Relations does not understand the economic implications of organizational problems.
Therefore, most of the principles advocated cannot be applied in the organizational context.
Human Relations theory also tends to be very vague. It stresses on “giving the workers a sense of
responsibility” but hardly tells what their responsibilities are.
Human Relations theory has made noteworthy contributions to the field of management. It provides
valuable guidance in understanding the employees and managing them. This theory also states the
importance of attitudes and behaviors in managing the workforce effectively. Human Relations is one
of the foundations on which the building of management is to be built. Although this theory has given
great insights, it has its limitations also. This theory focuses more on the informal group and is very
vague about the positive motivation aspects.

Adapted from Peter F. Drucker, The Practice of Management (New York: Harper Business, 1986)
278-280.

Follet also advocated the concept of integration, which involves finding a solution
acceptable to all group members. She believed that managers should be responsible for
keeping a group together and ensuring that organizational objectives are achieved
through group interaction. Her humanistic ideas have influenced the way we look at
motivation, leadership, teamwork, power and authority.

Elton Mayo: Focusing on Human Relations


Elton Mayo (1880-1949), the “Father of the Human Relations Approach,” led the team
which conducted a study at Western Electric’s Hawthorne Plant between 1927 and
1933 to evaluate the attitudes and psychological reactions of workers in on-the-job
situations. The researchers and scholars associated with the Hawthorne experiments
were Elton Mayo, Fritz Roethlisberger, T.N. Whitehead and William Dickson. The
National Research Council sponsored this research in cooperation with the Western
Electric Company. The study was started in 1924 by Western Electric’s industrial
engineers to examine the impact of illumination levels on worker productivity (see
Figure 1.3). Eventually the study was extended through the early 1930s. The
experiments were conducted in four phases:

14
History and Evolution of Management Thought

a. Illumination experiments
b. Relay assembly test room experiments
c. Interview phase
d. Bank wiring observation room experiments
The various phases of Hawthorne experiments have been explained in detail in chapter
2.
Contributions of Hawthorne experiments
The Hawthorne experiments, which laid the foundation for the Human Relations
Movement, made significant contributions to the evolution of management theory.
Some of the contributions are illustrated in Table 1.7.

Table 1.7: Elton Mayo and the Hawthorne Studies


Pre-judgments Findings
Job performance depends on the individual The group is the key factor in job performance.
worker.
Fatigue is the main factor affecting output. Perceived meaning and importance of the work
determine output.
Management sets production standards. Workplace culture sets its own production
standards.
Source: Louis E. Boone and David L. Kurtz, Management, International Student edition (USA:
McGraw-Hill Inc., 1992) 37.

Criticism of Hawthorne studies


The Hawthorne studies have received considerable criticism. They have been criticized
on the following grounds:
1. The procedures, analysis of findings, and the conclusions reached were found to
be questionable. Critics felt that the conclusions were supported by little evidence.
2. The relationship made between the satisfaction or happiness of workers and their
productivity was too simplistic.
3. These studies failed to focus attention on the attitudes of employees at the
workplace.

Abraham Maslow: Focusing on Human Needs


In 1943, Abraham H. Maslow (1908-1970), a Brandeis University psychologist,
theorized that people were motivated by a hierarchy of needs. His theory rested on
three assumptions. First, all of us have needs which are never completely fulfilled.
Second, through our actions we try to fulfill our unsatisfied needs. Third, human needs
occur in the following hierarchical manner: (i) physiological needs; (ii) safety or
security needs; (iii) belongingness or social needs; (iv) esteem or status needs; (v) self-
actualization, or self-fulfillment needs. According to Maslow, once needs at a specific
level have been satisfied, they no longer act as motivators of behavior. Then the
individual strives to fulfill needs at the next level. Managers who accepted Maslow’s
hierarchy of needs attempted to change their management practices so that employees’
needs could be satisfied.

15
Organizational Behavior

Douglas McGregor: Challenging Traditional Assumptions about Employees


Douglas McGregor (1906-1964) developed two assumptions about human behavior,
which he labeled “Theory X” and “Theory Y.” According to McGregor, these two
theories reflect the two extreme sets of belief that different managers have about their
workers. Theory X presents an essentially negative view of people. Theory X managers
assume that workers are lazy, have little ambition, dislike work, want to avoid
responsibility and need to be closely directed to make them work effectively. Theory Y
is more positive and presumes that workers can be creative and innovative, are willing
to take responsibility, can exercise self-control and can enjoy their work. They
generally have higher-level needs which have not been satisfied by the job.
Like Maslow’s theory, McGregor’s Theory X and Theory Y influenced many
practicing managers. These theories helped managers develop new ways of managing
the workers. Table 1.8 gives a comparison of Theory X and Theory Y characteristics.

Table 1.8: A Comparison of Theory X and Theory Y Characteristics


Theory X Theory Y
Most people dislike work and they avoid it Work is a natural activity like play or rest.
when they can.
Most people must be coerced and threatened People are capable of self direction and self
with punishment before they work. They control if they are committed to objectives.
require close direction.
Most people prefer to be directed. They avoid People become committed to organizational
responsibility and have little ambition. They objectives if they are rewarded in doing so.
are interested only in security.
Source: “Evolution of Scientific Management”, Engineering Management 333,
<http://www.ee.uwa.edu.au/~ccroft/em333/lectures97/lecb.pdf>.

Chris Argyris: Matching Human and Organizational Development


Chris Argyris, a Yale University professor, made significant contributions to the
behavioral school of management thought. The major contributions of this behavioral
scientist are the maturity-immaturity theory, the integration of individual and
organizational goals, and Model I and Model II organization analysis.
Argyris points out the inherent conflict between the healthy individual and the rigid
structure of the formal organization. He believes that people progress from a stage of
immaturity and dependence to a state of maturity and independence. Many
organizations tend to keep their employees in a dependent state, thereby blocking
further progress. This tendency may keep an individual from realizing his or her true
potential. Further, Argyris argues that several of the basic concepts and principles of
modern management – such as specialization – hinder the development of a “healthy”
personality. He feels that such incongruence between the organization and individual
development results in the failure and frustration of employees. Such incongruence,
Argyris argues, can be corrected by techniques such as job enlargement and job
loading, which increase the work-related responsibilities of the individual and allow
him to participate in the decision-making process.
Model I and Model II organizations
Argyris classifies organizations as Model I and Model II organizations on the basis of
the employees’ set of values. The employees in Model I organization are manipulative
and pitted against each other. They are not willing to take risks. Workers in Model II
organization are open to learning and less manipulative. Their access to information
gives them freedom to make informed choices, which in turn increases their

16
History and Evolution of Management Thought

willingness to take risks. Hence, according to Argyris, managers should strive to


create a Model II environment.

QUANTITATIVE APPROACH
The quantitative management perspective emerged during World War II. During the
war, the army (in the U.S and U.K) brought together managers, government officials
and scientists to help it deploy its resources more efficiently and effectively. These
experts used some of the mathematical approaches to management devised earlier by
Taylor and Gantt to solve the logistical problems encountered by the army during the
war. After the war, many organizations started applying the same techniques to solve
business problems. The quantitative approach to management includes the application
of statistics, optimization models, information models and computer simulations. More
specifically, this approach focuses on achieving organizational effectiveness through
the application of mathematical and statistical concepts. The three main branches of the
quantitative approach are: (i) management science (ii) operations management and (iii)
management information systems.

Management Science
The management science approach stresses the use of mathematical models and
statistical methods for decision-making. It visualizes management as a logical entity,
the action of which can be expressed in terms of mathematical symbols, relationships
and measurement data. Another name commonly used for management science is
operations research. Recent advances in computers have made it possible to use
complex mathematical and statistical models in the management of organizations.
Management science techniques are widely used in the following areas:
 Capital budgeting and cash flow management
 Production scheduling
 Development of product strategies
 Planning for human resource development programs
 Maintenance of optimal inventory levels
 Aircraft scheduling
Various mathematical tools like the waiting line theory or queuing theory, linear
programming, the program evaluation review technique (PERT), the critical path
method (CPM), the decision theory, the simulation theory, the probability theory,
sampling, time series analysis etc. have increased the effectiveness of managerial
decision-making. To apply a quantitative approach to decision-making, individuals
with mathematical, statistical, engineering, economics and business background skills
are required. Since one person cannot have all these skills the quantitative method
requires a team approach to decision-making. This approach has been criticized for its
overemphasis of mathematical tools. Many managerial activities cannot be quantified
because they involve human beings who are governed by many irrational elements.

Operations Management
Operations management is an applied form of management science. It deals with the
effective management of the production process and the timely delivery of an
organization’s products and services. Operations management is concerned with: (i)

17
Organizational Behavior

inventory management, (ii) work scheduling, (iii) production planning, (iv) facilities
location and design, and (v) quality assurance. The tools used by operations managers
are forecasting, inventory analysis, materials requirement planning systems,
networking models, statistical quality control methods, and project planning and
control techniques.

Management Information Systems


Management information systems focuses on designing and implementing computer-
based information systems for business organizations. In simple terms, the MIS
converts raw data into information and provides the needed information to each
manager at the right time, in the needed form.

MODERN APPROACHES TO MANAGEMENT

Besides the classical, behavioral and quantitative approaches to management, there are
certain modern approaches to management. Two of these approaches are the systems
theory and the contingency theory, which have significantly shaped modern
management thought. These two approaches to management are discussed in this
section.

Figure 1.4: A Systems View of Organizations

TRANSFORMATION
INPUTS PROCESS OUTPUTS

Resources Managerial and  Goods


Technological abilities
 Labor  Services
 Planning
 Materials  Profits and
 Organizing losses
 Capital
 Staffing  Employee
 Machinery
satisfaction
 Leading
 Information
 Controlling
 Technology

FEEDBACK

18
History and Evolution of Management Thought

Systems Theory
Those who advocate a systems view contend that an organization cannot exist in
isolation and that management cannot function effectively without considering external
environmental factors. The systems approach gives managers a new way of looking at
an organization as a whole and as a part of the larger, external environment.
According to this theory, an organizational system has four major components: inputs,
transformation processes, output and feedback (see Figure 1.4). Inputs – money,
materials, men, machines and informational sources – are required to produce goods
and services. Transformation processes or throughputs – managerial and technical
abilities – are used to convert inputs into outputs. Outputs are the products, services,
profits and other results produced by the organization. Feedback refers to information
about the outcomes and the position of the organization relative to the environment it
operates in.
The two basic types of systems are closed and open systems. A system that interacts
with its environment is regarded as an open system and a system that does not interact
with its environment is considered a closed system. Frederick Taylor, for instance,
regarded people and organizations as closed systems. In reality, all organizations are
open systems as they are dependent on interactions with their environment. Whether it
is a new product decision or a decision related to the employees of the organization, the
organization must consider the role and influence of environmental factors. Figure 1.4
depicts an open organizational system.

Contingency Theory
This is also known as the situational theory. This approach has been widely used in
recent years to integrate management theory with the increasing complexity of
organizations. According to this theory, there is no one best way to manage all
situations. In other words, there is no one best way to manage. The response “It
depends” holds good for several management situations.

Figure 1.5: Contingency Managerial Viewpoint

Systems Viewpoint
How the parts fit together
 Individual
 Group
 Organization Contingency Viewpoint
Managers’ use of other
Behavioral Viewpoint  Environment viewpoints to solve
How managers influence problems involving:
others:
 External environment
 Interpersonal roles Traditional Viewpoint
 Technology
 Informational roles What managers do
 Plan  Individuals
 Decisional roles
 Organize
 Lead
 Control

Source: http://www.ru.ac.za/academic/departments/management/about.htm

19
Organizational Behavior

The contingency approach was developed by managers, consultants, and researchers


who tried to apply the concepts of the major schools of management thought to real-
life situations. Managers who follow this approach, make business decisions or adopt a
particular management style only after carefully considering all situational factors.
According to the contingency approach, “The task of managers is to identify which
technique will, in a particular situation, under particular circumstances, and at a
particular time, best contribute to the attainment of management goals” (See Figure
1.5).
The contributions of the major approaches to management: Classical, behavioral and
modern approaches are illustrated in Table 1.9.

Table 1.9: Important Features of the Major Approaches


Approach Important Features
Classical This approach is divided into three schools – scientific management,
administrative theory and bureaucratic management.
Scientific management emphasizes the scientific study of work methods to
improve the efficiency of the workers. The administrative theory focused on
principles that could be used by managers to coordinate the internal activities of
organizations. Bureaucratic management emphasizes the need for organizations
to function on a rational basis.
Behavioral The behavioral approach to management emphasized individual attitudes and
behaviors and group processes, and recognized the significance of behavioral
processes in the workplace.
While Mary Parker Follett focused on the functioning of groups in the
workplace, Elton Mayo’s Hawthorne studies were aimed at evaluating the
attitudes and psychological reactions of workers in on-the-job situations and laid
the foundation for the Human Relations Movement. Abraham Maslow theorized
that people were motivated by a hierarchy of needs. Douglas McGregor’s
assumptions about human behavior led to the development of Theory X and
Theory Y which reflect the two extreme sets of belief that different managers
have about their workers. Chris Argyris is known for his maturity-immaturity
theory, integration of individual and organizational goals, and Model I and
Model II organization analysis.
Quantitative This approach focuses on achieving organizational effectiveness through the
application of mathematical and statistical concepts. The three main branches of
this approach are: management science, operations management, and
management information systems.
Contemporary The systems approach views organizations as a part of the larger, external
(systems and environment. The Contingency Theory states that there is no one best way to
contingency) manage all situations.

EMERGING APPROACHES IN MANAGEMENT THOUGHT


William Ouchi, a management expert, conducted research on both American and
Japanese management approaches and outlined a new theory called Theory Z. This
theory combines the positive aspects of both American and Japanese management
styles. The Theory Z approach involves providing job security to employees to ensure
their loyalty and long-term association with the company. It also involves job rotation
of employees to develop their cross-functional skills. This approach advocates the
participation of employees in the decision-making process and emphasizes the use of

20
History and Evolution of Management Thought

informal control in the organization along with explicit performance measures. The
organization shows concern for its employees’ well-being and lays emphasis on their
training and development. (Theory Z and American and Japanese styles of
management are discussed in detail in Chapter 2).
Another approach in the field of management thought that is gaining increasing
importance is that of quality management. Quality management is a management
approach that directs the efforts of management towards bringing about continuous
improvement in product and service quality to achieve higher levels of customer
satisfaction and build customer loyalty. To be successful and effective, this approach
needs to be integrated with an organization’s strategy.

SUMMARY
The Industrial Revolution provided the impetus for developing various management
theories and principles. Preclassical theorists like Robert Owen, Charles Babbage,
Andrew Ure, Charles Dupin, and Henry R. Towne made some initial contributions that
eventually led to the identification of management as an important field of inquiry.
This led to the emergence of approaches to management: classical, behavioral,
quantitative and modern.
The classical management approach had three major branches: scientific management,
administrative theory and bureaucratic management. Scientific management
emphasized the scientific study of work methods to improve worker efficiency.
Bureaucratic management dealt with the characteristics of an ideal organization, which
operates on a rational basis. Administrative theory explored principles that could be
used by managers to coordinate the internal activities of organizations.
The behavioral approach emerged primarily as an outcome of the Hawthorne studies.
Mary Parker Follet, Elton Mayo and his associates, Abraham Maslow, Douglas
McGregor and Chris Argyris were the major contributors to this school. They
emphasized the importance of the human element which was ignored by classical
theorists in the management of organizations. They formulated theories that centered
on the behavior of employees in organizations. These theories could easily be applied
to the management of organizations.
The quantitative approach to management focuses on the use of mathematical tools to
support managerial decision-making. The systems theory looks at organizations as a
set of interrelated parts. According to the contingency theory, managerial action
depends on the particular parameters of a given situation. One important emerging
approach to management thought is Theory Z. This approach combines the positive
aspects of American and Japanese management styles. All these views on management
have contributed significantly to the development of management thought.

21
Chapter 2

Foundations of Human
Relations and
Organizational Behavior
In this chapter we will discuss:
 Definitions of Human Relations and Organizational Behavior
 Historical Development of Human Relations and Organizational Behavior
 Contribution of Other Disciplines to Human Relations and Organizational
Behavior
 Significance of Human Relations and Organizational Behavior
 Research Foundations for Organizational Behavior
 Trends and Prospects in Organizational Behavior
Foundations of Human Relations and Organizational Behavior

People have a variety of needs. Irrespective of one’s status, age, and achievements, one
would still have some unfulfilled needs. In order to satisfy their unfulfilled needs more
effectively, people have learned to organize themselves into groups. The process of
organizing facilitates an organization in its specialization efforts. It helps the
employees to develop specialized skills and enhances the productivity and efficient
functioning of the organization. The organizational system consists of social, technical
and economic elements which coordinate human and material resources to achieve
various organizational objectives. Some of the objectives of an organization may be:
 To maximize profits
 To produce goods and services of good quality
 To compete with other players in the industry
 To ensure welfare of its employees
 To make efficient use of resources and achieve growth
Human behavior in organizations is as complex as the social system itself. People
differ from each other in their needs and values, which can be understood better with
the help of behavioral science. Behavioral science considers the influence of various
elements (social, economic and technical systems) of the complex external
environment on people’s behavior. It improves people’s understanding of interpersonal
skills and so also their ability to work together as a team to achieve organizational
goals effectively.

DEFINITIONS OF HUMAN RELATIONS AND ORGANIZATIONAL


BEHAVIOR

Human relations, in a very general sense, denote the interaction between different
kinds of people. In other words, it means socialization. However, in a business setting,
human relations have a different connotation. It deals with the interaction of people in
a work situation that helps to generate team spirit.
S. G. Huneryager and I. L. Heckmann define human relations as “A systematic,
developing body of knowledge devoted to explaining the behavior of individuals in the
working organization.”
According to Keith Davis in his book Human Behavior at Work, human relations is
“Motivating people in organizational settings to develop teamwork which
accomplishes individual as well as organizational goals effectively.”
Jack Halloran states, “The study of human relations in business and industry is the
study of how people can work effectively in groups in order to satisfy both
organizational goals and personal needs.”
From the above definitions, it is clear that human relations bring about an integration
of individual and organizational goals. The purpose of human relations is to assist
people to work together effectively to attain organizational objectives as well as to
satisfy personal needs.
According to W. G. Scott, “Human relations affect management practices and give
guidelines for managerial action.” This approach combines various branches of social
science and integrates their theories and methods to solve work-related problems.
Human relations is the result of the unique blend of the related disciplines –
psychology, social psychology, sociology and anthropology, that give rise to a better
understanding of individuals.

23
Organizational Behavior

Organizational Behavior (OB) is the study and application of knowledge about how
people as individuals and as groups act within organizations. Fred Luthans defines OB
as “the understanding, prediction and management of human behavior in
organizations.” Organizational Behavior may thus be defined as the systematic study
and application of human aspects in management of an organization.

HISTORICAL DEVELOPMENT OF HUMAN RELATIONS AND


ORGANIZATIONAL BEHAVIOR

Though human relationships have existed since time immemorial, the branch of
knowledge dealing with them is relatively recent. Prior to the industrial revolution,
people worked in small groups and had simple work relationships. They were,
however, subjected to unhealthy working conditions and scarcity of resources, so they
hardly had any job satisfaction.
During the early stages of the industrial revolution, the conditions of workers showed
no signs of improvement. But as increased industrial activity led to greater supply of
goods, wages, working conditions, and level of job satisfaction gradually improved.

Scientific Management Movement


Until the early 1900s, workers were made to work in inhuman conditions. The
importance of human element in organizations was first realized by Frederick W.
Taylor. Taylor is also known as “the father of scientific management” and his
contributions to the field of management were useful for the later development of the
field of organizational behavior. His studies helped improve the working conditions of
industrial workers and were instrumental in enhancing the productivity of the
organization. He propounded sound management practices by stressing on division of
labor and scientific selection, placement and training of workers. Taylor was also
instrumental in introducing the differential piece rate system in organizations.
According to Taylor, specific scientific methods could help people perform their jobs
effectively and efficiently. Taylor emphasized technical efficiency and mass
production in organizations. However, certain aspects of interpersonal and social
behavior that included leadership, communication, group tasks and norms, and group
cohesiveness were overlooked. Taylor’s work is important because it was the first
attempt to improve the conditions of workers in factories.

Research Studies
In the 1920s and 30s, Elton Mayo and F. J. Roethlisberger of Harvard University
conducted industrial experiments at the Hawthorne plant of the Western Electric
Company. It was the first attempt by academicians to study and analyze human
behavior at work. Their studies brought out a positive correlation between productivity
and worker participation. The Hawthorne studies concluded that the worker is the most
important element in an organization.
A number of research projects were conducted in the 1940s and 50s by several
organizations in order to understand human behavior at work. The Research Center for
Group Dynamics, University of Michigan, and the Personnel Research Board, Ohio
State University, conducted studies on leadership and motivation. While the Tavistock
Institute of Human Relations in London carried out research on a variety of subjects,
the National Training Laboratories in Bethel, Maine, concentrated on group dynamics.

24
Foundations of Human Relations and Organizational Behavior

The findings of these research studies helped managers understand people’s behavior
at work and the significance of human relations in work settings.

Other Developments
The first half of twentieth century was marked by development of concepts like
paternalism and welfare management. Personnel departments were created in
organizations to improve relations between employers and employees. A professional
approach was adopted to solve employees’ problems in work settings. During the
period of Depression in 1930s, there was no major activity in the field of human
relations. However, the revival of militant unionism triggered workers’ interests in
business activities of the organization. The World War II gave an additional impetus to
the human relations movement in industry. Many behavioral scientists undertook
extensive studies to improve business. These studies attracted the attention and
recognition of professional managers. However, by the 1950s, the human relations
movement had almost become a fad.

Interdisciplinary Studies
Professional journals like Human Relations, Personnel Psychology and Personnel
carried various research studies on human relations were conducted in different parts of
the world. In India, studies on human relations were conducted in some universities
and psychology departments of institutes like the Indian Institute of Technology,
Kanpur and Kharagpur. Organizations like ATIRA (Ahmedabad Textile Industries
Research Association), SITRA (South Indian Textiles Research Association), and SRC
(Shri Ram Center for Industrial Relations) were also established for interdisciplinary
research studies on the social and psychological problems of industrial workers. One
such famous study in India was the Ahmedabad Experiment, carried out by A. K. Rice
at the Ahmedabad Manufacturing and Calico Printing Company. The study, titled
Productivity and Social Organization, was published by the Tavistock Institute of
Human Relations in 1958. The Ahmedabad Experiment which was carried out over a
period of three years, studied the impact of social and technological changes in the
Ahmedabad Manufacturing and Calico Printing Company Ltd. The introduction of
technological changes in its plant, had given rise to many social and psychological
problems (both interpersonal and intergroup). Such research findings testified the fact
that human resource is instrumental in improving the organizational performance.

The Mature Outlook


Until late 1950s, human relations and OB were dismissed as a fad. When a large
number of students in the United States and other developed countries took up
organizational behavior and related disciplines as a major subject at the university
level, only then organizational behavior began to be considered as a subject of serious
study. The study of these subjects at the university level added maturity to
organizational practice. By 1960, human relations and OB had become a full-fledged
discipline. The publication of the book, The Human Side of Enterprise, authored by
Douglas McGregor, highlighted the mature outlook towards human relations and OB
that had developed as a result of in-depth study of these subjects.

The Emergence of Human Relations and Organizational Behavior


The fields of Human Relations and Organizational Behavior (OB) emerged when
concepts from psychology, sociology and economics were applied to problems specific
to organizations.
25
Organizational Behavior

Exhibit 2.1
Assumptions of the Human Relations Movement
Although scientific management brought in economic progress and improved the standard of living
of the employees in general, they still complained about the tediousness of jobs and apathetic
attitude of supervisors. These concerns led researchers to find out an ideal way of running an
organization. Factors like developments in the field of psychology, World War I and the economic
depression also raised questions on some of the basic assumptions of Scientific Management. The
Hawthorne Studies showed that workers did not respond to the classical motivational approaches
like economic rewards as suggested by Taylor. Instead, it was found that workers wanted to be
accepted by their group. Hawthorne Studies helped managers to understand that organizations are
not just a formal arrangement of different functions but representatives of social systems. The
Hawthorne Studies paved a way for many other research studies, triggering a Human Relations
movement.
Conventional managers assumed that employees worked only to satisfy their economic needs and
acted rationally to maximize their rewards. Moreover, they had the notion that there could never be
conflict between individual and organizational objectives. These assumptions were unrealistic and
were gradually replaced by the findings of the Human Relations movement. The Human Relations
movement brought forth the following assumptions:
 Organizations are not merely technical economic systems, but are social systems.
 People are motivated by many needs.
 People may not always behave in a logical or rational manner.
 People depend on each other for their work, and their behavior is determined by the social
context.
 The attitudes and performance of workers are determined to a very great extent by the informal
work group.
 The rules, regulations and economic rewards have a limited impact on the behavior of
employees. The informal group, on the other hand, has a stronger impact on the behavior of
people.
 Job roles are more complex than job descriptions. People sometimes tend to deviate from the
specifications in job descriptions.
 Communication channels should consider both the economic aspects of an organization and the
feelings of people working in it.
 Teamwork is essential for employees to make sound technical decisions.
 Job satisfaction gives rise to higher productivity and better use of resources.
 For managing people effectively, managers need not only technical skills, but also good social
skills.
These assumptions, made by the Human Relations theorists changed managers’ outlook towards
their subordinates. The employees were no longer considered as just another factor of production,
but as individuals who liked to be respected and whose contribution could help in meeting
organizational goals. The Hawthorne Studies also realized the significance of informal groups and
their effect on productivity.

Adapted from Prof. Edward G. Wertheim, “Historical Background of Organizational Behavior,”


<http://web.cba.neu.edu/~ewertheim/introd/history.htm>
Many theories of human behavior are being tested in real life situations under
controlled experimental conditions. Efforts are being made to find out new methods to
improve organizational performance and develop new insights into the complex and
unpredictable human behavior. Although human relations and OB do attempt to
comprehend people’s behavior and solve complex organizational problems, they are no

26
Foundations of Human Relations and Organizational Behavior

substitute to practical human judgement. By blending knowledge from behavioral


sciences and practical judgement, both managers and workers can benefit greatly.
Workers can have a better grasp of their work, identify themselves with their work, and
so derive greater job satisfaction. Managers, on the other hand, can improve their
administrative skills.

CONTRIBUTION OF OTHER DISCIPLINES TO HUMAN RELATIONS AND


ORGANIZATIONAL BEHAVIOR

Many disciplines have contributed to the study of human relations and OB. The most
significant contributors are psychology (social and industrial), sociology,
anthropology, economics and political science. The contribution of psychology has
been mainly at the micro level of analysis, that is, it has helped in a better
comprehension of individual behavior. The contribution of other disciplines, namely
sociology, social psychology, anthropology, economics and political science, has
increased an understanding of macro concepts such as group processes and
organizational development. These academic disciplines give valuable insights into
decision-making, communication, leadership, innovation, and resolving organizational
conflict as well as problems related to individual and organizational change. An
overview of major contributions to the study of OB has been graphically represented in
Figure 2.1. The various disciplines that have contributed to OB are discussed below.

Psychology
Psychology is a social science that helps explain, measure and remodel human
behavior. Psychologists are involved mainly in the study of individual behavior.
Several social scientists from diverse areas of psychology such as learning theorists,
personality theorists, counseling psychologists, and industrial and organizational
psychologists have made notable contributions to the study of individual behavior,
motivation, individual perceptions, learning, training, and the role of personality.

Social Psychology
Social psychology is a blend of psychology and sociology that focuses on the influence
of people on one another. This field has provided many useful insights in attitude
change, communication patterns, group processes and group decision-making. Social
psychologists have contributed greatly to the study of the implementation of change in
organizations and the way in which barriers to change implementation can be reduced.

Industrial Psychology
Industrial psychology applies the principles and theories of psychology to the industrial
context. It has contributed to OB by providing a better understanding of individual
differences, various processes of selection and placement, the influence of physical
environment on human performance, accident and safety, morale, and mental health.

Sociology
Sociology is the scientific study of the nature and development of society and social
behavior. The major contribution of sociologists to OB has been their analysis of group
behavior in formal and complex organizations at the group and organization level.
Their analysis has helped in better understanding of group dynamics, work teams,
norms, roles, status, formal organization theory and structure, organizational
technology, organizational culture, communication, socialization, power, conflict and
intergroup behavior.
27
Organizational Behavior

Figure 2.1 Toward an OB Discipline

Behavioral Contribution Unit of Output


science analysis
Learning
Motivation
Psychology Personality
Perception
Training
Leadership effectiveness
Job satisfaction
Individual decision making Individual
Performance appraisal
Attitude measurement
Employee selection
Work design
Work stress

Group dynamics
Work teams
Communication
Power
Conflict
Intergroup behavior
Sociology
Formal organization theory Study of
Organizational technology Organizational
Group
Organization change Behavior
Organizational culture

Behavioral change
Attitude change
Social Communication
psychology Group processes
Group decision making

Comparative values
Comparative attitudes
Cross-cultural analysis Organization
Anthropology system
Organizational culture
Organizational environment

Conflict
Intraorganizational politics
Political Power
science

Source: Stephen P. Robbins, Organizational Behavior, 8th edition (New Delhi: Prentice-Hall of
India, 1998) 19.

28
Foundations of Human Relations and Organizational Behavior

Anthropology
Anthropology involves the study of mankind, especially of its origin, development,
customs and beliefs. The work of anthropologists has provided insights into the basic
differences in values, attitudes and behavior of people from different countries and in
different organizations. Cultural anthropology has widely contributed to OB in the
following areas: Impact of cultural factors on OB, value systems, concepts of
interaction, comparative norms, values and attitudes, organizational culture and
environment, and cross-cultural analysis.

Economics
Economics is a science of production, distribution and consumption of goods and
services. Economics provides insights into the aspects of decision and choice, factors
that need to be considered while choosing the most suitable option, policies that affect
the economic growth of a firm and allocating limited resources to competing
alternatives.

Political Science
Political science involves the study of individual and group behavior within a
particular political environment. It has made significant contribution in the areas of
structuring of conflict, allocation of power, politics within the organization and the
overall administrative process.
The above stated disciplines have contributed immensely in developing a general
theory of human behavior at work. These disciplines tend to study very specific and
narrow aspects of human behavior, resulting in fragmentation of knowledge.
Behavioral science must attempt to integrate the concepts and principles from these
disciplines to make a comprehensive study of human behavior.

SIGNIFICANCE OF HUMAN RELATIONS AND ORGANIZATIONAL


BEHAVIOR

Human relations and OB play a significant role in the development of the skills of
employees and the improvement of organizational performance.

Development of Skills
In today’s rapidly changing business environment, employees undergo more stress,
greater frustration, and have higher job expectations. These factors may affect their
performance. Lately, realization has dawned upon organizations that employees, i.e.
human resource is its most important asset. Human resource can be defined as the sum
of the inherent abilities, acquired knowledge and skills as exemplified in the talents
and aptitudes of employees.1 Talent and skill of employees can be honed by training,
motivation and provision of opportunities for education and personal development.
A manager should spend ample time in improving interpersonal relations and direct the
employees to improve their quality of performance. It is very important for the superior
to know the factors that motivate an employee since the present day employees are
more educated and more demanding. Organizations too have become more complex
than what they were earlier, and so require greater managerial skills for effective
management. Further, government regulations, labor problems and the growing

1
R. S. Dwivedi, Human Relations and Organizational Behavior: A Global
Perspective, 5th edition (New Delhi: Macmillan India Ltd., 2001) 20.
29
Organizational Behavior

demands of customers have put the managers on higher levels of stress. In such a
scenario, human relations and OB make significant contributions toward effective
management of organizations.

Organizational Performance
Human relations and OB make productive organizations out of mere organizations.
The influence of various factors on the performance of productive organizations has
been well illustrated in the form of equations by Keith Davis.
Knowledge x Skill = Ability
Attitude x Situation = Motivation
Here ability is the product of a person’s knowledge and skills, while motivation is the
result of an individual’s attitude in a particular situation. The potential performance of
an individual is determined by his ability and his motivation levels. Therefore,
Ability x Motivation = Potential Performance
OB is very important in understanding what motivates people and how to motivate
people so that they can improve their abilities. Thus, OB taps the potential human
performance. However to derive overall organizational performance, human
performance should be combined with other resources such as tools, power and
material.
Human performance x Resources = Organizational performance.
Thus, managers’ knowledge of human relations and OB can help improve
organizational performance.

RESEARCH FOUNDATIONS FOR ORGANIZATIONAL BEHAVIOR

The various research studies conducted and theories propounded in different parts of
the world created a strong base for organizational behavior. Some of the studies and
theories which have served as landmarks in the field of organizational behavior are
Hawthorne Studies, Theory X and Theory Y, and Theory Z. These are discussed in
detail in the following section.

Hawthorne Studies
In the 1920s, the Hawthorne Works of the General Electric Company, Chicago
employed around 30,000 workers and manufactured equipment for Bell Telephone
System. Although it was a progressive organization, its managers were disturbed by
the large number of complaints and high level of dissatisfaction among workers. In
1924, the company hired efficiency experts to find out the cause of the problem, but
the investigations failed. Later, the company requested the National Academy of
Sciences to help them find a solution. In order to find the relationship between worker
efficiency and level of illumination in the workshop, the Academy conducted various
experiments which came to be known as the Illumination Experiments.

The illumination experiments


In these set of experiments, researchers modified the level of illumination i.e. the
intensity of light, to determine its effect on productivity. Two groups of employees,
namely, the control group and the experimental group, were selected to study the effect
of varied illumination levels on their productivity. Illumination was not changed for the
control group throughout the course of the experiments, while it was changed
constantly for the experimental group.

30
Foundations of Human Relations and Organizational Behavior

It was observed that when the illumination was enhanced for the experimental group,
its productivity increased as anticipated by the researchers. However, the productivity
in the control group also went up despite having no change in its illumination level.
The researchers then lowered the illumination intensity for the experimental group, but
surprisingly, the productivity still shot up. These experiments showed that productivity
of workers was influenced by some other variable and not merely by illumination.
These experiments revealed that there is some other variable beyond wages, hours of
work, working conditions that made a significant impact on productivity.

Relay assembly room experiments


This series of experiments began in 1927. These experiments were conducted by a
team led by Prof. Elton Mayo of Harvard Business School, along with his colleague,
Fritz Roethlisberger and some company representatives. Many management theorists
consider these experiments to be the actual beginning of the Hawthorne Studies since
the Illumination Studies failed to come out with any conclusion. Initially, two girls
were selected for these experiments and they were, in turn, asked to choose four other
girls. Thus, a group of six was formed. These girls were placed in a test room where
they had to assemble telephone relays. A telephone relay is a small but complex device
in which forty separate parts have to be assembled. The girls were seated on a lone
bench where they assembled the parts and the assembled relay was dropped into a
chute. An active observer was present with the girls in the workshop who kept a record
of all the happenings, informed the girls about the experiments, obtained feedback
from them and listened to their grievances.
The rate of production was determined by counting the relays that were dropped in the
chute. The researchers noted the basic rate of production at the start of the experiments.
They wanted to find out how productivity could be improved by introducing certain
variables like rest pauses and modifying other variables like cutting down on work
hours, and decreasing temperature and humidity. Various changes like change in the
number of hours in a work week, number of hours in a work day, the number of
breaks, lunch timings, etc. were planned and informed to the girls. Subsequently, these
changes were introduced and their effectiveness was measured by noting the increase
or decrease in the production of relays.

Feedback mechanism
The observer kept a record of all that was happening and also obtained feedback from
these girls. During the experiments, which lasted for five years, many changes were
introduced and these changes were tested for a period of four to twelve weeks. The
following results were obtained as a result of various changes:
 The girls produced 2,400 relays in a 48-hour week of six working days without any
breaks or rest pauses.
 For a period of eight weeks, the girls were paid on a piece-work basis (wages paid
according to the number of units produced). As a result, productivity increased.
 Two five-minute rest pauses, one in the morning and one in the afternoon, were
introduced. This resulted in an increase in productivity.
 The duration of these rest pauses was increased to ten minutes which led to a sharp
increase in productivity.
 The number of five-minute rest pauses was increased to six. This resulted in a
slight decline in the productivity because the work pattern of the girls was upset by
frequent pauses.

31
Organizational Behavior

 The earlier system of two rest pauses was again restored. In the first break, the
company provided the girls with a hot meal, free of cost. The productivity again
shot up.
 The girls were allowed to go home thirty minutes early, i.e. by 4.30 p.m. This again
led to an increase in the productivity.
 When the girls were allowed to go home an hour early, there was no increase in the
productivity.
 The original working conditions of six-day, 48-hour week was restored. All
amenities like rest pauses, hot meal and piece-work wages were withdrawn. The
girls worked in these conditions for twelve weeks, and they achieved the output
level of an average 3,000 relays per week, which was the highest ever recorded for
the group.
The productivity went up because the six girls had formed a close knit group and gave
their full cooperation for the experiments. They were happy because they participated
in the experiments out of their free will and not by force. They had job satisfaction
because they were not being supervised or pressurized by their superiors. Also, medical
checkups conducted on a regular basis showed no signs of cumulative fatigue in the
participants. Furthermore, absenteeism in the group declined by 80 percent.
One interesting observation was that the girls did not follow only one method of
assembling the components of a relay. Each girl had her own method of putting the
various parts together. In order to avoid boredom and monotony of the job, the girls
sometimes made variations to the method of assembling the components. It was also
observed that the number of variations made by the girl in the method of assembly
were higher if the girl was quite intelligent. Since the girls were given ample freedom
of movement sans any pressure, the members of the group developed within
themselves a sense of discipline and responsibility.
Findings of the relay assembly room experiments
The findings of the experiments took the researchers by surprise. Irrespective of the
changes made, there was an overall increase in the productivity. Even though the girls
worked for longer hours without any amenities like rest pauses or piece-work wages,
the productivity continued to show an upward trend. This disagreed with the prevalent
theory of Taylor, which stated that workers were motivated only by economic rewards.
The researchers realized that since the girls were given a great deal of freedom, they
had formed an informal group which also included the observer. They had a jovial time
at work and also engaged in social meetings after work. The researchers thus
discovered the concept of informal organization. They found that workplaces were
social environments that gave employees scope to interact with each other. It was also
realized that there were factors other than just economic self-interest that influenced
employee behavior. An important conclusion drawn from such observation was that
every aspect of an industrial work environment had a social value.
The self-esteem of the girls was elevated when they were preferred over other factory
workers as a part of the study. Moreover, the presence of a friendly observer rather
than an authoritarian supervisor at work added to their happiness. They felt valued and
important when the observer informed them in advance about the changes in work
pattern. As the supervisor was able to secure their whole-hearted cooperation the
productivity increased despite the withdrawal of many amenities at a later stage.
Interview phase
During the course of the experiments, about 21,000 people were interviewed over a
three-year period – between 1928 and 1930 – to explore the reasons for human
behavior at work. All the employees in the Hawthorne plant were interviewed. The
generalizations drawn from these interviews are given below:

32
Foundations of Human Relations and Organizational Behavior

1. A complaint is not necessarily an objective recital of facts; it can also be a


symptom of personal disturbance, the cause of which may be deep-seated.
2. Objects, persons and events carry social meaning. Their relation to employee
satisfaction or dissatisfaction is purely based on the employee’s personal situation
and how he perceives them.
3. The personal situation of the worker is a configuration of relationships. This
configuration consists of a personal reference and a social reference. While
personal reference pertains to a person’s sentiments, desires, and interests, social
reference pertains to the person’s past and present interpersonal relations.
4. The position or status of the worker in the company is a reference from which the
worker assigns meaning and value to the events, objects, and features of his
environment, such as hours of work, wages etc.
5. The social organization of the company represents a system of values from which
the worker derives satisfaction or dissatisfaction according to his perception of his
social status and the expected social rewards.
6. The experiences of the worker while working in a group influenced his social
demands.
Bank wiring observation room experiments
These experiments were undertaken by researchers in the later part of the Hawthorne
Experiments conducted during 1931-1932. The bank wiring observation room
experiments were aimed to understand the power of an informal group and peer
pressure on worker productivity. In this study, a group of fourteen men were engaged
in ‘bank-wiring,’ i.e. attaching wires to switches for certain parts of telephone
equipment.
The fourteen participants in the experiment were asked to assemble telephone wiring to
produce terminal banks. This time no changes were made in the physical working
conditions. The workers were paid on the basis of an incentive pay plan, under which
their pay increased as their output increased. Researchers observed that output stayed
at a fairly constant level, which was contrary to their expectations. Their analysis
showed that the group encouraged neither too much nor too little work. It seemed they
had their own idea of what “a fair day’s work” was and enforced it themselves. The
test room participants did not behave the way the ‘economic man model’ (this model
states that employees are predominantly motivated by money) predicted. Group
acceptance appeared to be more important to the worker than money. Thus, these
experiments provided some insights into informal social relations within groups.
The researchers came to the conclusion that the participants’ lack of trust in the
objectives of the project made them restrict the production of the group members by
preventing them from producing beyond a certain number of units. Other reasons for
decreasing the output were fear of unemployment, the aim to protect slow workers,
apprehension of management raising the standards, and a complacent attitude of the
management.
Many behavioral scientists believe that production increase in the relay room was due
to the fact that the participants received more attention and it was altogether a new
experience for them. This was termed as the ‘Hawthorne effect.’ Though there may be
an unintentional bias, the Hawthorne Studies laid the foundation for the Human
Relations Movement and was responsible for the development of various concepts like
participatory management, team building etc.

33
Organizational Behavior

Theory X and Theory Y


In his book The Human Side of Enterprise, Douglas McGregor formulated two sets of
assumptions, i.e. Theory X and Theory Y, about how individuals behave at work.
Theory X assumes that employees are basically lazy and dislike work. They need to be
directed and have the tendency to eschew additional responsibilities. These views were
held by Taylor and other proponents of the scientific management approach. Theory
Y, on the other hand, assumes that people consider work as natural as play or rest. If
employees are happy and satisfied, they would be more committed to the achievement
of organizational goals. After observing how managers interacted with their
subordinates, McGregor concluded that managers’ perception about the nature of
people depended on the assumptions they had about people. The managers molded or
improvised their behavior towards their subordinates according to their assumptions.

Theory X assumptions
 The average person dislikes work and tries to avoid it if he can.
 They have to be either coerced by punishment or goaded by means of financial
rewards to make them work effectively.
 The average employee prefers to be given directions about his work and shies away
from taking greater responsibilities. They are not too ambitious, seldom take risks
and give high importance to their security needs.
The assumptions of Theory X serve as the basis for most organizational principles and
have given rise to “tough” and “soft” management practices. “Tough” management
practices aim at achieving organizational goals by using fear tactics. These include
punishment and tight controls. On the other hand, “soft” management practices are
those which attempt to bring harmony in the workplace.
However, both these practices are not fully justified as employees do not seek just
financial rewards, but an opportunity to fulfill their higher needs. The managers who
believe in Theory X deny their subordinates this opportunity and so, the subordinates
do not show the right interest in their work.

Theory Y assumptions
 People can put in physical and mental efforts in work as naturally as they do while
playing.
 Tight controls and punishments cannot make people deliver the goods. An
employee would put in his best efforts if he is committed to the goals of the
organization.
 An average person would not only accept responsibility but also seek it if proper
conditions exist in the organization.
 If people find the job satisfying, they would be more happy and would stay
committed to the goals of the organization.
 People can solve their work-related problems by using creativity and imagination.
These qualities can be found in a large number of people and not necessarily in
managers only.
 Generally the intellectual capabilities of an average person are not properly utilized
in the modern industrial condition.

34
Foundations of Human Relations and Organizational Behavior

Exhibit 2.2
Working with a Theory X Manager
Douglas McGregor’s Theory X and Theory Y was a very important development in the field of
motivation. Although these theories have been criticized for being too rigid, they remain as valid
principles for development of positive management style and techniques. While modern management
theory advocates empowerment of employees, in reality, many managers still hold Theory X
assumptions about employees.
A typical Theory X manager is characterized by most or all of the following attributes. A Theory X
manager:
 Is driven entirely by results and deadlines
 Is intolerant, detached and aloof
 Has a short temper
 Issues deadlines and ultimatums
 Is too demanding
 Does not encourage participation
 Does not encourage team work
 Is unconcerned about the morale or welfare of the staff
 Is generally commanding rather than friendly
 Is fundamentally insecure
 Does not acknowledge or appreciate good work
 Is not receptive to suggestions and criticisms, especially from subordinates
 Tends to pass the buck in case of failure
 Does not delegate effectively
 Lacks a vision for long-term investments for future development
Working with a Theory X manager can be too frustrating. It is advisable on the part of employees to
avoid a direct confrontation with them. Since Theory X managers are only result-oriented,
employees should be very clear about what they can achieve. The subordinates should be ready with
accurate and relevant information since Theory X managers are very particular about facts and
figures. Theory X managers generally are unconcerned about subordinates’ problems and so any
approach regarding such issues is a futile exercise. Theory X managers want people to deliver the
goods. In case the subordinates feel that the goals set are unrealistic, they should justify their stand in
a constructive manner rather than questioning them.
The essence of working effectively with Theory X managers is to have a clear focus and to come to
an agreement on the results and deadlines. If the subordinates consistently show good performance,
the managers may allow them more freedom. The subordinates should also realize that Theory X
manager may be under pressure from his superiors to be so due to the short-term demands of the
organization. If the subordinates understand how to cope up with such managers, they can achieve
their goals as well as those of the organization.

Adapted from “Douglas McGregor – Theory X and Theory Y,” businessballs.com, Alan Chapman
Consultancy, <www.businessballs.com/mcgregor.htm>

Some observations regarding Theory X and Theory Y assumptions


Social science research forms the basis on which these assumptions have been
developed. These assumptions demonstrate that people have tremendous potential and
that the organizations should tap and exploit this potential for organizational growth.
35
Organizational Behavior

These theories are basically considered as two contrasting views about people, as held
by the managers. Although there are managers who are proponents of Theory X, the
style of management based on Theory Y is fast catching up in modern day
organizations.
Managers may sometimes need to exercise their authority to achieve desired results.
This is especially true in those conditions where there are discrepancies between the
subordinates and managers over the results. However, if it is possible to gain the
subordinates’ commitment to the organizational goals, it is better that managers resort
to discussion so that subordinates can understand the underlying reason for any action.
By doing so, the employees can perform better as they would be more conscientious in
discharging their duties.
A participative approach to problem-solving is a sensible management technique in
case of emotionally mature, highly motivated subordinates and a flexible work setting.
The managers can achieve better results under these conditions by participative
approach rather than the authoritarian one. Once the management realizes that it is
underestimating the true potential of its employees and switches to the Theory Y
assumptions, it can then invest time, money and effort in executing this theory in a
better manner.
Theory Y assumptions have featured in many management training courses. They have
also influenced the design and implementation of personnel policies and practices.

Soft and hard management practices propounded by Theory Y


Theory X lists out some methods to improve the performance of employees. These
include both soft and hard methods. Hard methods are depicted as “the stick.” These
include the use of didactic language, tight controls and disallowance of flexibility in
work. Soft methods are represented by “the carrot.” These include rewards and
promises for the employees, like higher pay, a fair day’s pay for a fair day’s work,
financial incentives, etc. These methods try to work out an exchange or a bargain for
the amount of work done.

Theory Y and abdication of managerial responsibilities


It should not be assumed that Theory Y advocates abdication of responsibilities by a
manager. On the other hand, it gives subordinates the freedom to interpret
organizational objectives and implement them in the best possible manner. The
manager helps in initiating and controlling this process. One of the important aspects
of the Theory Y culture is a monitoring, feedback and control system where the onus is
on the individual and not on his superior.

Are Theory Y assumptions reformulated assumptions of Theory X?


Although Theory Y propagates assigning higher responsibilities to an individual,
management control mechanisms still remain a very important constituent. Therefore,
some analysts consider Theory Y as “a glossy, reformulation of Theory X.” They feel
that the only extra element in Theory Y is the humanistic approach, which has been
added to enhance motivation levels of workers to ensure better performance.

The manager as a developer and facilitator


Both Theory X and Theory Y advocate that managers are responsible for organizing
various aspects of the production process, and ensuring the cooperation of workers in
order to achieve the goals of the organization. The manager plays the role of a
developer and facilitator, and sets the target for performance. The managers work
systematically with junior staff to design jobs, decide the priorities, plan the schedules
of operations, implement programs and review their accomplishments.

36
Foundations of Human Relations and Organizational Behavior

Empowerment
Theory Y recommends empowerment of employees for improving work performance.
This was termed as “job enrichment” by Frederick Herzberg in 1964 and as
“empowerment” by Tom Peters in the early 1980s. Job enrichment refers to the vertical
expansion of jobs. It increases the degree to which the worker controls the planning,
execution and evaluation of his work.2 Empowerment is the authority to take a decision
within one’s area of operations without having to get anyone’s approval. It involves
redesigning jobs to expand opportunities for self-control and self-decision. Although
the manager should exercise control to certain extent, they should remove some job
restrictions in order to help the employees grow and contribute their best to the
organization.

Theory Z
In his book, Theory Z: How American Organizations Can Meet the Japanese
Challenge, William Ouchi propounded Theory Z as an integrative method combining
both American and Japanese management practices. He found that the management
style adopted by some American companies like IBM, Intel, HP, Eastman Kodak and
Eli Lilly was a combination of both American and Japanese management styles. These
organizations were referred to as Theory Z organizations. These organizations were
American by origin, but were both American and Japanese in their business operations.
There are some basic differences in the management styles of Japanese and American
organizations. Japanese organizations believe in providing lifetime employment to
their employees until they retire at the age of 55 years. Japanese companies do not fire
an employee unless he has committed a crime. They believe that an employee should
understand all aspects of a company’s functioning before they are promoted.
Therefore, promotions are slow and are awarded to employees only after they have
served the organization for a considerable period of time. The career paths of
employees in Japanese organizations are not specialized as employees are trained in all
aspects of an organization’s functioning. The Japanese organizations take collective
decisions and collective responsibility for carrying out a particular task. They have
implicit control mechanisms, that is, the relationships between the organizations and
employees, suppliers, and creditors are based on trust and goodwill. Moreover,
Japanese organizations are not only concerned about performance of employees at
work, but also their families and social life. Japanese employees consider themselves
as a family and are very loyal and committed to the organization. In turn, the
organizations also provide many facilities to their employees and their families.
At the other extreme, American organizations have a totally different management
style. Short-term employment is more common in American firms. Moreover,
companies tend to downsize if there is a downturn in the economy or if the employees’
performance is dissatisfactory. American organizations believe in going fast track and
award promotions to the employees for extraordinary performance. Therefore,
employees can speedily climb up the corporate ladder. The career paths of employees
in American companies are specialized, that is, they tend to remain confined to one
functional area throughout their career. Further, American organizations have explicit
control processes and systems, well-defined rules and policies to regulate employee
behavior. Unlike their Japanese counterparts, American organizations focus on the
individual. Here, a manager takes decisions for the entire group. This makes him
accountable for the decisions. And unlike Japanese, American organizations are only
concerned about an employee’s work or professional life.

2
Stephen P. Robbins, Organizational Behavior – Concepts, Controversies, Applications, 8th
edition (New Delhi: Prentice-Hall of India Private Limited, 1998) 535.
37
Organizational Behavior

Exhibit 2.3
The Type Z Organization
Many researchers have studied Japanese companies and have tried to analyze the reasons for their
high productivity levels and loyal workforce. They found that Japanese organizations depend highly
on the employees’ socialization into the company’s culture. Japanese organizations also have high
regards for the employees’ acceptance of its core beliefs and values. As a result, the rate of
productivity is higher than that of American industry and the rate of absenteeism is below 2 percent.
The excellent performance of Japanese companies led many American researchers to adopt the
Japanese style of management for American organizations. The most notable contribution is that of
William Ouchi, who propounded Theory Z, which combines both American and Japanese styles of
management.
The Type Z organization refers to those organizations which blend American and Japanese style of
management. Some of the prominent companies which can be classified as Type Z organizations are
Kodak, Procter & Gamble, Hewlett-Packard, and IBM. The Type Z organizations are more inclined
towards Japanese organizations, as it provides a stable, long-term employment to its employees.
Since the employees have a relatively stable tenure in the organization, they are able to adapt
themselves to the corporate culture. Type Z organizations practice moderate career specialization.
This is done by job rotation, and making employees acquainted with various interrelated functions.
The process of promotion is a slow one, which ensures that employees understand the culture, beliefs
and values of the organization well before they are given a job of responsibility. Decisions are made
collectively by managers. The commonly shared culture and collective decision-making processes
that characterize Type Z organizations lessen the need for direct supervision and control over
employees. Such organizations also do not have problems of high turnover, as they offer good
working conditions and attractive pay packets for their employees. They also stay out of volatile
markets and outsource the necessary but unstable jobs to external firms. The divisions of the Type Z
organizations do not operate entirely as independent profit centers. The divisional managers consider
the broader interests of organization and not merely those of the division.
Although Type Z organizations have many strong points, it has its drawbacks too. Since values and
beliefs in these organizations are very homogeneous, these organizations may not be open to diverse
views which may be very important for survival in a dynamic environment. Sometimes the
employees may experience conflicts between their personal goals and those of the organization. In
Type Z organizations, people who are culturally dissimilar may find themselves isolated, and suffer
failures.
The Type Z organizations, however, try to fulfill both the needs of employees – the need for
independence, and the need for affiliation. The employees of Type Z organizations make efforts to
perform effectively while adhering to the organization’s beliefs and values. It is observed that many
companies have successfully adopted Theory Z in order to derive the advantages of both American
and Japanese styles of management.

Adapted from William G. Ouchi and Raymond L. Price “Contemporary Industrial Clans: Type Z
Organizations,” Organizational Dynamics, Volume 21, Issue 4 (Spring 1993) p62, 9p.

Although Theory Z organizations imbibe many features of the Japanese management


style, they also have some distinctive American traits. These organizations offer long-
term employment for their employees and invest a considerable amount of money and
time in training their personnel. Employees are promoted on the basis of their
contributions, rather than on their tenure. However, in such organizations, promotions
are relatively slow. Employees are given cross-functional training so that they can
understand different aspects of managing the business. These organizations use both
implicit and explicit controls. Although these organizations have some formal
guidelines for control, they also depend on employees’ judgements for appropriateness
or inappropriateness of an action. Decisions are made by consensus that involve
employees’ participation. The manager is held responsible for the decisions taken,

38
Foundations of Human Relations and Organizational Behavior

which is predominantly an American trait. Theory Z organizations have a holistic


concern for their employees. Therefore, Theory Z organizations try to combine the
positive aspects of both American and Japanese styles of management.
William Ouchi proposed Theory Z as an integrative model of organizational behavior.
He believed that in order to match the quality and productivity of the Japanese firms,
the American organizations have to modify their management styles. Ouchi
recommended American companies to make the following changes in the human
resources management:
 They should offer more secure and better career prospects.
 They should involve employees in the decision-making process.
 They should emphasize team spirit and recognize an individual’s contribution to
the team effort.
 Managers and their subordinates should have mutual respect for each other.
Thus, Theory Z emphasizes on building close and trusting relationships among
workers, managers and others. The central idea of Theory Z is to create an industrial
team within a stable work environment, which fulfills employees’ needs for affiliation,
independence, and control as well as organization’s need for high-quality work.
In addition to the Hawthorne studies, Theory X, Theory Y and Theory Z, the other
prominent studies that were carried out in the field of organizational behavior are listed
below:

Lippitt and White Leadership Studies


These studies were carried out by Ronald Lippitt and Ralph K. White, wherein they
tried to determine the effect of different leadership styles on the behavior of three
groups of 10-year old boys. This study revealed that although groups were similar in
many aspects, the boys exhibited totally different and complex reactions to different
styles of leadership.

The Coch and French Study


These studies were carried out by Lester Coch and John R. P. French in the 1940s. The
purpose of these studies was to study the impact of the degree of participation by
workers on their productivity, attitude and turnover. It was found that increased
participation led to improved productivity, positive attitude and less turnover among
employees.

The Ahmedabad Experiment


This experiment was conducted by A. K. Rice of the Tavistock Institute of Human
Relations, London at the Calico Mills, Ahmedabad. This experiment consisted of three
phases: experimental reorganization of automatic weaving, experimental
reorganization of non-automatic weaving and experimental reorganization of
management. The purpose of this experiment was to study the impact of technological
changes on individuals and work groups. This experiment revealed that introduction of
modern technology in organizations led to the improvement of employee performance,
creation of job satisfaction and stable work-group relationships.

Milgram’s Obedience to Authority Study


This study was carried out at Yale Psychological Laboratory by S. Milgram to observe
how a situation affected the personality of an individual. This study showed that people
tend to deviate from their moral values in order to show obedience to authority.
39
Organizational Behavior

TRENDS AND PROSPECTS IN ORGANIZATIONAL BEHAVIOR


Globalization, changes in technology, the Internet revolution and other changes in the
external environment have had a major impact on the way organizations function. As a
result, the field of organizational behavior has also undergone significant changes.
According to Fred Luthans, the following changes will affect the field of
organizational behavior.
Reduction in the number of middle management personnel
Downsizing will reduce the number of middle level managers in the future. They will
have additional responsibilities and consequently, their roles in their organizations will
be expanded significantly.
Increasing use of computers and Information Technology in organizations
Computers would be used extensively in the various functional areas of organizations.
Information technology and the Internet would bring many changes in organizational
structure and the way in which organizations function.
Entry of women and minorities in the workforce
Women and members of various minority groups would enter the corporate world,
increasing the diversity of the workforce.
Cooperation between management and unions
Factors such as globalization and increasing competition will necessitate cooperation
between the management and unions so that organizations can perform effectively.
Achieving such cooperation will not be easy and will require a lot of effort on the part
of both management and unions.
Innovative work approaches for special needs of employees
Various innovative approaches like flextime, job-sharing, and leave encashment will be
used by organizations to help employees meet their personal and professional
commitments. Organizations will try to improve the quality of work life to provide
employees with a more congenial and stimulating work environment.
According to management experts Steven L. McShane and Mary Ann Von Glinow, the
important trends which would emerge in organizational behavior are:
 Change in the composition of the workforce
 Spread of globalization
 Changes in the workplace values and ethics
 Increased usage of Information Technology in the organizations
 Changes in the employee-employer relationship.
As women and people from diverse backgrounds and culture enter the workplace, the
composition of the workforce would be very different from that of the past. Apart from
managing a culturally diverse workforce, organizations would also have to decide how
to manage employees who are 55 and above in age. These older employees would
constitute the fastest growing section of the workforce. Organizations would also have
to deal with the high turnover rates, especially among younger employees.
Many organizations will set up operations in different parts of the world in order to
reduce costs or to enhance their business prospects. Globalization would make it
imperative for organizations to develop structures and systems which are compatible
with the culture of the host country.
Globalization has resulted in the coexistence of diverse values and ethics in a single
workplace. Organizations will have to function in an ethical and socially responsible
manner and also adapt to the culture and conditions prevailing in the country they are
operating in.

40
Foundations of Human Relations and Organizational Behavior

The advent of computers and Information Technology will create a revolution in the
workplace. It would be possible to connect employees located in various different parts
of the world by means of the Internet. The use of Information Technology would help
create a networked organization, i.e., an association of several organizations that come
together for a common purpose.
Since organizations will operate in a very dynamic environment, employees will have
to continuously upgrade their skills and perform cross-functional activities. An
employee’s terms of employment will depend on the needs of the organization. For
example, an organization may hire a person only for a particular project or for a limited
period of time, instead of hiring him on a permanent basis. Innovative work style such
as flexible work hours, telecommuting, and job-sharing, which allow employees to
work according to their convenience, will also increase in the future.
All these changes in organizations will also have an impact on the field of
organizational behavior:
 Organizational behavior will become a distinct field of study in itself and will have
a wide range of applications in human resource management.
 Organizational behavior will be considered a distinct discipline. It will be
differentiated from other fields of study such as general management or human
resource management.
 The focus of organizational behavior will shift from broad areas of study, such as
perception, personality and group dynamics, to specialized areas such as job
design, job conflict and stress, organizational power and politics, and
organizational development.
 The field of organizational behavior will become more application-oriented.
Organizational behavior will help managers understand the behavior of people working
within organizations. Therefore, this field of study will provide managers new insights
about managing people effectively.

SUMMARY

People differ from each other in their needs and values. Group effort eases their task of
achieving organizational goals effectively. Human relations can be defined as
motivating people in organizations to work as a team. Although human relationships
have existed from quite some time in the past, the study of human relations has
developed only recently. Social sciences like sociology, psychology, anthropology,
economics and political science have contributed to the development of OB and human
relations.
Human relations and OB play a significant role in the development of the skills of
employees and the improvement of organizational performance. Various studies and
theories in the field of organizational behavior have given new insights into the
behavior of people at work. The most important studies are the Hawthorne studies,
Theory X and Theory Y, and Theory Z.
The Hawthorne Studies, conducted by Elton Mayo at the Western Electric Company,
was the first systematic study that recognized the significance of informal groups in the
workplace and its impact on productivity. The conclusion drawn from these studies
was that it was security and recognition, not just good physical working conditions that
bring a drastic improvement in productivity. Moreover, informal groups operating
within the work settings exert strong control over work habits of individual workers.
Douglas McGregor formulated two theories called Theory X and Theory Y. In these
theories, he has made two contrasting sets of assumptions about individuals at work –
negative and positive. Theory X assumes that people are lazy and have an inherent
41
Organizational Behavior

dislike for work, so they have to be forced to work in order to get the desired results.
On the contrary, Theory Y believes that work comes naturally to people and they
would be more dedicated if they understood and believed in the goals of the
organization. William Ouchi proposed Theory Z as an integrative model of
organizational behavior. This theory blends the positive aspects of Japanese and
American styles of management and stresses on building a close and trusting work
environment.
Other notable studies that have led to better understanding of Organizational Behavior
include Lippitt and White Leadership Studies, the Coch and French Study, the
Ahmedabad Experiment and Milgram’s obedience to authority study.
Changes in the world of business have led to (among other things) reduction in the
number of managers at the middle managerial level, extensive use of computers, and
increasing diversity in the workforce. These changes have led to changes in the
behavior of employees. The spread of globalization, changes in workplace values and
ethics and changes in the nature of employee-employer relationship have also altered
behavioral patterns in organizations.

42
Chapter 3

Individual Behavior in
Organizations
In this chapter we will discuss:
 Understanding Behavior as an Input-Output System
 Biographical Characteristics
 Biological Foundations of Behavior
 Cognitive Processes
Organizational Behavior

Most of you must have assembled jigsaw puzzles. You probably know that such
puzzles consist of numerous small, oddly-shaped interlocking pieces, which if
assembled correctly form a complete picture. Moreover, no two puzzles are exactly
alike. Each puzzle consists of a different number of pieces of varying shapes and sizes
which interlock with one another in different ways. Human behavior is analogous to a
jigsaw puzzle. Just as puzzles differ from one another, similarly no two individuals
behave in precisely the same manner in the same situation. Thus, each person in an
organization has unique behavioral patterns which varies from those of other
individuals. If managers want to manage people effectively they must understand
human nature.
In this chapter, we will discuss the various perspectives, on the basis of which, human
behavior can be understood. Then we shall move on to discuss the various biographical
characteristics such as age, gender, marital status and tenure which determine the
performance of employees. The biological foundations of behavior such as heredity,
biological development and the nervous system are also examined in detail. We will
conclude the chapter with a discussion on cognitive processes such as thinking,
problem-solving etc.

UNDERSTANDING BEHAVIOR AS AN INPUT-OUTPUT SYSTEM

Many behavioral theorists believe that human behavior is caused by certain external
and internal stimuli. Individual behavior is not random in nature. Instead, it is directed
towards the achievement of specific goals. Human behavior can be understood from
three different perspectives – the traditional perspective, the behavioral perspective and
the perspective based on the input-output system. We will begin by examining the
traditional perspective.

The Traditional Perspective


Early behavioral theorists regarded human behavior as a stimulus-response (S-R)
process. In other words, the stimulus causes a corresponding response, i.e. it evokes
certain behavioral patterns in an individual. This classic S-R model has been modified
to give rise to the S-O-R model, in which ‘O’ represents the human being, who
constantly interacts with the environment. He observes the surrounding environment,
emulates what others are doing, avoids doing certain things, and in the process
develops a certain pattern of behavior.

Behavioral Perspective
As shown in Figure 3.1, the behavioral perspective attempts to explain human behavior
with the S-O-B model. In this model, ‘S’ stands for situation, ‘O’ for the organism or
individual, and ‘B’ for behavior. Situation refers to the various physical, socio-cultural,
and technological aspects of the environment. The individual plays a very important
role in this model. Both the physiological and psychological aspects of the individual
are taken into consideration. The physiological aspects include heredity, nervous
system, sense organs, and muscles. The psychological aspects include cognitive and
psychological processes, and the personality of the individual. The individual,
therefore, is a highly complex being. The individual and the situation interact with each
other. This is called perception and it becomes an integral part of the individual’s
personality as well as a part of his psychological processes such as learning and
motivation. Since the variables ‘S’ and ‘O’ interact with one another, they are
connected by a double-headed arrow in the figure. This interaction is significant
because it is responsible for how a person behaves. The final variable in the model is
behavior (‘B’), which stands for behavior embracing both overt and covert responses

44
Individual Behavior in Organizations

and patterns1. According to behavioral scientists, there exists a two-way relationship


between the variables ‘O’ and ‘B’, which is depicted by a two-headed arrow in the
figure. Thus, as you will observe in this model, all the variables interact with and
influence one another.
Figure 3.1: S-O-B Model for Understanding Individual Behavior in Organizations

SITUATION (S) ORGANISM (O) BEHAVIOR (B)

Psychological processes
Physiological processes

Cognitive processes
Environment
Stimulus

Patterns of behavior
Responses
Behavior as an Input-Output System
B.J. Kolasa, a behavioral scientist, viewed human behavior as a systems model with an
input-output arrangement. According to this model, stimuli in the form of inputs are
processed at a central processing region and converted into outputs or responses. The
input-output model also provides an insight into various other processes associated
with behavior. The central processing region in which the stimuli are processed into
responses is responsible for cognition. Cognition thus forms a vital aspect of human
behavior. It includes perception, and other related processes such as thinking,
reasoning, problem-solving, and decision-making. In other words, cognition refers to
the act of knowing something. This knowledge precedes behavior. Apart from
cognition, the central processing region is also responsible for the storage of
information, which is known as memory.
Let us now discuss the various components of the input-output system:

Inputs
Inputs refer to the different stimuli that an individual receives from the environment.
The individual receives input in the form of information about events. He arranges this
information into certain patterns based upon his past experiences and the importance or
relevance of the information to him. This information about events is converted into
sensations by the various sense organs. Thereafter, it is organized within the central
processing region in such a way that it leads to coherent results. Thus the inputs are
responsible for the behavior of an individual in the input-output system.

1 R. S. Dwivedi, Human Relations and Organizational Behavior – A Global


Perspective, 5th edition (New Delhi: Macmillan India Ltd., 2001) 79.
45
Organizational Behavior

Processing
The information received in the form of inputs is sent to the central processing region
by the receptors or the sense organs. Here, the information is arranged in a logical and
meaningful manner. The personality traits of an individual and his experiences in
social settings affect the process of this arrangement of information. After the inputs
have been arranged in a meaningful manner, thinking, reasoning, or problem-solving
takes place in the cognitive region. However, this does not generate the final output.
Additional information needs to be processed in the central cognitive region before
output can be generated in the form of an individual’s decisions.

Outputs
The outputs of this input-output system refer to the various actions taken by the
individual. When stimuli are processed in the central processing unit, various signals
are generated. These are conveyed to different parts of the body through the motor
nerves. Consequently, the person either displays physical movements or verbal
expression of thoughts. This output that is generated is stored in the memory of the
individual and acts as a guide for future action enabling the individual to take similar
action in similar situations in the future. Further, the type of output generated is also
influenced by various environmental situations such as temperature, humidity, noise
levels, etc. In order to understand behavior completely, it is also necessary to
understand the process of motivation, which provides a psychological basis for the
individual’s behavior.

Motivation as the basis for the input-output system


An individual is continuously exposed to various kinds of stimuli. However, the
individual’s response in terms of output depends on his motivation level. This forms
the basis of the input-output system. Motivation explains how an individual can adjust
his behavior in response to various stimuli. Motivation can never be directly observed,
but it can be inferred from the way an individual behaves. Motivation can be broadly
classified into two types: primary or physiological motivation and secondary or socio-
psychological motivation. Physiological motivation refers to a lower level of
motivation while socio-psychological motivation refers to a higher level of motivation.
Physiological motivation includes hunger, thirst etc. whereas higher levels of
motivation include cognitive and aesthetic needs. Only when the lower level of needs
are satisfied will an individual be stimulated to achieve the higher level needs. The
satisfaction of these motivational needs influences the behavior of the individual.

BIOGRAPHICAL CHARACTERISTICS

When viewed from an organizational context, the most important biographical


characteristics are those which affect the performance of employees at work. These
characteristics are age, gender, marital status, and tenure of the employee in the
organization. They can be easily obtained from the personnel file of an employee.
These characteristics have an impact on the productivity, satisfaction, absenteeism and
turnover rates of employees. We will discuss this further in subsequent pages of this
chapter.

Age
Employers have mixed opinions about older employees. They agree that older
employees make valuable contributions by virtue of their experience and sound
judgement. Moreover, these employees have high work ethics and are quality
conscious.

46
Individual Behavior in Organizations

Exhibit 3.1
Retraining Older Workers
Due to improvement in the quality of life and improved medical facilities, mortality rates have
dropped significantly. This has led to an increase in the population of older people. This
demographic trend has forced organizations to think about hiring older people. Many employers
agree that hiring older workers has many advantages. Older workers bring in varied experience,
have fewer accidents, and are less likely to leave the job or take leave of absence. In addition, they
are willing to take up challenging tasks. At the same time, they also feel that older workers are afraid
of using new technology. Various studies, however, reveal that older workers can be trained
comfortably in new technology skills. The American Society of Aging states that people above the
age of 50 use the Internet extensively and also realize that computer skills are essential for working
in the new economy.
The only reason why older workers hesitate to adopt new technology is that they are not given
enough encouragement or training in the technology. As new technological trends emerge, older
workers feel obsolete and are unable to cope. In order to ensure that the skills of older employees are
utilized in the best possible manner and to make them more productive, organizations should provide
proper training and retraining programs for them.
Certain things must be considered by organizations when they design retraining programs for adults.
The two most important things to be kept in mind when designing such programs are to ensure that
the participants are exposed to lower levels of stress and that they are treated as equals. The
organization should make older employees feel that they are being sent to the training program not
because their performance is bad, but because they are valued and the organization is interested in
keeping them updated. Since the older workers may be anxious about ‘going back to school’, they
must receive encouragement and support from the management.
In The Ultimate Training Workshop Handbook, Bruce Klatt provides some useful insights into the
development of training or retraining programs for older workers:
 The purpose and benefits of the program should be explained to the participants.
 The group should be encouraged to participate in discussions and talk about their experiences.
This interaction will make the members of the group understand each other better.
 The training program should be designed in such a manner that it does not hurt the self-esteem
of the participants. Older employees are very sensitive and may not participate to the fullest
extent if their self-esteem is hurt.
 The training should be given in easy, manageable modules so that the participants are able to
understand the concept. Moreover, the management should be sensitive to the limitations of the
older employees and should ensure that the training program is not too strenuous for them.
 The participants should be provided constant feedback on their performance and suggestions for
improving it. They should also be given adequate encouragement and rewards when they do
well in the program.
 Since older employees may take a longer time to learn things, concepts must be summarized and
reviewed at the end of each session.
 Older workers like to learn by doing things. They should be provided with an environment
where they can experiment and thereby, learn new concepts.
 Older employees do not like excessive guidance as they tend to be self-directed. Spoon-feeding
them will make them feel disgruntled and angry.
Since many organizations agree that older employees are cost-effective and that it is advantageous to
the organization to employ them, such employees should be encouraged to work and make
significant contributions to the workplace. In order to make the best possible use of this skilled

47
Organizational Behavior

section of the workforce, organizations should provide them with a safe work environment, flexible
work hours and good benefit packages. They should also be given training and retraining programs
so that they do not feel obsolete.

Adapted from Barbara McIntosh, “An Employer’s Guide to Older Workers: How to Win Them Back
and Convince Them to Stay,” <wdsc.doleta.gov/seniors/other_docs/EmplGuide.doc>

However, they are also perceived as inflexible and are generally unwilling to adapt to
new technology or methods of working. Due to these drawbacks, organizations are
often unwilling to hire older workers. Moreover, when organizations downsize or
restructure, the older employees are the first to be laid off.
Age has a significant impact on turnover, absenteeism, productivity and satisfaction.
As people grow older, they are less likely to leave the job because they have limited
opportunities available. Further, their longer tenure in the organization guarantees them
higher pay, longer paid vacations, and good pension benefits. Age also has an effect
on the absenteeism rates. In general, it has been observed that older employees have
higher rates of unavoidable absence because of various health-related problems and
also because they take a longer time to recover. However, they have lower rates of
avoidable absence as compared to younger employees. Coming to productivity, there is
a widespread belief that productivity declines with age. However, research reveals that
age and job performance are totally unrelated in all kinds of professional and non-
professional jobs. Thereby, it can be stated that age has no bearing on productivity.
Even if there is a small decrease in the level of productivity due to age, it is amply
compensated by additional experience, which benefits the organization in the long-
term. Studies carried out to find the relationship between age and job satisfaction come
up with mixed results. Many studies have reported that among professionals, up to the
age of 60, satisfaction increases with age. Other studies, however, state that the
relationship between age and satisfaction among non-professionals can be denoted by a
U-shaped curve. In other words, satisfaction levels decline in their middle age and
increase in their later years.

Gender
Researchers have found that there are very few differences between men and women
which affect their performance at the workplace. Like men, women also displayed
problem-solving abilities, analytical skills, motivation levels, interpersonal skills and
learning abilities. However, some psychological studies revealed minor differences
between men and women. For instance, men are more aggressive than women and
women are more likely to comply with instructions given by superiors. As far as job
satisfaction is concerned, there is no evidence to indicate that the gender of an
employee has any effect on this. Further, studies carried out to determine whether
women are relatively unstable in their jobs have found mixed results. Some studies
have reported that women have higher turnover rates than men, while other studies
found no significant difference between the turnover rates of men and women. Thus,
there is not enough information to conclude that turnover rates are higher among
women employees as compared to their male counterparts. However, research on
absenteeism shows that women display higher absenteeism levels than men. This could
be attributed to the fact that women have to cope with family responsibilities in
addition to their professional responsibilities. Quite often, when family emergencies
crop up such as a child falling sick, it is generally the woman who is expected to take
time off from work to do the needful. However, the traditional scenario which casts
woman in the role of a homemaker is giving way to one where men also share the
responsibilities of the family and child care.

48
Individual Behavior in Organizations

Marital Status
Research has been conducted on the effect of marital status on productivity. It was
found that married people have greater responsibilities as they have to provide for
their families. Hence they value a steady job far more than their counterparts who are
single. Consequently, they are steady and reliable. They take fewer leaves of absence
and are generally more satisfied with their jobs. Thus, while research has shown the
effects of marital status on productivity, it is limited. Moreover, researchers have not
studied the effect of divorces, widowhood, and the more modern trends such as live-in
relationships on the performance of employees.

Tenure
Research studies have been carried out to understand the relationship between a
person’s productivity and his tenure within an organization. Recent research has shown
that employees who have vast work experience are likely to be more productive and
satisfied. An employee’s tenure within an organization is a better indicator of job
satisfaction than his age. Evidence also shows that a person’s tenure in the previous
organization is the best way of predicting whether he is likely to stay for long in the
present job or seek a change after a short while.

Biological Foundations of Behavior


Certain factors in an individual such as his heredity, his subsequent biological
development, and certain biological characteristics affect the way he perceives external
information, understands it, and responds to it. As an individual grows up and broadens
his thinking, these factors have a significant impact on his behavior which is expressed
in the form of psychological processes. These factors are discussed in detail in the
subsequent pages:

Heredity
The Cambridge International Dictionary of English defines heredity as “the process by
which characteristics are given from a parent to the child through the genes.” Some of
the characteristic traits determined by heredity are physical stature, gender,
temperament, muscle composition and reflexes, energy levels, and biological rhythms.
These hereditary traits are either completely or substantially determined by the
biological, physiological, and psychological makeup of the individual’s ancestors.
Every individual has a unique genetic makeup. Consequently, he may be like other
people in a certain respect but he will also possess some strikingly different
characteristics. Therefore, to a certain extent, a person’s behavior is determined by the
physical traits and intellectual abilities that he inherits from his ancestors. The
combination of the inherited traits of a person as well as certain environmental factors
give rise to a unique behavioral pattern in an individual. This behavior is the
individual’s response as he tries to adjust to the environmental conditions.

Biological development of the individual


An individual’s development is influenced by various physiological aspects, such as
the functioning of the endocrine system. The secretions of various glands such as
pituitary, thyroid, adrenal and gonads are responsible for the physical and emotional
growth of an individual. An individual’s level of maturity also determines how he
interacts with others.

49
Organizational Behavior

Exhibit 3.2
The Effect of Genes on Behavior
th
In the latter part of the 20 century, it was discovered that genes affect the behavior of individuals.
This came as a shock to many who till then believed that it was possible to mold the behavior of a
person by providing him the right environment. Various studies revealed that genes had a profound
effect on a person’s behavior as well as mental state. For example, it was found that identical twins
who had been brought up in different environments, have similar intellectual capabilities and
personality traits (such as introversion, antagonism etc.). They also had similar behavioral
peculiarities like giggling unnecessarily, and flushing the toilet before and after use. Studies also
revealed that identical twins (who share the same genetic material) share more similarities than
fraternal twins (who do not look alike but share half of the genetic material). Research also showed
that psychological disorders like schizophrenia, obsessive-compulsive disorders, and depression were
partially heritable.
Rapid advances in biotechnology and genetic engineering have now made it possible to isolate genes
responsible for certain diseases. Many people are concerned that governments and parents may try to
change basic human nature and try to produce children with certain desirable behaviors by
manipulating genes.
However, these fears are unfounded. Although genes do affect behavior, other factors also influence
behavior. Genes by themselves cannot influence behavior directly. Genes influence the shape and size
of the brain, its sensitivity to hormones and other molecules, and its functioning. They also affect a
person’s memory and his response to various courses of action. However, the possibility of isolating a
gene responsible for a particular behavior is rather dim. Studies on identical twins show that they
share a large group of genes. Since genes act together and form a complex combination to exert some
influence, psychological engineering can be regarded as a very remote possibility only. Thousands of
genes may be responsible for a particular talent or behavior, all of which will have to be arranged in a
complex manner to obtain the desired effect. Thus, finding the right genes and the right combination
for a particular behavior may be a Herculean task.
All this does not imply that efforts should not be made for social or personal development. Every
individual is born with certain talents and unique qualities, so he should try to do his best within his
limitations. It is foolish to blame one’s genes for one’s behavior or limitations. While genes do have a
profound effect on a person’s personality, they are not everything.

Adapted from Steven Pinker,”Are Your Genes to Blame?” Time, Vol. 161, Issue 3 (20 January,
2003): p98, 3p.

The nervous system


Many psychologists agree that an understanding of the nervous system and the various
physiological processes associated with it would provide some insights into human
behavior and personality. The nervous system provides the basic connecting
framework in the human body. It is responsible for transmitting data in the form of
stimuli from the sense organs to the brain, and responses back from the brain to the
target sites, such as muscles, organs and glands.
The neurons or nerve cells are the basic building blocks of the nervous system.
Neurons are specialized cells that transmit information from one part of the body to
another. A neuron is made up of three components:
 Axon: This is a long, thin fiber that carries information towards other neurons.
 Dendrites: These are certain projections that branch out from the neuron. They
receive information from other neurons.
 Synapse: This is the small space between two neurons through which
communication takes place.

50
Individual Behavior in Organizations

Exhibit 3.3
The Herrmann Brain Dominance Instrument
The human brain is a marvel of creation. Weighing only approximately 1.5 kg, the brain consists of
more than 10 trillion neurons, each of which can potentially communicate with about 1,00,000
adjoining neurons. The brain is responsible for a person’s thinking and learning processes, and has
unlimited potential. Knowledge of the functions and structure of the brain has progressed
exponentially due to the advent of new technologies like electroencephalography, positron emission
tomography, magnetic resonance imaging, etc. Many researchers are interested in finding out how
the brain is responsible for behavior. This interest led to the development of various instruments
which help in determining the functions of various parts of the brain and the way in which they affect
behavior and thinking.
One such application, called the Herrmann Brain Dominance Instrument (HBDI), was designed by
Ned Herrmann. HBDI helps researchers determine an individual’s brain dominance and thinking
preference. The HBDI illustrates and explains how a person likes to think, learn, communicate, and
make decisions. By understanding his personal thinking preferences, a person can adapt his thinking
style, decision-making and communication to handle certain situations well.
The HBDI considers the brain to have four quadrants. These are classified as:
Quadrant A (left brain, cerebral)
Quadrant B (left brain, limbic)
Quadrant C (right brain, limbic)
Quadrant D (right brain, cerebral)
The thinking preferences of each of these quadrants are given below:
Quadrant A: A person who is Quadrant A dominant is analytical, logical, critical, quantitative, and
factual.
Quadrant B: A person who is Quadrant B dominant is planned, sequential, organized, detailed and
structured.
Quadrant C: A person who is Quadrant C dominant is emotional, interpersonal, sensory and spiritual.
Quadrant D: A person who is Quadrant D dominant is innovative, artistic, visual, holistic, and good
at conceptualizing.
It has been observed that different people in different professions have different thinking preferences.
For example, most professors of engineering are strongly Quadrant A dominant. Consequently, their
thinking is dominated by quantitative facts and they tend to be logical and analytical.
This instrument is very useful because it allows people to become more aware of their thinking
preferences. By being more aware of their thinking preferences, they can appreciate how others think
and comfortably interact with them, even though their perspectives may be different.

Adapted from “Whole Brain Thinking (Using HBDI),” January 2003, mindwerx International Pty.
Ltd. <http://www.mindwerx.com.au/HBDI_programs.htm> and Richard M. Felder, “Matters of
Style,” <http://www.ncsu.edu/felder-public/Papers/LS-Prism.htm>

The various sense organs receive stimuli. These stimuli are converted into neural
impulses by the receptor cells attached to the person’s sense organs. These neural
impulses are converted into responses by the various effector cells located in the
muscles and glands. These responses may be in the form of a simple reflex action or a
complicated activity.

51
Organizational Behavior

Constituents of the nervous system


The nervous system can be divided into the central nervous system and the peripheral
nervous system. The central nervous system consists of the nerves that are enclosed in
bone. The basic function of the central nervous system is to process the available
information and provide instructions to the various parts of the body to carry out
certain actions. The major components of the central nervous system are the brain and
spinal cord. The most important part of the brain is the cerebrum, which is responsible
for carrying out complex mental activities. The outer portion of the cerebrum is called
the cortex. It consists of certain areas controlling motor and sensory processes. When
the nerves of these areas are stimulated, it results in the movement of the muscles to
which these nerves are connected. An injury to these nerves could result in the
paralysis of the areas connected by these nerves.
The peripheral nervous system comprises of nerves that are not enclosed in bone. It can
further be subdivided into a somatic system and an autonomic system. Somatic nervous
system controls the voluntary muscles. The main function of the somatic system is to
carry messages from the sense organs to the central nervous system and back to the
muscles. This results in certain specific actions such as blinking in response to a
sudden bright light, trying to balance oneself if something makes a person lose his
balance. The autonomic system, on the other hand, is responsible for involuntary
actions, e.g., increase in the rate of heartbeat, profuse perspiration, etc. The autonomic
system is responsible for maintaining the internal balance of the body. It comprises of
the sympathetic and parasympathetic systems. The sympathetic system is activated in
various emotional situations, while the parasympathetic system is responsible for
carrying out the routine activities of the body.

COGNITIVE PROCESSES
Cognitive processes refer to the various higher mental processes of human beings such
as thinking, problem-solving, autistic thinking, daydreaming, and pathological
thinking. These cognitive processes differentiate human behavior from those of lower
organisms. These cognitive processes have been explained below.

Thinking
Man’s thinking capacity enables him to react to stimuli not physically present. Thus he
can respond to actions, words, or images that are not explicitly visible. Thinking is
believed to be the most complicated form of learning available to human beings. The
process of thinking involves the perception of relationships between different objects.
It also includes the use of concepts (learned responses) to different kinds of stimuli.
The use of concepts helps people classify various objects, situations, or events in the
environment according to perceived similarities and differences. Various studies have
shown that concepts are learned faster under the following conditions:
 When the individual faces specific instances which allow him to respond only in a
limited number of ways.
 When the individual faces familiar instances.
 When the instance has had a positive impact on the individual.
 When a series of instances unite to give rise to a final instance, which generates a
response in the individual.
The thinking process follows a certain sequential pattern. Initially, the person identifies
and defines the problem. Then, he associates the problem with the relevant concepts he
had formed based on his previous experiences. Next, he verifies whether the concepts
developed will hold true in the present situation. If they do so, then these concepts can
be applied to the present situation as well.

52
Individual Behavior in Organizations

Problem-Solving
Problem-solving abilities like sorting and discrimination vary from person to person
due to differences in their linguistic habits. Different individuals tend to use varying
language styles to arrive at solutions to problems. For example, solutions to problems
can easily be generated if the problem is well expressed and a logical plan of action is
formulated to deal with it.
People should also be knowledgeable if they are to formulate effective solutions.
However, the knowledge of something can be affected by biases which hinder the
process of problem-solving. Both personal and group biases can affect individual
problem-solving abilities.

Other Cognitive Processes


Cognitive processes also include autistic thinking, daydreaming and pathological
thinking. Autistic thinking and daydreaming are motivated processes, but not tied to
reality. These processes are irrelevant to problem-solving. Pathological thinking which
occurs in a state of mental disorder is characterized by illogical thought
processes. However, these cognitive processes have not been studied to the extent that
simple forms of learning have been examined.

SUMMARY
Human behavior varies from person to person. People behave in different ways when
they are confronted with an identical situation. Human behavior is considered to be
goal directed. It can be understood from three different perspectives – the traditional
perspective, the behavioral perspective and the perspective of the input-output system.
The traditional perspective considers behavior as a process whereby a response is
produced to a specific stimulus in the environment. The behavioral perspective
considers that the situation (comprising of various environmental aspects) interacts
with the individual and results in certain behavioral patterns. B.J. Kolasa first
explained behavior as an input-output system. This model explains how inputs (the
stimuli) are converted into outputs (responses) in a central processing region. The
inputs received at the central processing region of the individual are arranged in a
meaningful pattern and the subsequent response in the form of an action constitutes the
output. Motivation forms the underlying basis for the input-output system, which
means that an individual should be motivated in order to respond to the stimuli.
In the organizational context, the biographical characteristics such as age, gender,
marital status and tenure have a great impact on an individual’s performance. These
can be easily obtained from an employee’s personnel files.
An individual’s behavior is also influenced by biological characteristics such as
heredity, stage of biological development, and the nervous system. Heredity refers to
the genetic transfer of characteristics from a parent to the offspring. Each person has a
unique genetic makeup which makes him different from other people. The biological
development and emotional maturity levels of an individual are also responsible for his
behavior. Apart from these two factors, a basic understanding of the nervous system
provides a better insight into human behavior.
Various higher mental processes or cognitive processes are also discussed in this
chapter. These include thinking, problem-solving, autistic thinking, daydreaming and
pathological thinking. Thinking is the most complicated form of learning and involves
the ability to perceive relationships between various things. Problem-solving abilities
include sorting and discrimination. These help people to understand the problem and
develop effective solutions. Autistic thinking and daydreaming are motivated processes
and are not based on reality. Pathological thinking is evident in a disorder called
psychosis wherein the individual exhibits illogical and discontinuous thought
processes.
53
Chapter 4

Learning and Behavior


Management
In this chapter we will discuss:

 Significance of Learning
 The Theoretical Process of Learning
 Principles of Learning
 Behavioral Management
Learning and Behavior Management

Organizations and businesses keep changing due to the dynamic nature of the business
environment. In order to survive, organizations, like individuals, must learn new skills
and acquire knowledge about emerging theories and techniques. Learning is defined as
the acquisition of knowledge or skills through study, practice, or experience.1 Learning
usually causes a relatively permanent change in the behavior of a person. Since most of
the behaviors exhibited by people in organizations are learned, learning has become an
important constituent in the study of organizational behavior.
In order to explain and predict the behavior of people in organizations, we must have
an understanding of the way in which people learn. This chapter examines various
theories of learning: the behavioral theories that cover both classical and operant
conditioning, the cognitive theories propounded by Edward Tolman, and the social
learning theory. The concept of reinforcement, both positive and negative (and also
how the latter differs from punishment) is also discussed. The final part of the chapter
explores behavioral management. In this part we discuss the Organization Behavior
Modification (O.B. Mod) process developed by Fred Luthans and Robert Kreitner. The
O.B. Mod. process is a behavioral approach which uses the reinforcement theory to
human resource management to improve the performance of employees.

SIGNIFICANCE OF LEARNING

We must understand the concept of learning if we are to understand, develop and


manage the human resources in an organization. Traditionally, though the concept of
learning did not receive as much attention as motivation or attitudes, it has gained lot
of prominence in the recent times. The concept of ‘learning organizations’ is an
indicator of its growing popularity. This is so because all behaviors of people in an
organization are learnt, either directly or indirectly. The skills of a worker, the attitude
of a manager, an accountant’s style of dressing – these are all learned behaviors.
Learning impacts practically all aspects of organizational behavior. By applying the
processes and principles associated with learning, organizations can mould the
behavior of employees to enhance their performance.

THE THEORETICAL PROCESS OF LEARNING

Theories are attempts to explain and understand specific phenomena. As a theory is


perfected over time, it can be applied more and more widely. At the same time, it
becomes more and more effective in predicting and controlling different situations. So,
a perfect theory of learning can be applied across different situations, i.e., it can be
applied to children, college students, managers, and workers. It can also explain all
aspects of learning and predict as well as control learning situations. Unfortunately, no
such perfect theory of learning exists today. Although many behavioral scientists agree
on some principles of learning (like reinforcement), there is still considerable
difference of opinion among them about the theoretical underpinnings of learning.
Many efforts have been made to develop a perfect theory of learning. The most widely
recognized theoretical approaches to learning are the behavioristic, cognitive and social
learning theories. These theories, which help us understand the behavior of people in
the workplace, are very important in the study of organizational behavior.

1 Curtis W. Cook, Phillip H. Hunsaker and Robert E. Coffey, Management and Organizational
Behavior, 2nd edition (USA: McGraw-Hill, 1997) 158.

55
Organizational Behavior

Exhibit 4.1
Implications of Learning Theories
Organizations constantly endeavor to make their employees synchronize their behavior to enable
them to keep pace with their subordinates, peers and superiors. Organizations can put to use learning
theories to train the employees and polish their skills. Learning theories help managers construe
people’s acquisition of certain behaviors and skills. In the organizational context, learning theories
have the following implications:
 The theories state that active participation of the employees in the learning process will speed
up the employees’ learning process.
 Repetition of concepts, procedures or desired behavior before the employees makes assimilation
faster.
 Employees pick up fast if the training equips them with the essential skills of the job.
 Learning is enhanced when employees get a clear and accurate feedback of their performance.
 All employees should not be rewarded in the same way. The organization should ensure that the
rewards are proportionate to the employee’s inputs. This induces learning in the employees and
they begin to understand the correlation between their inputs and rewards.
 Employees’ opinion must be sought before deciding on the rewards.
 Managers must observe the ways the rewardees utilize the reward.
 Choice of rewards should be made clear so that employees have a clear idea as to what aspect of
their behavior can fetch them a reward.
 Organizations should clearly define the specific behavioral objective or the level of performance
the employees should strive to achieve in order to obtain a reward.
 The benchmark for performance should be challenging to employees but possible to reach.
 The organization can reinforce desirable behavior in employees by rewarding them with
something that is of value to them.
 Rewards should be given for excellence in performance or when employees are close to
achieving the target.
 The organization should reward an employee immediately when he exhibits a desirable
behavior.
 The behavior that needs modification should be specified to the employees at the time of
punishment.
Learning has, therefore, become a very important aspect of organizational behavior and finds
application, right from the comprehension of employees’ behavior to the designing of various
training programs and reward schemes.

Adapted from Professor E. Wertheim, “Learning and Behavioral Modification: A Technical Note,”
<http://web.cba.neu.edu/~ewertheim/indiv/learn.htm>

Behavioristic Theories
The oldest and most extensively researched theory of learning originated from the
behaviorist school of thought in psychology. Learning principles like ‘reward systems’
and ‘behavioral management approach’ are derived from these behavioristic theories.
Well-known classical behaviorists like Ivan Pavlov and John B. Watson considered
learning as the association of stimulus and response (S-R connection). But B. F.
Skinner, an operant behaviorist, believed that learning occurs as a consequence of

56
Learning and Behavior Management

behavior, i.e., learning is due to the consequence that follows the response, which
influences the repetition of the response. Operant behaviorists thus based their theories
on the response and stimulus (R-S) connection. Since these theories emphasize the
connection between stimulus and response, these theories are also called connectionist
theories. The S-R connection deals with classical or respondent conditioning while the
R-S connection deals with instrumental or operant conditioning. These conditioning
processes help us understand how people acquire patterns of behavior.

Classical conditioning
The theory of classical conditioning grew out of the famous experiments conducted on
dogs by the Russian psychologist, Ivan Pavlov. In these experiments, Pavlov used a
simple surgical procedure to measure the exact amount of saliva secreted by the dogs.
When he gave the dog a piece of meat, it would start salivating. In this case, the piece
of meat was the unconditioned stimulus, and the salivation the unconditioned response.
Next, he just rang a bell, which naturally did not cause the dog to salivate. In
subsequent experiments, he gave the dog a piece of meat when a bell was rung. After
this process was repeated several times, the dog began to associate the ringing of the
bell with meat. In subsequent experiments, Pavlov found that the dog would start
salivating at the mere ringing of the bell, even when it was not given any meat. Thus
the dog developed a conditioned response (i.e. salivation) to a conditioned stimulus
(i.e. the ringing of a bell), which was previously a neutral stimulus.
Classical conditioning, as illustrated above, can therefore be defined as a process in
which a formerly neutral stimulus, when paired with an unconditioned stimulus,
2
becomes a conditioned stimulus that elicits a conditioned response. In other words,
when an unconditioned and a neutral stimulus are paired, the neutral stimulus becomes
a conditioned stimulus and elicits the response of the unconditioned stimulus. Classical
conditioning essentially involves learning a conditioned response by associating a
conditioned stimulus with an unconditioned one.
Most modern theorists feel that classical conditioning represents only a very small
fraction of human learning abilities. B.F. Skinner felt that classical conditioning
provided an explanation only for reflexive or respondent behaviors, which are
involuntary responses caused by different stimuli. He argued that the more commonly
displayed but complex human behaviors cannot be explained by classical conditioning
alone and that such behaviors are learnt by operant conditioning.

Operant conditioning
Operant conditioning or reinforcement theory has been associated with the work of B.
F. Skinner. Skinner designed an apparatus called the “Operant Chamber” or the
“Skinner Box” to understand learned behavior in animals (he used rats and pigeons in
his experiments). The Skinner box has a lever, which on pressing, drops a pellet of
food. A hungry rat was placed in the Skinner box. Soon, it started exploring and
sniffing around, looking for food. It eventually pressed the lever by accident and
received a pellet of food. The rat soon learned to associate pressing of the lever with
the reward of food. This reward acted as a reinforcing factor. This form of learning,
which is based on trial and error, is called operant conditioning.
According to the operant conditioning theory, consequences determine the behavior
that results in learning. People learn to behave in a particular manner in order to obtain
something they want or to avoid something they do not want. Operant conditioning
focuses on voluntary or learned behavior, as opposed to reflexive or unconditioned

2 Fred Luthans, Organizational Behavior, 8th edition (India: Irwin McGraw-Hill,


1998) 224.
57
Organizational Behavior

behavior (in classical conditioning). According to reinforcement theory, behavior is


repeated depending on the reinforcement or lack of reinforcement brought about as a
consequence of a particular behavior. Behavior is strengthened and is likely to be
repeated if it is reinforced.
Skinner argued that the frequency of specific forms of behavior could be increased if
they were followed by pleasant consequences. That is, positive reinforcement would
establish a particular pattern of behavior. He also argued that the effectiveness of
rewards is at its highest when they are given immediately after the desired behavior is
exhibited. Similarly, when behavior is not rewarded or is punished, the chances of such
behavior being repeated are less.
Operant conditioning differs from classical conditioning in many ways. The most
important differences between the two are given below:
a) The strength and frequency of classically conditioned behaviors are determined by
the environmental event that precedes the behavior. In operant conditioning, it is
the environmental event following the behavior that determines the strength and
frequency of the behavior. That is to say, in operant conditioning, what happens as
a consequence of the response determines the behavior of individuals.
b) In the classical conditioning process, the unconditioned stimulus that serves as a
reward is presented every time. In operant conditioning the reward is given only
when the organism gives the correct response. This requires the organism to
operate on the environment to receive a reward. Table 4.1 lists some examples of
classical (S-R) and operant (R-S) conditioning.

Table 4.1: Examples of Classical and Operant Conditioning

Classical Conditioning

(S) (R)
Stimulus Response
watches favorite tennis jumps with joy
player winning a tournament
touches a hot vessel moves away
The individual hears good music hums and rocks gently
steps on a nail jumps and screams in
pain
Operant Conditioning
(R) (S)
Response Stimulus
browses the Internet obtains desired
information
uses power carefully saves money on
electricity bill

carries a credit card finds it convenient for


The individual shopping
pays loan instalments attracts no penalty for
promptly delayed payment

achieves sales targets obtains incentives and


gifts

58
Learning and Behavior Management

Operant conditioning finds greater application in human learning than classical


conditioning. Many aspects of organizational behavior can be explained by operant
conditioning. For example, it can be said that employees work in order to provide the
basic amenities for themselves and their families. Many managers base their behavioral
strategies on the operant theory to motivate their employees and teach them desirable
behaviors.

Cognitive Theories
Edward Tolman, a pioneering theorist in the field of cognitive psychology, stated that
cognitive learning consists of a relationship between cognitive environmental cues and
3
expectation. He tested this theory by conducting controlled experiments on white rats.
In these experiments, rats were allowed to run through a complicated maze in search of
food. The food was placed at certain points in the maze. When the rats came across the
food, they began to associate the presence of food with certain cognitive cues. As a
result, learning took place. Based on his research, he concluded that rats and other
animals developed ‘cognitive maps’ of their environment. They learn where different
parts of the environment are in relation with one another. Tolman therefore considered
learning as developing a pattern of behavior from bits of knowledge about and
cognition of the environment. This learning of the association between the cue and
expectation is termed S-S (Stimulus-Stimulus) learning.
This theory influenced many industrial training programs in the 1940s and 1950s. The
aim of these programs was to strengthen the relationship between the cognitive cues
(like supervisory, organizational and job procedures) and the expectations of
employees (rewards or incentives for good performance). In line with Tolman’s theory,
these programs sought to increase the productivity of workers by associating
compliance with orders or instructions with financial rewards.
Nowadays, cognitive psychology focuses on the structures and processes of human
competence, like the role of memory and information processing in learning.
Expectations, attributions, locus of control, and goal setting are all cognitive concepts.
The cognitive approach has been applied to many theories of organizational behavior,
particularly theories of motivation.

Social Learning Theory


Though the social learning theory blends both behaviorist and cognitive concepts, it is
more of a behavioral theory since it depends heavily on the concepts of classical and
operant conditioning. However, it goes beyond these theories and states that there is
more to learning than just the antecedent stimulus and dependent consequences. This
theory assumes that learning can also take place through vicarious or modeling
processes and self-control processes.

Modeling processes
Observational learning is the essential component of vicarious or modeling processes.
Behavior acquisition through the modeling process cannot be directly attributed to
either classical or operant conditioning. According to N. E. Miller and J. C. Dollard,
learning need not result always from S-R or R-S connections. They argued that
learning could occur through imitation of others. Albert Bandura carried out
considerable research on the modeling processes to examine the process of learning.

3 Fred Luthans, Organizational Behavior, 8th edition (India: Irwin McGraw-Hill, 1998) 225.
59
Organizational Behavior

He hypothesized that people could learn from others and that such learning took place
in two steps:
1) Through observation a person acquires a mental picture of an act carried out
by someone and its consequences.
2) Then the person enacts the acquired image.
If the consequences turn out to be positive, the behavior is repeated; otherwise, it is
discontinued. While operant conditioning proposes that new behavior is acquired as a
result of response-consequence connection, the modeling process goes a step further
because of its cognitive, symbolic representation of modeled activities. Bandura further
states that modeling also includes various other subprocesses, such as attention,
retention, motoric reproduction and reinforcement, which are all related to one another.

Self-efficacy
Self-efficacy has become integral to the study of organizational behavior since it helps
us understand various other concepts like motivation and personality. Albert Bandura
defined self-efficacy as: “The self-perceptions of how well a person can cope with
4
situations as they arise.” People with high self-efficacy, that is, people who think they
can perform a task well, usually do better than people with low self-efficacy, that is,
the ones who think they will fail. Research suggests that there is a fairly clear
relationship between self-efficacy and work related performance. It has been observed
that people with high self-efficacy tend to persevere at their tasks and do a good job
without becoming stressed out.

PRINCIPLES OF LEARNING

The most important principles of learning are reinforcement and punishment. It is


generally agreed that reinforcement is a better approach for making people learn
desirable behaviors. Therefore, it is considered to be the most important principle of
learning. Reinforce means to strengthen, and the term ‘reinforcement’ refers to a
stimulus which strengthens the probability of a particular response being repeated.
Appreciating the good work of an employee and awarding promotions or raises are
examples of commonly used reinforcers in organizations. Reinforcements can be either
positive or negative. Positive reinforcement increases the chances that a particular
behavior would be repeated because it results in a desirable consequence. Negative
reinforcement also increases a particular behavior being repeated, but it does so in
different ways. In negative reinforcement, the individual repeats a behavior not
because he wants to but because he wants to avoid a negative consequence. The main
purpose of reinforcers is to strengthen a particular behavior. Another method of
managing behavior involves the use of punishments. Punishments are sometimes
wrongly considered to be the opposite of reinforcement. A punishment can be defined
as a action that weakens a particular behavior and reduces its frequency. It usually
involves withdrawing a desirable consequence or applying an undesirable one. For
example, a manager who has a poor performance record could be punished through
curtailment of some of his organizational privileges.
Thorndike’s Law of Effect placed principles of reinforcement within a broad
theoretical framework. This is discussed in detail in the following section.

4 Albert Bandura, ‘Self-Efficacy Mechanism in Human Agency,’ American Psychologist, 37


(1982): 122-147.
60
Learning and Behavior Management

Law of Effect
Edward L. Thorndike believed that learning involved forming bonds between stimuli
and responses. In 1920, Thorndike proposed the ‘The Law of Effect’:
“Of several responses made to the same situation those which are accompanied or
closely followed by satisfaction to the animal will, other things being equal, be more
firmly connected with the situation, so that, when it recurs, they will be more likely to
recur; those which are accompanied or closely followed by discomfort to the animal
will, other things being equal, have their connections to the situation weakened, so that,
when it recurs, they will be less likely to occur. The greater the satisfaction or
discomfort, the greater the strengthening or weakening of the bond.”
In other words, the Law of Effect states that responses followed by pleasant
consequence are more likely to be repeated, while responses followed by unpleasant
consequences are less likely to be repeated. This law has been accepted by many
behavioral scientists. It has been proved repeatedly in controlled learning experiments
as well as in real life that consequences of reinforcement either increase or decrease the
probability of a behavior being repeated.
However, there are some exceptions to this rule. For example, some employees do not
learn from repeated failures (on the job) as they have high self-efficacy (their belief
that they possess the knowledge and right behaviors to accomplish a task). Such
employees also do not obey the instructions given by the manager and continue to
work in their own style. Such a misguided sense of self-efficacy could neutralize the
Law of Effect. In spite of this drawback, the law has gained acceptance among many
behavioral scientists. Moreover, the Law of Effect increases our understanding of the
concept of reinforcement.

Meaning of Reinforcement
One very popular definition of reinforcement explains it as ‘anything the person finds
rewarding.’ Although this is a very simple and concise explanation, it is not a correct
definition, as it uses the terms reinforcement and reward interchangeably. An
operational definition of reinforcement can be found in the Law of Effect. According to
this, reinforcement is defined as anything that tends to increase the intensity of a
response and also induces the person to repeat the behavior which was followed by
reinforcement. A reward, however, is something which is given or done in recognition
of an individual’s achievements or performance. It is given by someone to a person he
feels deserves to be rewarded.
From a functional perspective, something is reinforcing only if it strengthens the
response preceding it, thus inducing the response to be repeated. In order to understand
the difference between reinforcement and reward, let us consider an example. By
publicly praising an employee who found an error in a report, a manager tries to reward
him. However, other workers may criticize him for finding this error, and as a result,
he may not repeat the same behavior. In this case, the reward is not reinforcing.
Though technically such a difference exists, many times these two words are used
interchangeably. In order to understand the differences between rewards and
reinforcers, we should understand what positive and negative reinforcers are.

Positive and negative reinforcers and punishment


The terms positive reinforcement, negative reinforcement and punishment often cause
a lot of confusion. Reinforcement, whether it is positive or negative, increases the
61
Organizational Behavior

Figure 4.1: Difference Between Positive and Negative Reinforcement and Punishment

Behavior Encouraged Behavior Suppressed

POSITIVE REINFORCEMENT PUNISHMENT


Stimulus Example: good performance rating Example: suspension of the
Presented employee

NEGATIVE REINFORCEMENT PUNISHMENT


Stimulus Example: calling off strike and Example: no access to recreation
Removed or resuming work to avoid being facilities or e-mailing system for a
Withheld dismissed week

Adapted from http://www.abacon.com/slavin/t48.html.

intensity of any response and makes it more likely to be repeated. However, positive
and negative reinforcers affect behavior in totally different ways. Positive
reinforcement strengthens and increases the likelihood of a particular behavior being
repeated because a desirable consequence is presented. Negative reinforcement also
strengthens and increases the probability of a particular behavior being repeated, but by
withdrawing an undesirable consequence. Figure 4.1 shows the difference between
positive and negative reinforcers and punishments.
If a manager praises an employee for the successful completion of a task on schedule,
positive reinforcement is said to have taken place. This reinforcement encourages the
employee and increases the likelihood of the employee performing his tasks on time.
But if a worker is asked to get back to work when the supervisor notices him talking to
his colleagues, negative reinforcement is said to have taken place. In order to avoid
being singled out again by the supervisor, the worker may not repeat this behavior and
instead, focus on the task at hand.
Though more complex in nature than positive reinforcement, negative reinforcement is
not synonymous with punishment. While punishment weakens and decreases the
probability of occurrence of a particular behavior, negative reinforcement strengthens
and increases it. The only common feature of negative reinforcement and punishment
is the fact that both are forms of negative control of behavior. One could even describe
negative reinforcement as a form of social blackmail, which makes a person behave in
a particular manner.

BEHAVIORAL MANAGEMENT

Behavioral management is the application of the reinforcement theory or operant


conditioning to exert a positive influence on the performance of employees. Robert
Kreitner and Fred Luthans coined the term ‘Organizational Behavior Modification’ or
‘O. B. Mod’ for behavioral management. The O. B. Mod process focuses on the
following aspects: the influence of the environment on employee behavior; the
antecedent cues or conditions that precede a behavior; the consequence of a particular
behavior; and the impact of the behavior on performance effectiveness. The O.B. Mod
process can help increase the frequency of desirable behaviors in employees. However,
only those behaviors which are tangible, observable, measurable, and repeatable can be
improved by means of the O.B. Mod process. This process has been shown to reduce
absenteeism, improve productivity, decrease costs, reduce defective output and
improve safety.
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Learning and Behavior Management

Steps in the O. B. Mod Process


The O. B. Mod process uses the reinforcement theory to make employees behave in the
desired manner. By following the steps given below, managers identify those behaviors
which are important for improving the performance of the organization. These
behaviors are then linked to specific rewards, which will encourage employees to
exhibit the desired behaviors.
Figure 4.2: Flowchart of Steps in the O.B. Mod Process

Identify
Identify the critical behaviors
which have a significant impact
on the individual’s performance,
and therefore, on the
organization’s performance

Measure
Determine the number of times a
particular behavior is exhibited
before using any managerial
intervention to modify that
behavior.

Analyze
Determine the antecedent cues
responsible for a particular
behavior and also the
consequences that maintain the
behavior.

Intervene
Design an appropriate strategy to
encourage desirable behavior and
discourage undesirable behavior

Evaluate
Assess the effectiveness of the
intervention (checking whether
the intervention really improved
performance of the organization)
based on various parameters.

The steps in the O. B. Mod process (see Figure 4.2) are as follows:
1. Identifying critical performance behaviors
2. Measuring the critical performance behaviors
3. Carrying out a functional analysis of the behaviors
4. Developing an effective intervention strategy
5. Evaluation of the intervention strategy to ensure performance improvement
These steps are discussed below.
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Organizational Behavior

Identifying critical performance behaviors


In organizations, employees exhibit a variety of behaviors. Some of these behaviors
have a significant impact on the performance of the individual and the organization.
The first step of the O.B. Mod. process involves identifying these critical behaviors
which have a significant impact on the individual’s performance, and therefore, on the
organization’s performance. The objective of this step is to identify those critical 5 or
10 percent of the behavior which accounts for around 70 to 80 percent of the
performance of the individual. These critically important behaviors can be identified in
different ways. One way of doing so is to ask the jobholder or her immediate
supervisor to identify the critical performance behaviors. Since they are the people who
are most closely involved with the job, they can correctly identify the behaviors
essential for good performance. Since this method actively involves the jobholder, she
may be more committed to the successful completion of the O.B. Mod. process. A
behavioral audit by internal staff specialists or external consultants can also be
conducted to identify critical performance behaviors. Such an audit involves an
analysis of jobs, using job analysis techniques. Through this method, the organization
avails the expertise and experience of specialists.
In order to identify critical behaviors for O. B. Mod, the following questions need to
have an affirmative answer:
(i) Can the behavior be directly measured?
(ii) Does it affect the performance outcome?
Only performance behaviors that can be directly measured can be considered for the
O.B. Mod process. Such behaviors include absenteeism or attendance, tardiness or
promptness etc. Other examples of operationally measurable behavior are: not being
present at the workstation, tardiness while returning from breaks, and disrupting the
work of colleagues. Lack of commitment or an employee’s lack of seriousness on the
job cannot be regarded as critical behaviors, as they are not measurable. Behaviors
considered to be critical should also have a significant impact on the performance of
the organization. That is, they should either affect the quantity or quality of products or
services.
Many organizations face behaviorally related performance problems, even though they
may have the latest technology and provide good training to their employees. In order
to be effective, organizations should encourage and increase the frequency of
functional behaviors; dysfunctional behaviors should be discouraged so that they occur
less frequently.

Measuring critical performance behaviors


After identifying the critical behaviors, the organization must measure them. A base-
line measure is obtained by determining the number of times a particular behavior is
exhibited before any managerial intervention is used to modify that behavior. The
base-line measure can be determined either by observing when a particular behavior is
exhibited and counting such instances, or from the existing records. The base-line
measure helps one determine whether the frequency of a particular problem is more or
less severe than anticipated. For example, in an organization, attendance may have
been identified as a critical behavior which requires improvement. However, the base-
line measure may reveal that on an average, there is 96 percent attendance. This level
of attendance may be regarded as acceptable, thus ruling out low attendance as a
problem area.
The base-line measure provides data about the frequency of occurrence of a particular
behavior. This indicates the strength of the behavior at a given point of time. The
behavior has to be measured both before and after managerial intervention. A
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Learning and Behavior Management

comparison of the base-line measure with the measured behavior after managerial
intervention provides an indication of the efficacy of the intervention strategy.

Carrying out a functional analysis of the behavior


The third step in the O. B. Mod process is to perform a functional analysis of the
behavior. A functional analysis uses the A-B-C model, which has antecedent (A),
behavior (B) and consequence (C) as components.
The antecedent represents the condition or cue which precedes a set of behavior
alternatives. In other words, an antecedent is a stimulus or circumstance which elicits a
particular behavior from an individual. Examples of antecedent conditions are the
ringing of an alarm clock, or a manager asking an employee for a particular report.
Behavior is a person’s response to the antecedent. Getting out of bed rather than
sleeping longer or submitting a detailed report are desired behaviors to the antecedent
cues mentioned earlier.
Consequence results from a particular behavior. One consequence could be positive
reinforcement, for example, public praise for presenting a good report. Sometimes, the
consequence could be negative reinforcement, which is designed to reduce or avoid a
particular negative outcome. Cutting the pay of employees who arrive late for work is
an example of negative reinforcement.
The main purpose of functional analysis is to identify the antecedents and
consequences of a specific behavior. In order to understand, predict and control human
behavior in an organization, an understanding of both antecedent and consequent
environments is necessary. Functional analysis helps one determine the antecedent
cues responsible for a particular behavior and also the consequences that maintain the
behavior. These have to be carefully analyzed before an effective intervention strategy
can be developed. Functional analysis reveals various contingent consequences that
affect the behavior of people in the organization. For example, a manager may punish a
subordinate for a particular behavior in order to decrease the frequency of that
behavior. However, the negative behavior may get reinforced because of support from
his coworkers. In such a situation, the manager’s response may not have any affect on
the behavior of the subordinate. Therefore, it is very essential that functional analysis
identify the right consequences that affect the critical behavior.

Developing an effective intervention strategy


This is the most important step in the O. B. Mod process. The objective of the O.B.
Mod process is to strengthen and increase the occurrence of functional performance
behaviors and weaken or reduce the occurrence of dysfunctional ones. The most
important intervention strategies for achieving this objective are positive reinforcement
and punishment-positive reinforcement.

Positive reinforcement strategy


This is considered to be a more effective intervention strategy for behavioral
management than negative reinforcement. A positive reinforcement strategy is a
positive way of controlling the behavior of employees because it reinforces a particular
behavior by associating it with a desirable consequence. Negative reinforcement,
however, is a negative way of controlling behavior because it reinforces a particular
behavior in an individual by compelling him to repeat it so as to avoid a negative
consequence.
When an organization uses a positive control strategy, the employees behave in a
particular manner to achieve a desired outcome. Let us examine the issue of attendance
again. When a positive control strategy is used, employees will come regularly to work
65
Organizational Behavior

so that they can contribute to organizational goals, rather than out of fear of being
sacked for being absent too often. Similarly, with a positive reinforcement strategy,
employees will work diligently, even when they are not being observed or directly
supervised, in order to do a good job or to become eligible for incentive payments. A
positive reinforcement strategy is much more effective than a negative reinforcement
strategy as its effects last longer and it creates a healthier and more productive work
climate. As mentioned earlier, a positive reinforcer is anything that increases the
frequency or strength of performance behavior. The most commonly used positive
reinforcers are money, attention, recognition and feedback.

Punishment-positive reinforcement strategy


Although positive reinforcement strategies are usually effective, sometimes
punishment has to be used to weaken and decrease the frequency of occurrence of
undesirable behaviors. This is especially applicable to unsafe behaviors which must be
stopped or decreased immediately. Unfortunately, a punishment often results in many
negative consequences, and the behavior for which an employee has been punished is
suppressed only for a short while. Suppose a manager scolds an employee for talking
often to other coworkers during work hours. The employee may not repeat the same
behavior when the manager is in the vicinity, however, when the manager is not
around, he may resume chatting with his colleagues. The use of punishment also has
other negative consequences. It may make the persons who have been punished
anxious and apprehensive. Thus, it may lower morale and cause unnecessary stress.
The most serious problem with the use of punishment is that it is very hard for a
supervisor to switch from punishment to a positive reinforcement strategy. Since
punishment has many negative aspects, it should be avoided as far as possible.
However, in some instances, it may not be possible to avoid punishment. In such cases,
after the punishment, positive reinforcement of the desired behavior should be done at
the earliest possible opportunity.
In the O.B. Mod process, punishment alone is never be used as an intervention
strategy. When punishment becomes unavoidable, it is used in combination with
positive reinforcement. Using punishment and positive reinforcement together helps
replace the undesired behavior with the desired one. The effects of such an intervention
also tend to last longer than an intervention where only punishment is used.
Evaluation of the intervention strategy to ensure performance
improvement
It has been observed that many human resource programs lack mechanisms to measure
their effectiveness. As a result, inaccurate evaluations are often made about their
effectiveness, which affect their credibility. The O. B. Mod. process tries to address the
problems of accountability and credibility by including evaluation as a part of the
process.
There are four levels of evaluation: reaction, learning, behavioral change and
performance improvement. Reaction, which is the first level, refers to the response of
the people on whom the intervention is being carried out. An intervention is more
likely to succeed when people react positively to it. Reaction evaluations also provide
useful information for planning future programs and data pertaining to interventions
applied over groups across various periods of time. The resulting data can then be
easily compared. A positive reaction ensures the support of the organization and
facilitates the other levels of evaluation.
The second level, learning, seeks to discover whether people using the O.B. Mod
process understand the reasons, the background, and the underlying assumptions
behind each of the steps in the process. If the people do not understand these properly,
the O.B. Mod. process cannot be applied effectively.
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Learning and Behavior Management

The third level of evaluation, behavioral change, examines whether there has been any
change in the behavior of the users of the O.B. Mod process. By observing and
recording the behaviors of the users of the O. B. Mod. process, objective data on
behavioral change can be obtained.
The final level of evaluation is performance improvement. This is the most important
level of evaluation, as the ultimate objective of the O. B. Mod process is the
improvement of individual performance. The effectiveness of the O. B. Mod. process
is assessed on the basis of the data obtained on parameters such as quality and quantity,
turnover, absenteeism, customer complaints, employee grievances, number of clients
served, and rate of return on investment.

Application of the O. B. Mod Process


The O. B. Mod process has been found effective in improving employee performance
in manufacturing as well as non-manufacturing and service industries. The Handbook
of Organizational Behavior Management5 lists some of the areas where the O. B. Mod
process improved employee performance:
Employee productivity
Much of the research on the O. B. Mod process has focused on employee productivity.
It has been found that by using the O. B. Mod. process, employee productivity can be
improved and the tasks assigned to employees completed faster. In almost all the
organizations studied, it was found that the application of the process enhanced either
the quality or quantity of employee output.
Absenteeism and tardiness
This is another area where the O.B. Mod. process is often applied. Many organizations
have used a combination of rewards for attendance or promptness, and punishments for
absenteeism or tardiness. Studies have found that the O.B. Mod. process resulted in an
18 to 50 percent reduction in absenteeism and a 90 percent reduction in tardiness.
Safety and accident prevention
Safety issues are important in most manufacturing organizations. Most organizations
focus on reducing safety hazards and on increasing employee behaviors which ensure
their safety (e.g., wearing helmets, gloves or earplugs while working in dangerous
conditions). Behavioral management techniques have been found to be successful in
preventing accidents and promoting employee safety.
Sales performance
Selling behaviors can be identified and modified through appropriate interventions.
Some critical selling behaviors are approaching a customer, making closing statements,
etc.

SUMMARY

It has been observed that practically all the behavior of individuals in an organization is
either directly or indirectly learned. The most widely accepted learning theories are the
behavioristic, cognitive and social learning theories. Learning was attributed to the
association or connection between stimulus and response (S-R) by classical
behaviorists like Ivan Pavlov and John Watson. Psychologists like B.F. Skinner and
others focused more on the role of consequences in learning, or what is usually known
as the response-stimulus (R-S) connection. The S-R connection deals with ‘classical’

5 Lee W. Frederiksen, Handbook of Organizational Behavior Management (New York:


Interscience-Wiley, 1982) 12-14.
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Organizational Behavior

or ‘respondent’ conditioning while the R-S connection deals with ‘instrumental’ or


‘operant’ conditioning. Cognitive learning, popularized by Edward Tolman, explores
the relationship between cognitive environmental cues and expectations. This learning
of the association between the cue and the expectation is known as stimulus-stimulus
(S-S) learning. The social learning theory states that there is more to learning than just
the antecedent stimulus and the dependent consequence. Learning can also take place
through vicarious or modeling processes. A person’s learning abilities also depend
upon his concept of self-efficacy.
The most important principles of learning are reinforcement and punishment. In order
to understand these principles, we must first understand the ‘Law of Effect,’ proposed
by Edward L. Thorndike. The law states that responses followed by pleasant
consequences are more likely to be repeated, while responses followed by unpleasant
consequences are not likely to be repeated. Reinforcement is defined as anything that
both increases the strength of a response and also induces repetitions of the behavior
that preceded the reinforcement. By providing a desirable consequence, positive
reinforcement strengthens a specific behavior. In contrast, negative reinforcement
strengthens behavior by the termination or withdrawal of an undesirable consequence.
Behavioral management refers to the application of behavioral theories, especially the
reinforcement theory, to improve the performance of employees. Fred Luthans and
Robert Kreitner coined the term ‘Organization Behavior Modification’ (O.B Mod) for
behavioral management. The O. B. Mod process has five steps. In the first step, the
critical behaviors are identified. Critical behaviors are those behaviors that may
represent only a fraction of many possible behaviors, but have the greatest impact on
total organizational performance. In the second step, a base-line measure is obtained
for each critical behavior to determine their frequency prior to any intervention. The
third step involves carrying out a functional analysis of the behavior. The antecedents
and consequences of a particular behavior are identified, and these are used to
formulate an effective intervention strategy to modify the behavior. In the fourth and
most important step in the O. B. Mod process, an appropriate intervention strategy is
developed. The objective of the intervention strategy is to strengthen and promote
functional behaviors and weaken and discourage dysfunctional behaviors. The last step
in the process involves the evaluation of the efficacy of the intervention strategy in
bringing about an improvement in performance. This evaluation is carried out at four
levels – reaction, learning, behavioral change, and performance improvement.
The O.B. Mod process is often used to improve employee productivity, reduce
absenteeism and tardiness, prevent accidents and encourage safety, and improve sales
performance.

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Chapter 5

Perception
In this chapter we will discuss:
 Meaning and Significance of Perception
 Sensation vs Perception
 Subprocesses of Perception
 Perceptual Selectivity
 Factors influencing Perception
 Perceptual Organization
 Social Perception
 Impression Management
 Linkage between Perception and Individual Decision-making
Organizational Behavior

People working in an organization could differ in many ways. They could differ in
physical characteristics such as height, weight and complexion. They could also differ
in background characteristics like level of education and training. But the most
important difference could be in their perceptions.
Suppose, an employee on duty in his office is leaning back in his chair and has his eyes
closed. If his boss enters his room at that time, he could think either that the employee
is sleeping during office hours or that he is thinking deeply. If the boss concludes that
he is sleeping, he may behave harshly with the subordinate and may even initiate
disciplinary action against him. On the other hand, if the boss assumes that the
employee is thinking deeply about a solution to some problem, his behavior may very
well be different.
To a person, what he perceives is the reality, irrespective of the objective truth, and his
behavior is determined by his perception. Thus, the reason people react differently to
even similar situations is the underlying cognitive process of perception that shapes the
way they think about a situation. Perception forms an important part of the study of
OB.
There are several factors that influence perception. In the same situation mentioned
above, if the boss is aware that the employee had worked till 2.00 AM on a priority
project, he is not likely to take any action on him. But if the boss believes that the
employee had left the office exactly on time, the previous day and that he has a habit of
attending late night parties, his reaction may indeed be different. Thus, a person’s
behavior is dependent on the factors leading to the situation. These factors are often
called attributes. In this chapter, we discuss the process of perception, the various
factors that influence an individual’s perceptions. We also discuss how the theories of
perception may be applied to the management of human resources in organizations.

MEANING AND SIGNIFICANCE OF PERCEPTION

Perception may be defined as the process by which an individual selects, organizes and
interprets stimuli into a meaningful and coherent picture of the environment in which
he lives. It is a complex cognitive process and differs from one individual to another,
depending on the needs, values and expectations of the individual. The perception of
two individuals may differ even if they are exposed to the same stimuli, under the same
conditions. If a manager, in an organization, comes to each employee’s desk and
interacts with him, one employee may perceive the manager’s visits as friendly in
nature while another may perceive the visits as an attempt by the manager, to keep an
eye on them.
Sometimes, an individual’s perception may be far removed from the reality. Suppose,
after a meeting with managers, a union leader decides to withdraw some of the
demands of the union and asks his employees to cooperate with the management. Some
employees may perceive this as a result of the union leader having been bribed by the
management to act in their favor. But the reality may be that the union leader was
really convinced by the management about the inability of the organization to fulfill
the demands of the union owing to the poor financial situation of the organization.
People respond to situations on the basis of their perception about reality rather than
the reality itself. Hence, it is important to recognize the differences in the perceptions
of individuals to understand their behavior at the workplace. For example, most
managers assume that all employees want to be empowered to make decisions, but in
reality, some subordinates do not want to have decision-making power, because it will
impose on them additional responsibilities and they will be accountable for wrong
decisions. Here, the perceptions of the managers differ from that of the subordinates.
Perceptual differences can sometimes lead to conflicts in the organization. Differences
can be resolved and work environment can be improved by understanding the

70
Perception

Exhibit 5.1
Reality and Perception
In most organizations, an individual’s performance is evaluated against a limited number of
attributes. Those who score low on these attributes are labeled as non-performers. They are trained,
coached, threatened and persuaded to become high-performers and conform to the standards of the
organization. If they still continue their old behavior and performance, they may be fired. In doing
so, organizations often fail to recognize that they may actually be losing valuable employees.
Some employees fail to deliver their best performance because they spend most of their time helping
fellow employees complete their tasks. They may not meet their own deadlines and therefore may be
categorized as the bottom 10% in many competitive organizations. Some employees are fun-loving
in nature. They may not experience tension and stress even in the most difficult of times. Also, they
may attempt to spread laughter among other employees and relieve them from stress caused by work
pressure. However, such jovial nature is often considered as negative and nonproductive in
competitive organizations. In competitive organizations, many believe that the employees can
perform better when they are serious. The fact that cheerfulness and happiness among employees at
the workplace stimulates their creativity and innovation is overlooked. Humor helps employees cope
up with the problems and difficulties they may face at the workplace.
Today, organizations operate in an ever-changing business environment. In order to emerge as
winners, they have to encourage teamwork. Each member of the team will contribute his own ideas,
views and perspectives, based on his experience and background. This helps the organization face
challenges and takes decisions in a better way.
Thus, organizations with a cooperative rather than a competitive environment are successful. When
an organization transforms itself from being competitive to become cooperative, the poor performers
in the competitive environment become superior performers in the cooperative environment. This is
not because the individuals, who were labeled ‘poor performers’ in the competitive organization,
have changed themselves drastically. It is simply because cooperative organizations honor and value
the unique talent of these individuals and encourage them to maintain their identity. The performance
of individuals, in cooperative organizations, is evaluated in much broader terms, than in a
competitive organization. For instance, cooperating with co-workers, or solving problems of other
employees are not considered as value-adding attributes in the performance evaluation in competitive
organizations but they carry significant weightage in performance evaluation in cooperative
organizations. Thus, poor performers become top performers because the perception of performance
in cooperative organizations is different.
In competitive organizations, there is a constant struggle among departments and business units for
resources. However, there is no such struggle in cooperative organizations.
This does not imply that competitive organizations have scarce resources and cooperative
organizations have abundant resources. This, is again, because of a change in perception.
Competitive organizations perceive that resources are scarce and encourage their business units to
compete for them. Cooperative organizations perceive that they have adequate resources and
encourage their business units to share them.
Thus, differences in perception between organizations can mean a difference between being a winner
and being a loser, in the context of a dynamic business environment.

Adapted from Tome Heuerman and Diane Olson, “The Identified Losers: Reality or Perception?” Self-
help Magazine, 01 June 1998, <http://www.selfhelpmagazine.com/articles/wf/idlose.html>

processes and subprocesses of perception and the factors that influence perception.
Perceptions may also differ from organization to organization. Some organizations
perceive that aggressive and dominating culture and the maintenance of conformity (of
all employees to certain beliefs and values) is essential for their success. But some
organizations perceive that cooperation, team culture and preservation of individual
identities is crucial for their success. Exhibit 5.1 discusses the perceptual differences
among organizations and their implications for their effective functioning.
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Organizational Behavior

SENSATION VS PERCEPTION

The relationship between sensation and perception is often not understood well.
According to behavioral theorists, people interpret situations/events based on their
senses. They obtain data related to the events through their senses and process it to
understand the events and the world.
People use their sensory organs to sense: eyes to see, ears to hear, skin to feel things,
nose to smell and tongue to taste. Though some people believe that intuition may be
considered as a sixth sense, psychologists do not accept this view. The senses receive
stimuli both from within and outside the body. Some of the external stimuli are light
and sound, mechanical pressure, the taste of food and the smell of chemicals. The
internal stimuli include hunger, thirst, pain, etc. Thus, sensation deals with the basic
behavior of an individual, caused by his physiological functions.
Perception is a more complex concept. At first, an individual takes in the raw data
through his senses and then, refines, modifies or completely alters it by his cognitive
process. For example, if a manager scolded an employee in front of other workers, the
perception of each worker about the reasons for the scolding may differ even though
everyone saw the same sight of the manager scolding the worker. The difference
between sensation and perception can be understood from the following examples too:
 Consider the example of an employee working continously on a computer under
poor ergonomic conditions and his productivity failing to match the expectations of
the manager. The manager perceives the employee as a poor performer whereas in
reality, the employee may be unable to perform well due to the pain he experiences
in his fingers while typing on the keyboard for long hours..
 Many times, the food served in restaurants is deep red in coor making the customer
perceive that it might be too spicy and hot. However, the chef may have only used
an artificial color in the food to make it look attractive and the customer may
actually find the food quite bland on tasting it.

SUBPROCESSES OF PERCEPTION

The process of perception includes several subprocesses, which give rise to


complexity. Figure 5.1 represents the subprocesses of perception and the relation
between them. The subprocesses consist of stimulus or situation, registration,
interpretation, feedback, behavior and consequence.
The first subprocess, stimulus or situation, refers to an individual’s confrontation with
an internal or external stimulus. An individual may experience an immediate sensual
stimulation or the confrontation may take place with the entire physical and
sociocultural environment. When a supervisor shows his appreciation of a shopfloor
employee’s performance, by patting him on the back and praising him before the rest
of the employees, it serves as an immediate sensual stimulation for the employee
encouraging him to achieve greater levels of performance. An example of an
individual’s confrontation with an external stimulus would be the dejection
experienced by a middle level manager when he doesn’t get a cabin for himself and
made to sit with his subordinates.

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Perception

Figure 5.1 The Subprocesses of Perception

STIMULUS OR SITUATION PERSON

EXTERNAL
ENVIRONMENT
Sensual stimulation CONFRONTATION REGISTRATION INTERPRETATION FEEDBACK
of specific stimulus of stimulus (e.g., of stimulus (e.g., for clarification (e.g.,
Physical Environment (e.g., supervisor or sensory and neural motivation, learning kinesthetic or
Office new procedure) mechanisms) and personality) psychological)
Factory floor
Research laboratory
Store BEHAVIOR

BEHAVIOR
Climate (e.g., overt such as
etc. rushing off or covert
such as an attitude)
Sociocultural Environment
Management styles
Values

CONSEQUENCES
Discrimination CONSEQUENCE
etc. (e.g.,
reinforcement/punishment
or some organizational
outcome

Source: Fred Luthans, Organizational Behavior, 8th edition (India: Irwin McGraw-Hill, 1998) 105.

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Organizational Behavior

The second subprocess, registration involves an individual taking note of the stimulus
received from the environment or recording it in his mind. Physiological mechanisms
play an active role in registration. For instance, eyes capture the beauty of a scenery,
ears receive sounds, and both send signals to the mind where a complete image is
formed and stored for future retrieval. For instance, an employee may have a habit of
wearing simple and light colored shirts to office. If suddenly, one day, he comes to
office wearing a bright and colorful shirt, his colleagues may not recognize him from a
distance. This could be because his image, registered in the minds of his colleagues,
may be that of a person who wears simple and light colored shirts. Thus, the
physiological ability of a person to see and listen could have an impact on his
perception.
The next subprocess, interpretation, is the most important cognitive aspect of
perception. Interpretation is affected by the psychological processes of an individual.
The aspects of learning, motivation and personality largely affect an individual’s
interpretation of a situation. For example, in an organization, all employees can
recognize the voice of their manager. So when an employee hears his voice, he
interprets that his manager is somewhere nearby and tries to appear engrossed in his
work.
Another important subprocess of perception is, feedback. For example, a sales
executive submits his monthly sales report to the sales manager. The manager, after
glancing at the report, has a disapproving look on his face. The expression on the
manager’s face serves as a feedback to the sales executive and conveys the message to
him that the sales manager is not pleased with his performance.
The subprocesses of registration, interpretation and feedback that occur within a person
in response to a stimulus (from external environmental situation), result in a certain
behavior on the part of the individual and finally lead to a certain consequence. The
behavior may be either overt (open/public) or covert (concealed/secret). If an employee
is reprimanded for coming late to office, then he may start coming to office on time.
This is overt behavior. If a manager shows favoritism to one employee then other
employees may develop hatred towards that employee as well as the manager. This is
covert behavior.
The sequence of registration, interpretation, feedback, resultant behavior and
consequence can be explained with the help of an example. Suppose the general
manager of a company instructs the production manager to make sure that the products
being manufactured by the company are error-free and warns that a maximum of only
4 % errors would be tolerated. However, later, the company gets several complaints
from customers about defects in its products. The general manager informs the
production manager about the large number of complaints that the company has
received (feedback). The production manager immediately calls for an emergency
meeting of his staff and gives them a dressing down, holding them responsible for not
ensuring the quality of the products (behavior). This is followed by a drastic reduction
in the salaries of the entire staff belonging to the production department (consequence).
The situation and the behavior are visible to others. The three subprocesses of
perception – registration, interpretation and feedback – are internal cognitive processes
that cannot be observed. Research has supported the view that a relationship exists
between the two cognitive variables – perception and behavior. In addition to the
perceptual subprocesses, perceptual dimensions such as selectivity and organization
also help in having a better understanding of the cognitive aspects of perception.

PERCEPTUAL SELECTIVITY

People constantly encounter various stimuli. The noise of people talking, the sound of
the air conditioner, or the noise of vehicles are some of the stimuli that are sensed.

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Perception

Sometimes the stimuli may be so subtle that an individual may not even be conscious
that he is exposed to some stimulus. This is called subliminal perception.
Though people are exposed to several stimuli, they tend to select only a few at a given
point of time. The study of the principles of perceptual selectivity helps us understand
the process of selection and the reasons for such selection. Perceptual selectivity
depends on external attention factors and internal set factors. These are described
below:

External Attention Factors


Factors such as intensity, size, contrast, repetition, motion, novelty and familiarity of
objects and situations comprise external attention factors and influence the perceptual
selectivity of individuals.

Intensity
According to the intensity principle of attention, the intensity of an external stimulus
determines its probability of being perceived. A bright light, a strong odor or a loud
noise are more likely to be noticed than a dim light, a weak odor or a soft sound. The
intensity principle of attention is usually used by organizations to promote their
products. For instance, they may use bright colored product packages and their TV
commercials may be at a volume higher than the regular programs, to gain attention of
the customers. However, intensity need not always lead to positive responses. Suppose,
a supervisor on the shop floor keeps scolding workers in a loud voice, to gain their
attention and make them do work better. The workers will stop giving attention to or
responding favorably to the supervisor’s shouting after some time. Therefore, a
specific perceptual principle by itself, cannot explain complex human behavior. The
intensity principle of attention is only a small part of the perceptual process, which in
turn is one of the cognitive processes that determine human behavior.

Size
The principle of size is similar to that of the principle of intensity. A larger object is
more likely to be noticed than a smaller object. For example, a big supermarket is more
noticeable than a small grocery store. Similarly, a full-page advertisement catches the
attention of the reader better than a few lines in the classified section.

Contrast
According to the principle of contrast, the stimuli that contradict most with the
background or the expectations of people receive maximum attention. Figure 5.2
represents the contrast principle.
The white square on the left appears to be much bigger than the white square on the
right although, both the squares are of the same size. This is because of the contrast
between the white square on the left with the background squares in terms of size. The
white square on the left draws more attention because the size of the square is much
more than the squares surrounding it. In the case of the figure on the right, the size of
the white square is much smaller than that of the background squares. Similarly, an
employee in an airport gets so used to hearing all kinds of sounds that he is not likely
to notice the roaring sound made by airplanes while landing and takeoff. But if on any
day, due to some reason, if there is a reduction in the air traffic problem, then the
employee will immediately notice the reduction in the noise level.
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Organizational Behavior

Figure 5.2: The Contrast Principle of Perception: Which White Square is


Smaller?

Repetition
The principle of repetition states that the more number of times a stimulus is repeated,
the more it is likely to be noticed. For example, workers are likely to be more
meticulous in performing those tasks for which the supervisor repeatedly gives
instructions. Organizations use repetitive advertising for promoting consumer goods
like soap, cool drinks and biscuits.

Motion
According to the principle of motion, people give more attention to moving objects
than to stationary objects. Workers generally tend to pay more attention to objects
moving past them on a conveyor belt than to a stationary machine operating beside
them.

Novelty and Familiarity


New objects in a familiar situation or familiar objects in a new situation draw the
perceiver’s attention. For example, during job rotation, when an employee is shifted
from one job to another, he is likely give more attention to the new job because he has
to perform new duties (though the organizational setting is the same).

Internal Set Factors


Internal set factors too play an important role in the process of perceptual selectivity.
Set is an important cognitive process based on the psychology of an individual. People
select those stimuli from the environment that appeal to them and suit them based on
their learning, motivation and personality. These aspects are discussed in detail below.

Learning and perception


Learning by itself plays a major role in developing the perceptual set. For example,
read the sentence in Figure 5.3.

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Perception

Figure 5.3: Learning and Perception

HILLY
TERRRAIN
AHEAD

Even though the letter ‘R’ has been repeated thrice in the word ‘Terrain’, it would take
a little time for a person to realize that something is wrong with the word. The earlier
learning of the person results in his familiarity with the word and hence makes him
read the sentence as “Hilly terrain ahead.” This shows that learning has an impact on
an individuals’ process of perception. Learning creates expectancies in individuals and
encourages them to perceive things in a particular way. The expectancies created in
individuals influence their perception and their behavior. What people see and hear is
influenced by their expectancies. Many illustrations are used to substantiate the effect
of learning on the development of the perceptual set of an individual (e.g. There is a
picture which is perceived by some people as depicting a young lady and by some as
depicting an old woman. If a person is shown the picture of a young lady first and then
the ambiguous picture is shown, he is likely to perceive the picture as that of a young
lady the second time as well). People always apply their past experience to understand
the present situation, irrespective of the relevance of the experience to the situation.
This often distorts reality and leads to illusions.

Perceptual set in the workplace


After working in an organization for a certain period of time, employees learn to
interpret some (but not all) statements and situations in a similar way. They may use
common names, phrases and remarks (that are unique to their organization) to denote
some things. For example, priority projects may commonly be referred to as PP and
influential people by IP and so on.
However, in a majority of cases, learning leads to substantial individual differences.
Employees may perceive a particular situation or stimulus in completely different
ways. For example, different people in an organization may attribute low production
levels to different reasons. The production manager may attribute it to obsolete
technology or machinery, the personnel manager may attribute it to lack of training
given to workers, while the general manager may assume that the lack of effective
organizing, planning and controlling has resulted in low productivity. However, the
workers may consider the reduced output to be a form of revenge against their
supervisor. Thus, personnel in the same organization may perceive a situation in
entirely different ways.
For example, employers and employees may differ in their perceptions (Refer Exhibit
5.3). Another common example is the difference in the perceptions of the union
members and the management. The work environment provided in an organization is
perceived as the best by the management while the trade unions perceive the opposite.

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Exhibit 5.3
Variations in Perceptions of Employees and Employers
An employee survey on communication conducted during Feb-March 2003 by Randstad (a survey
organization), in association with leading research firm Roper ASW, revealed the following:
 Most of the employers surveyed felt that their organizations were highly ethical. But most of the
employees disagreed with their employers and gave their respective companies a poor rating for
ethical conduct.
 Of the employees surveyed, 65% considered their companies poor communicators. Most of the
employers, however, were of the opinion that the communication system in their organizations
was excellent.
 More than 50% of the employees stated that they received information regarding important
management decisions first through informal channels. But more than 80% of employers claimed
that formal channels were effective and conveyed important information to employees well
before informal channels.
The research revealed the wide variation between the perceptions of employees and employers. It
also indicated that in the absence of official channels of communication in an organization, the
grapevine plays an important role. This informal channel of communication transmits accurate
information as well as gossip and unwanted information. Therefore, employers should communicate
with employees regularly and make optimal use of official channels to prevent the grapevine from
becoming a dominant channel in the organization.
Through the formal channel of communication, employers can collect feedback from employees
regarding their decisions and actions. They can also respond to employees’ queries through the
formal channels. A continuous flow of communication between employers and employees will help
the latter understand the goals and values of the organization and contribute to its success.

Adapted from “Research Reveals Gaps in Perception,” Randstad’s 2003 Employee Review, Spring
2003.

The trade unions may continuously demand for improvement in the work environment
while the management may decline these demands. This often leads to industrial
disputes.

Motivation and perception


Motivation also plays an important role in determining perceptual selectivity. The
primary motives such as hunger and thirst influence the perception of an individual.
The people in a country affected by drought will give more attention to the sight,
mention or aroma of food than the people from a country where there is a good crop
yield and food is available in plenty.
Perceptual set is also influenced by secondary motives, such as the need for power,
affiliation or achievement. A person who has a high need for power, affiliation, or
achievement is more attentive to the situations which provide him an opportunity to
attain them. If a political party invites people to join the party, a person who is
interested in politics and desirous of becoming a minister in the future will show keen
enthusiasm and may immediately approach the party head to become a member.
Sometimes, perception may have a significant impact on motivation. Suppose some
trade unions have called for a bandh on a particular day. An organization has decided
not to declare a holiday, but has expressed its inability to provide pickup and drop
service on that day. Some of the employees may perceive that the union’s call for the
bandh is justified. Their perception may fail to motivate them to come for work on that
day. On the other hand, an employee who may perceive that the organization is right in

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Perception

not supporting the bandh, may make all attempts to reach the office by using some
means of transport to reach the office at any cost. Thus, it can be seen that perception
and motivation have an impact on one another.

Personality and perception


An individual’s personality may also affect his perception of a particular situation. For
example, young managers often complain that senior managers resist change, rely
heavily on paperwork and delay decisions. The senior managers often perceive that
young managers initiate unnecessary changes, fail to maintain records for future
reference and make hasty decisions. Gender difference may also give rise to
differences in perceptions. Women may perceive that they are being discriminated
against in job or promotion opportunities. Men, on the other hand, may perceive that
women are diminishing their employment and career opportunities. Similarly, a
person’s values and sometimes, even age can influence his perception.

FACTORS INFLUENCING PERCEPTION

The perception of an individual is influenced by several factors. These factors help


shape perception but can sometimes even mislead the individuals by distorting
perception. The factors which influence perception include the perceiver himself, the
object or target being perceived, and the situation in which the perception occurs.

The Perceiver
The perceiver’s personal characteristics play a major role in influencing the way he
interprets a target (stimulus). A person’s attitudes, motives, interests, past experiences
and expectations affect his perception.
The perception of a person having a positive attitude about a particular thing will be
different from that of a person having a negative attitude. A research held in the field
of OB has revealed that an individual’s perception is greatly influenced by his
unfulfilled needs and goals. In the research, the participants had not taken food for a
varying number of hours – ranging from one hour to sixteen hours before the
experiment started. Some blurred pictures were then shown to the participants. Each
participant interpreted the pictures differently. People who had not eaten food for a
longer time interpreted the blurred pictures as images of food more often, than the
people who had not eaten only for a shorter time before the experiment. This situation
holds true for organizations as well as employees. For example, if many companies in
the industry have announced lay-offs and the employees come to know that an
emergency meeting has been called between the production manager and the CEO,
they may associate it with a discussion regarding the number of people to be laid off.
A person who is disturbed by a personal problem may find it difficult to concentrate on
his work. This shows that an individual’s attention is influenced by his own interest.
Due to considerable variation in individual interests, there are differences in their
perceptions even in the same situation.
One’s past experiences may also influence a person’s perception. For example, an
employee is more likely to notice a new automatic machine installed on the shop floor
if its appearance is something he has never seen before than if it resembles the existing
machines. Individual perceptions are influenced by expectations as well. Suppose there
is a big garment showroom, with a board specifying that it is a fixed price shop. People
may perceive that the garments displayed in the showroom have the right price tags
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and may not try to bargain in such places. However, in small shops without any such
boards people may expect that the price tags quote much higher prices than the actual
worth of the goods and that they need to bargain in order to arrive at reasonable prices.
Expectations may also sometimes distort perceptions such that people tend to view a
person the way they expect the person to be, irrespective of the actual traits of the
person. For example, nurses are perceived as caring and gentle and police officers are
perceived as fearless and authoritative. Likewise, different individuals will perceive the
same person (or an object or an event or a situation) in different ways irrespective of
his actual traits (or the characteristics of the object or the nature of the situation) based
on their own experience and expectations.

The Target
Perception is affected by the characteristics of the target (stimulus). People who are
loud or very tall or attractive are more likely to be noticed in a crowd. The target is
perceived based on its attributes such as motion, sound, size, etc.
Sometimes, a target is not perceived in isolation but it is grouped or associated with
things similar to it. This may lead to grouping of unrelated objects or events. People
tend to group objects together because of the physical proximity of the objects. Events
may be grouped together because they occurred during the same time. The way in
which we isolate a figure from its general background also influences our perception.
For example, when two or more people quit an organization almost at the same time
the management may try to find a common reason for it, though each of them may
have left the organization for his own personal reasons. Suppose, there is an overall
increase in the production level after a new production manager has taken charge. This
success may not be actually due the new production manager but may be due to the
new sophisticated technology that has been recently adopted by the company.
However, the tendency of people to club closely occurring events may lead them to
believe that the increase in production took place due to the efficient handling of
operations by the new production manager. It is also common to group together
persons by profession, age or race. For instance, people perceive the police as
hardhearted, lawyers as liars, young army officers as active and tribal people as
innocent. The greater the similarity between objects, events or persons, the more they
are likely to be perceived as a group.

The Situation
The context or environment, in which objects or events are seen, plays an important
role in influencing an individual’s perceptions. When a person wearing a tracksuit
walks into a health club, he will not attract attention from his boss, who may have
come to the same health club. But if the person goes to office dressed in the same way,
he is sure to attract the attention of his boss, who may question him on his dressing
style, and reprimand him for not dressing appropriately to office. In this example, there
is no change either in the perceiver or the target, but only in the situation. Time,
location, climate, a person’s state of mind and other situational factors influence his
perception. The factors influencing perceptions are summarized in Figure 5.4.

PERCEPTUAL ORGANIZATION

Perceptual organization emphasizes on the subsequent activities that take place in the
perceptual process after a stimulus is received. A person rarely perceives the extent of
color, light or sound associated with objects. Instead he perceives organized patterns,
stimuli and identifiable whole objects. For example, when a person is given a book, he

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Perception

Figure 5.4: Factors that Influence Perception

Characteristics of Characteristics of Target Characteristics of


Perceiver Novelty Situation
Attitudes Motives Time
Motives Sound Work environment
Interests Size Social environment
Experience Background
Expectations Proximity

Perception of the individual

does not normally perceive its color or shape, but perceives the characteristics
associated with reading it, like pleasure, excitement, knowledge, etc. Therefore, it can
be said that a person’s perceptual process organizes the information he receives to form
a meaningful whole.

Figure-ground
Figure-ground is a form of perceptual organization. In this form of perception,
perceived objects are separated from their general background by the perceiver. For
example, when a person is given a white paper with something written in black ink in a
language unfamiliar to him, he may perceive it as patches of irregular black and white
shapes. However, a person who knows the language would perceive the black shapes
in the form of letters, words and sentences that are printed against a white background.
In other words, the perceiver using his perception organizes incoming stimuli into
recognizable figures (words) that are seen against a ground (white page).

Perceptual Grouping
According to the grouping principle of perceptual organization, an individual tends to
group several stimuli together into a recognizable pattern. This ability is usually
inborn. When a simple set of stimuli are presented, an individual will tend to group
them together on the basis of closure, continuity, proximity or similarity.

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Closure
According to the principle of closure, a person may sometimes perceive a whole,
where it does not exist while sometimes, a person may not be able to perceive a whole
although one exists. In the former case, the gaps that remain unfilled from sensory
input are bridged by the person’s perceptual process. For example, a departmental head
who wishes to increase the work load of employees to meet a deadline, may ask them
if they would agree with his proposal. Some of the employees may agree with the head
although there may also be several who disagree. The agreement obtained from some
of the employees may cause the head of the department to close the existing gaps and
perceive absolute agreement of all employees to his proposal, which in reality, does not
exist. Thus, in this situation, the individual closes the gaps and perceives a whole. The
opposite situation occurs when functional managers, highly specialized in their
respective areas, begin to lose track of the overall organizational goals. They would not
be able to integrate their department and its functions with the rest of the organization
and so, fail to have a holistic view of the organization in mind while carrying out their
responsibilities. Modern organizations are trying to overcome this problem by adopting
inter-functional or horizontal structures.

Continuity
Continuity and closure are closely related. Some psychologists ignore the distinction
between these two principles of grouping. While closure fills the missing stimuli, the
continuity principle states that a person tends to perceive the extension of a stimulus.
However, it will be limited to obvious, continuous lines or patterns. It may lead to
inflexibility and non-creative thinking in organizational members. For example, an
employee in a fashion designing firm may come out with a new textile design for
customers. If the design becomes popular in the market, the other employees may
simply modify and add more colors or shapes to it and release it into the market later.
New, innovative ideas or designs may not be perceived by these employees. Continuity
has a major impact on the systems design of an organizational structure.

Proximity
According to the principle of proximity or nearness, a group of stimuli that are
physically close to each other are perceived as a set of parts belonging together. For
example, all the members of a particular department or team may be perceived as a
single entity by those external to the department or team because of the physical
proximity of the members of the department or the team. This is despite the fact that,
there might be wide variations in the attitudes and behaviors of the members of the
department or the team. The practical application of the principle of proximity in
organizations helps consolidate the team strength and promotes team work.

Similarity
The greater the similarity of the stimuli, the more they are likely to be perceived as a
common group. Though similarity is related to proximity, in most cases, it is stronger
than proximity. For example, all blue-collared employees may be perceived as a single
group, though in reality, they are all individual employees with their own unique
personalities. Similarly, women, minorities, student unions and doctors association are
all described as common groups because of the similarity in gender, background and
profession etc. Such grouping by similarity causes problems of stereotyping.

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Perceptual Constancy
Perceptual constancy is one of the advanced forms of perceptual organization.
According to this principle of constancy, the perception of elements like size, shape,
color, brightness and location of an object remains constant and does not change from
one individual to another. For example, if a photograph of a person is printed in a
newspaper and although the photograph measures only 2-3 inches in length, we still
perceive the individual to be between 5 to 6 feet in height. Perceptual constancy, thus,
provides people with a sense of stability in the way they view objects in this complex
and changing world. Learning plays a more vital role in the case of the constancy
principle than in the case of figure ground or grouping phenomena.
Learning helps individuals perceive certain patterns of cues in a similar way and leads
to perceptual constancy. The absence of perceptual constancy would have made things
very difficult. Let us consider a situation where the job of an employee requires him to
assemble a product by collecting various parts of the product from several locations in
the workplace and assembling them together. Even though the employee moves from
one place to another to assemble the product, the size of the tool he has to pick up from
each location remains constant in his mind. This is an example of how perceptual
constancy of an individual helps in retaining the same constant image of the tool in his
mind irrespective of a change in the location of the tool.
Another example of perceptual constancy can be seen in the way we tend to identify a
fruit, for example, an apple just by the sight of it. It doesn’t matter whether we see a
picture of the fruit or the fruit itself. Our identification of the fruit also doesn’t vary
whether we see a picture of the fruit in black and white or in color. Thus the image of
an apple remains constant in our mind and doesn’t change irrespective of the color of
the picture.
Even though learning helps the individual to perceive patterns of cues, there may still
be some variations in perception due to the interactions that take place in the perceptual
process, between the inborn and learned tendencies of individuals. These interactions
differ from individual to individual.

Perceptual Context
Perceptual context is the most advanced form of perceptual organization. It provides
meaning and value to objects, events, situation and other people in the environment.
Sometimes, the visual stimuli, by themselves, do not convey any meaning. It is only
when they are placed in a certain context that its meaning and value can be perceived.
Though workers and managers may speak the same language within and outside the
organization, the words and actions they use may have different meaning in the context
of the organization. For example, if a manager pats the back of his two year old son,
his gesture conveys love and affection. But if he pats the back of an employee in the
organization, it implies his appreciation of the employee for doing a good job. If the
manager asks his wife or son to do something and they fail to do it, he may not take it
seriously. But if his staff in the office fail to complete the task he had asked them to do,
he will perceive it as indiscipline and may take serious action against them. Similarly, a
verbal order, a memo, a new policy, a suggestion, shrugging of shoulders, a raised
eyebrow, etc. have different meaning and value, when associated with the context of
work organization.

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Perceptual Defense
Perceptual defense is closely related to the perceptual context. A person may establish
a defense against some stimuli or situational events because they may be clashing with
his personal values or culture or may be threatening, in nature. Perceptual defense
plays a vital role in understanding relationships, especially relationships like those
between the union and the management or the superior and the subordinate.
Research has supported the existence of a perceptual defense mechanism. Two of the
classic studies, dealt with the identification of barriers that prevent people from
perceiving personality-threatening words, and thresholds for recognizing critical and
emotionally toned words. In another study, the researchers observed how people react
to a perceptual defense that is activated in them when they come across a fact that is
inconsistent with a preconceived notion. In this study, college students were presented
with the word “intelligent” as a characteristic of a factory worker. This was contrary to
their perception of factory workers and they formed perceptual defenses in the
following ways.
 Denial – Many students refused to support the claim that factory workers were
intelligent.
 Modification and distortion – One of the most widely used forms of defense is
modification and distortion. The students tried to modify the given statement by
linking the intelligence trait in workers with some other traits found in them, in
such a way that the final conclusion complied with their own beliefs that workers
lack intelligence. For example, according to same students, although the workers
are intelligent, they lack in initiative and enthusiasm, which prevented them from
rising above the others.
 Change in perception – Many students perceived the “intelligence” characteristic in
a different way. For example, they said that the workers were witty and pleasing.
 Recognition but refusal to change – Some students recognized the conflict between
the characteristic of intelligence attributed to workers and their own perception of
workers. However, they attempted to justify their perception about workers by
stating that their own experience does not support the fact that factory workers are
intelligent.
Thus, the study suggested that people attempt to avoid registering those stimuli that
conflict, threaten, or are unacceptable to them.
The results of some relevant studies pertaining to perceptual defense have been
summarized below:
 People resist perceiving information which they believe would disturb their
emotions. Therefore, emotionally disturbing information has a higher threshold for
recognition.
 People substitute their original perceptions (caused by disturbing stimuli and
information) with favorable perceptions to cope with the situation. For example, a
manager may perceive that his workers are happy and satisfied though actually
there may be discontent among the workers. Even if the workers express their
discontentment by coming together, shouting slogans and protesting against the
management, the manager may still continue to think that they are being influenced
by some instigators and that things are not as serious as they appear to be.
 Although some information may actually arouse emotions in an individual, he may
distort and direct the emotion elsewhere. For example, if a person is angry with his
superior, he tries to vent out his anger on his wife or his son or a machine.

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SOCIAL PERCEPTION

Social perception deals with how an individual perceives other individuals. It is also
the study of how an individual gets to know other individuals. An understanding of
social perception is necessary since it plays an important role in organizational
behavior.
Research findings have shown that certain characteristics of the perceiver as well as the
perceived play a role in influencing social perception. The following are the
characteristics which influence the perceptions of an individual (perceiver):
1. If an individual understands his own personality well, it becomes easier for him or
her to understand others accurately.
2. Personal characteristics of an individual may affect the way he perceives others.
For instance, a person who is scheming and manipulative will perceive everyone
else as being scheming and manipulative too.
3. An individual who has a high self-esteem is more likely to perceive favorable
aspects in others as well.
4. How accurately an individual perceives others is based on not just a single skill
but involves many other skills.
Apart from the characteristics of the perceiver, certain characteristics of the person
being perceived also play a role in influencing social perception. These characteristics
are:
1. The persons being perceived fall into various categories due to certain
characteristic aspects associated with them. Two of these aspects that help
categorize the persons being perceived are status of the individual and the role
played by the individual in the organization or in the society.
2. The status of the person being perceived greatly influences the perception of the
perceiver.
3. The way a person is perceived, is greatly influenced by the visible traits of the
person. These visible traits may often tend to prejudice the perceiver.
An understanding of the characteristics of both, the perceiver and the perceived, helps
managers to understand the vital role these characteristics play in determining the
social perception of individuals as well as their resulting behavior both within and
outside organizations. For example, suppose a manager, with a high self-esteem, is
scheduled to meet a very pleasant mannered salesperson. The characteristics of the
manager as well as the characteristics of the salesperson would be responsible for the
manager forming a positive and favorable opinion about the salesperson. The opposite
happens when a manager, with a low self-esteem, meets an arrogant salesperson.
In an organization, perceptions are constantly being made about each other by the
members of the organization. Managers are constantly perceiving the employees while
the employees are constantly perceiving the managers. Similarly, line and staff
personnel are perceiving one another in their own way, and front-line personnel and
customers too develop perceptions about one another. Although there are a number of
factors that affect the process of social perception, the primary factors that affect social
perception are related to psychological processes, such as attributions made by people,
stereotyping and the halo effect. While the attribution theory explains the reasons or
the cause for an individual’s behavior, stereotyping and the halo effect are problems
associated with social perception.

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Organizational Behavior

Attribution
The way in which people explain the cause for their own or others’ behavior is referred
to as attribution. The process of attribution helps individuals to make sense of one
another’s behavior and to draw conclusions about the factors that influence behavior.
Generally, there are two types of attributions made by people – dispositional
attributions and situational attributions. In dispositional attribution, a person’s behavior
is attributed to the internal factors that characterize the person such as the personality
traits of the individual, his motivation or his ability. In situational attribution, on the
other hand, a person’s behavior is attributed to factors external to the person such as
the equipment that he may be handling, or the social influence he may be subject to.
Attribution theories are increasingly gaining importance at work places due to their
role in motivation, performance appraisal and leadership.
The attribution theory of motivation has already been discussed in Chapter 7.
Attribution is a process of searching for causal factors or attributes that help in
interpretation of one’s own as well as others’ behavior. Attribution process influences
how one evaluates others’ performances. It helps determine the manner in which
supervisors behave towards their subordinates. Attribution also helps determine one’s
attitude towards work and personal satisfaction with one’s work. Perceptions and the
consequent behavior of an individual depends on whether a person makes dispositional
attributions or situational attributions. For example, suppose a sales executive has
exceeded his sales target. But the sales manager’s perception and behavior toward the
sales executive will depend on what he perceives are the causal factors for the
executive’s performance. If the manager perceives that it is the subordinate’s hard
work that is responsible for his outstanding behavior, then his behavior towards the
subordinate would be different from how he would behave if he attributes the
outstanding performance to the company’s recently launched promotional strategies
(such as discount offers and free gifts).

Stereotyping
The term, stereotype, refers to the tendency of generalizing the characteristics of all the
members of a group. When a perceiver judges some person based on his perception
about the group to which the person belongs, it is known as stereotyping. A person
resorts to stereotyping to simplify the process of managing innumerable and complex
stimuli that are encountered on a continual basis. Stereotyping may attribute favorable
or unfavorable traits to the person being perceived. For example, politicians have been
stereotyped as being manipulative, corrupt, or having an insatiable greed for power.
Women have been stereotyped as being sensitive, caring or patient. In most cases, a
person is stereotyped because the perceiver is familiar only with the overall category or
group to which the person belongs. However, as each person is unique, it will be unfair
as well as inaccurate to stereotype him or her. For example, public servants are usually
stereotyped as being corrupt and arrogant, although in reality there may be many public
servants who maintain their integrity and are courteous in nature.
Generally, in organizations, stereotypes are based on gender, race, ethnicity, etc. It is
often assumed that women do not prefer a promotional transfer due to possible
dislocation from family, that men do not prefer to take care of children, that older
employees do not have the aptitude to learn and acquire new skills, or that Asians are
risk averse. People hold such perceptions though there may not be much evidence to
supporting their perceptions. In many cases, the stereotyped perceptions are likely to be
inaccurate – for example, there may be women who welcome promotional transfer or
men who enjoy baby-sitting. Inaccurate stereotyping leads to problems of prejudiced or
biased action. For example, if people from a certain tribe are stereotyped as lazy, and
the management rejects a candidate who is actually sincere and hard-working just
because he belongs to that group, it will be a case of biased action owing to
stereotyping.

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Perception

Stereotyping is widespread despite the fact that it may not involve any truth or that it
may be irrelevant.

The Halo Effect


At times, people draw a general impression about an individual based on a single
characteristic, such as intelligence, sociability, aggressiveness, etc. In stereotyping,
perceptions are based on a certain category to which people belong to, while in the halo
effect, perceptions are formed on the basis of a certain (dominant) trait. The halo effect
is commonly seen in performance appraisals when the appraiser or rater commits an
error in evaluating the performance of the appraisee on the basis of a single trait such
as appearance, punctuality, cooperativeness, etc. A certain positive trait of a person
may outweigh all other characteristics that have to be considered while evaluating
performance or making a decision.
Research has shown that halo effect is a major problem that affects the accuracy of
appraisals. Some of the research findings on halo effect are summarized below:
 Halo effect is a common error made by performance appraisers or raters.
 There are two sides or components to the halo effect – true and illusory.
 If an appraiser is impressed by a particular trait of a person, he tends to give a high
rating to all other traits of that person. This tendency of the appraiser to make a
general evaluation and give specific judgments on the basis of it, leads to an
inflated correlation among rating parameters.
 Halo effect has negative consequences that ought to be avoided or eliminated.
Further researches made in this field showed that the halo effect is most likely to occur
under conditions such as (a) the perceiver is not familiar with the traits or doesn’t
frequently encounter these traits, (b) the traits are ambiguous and cannot be clearly
expressed in behavioral terms and (c) the traits have moral implications.
In a research study conducted to observe the influence of the halo effect on perception,
the respondents were asked about their perception pertaining to two individuals who
had identical personalities except for one trait. The trait ‘warm’ in the character list of
one person was replaced by the trait ‘cold’ in the character list of the other person. This
resulted in a significant difference in the perceptions of the respondents regarding both
the individuals. Thus, one trait of a person dominated the perceptual process of the
respondents.
Another study conducted in a company showed the role of halo effect in influencing
the perceptions of employees in an organization. Despite being in losses, the company
paid good wages and salaries to its employees, provided good working conditions, and
there was minimum supervision of employees in the company. Inspite of these
favorable conditions, the employees were not satisfied with the company because of
the fact that they were not secure in a loss-making company. Here one negative aspect
of the company dominated all other positive aspects. One of the significant challenges
faced by human resource managers in organizations is that of overcoming perceptual
problems like stereotyping and the halo effect.
What has been termed as ‘Social Perception’ by Fred Luthans has been termed as
‘Person Perception’ by other behavioral Scientists, such as Stephen P. Robbins. In
addition to stereotyping and the halo effect, Stephen Robbins has also discussed
various other problems such as selective perception, contrast effects, and projection.

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IMPRESSION MANAGEMENT

Impression management is sometimes referred to as “self-presentation.” It is the


process by which people try to manage or control the perceptions formed by other
people about themselves. Often, people like to present themselves in a socially
desirable way and impress others. Exhibit 5.2 discusses the different impression
management techniques used by people and their impact on the audience. Impression
management is used by some people as a shortcut to achieve success in the
organization. However, such attempts by subordinates to impress superiors can affect
the validity of performance appraisal in organizations.

Exhibit 5.2
Impression Management
Impression management techniques are used by individuals for various purposes. They may be used
to obtain approval, to command respect in society or to project self image and satisfy one’s need for
self esteem. They may also use it to obtain control over the environment. Some of the techniques
extensively used for impression management, are listed below:
 Self promotion: It is a technique by which individuals attempt to project themselves as
competent and effective so as to gain respect from others.
 Supplication: In this technique, people project themselves as weak and irresponsible to obtain the
concern and attention of others.
 Exemplification: This technique involves people projecting themselves as ethical and socially
responsible individuals.
 Intimidation: This technique is employed by people to project themselves as fierce and powerful
in order to create fear among others.
 Ingratiation: This technique is used by people to project themselves in a manner that will make
them likable.
An individual may select one or more of the above techniques, depending on the situation and its
importance in achieving his goals.
Impression management techniques are avoided by individuals who believe that their behavior will
subject them to sanctions from society or will cause them to lose their respect, if the projected image
contradicts their image known to the public.
Not only individuals, but organizations also engage in impression management tactics. Organizations
may use these techniques to establish their legitimacy and impress upon the shareholders.
In impression management techniques, people carefully control the information presented to the
audience, and the audience often finds it difficult to identify the real characteristics of the person.
People may even try to deceive the audience by presenting an image completely opposite to that of
themselves.
As high self-monitors are good at manipulating their image, they are able to present different self
images to different audiences. Extroverts usually attempt to project an image that conforms with the
opinions of the audience, irrespective of their views on a particular issue.
Introverts, on the other hand, may resist any conformity and may expect the audience to accept the
image they project of their self. If they believe that the audience did not get the desired impression,
they will put vigorous efforts to ensure that they make the impression they want.
Research conducted on impression management has revealed that ingratiation has the most positive
impact on perceptions in comparison to other techniques. Further, it was observed that self
promotion often has a negative effect and while apology may have a positive effect on the audience.

Adapted from “Impression Management”, Alinea group, 2003,


<http://www.alineagroup.com/Impression%20Management.htm>

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Perception

The Process of Impression Management


Like other cognitive processes, impression management also includes many conceptual
dimensions. Many researches have been conducted on impression management to
study its relation to aggression, attitude change, attributions, social facilitation and so
on. However, behavioral scientists have recently identified two new components of
impression management – impression motivation and impression construction.
Impression motivation is particularly applicable in organizations where employees try
to control the perceptions of their superiors about them. The extent to which an
individual is motivated to manage his impression depends on the following factors:
 Relevance of these impressions in helping the individual attains his goals.
 The value of the goals to the individual.
 The discrepancy between the image the individual would like to create of himself
in other’s mind and the image he believes others already have about him.
The other important component of impression management is impression construction.
It refers to the methods adopted by a person to create the specific impression that he
wants. The impression may be related to various factors such as personal
characteristics, attitudes, interests and values. Research studies in this field have
indicated that there are five factors that are particularly relevant to the type of
impressions people want to create – the self-concept, desired and undesired identity
images, role constraints, the value of the target and the current social image of the
individual. Though researchers have done considerable research in this field, they are
unable to determine how people select a particular way to manage their impression on
others, and how the above factors influence the process. For example, an employee can
manage his impression on his boss in various ways. He may directly approach his
superior and inform him that he may be given additional tasks and responsibilities,
because he is competent and capable of performing them. Otherwise he may indirectly
communicate his efficiency and competency to his boss by making statements such as,
“I admire Bill Gates. He is a fiercely competitive man.” But, researchers have been
unable to determine which method a particular employee would adopt or prefer to
adopt, and what makes him adopt that method.

Impression Management Strategies Used by Employees


The two prime strategies of impression management that employees use are demotion-
preventative strategy and promotion-enhancing strategy.

Demotion-preventative strategy
It is used when employees want to minimize their responsibilities for a negative
outcome or to remain out of trouble. The characteristics of demotion-preventative
strategies are:

Accounts
The employee attempts to justify the occurrence of a negative outcome by giving
excuses. For example, an employee may tell his boss that he could not complete his
task because of bad health or that he helped his colleague complete a priority task.

Apologies
When an employee is unable to come up with any excuse to support his action, he will
seek to apologize to his superior. This will give an impression to the superior that the
employee regrets the occurrence of the negative outcome and would not repeat it in
future.
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Organizational Behavior

Disassociation
When employees are not directly responsible for a negative outcome, they may try to
disassociate themselves from those who were responsible for the outcome and thus
from the responsibility for the problem. This especially holds good if the employee was
a member of the team responsible for making the wrong decision. The employee may
explain to his superior that, despite his efforts to do the right thing, his opinion was
overruled.

Promotion-enhancing strategy
It is used when employees want to maximize their responsibility for a positive outcome
or improve their image. The characteristics of promotion-enhancing strategies are:

Entitlements
Sometimes employees may perceive that due credit has not been given to them for the
positive outcome and may try to make this known to their boss through formal or
informal channels.

Enhancements
Sometimes, the efforts of an employee may result in an outcome that delivers much
more profits than were expected. Apart from this, the outcome may also have scope for
improved profits in the future. Although an employee may have been rewarded for a
positive outcome, he may perceive that his achievement deserved more than what he
received. For example, an employee may have been assigned a task to improve the
design of a product so that sales would increase by 25% and may have been given a
deadline of six months to complete the project within six months. The employee may
have completed the project in two months and the sales may have increased by 75%. In
such a case, the employee may believe that he deserved a promotion, rather than just an
increment and may convey his expectations to the management.

Obstacle disclosures
Under this strategy, employees try to impress upon the boss by making him aware of
the personal (ill-health or family) and organizational (lack of cooperation or scarcity of
resources) obstacles they had to overcome, to achieve the outcome. They try to make
their boss perceive that they deserve more credit because they achieved a positive
outcome despite facing many obstacles.

Association
As the saying goes, ‘A man is known by the company he keeps.’ An employee tries to
be seen with the right people at the right time. By doing so, he tries to convey the
impression that he has good contacts and that he is associated with successful projects.
All the strategies stated above help an employee to develop a positive perception or
impression in others about himself. It is likely that the motivation behind an
employee’s attempts to develop a positive perception or impression about himself is to
obtain more political power, promotions, or monetary rewards. However, it is also
likely that this may not be the case. Impression management is used in organizations
either to maintain good relationships with customers or to rise in the organizational
hierarchy. During the evaluation of employees, it is important for managers to consider
whether people are deliberately manipulating perceptions or whether they are
projecting their real self. Employees should also ensure that they do not try to portray
an incorrect picture of themselves. They should always project the best image of
themselves but not at the cost of their identity and integrity. Doing so can lead to
personality problems in future.

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Perception

LINKAGE BETWEEN PERCEPTION AND INDIVIDUAL DECISION-


MAKING

Decision-making forms an important and is an ongoing activity in organizations.


Managers at all levels are always involved in making some decision or the other. While
managers at the top level are involved in making strategic decisions for the
organization (determining organizational goals, deciding what products or services to
offer to the customers, deciding about financing of operations, and determining the
location of a new unit), middle and lower-level managers are involved in decisions
pertaining to production schedules, recruitment of new employees, etc. However, it
should be noted that making decisions is not just the prerogative of managers. Even
non-managerial employees in organizations are constantly involved in making
decisions pertaining to their work. These may include decisions such as whether to
report for work or not, whether to bring a particular problem to the notice of the
manager or not, how much effort is required to accomplish the task, etc. Moreover,
many organizations today are subscribing to the philosophy of empowering non-
managerial employees, by giving them the authority to make job-related decisions
which, earlier, only managers were allowed to do. Decision-making by individuals has,
therefore, become an important part of the study of organizational behavior. And,
perception of individuals plays a major role in individual decision-making, by
influencing the decisions they make and the quality of their decisions.
Decision-making by an individual is in response to a problem. For example, when
there is a fall in sales, the manager of the company will need to evaluate the problem
and take a decision as to how to solve it. The manager will consider various options to
tackle the problem. He may consider placing greater emphasis on quality control of the
products, to increase the incentives given to the distributors, introduce new technology
to improve product quality or to increase the advertising expenditure of the company in
order to increase the sales of its products. The need for decision-making arises when
there is a discrepancy between the current state and the desired state and it requires the
decision-maker to consider various alternative courses of action and to decide upon the
best option to solve the problem. However, what appears to be a problem to one person
may appear to be a satisfactory state of affairs to another person. Hence, the awareness
of the existence of a problem and the realization of the need to make a decision to
solve the problem are matters of perception.

SUMMARY
Perception can be defined as a process by which individuals select, organize and
interpret their sensory impressions, so as to give meaning to their environment.
Perception is a complex cognitive process and differs from person to person. People’s
behavior is influenced by their perception of reality, rather than the actual reality.
In comparison to sensation, perception is a much broader concept. Sensation involves
simply receiving stimuli through sensory organs, whereas the process of perception
involves receiving raw data from the senses and then filtering, modifying or
transforming the data completely through the process of cognition. The processes of
perception consist of various subprocesses such as confrontation, registration,
interpretation and feedback.
Though people are continuously exposed to numerous stimuli, they tend to select only
a few of them. The principle of perceptual selectivity seeks to explain how, and why
people select only a few stimuli out of the many stimuli they keep encountering at any
given time. Perceptual selectivity is affected by various internal set factors and external
attention factors. Some of the internal set factors are learning, motivation and
personality. External attention factors include environmental influences like intensity,
size, contrast, repetition, motion, novelty and familiarity.
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Organizational Behavior

Sometimes, different individuals may perceive the same thing differently. Differences
may arise due to factors associated with the perceiver (attitudes, motives, expectations,
etc.) or the situation (time, place, etc.) or the target (novelty, background, sounds, size,
etc.).
Perceptual organization focuses on the subsequent activities in the perceptual process
after the information from the situation is received. The various principles of
perceptual organization consist of figure-ground, perceptual grouping, perceptual
constancy, perceptual context and perceptual defense. The principle of figure-ground
states that perceived objects stand out from their general background. According to the
principle of perceptual grouping, people tend to group several stimuli together into a
recognizable pattern. People usually tend to group stimuli together on the basis of
closure, continuity, proximity or similarity. Even if a person is not able to obtain
sufficient information to arrive at a decision, he tries to close the gap by grouping the
available information with the information from his past experience. This is called the
principle of closure. Sometimes people tend to think only in a particular direction. This
is called principle of continuity. It may also happen that people may group the stimuli
based on their proximity and similarity. According to principle of perceptual
constancy, there are some things which are perceived alike by all people, irrespective
of the factors influencing perception. It provides a person a sense of stability in this
changing world. Perceptual context provides meaning and value to stimuli with respect
to a particular context. According to the principle of perceptual defense, people tend to
resist information that is emotionally disturbing or clashes with their personal
convictions or cultural values.
Social perception is concerned with how individuals perceive one another. The primary
factors that lead to social perception are the psychological processes that lead to
attribution, stereotyping and halo effect. Attribution refers to the way in which people
explain the cause of their own behavior or others’ behavior. If a person’s behavior can
be attributed to internal factors such as personality traits, motivation or ability, then it
is called dispositional attribution. If a person’s behavior is attributed to external factors,
such as a machine or being under the influence of others, then it is referred to as
situational attribution.
Stereotyping and the halo effect are common problems in social perception. When an
individual is judged based on the perception about the group to which he belongs, it is
termed as stereotyping. When people draw a general impression about an individual
based on a single characteristic, it is known as the halo effect. The process by which
people try to manage or control the perceptions other people form of them is called
impression management. It is used by employees in organizations to favorably impress
their boss and move up the hierarchy.
Perceptions have a crucial role in individual decision-making in organizations, by
affecting both the decisions as well as the quality of the decision. The decision taken
by an individual is a complex process involving the intake of data, screening,
processing, and interpreting and evaluating of data, based on the perception of the
individual.

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Chapter 6

Personality and Attitudes


In this chapter we will discuss:
 Meaning of Personality
 Personality Determinants
 Other Personality Attributes that Influence Organizational Behavior
 The Development of Personality and Socialization
 Matching Personalities with Jobs
 Beliefs and Values
 Concept of Attitudes
 Attitudes and Consistency
 Cognitive Dissonance Theory
Organizational Behavior

Some people are silent and submissive while others are sociable and aggressive; some
are punctual and hardworking whereas some lack punctuality and are lazy; some are
assertive and optimistic while some are shy and pessimistic. The personalities and
attitudes of people are complex and difficult to interpret. To complicate matters
further, there is no agreement among theorists regarding the definition of personality.
They define personality from a number of different perspectives.
An employee’s personality together with his attitude determines his behavior and job
performance in an organization. Thus, the study of personality assumes significance in
organizations. In this chapter, we will discuss the concepts of personality and attitude
and their influence on organizational behavior.

MEANING OF PERSONALITY

The physical characteristics of a person are purely hereditary, but the psychological
characteristics of a person are partly hereditary and partly conditioned by the
environment. In an organization, the psychological characteristics of a person are of
more concern than his physical characteristics. The way a person behaves and
influences the behavior of others and the way in which he reacts to a particular
situation determine how well he fits into an organization. According to psychologists,
personality is a dynamic concept that describes the growth and development of a
person’s psyche. They argue that the personality of a person cannot be summed up in
simple words such as polite, honest, friendly or intelligent. Personality should describe
a person from a holistic point of view and not just look at individual aspects of his
character.

Personality Traits
Personality can be defined as the sum total of ways in which an individual interacts
with people and reacts to situations. Personality can also be defined as the traits
exhibited by a person during these interactions. These personality traits are very
significant to the study of organizational behavior. Research has indicated that there
are five important traits that form the basis of an individual’s total personality and
affect his performance at work.

Extraversion
This refers to the extent to which a person is comfortable with other people. People
who have a high degree of extraversion are sociable, talkative and friendly. They are
extroverts and tend to develop new relationships easily. People who are low in
extraversion are introverts. They prefer to be by themselves instead of talking to
others. Introverts are reluctant to interact with other people and avoid developing new
relationships. An individual’s degree of extraversion has an influence on his job
preference as well as his job performance. Individuals who are high in extraversion
tend to perform better than introverts in certain jobs. In addition, they tend to prefer
jobs that require them to interact with a number of different people (for example,
marketing, public relations, human resources, etc.).

Agreeableness
This refers to the extent to which a person subjugates his interests for the sake of the
group. People who are very agreeable give importance to maintaining harmony and do
not insist that others agree with what they say or follow their suggestions. Agreeable
people are good-natured, cooperative and trusting (trust others).

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Personality And Attitudes

People who are less agreeable give more importance to their own needs, opinions and
values than those of others. From an organization’s perspective, highly agreeable
people are likely to develop good working relationships with all organizational
constituents (co-workers, subordinates, superiors, customers, and suppliers) while less
agreeable people are unlikely to develop good relationships.

Conscientiousness
This trait refers to the extent to which a person is responsible and achievement
oriented. People who are very conscientious limit the number of goals they set for
themselves, devote their time and energy to those goals and often succeed in achieving
their goals. They are responsible, dependable, persistent and highly achievement-
oriented. People who are less conscientious set too many goals for themselves and
often fail to achieve any of them. People who are very conscientious are more
organized, responsible and self-disciplined and perform better in their jobs than those
who not so conscientious.

Emotional stability
This trait determines an individual’s ability to withstand stress. Individuals who have
“positive” emotional stability feel emotionally secure and tend to be calm. They are
enthusiastic about their work and are capable of withstanding the tensions and
pressures of a job. People who have “negative” emotional stability are emotionally
insecure and experience feelings of anxiety, nervousness and depression. They are
unable to withstand job pressures.

Openness to experience
This personality trait refers to an individuals’ range of interests and indicates how
innovative or how rigid he is in his beliefs. An individual with a high level of openness
tends to be creative and has a wide range of interests. Such individuals are open to
learning and make good workers. Individuals who have a low level of openness, in
contrast, have a narrow range of interests, rigid mindsets and tend to be less curious
and less willing to accept new ideas. Such individuals make poor workers.
Apart from personality traits, ‘self-concept’ and ‘person-situation interaction’ also play
a significant role in determining the performance of an individual.

The Self-concept: Self-esteem and Self-efficacy


‘Self’ refers to the personality of an individual as viewed by that person himself.
According to personality theory, “self-concept” refers to the efforts made by an
individual to understand his own self (Refer Exhibit 6.1). Self-concept is closely
related to the concepts of self-esteem and self-efficacy. Traditionally, more attention
was given to the concept of self-esteem than to the concept of self-efficacy. However,
recently, the concept of self-efficacy has begun to attract great attention in the field of
organizational behavior.
Self-esteem refers to the self-perceived competence and self-image of people.
Behavioral scientists have conducted extensive research on the role of self-esteem in
influencing organizational behavior. These studies have shown that self-esteem has a
moderating influence on employees’ emotional and behavioral responses to various
situations and the stress experienced by them. These studies have also proved that
employees with high self-esteem perceive themselves as unique, competent, secure and
empowered. That is, they possess the ability to positively influence situational factors
in order to accomplish the assigned tasks. Moreover, such people are able to
confidently and freely interact with people around them.

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Organizational Behavior

Exhibit 6.1
Self-Concept
Many researchers in the field of OB have attempted to discover the ways in which people develop
self-concepts. Most of them focused on the early stage of the life cycle of individuals during which
they learnt about their roles and adopted them. Their research revealed that middle-aged adults
approaching the age of retirement lose interest in their roles. However, a recent study conducted in
the US disproved their findings.
This new research studied middle-aged people (about to retire) with respect to their various roles as
employee, friend, neighbor, religious person, volunteer (social worker), spouse, parent, son/daughter
and sibling. The participants in the research were surveyed to find out the importance they gave to
each of the above roles, the role they felt was central (most important) to their lives, and the extent
to which they achieved a balance among these roles. Most of the respondents gave importance to
their family roles. Men gave more importance to their role as spouse while women gave more
importance to their role as parent.
People who considered the role of worker central to their lives could not define their role as a
spouse clearly. This implies that high work centrality has a negative impact on a person’s role as a
spouse. According to the study, high work centrality also had a negative impact on a person’s role as
a parent. Giving importance to work does not affect these roles, but making work central to one’s
life has a negative effect on other roles.
People who felt that the role of worker was central to their lives defined their family role as “being a
good provider” or “contributing to the economic well-being of the family.” This indicates that they
associated each role with financial or extrinsic factors. Hence, they were less than satisfied with any
of their roles. Spouse or parent centrality, however, did not have a negative effect on worker role
satisfaction.
The extent to which middle-aged people were able to achieve a balance between their roles was
found by finding the ratio between the number of roles important to them (overall breadth of self-
concept) and the number of roles actually held by them. Men obtained a score of 0.69 while women
obtained a score of 0.74. This indicates that middle-aged working people had well-balanced self-
concepts, i.e., they understood their multiple roles and responsibilities and performed them
effectively.
Research is currently being conducted to find out whether middle-aged people who attribute greater
centrality to worker roles would experience greater stress than others (who attribute centrality to
other roles) in adapting to post-retirement life.

Adapted from Donald C.Reitzes, Elizabeth J.Mutran, “Self-Concept as the Organization of Roles,
Importance, Centrality and Balance,” The Sociological Quarterly, Volume 43, no. 4, 2002, p 647-
667.

Self-efficacy refers to a person’s perception of his ability to cope with different


situations as they arise. People with high self-efficacy have the capability and the
required confidence to rise to the occasion. Though self-efficacy is closely related to
self-esteem., there are certain differences. One major difference between the two
concepts is that self-esteem is a generalized trait (it is present in all situations) whereas
self-efficacy is situation-specific. The self-efficacy of a person can be measured along
three dimensions – level, strength and generality. ‘Level’ refers to the number of tasks
a person can effectively perform, ‘strength’ refers to how firmly a person believes he is
capable of performing a task and ‘generality’ refers to the extent to which the self-
efficacy expectations of an individual can be generalized (instead of varying from
situation to situation). Researches found that self-efficacy and employee performance
are highly correlated. The relationship between self-efficacy and performance is
cyclical. Self-efficacy affects performance which in turn affects self-efficacy. The role
of self-efficacy is vital in helping an individual cope with tough jobs, make a career

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Personality And Attitudes

choice, learn and achieve something, and adapt to new technology. Organizations can
enhance the self-efficacy of employees by training them.

Person-Situation Interaction
Person-situation interaction enhances our understanding of human personality.
Although there may be very small differences among the situations, a person finds
himself in, these differences may appear as quite large differences when filtered by a
person’s cognitive mediating process. A person may respond to these situations in
various ways. Thus, people do not act in a similar manner in all situations, but exhibit
different behavioral responses in different situations. Further, two different people may
exhibit different behaviors, in similar situations. (The socialization process, which will
be discussed later in this chapter, explains interaction between person and
organization.)
In short, we can say that personality is a diverse and complex cognitive process. It
refers to the entire person, and includes the person’s external appearance, traits, self-
concept and situational interactions.

PERSONALITY DETERMINANTS

Studies in personality research have come to the conclusion that personality is


influenced by both heredity and environment. There is also a third factor that
influences an individual’s personality, that is, the situation. Let’s discuss each of these
factors in more detail.

Heredity
The biological, physiological or psychological characteristics that an individual is born
with constitute heredity. According to the heredity approach to personality, an
individual’s personality is determined by the type of genes he inherits from his parents.
Some of the characteristics that an individual may wholly or partially inherit from
either of his parents are physical stature, facial features, skin and hair color,
temperament, muscle composition and reflexes, energy levels and biological rhythms.
Of the several groups involved in personality research, the results obtained by three
teams showed that heredity plays a significant role in influencing an individual’s
personality. The first team based its study on the genetic reasons underlying human
behavior and temperament among young children, the second team based its study on
twins who were separated at birth, and the third team studied the consistency in job
satisfaction over time and across situations.
The first team’s study (based on young children) indicated that traits such as shyness
and fear are inherited at the time of birth. The researchers, therefore concluded that
some traits may have the same genetic code and may be genetically transmitted along
with physical characteristics such as height and hair color.
The second team conducted studies on 100 identical twins who were separated at birth
and brought up in different places. If A1 and A2 were one pair of twins and B1 and B2
were another pair of twins, A1 and B1 were brought up together in one place while A2
and B2 were brought up together in a different place. Although researchers expected to
find no similarities in twins who had been reared apart, they were surprised to find that
despite being brought up separately, the personalities of the individuals who comprised
the same pair of twins had quite a few similarities. They also found that the personality
of A1 was more similar to that of A2 than B1. Researchers have also found that most
of the differences that existed between twins separated at birth were associated with

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Organizational Behavior

their genetic makeup. The researchers found that 50 percent of differences in


personality and 30 percent of differences in occupational and leisure interests can be
attributed to genetic factors.
The third team conducted studies on individual job satisfaction. Researchers found that
an individual’s job satisfaction tends to be stable over time. They observed that an
individual’s level of satisfaction with his work was relatively stable during his lifetime
though he changed many jobs and employers. This indicates that job satisfaction is
determined by the inherent characteristics of a person rather than external
environmental factors.
If heredity alone influenced the personality characteristics of an individual, then it
would be impossible to alter an individual’s personality. Research has shown that
people can change over a period of time. For example, a stubborn person can become a
cooperating employee in an organization. Such research substantiates the claim that
personality characteristics are not determined by heredity alone.

Environment
According to the environment approach, the environment that an individual is exposed
to plays a major role in shaping his personality. Environmental factors include the
culture of the society in which an individual is brought up, the norms set by the
parents, teachers and other social groups with which the individual interacts, and other
situations and experiences he undergoes in his life.
Norms, attitudes and values are specific to a culture, remain consistent over time and
pass on from one generation to another. For example, American culture encourages
industriousness, competition, independence and achievement. As a result, Americans
are ambitious and aggressive. Other cultures (for example, Indian culture) encourage
group efforts, cooperation, priority to family over work, importance to religion etc.
People brought up in such cultures may be relatively less aggressive and ambitious.
After considering arguments that claim either heredity or the environment to be the
primary determinant of personality, it can be stated that both heredity as well as
environment are important in shaping the personality of an individual. Heredity defines
the boundaries of an individual, but the individual can realize his full potential only
when he adapts to the demands and requirements of the environment. The
complementary nature of heredity and environment can be understood better by
recalling the relationship between seed, land and crop. A poor quality seed (heredity)
cultivated on a fertile land (environment) might yield a good crop (outcome). On the
other hand, a good quality seed cultivated in a barren land may also yield a good crop.

Situation
Apart from heredity and environment, the situation in which an individual is can also
influence his personality. An individual’s personality may not change entirely with a
particular situation. However, different situations bring out different aspects of an
individual’s personality. Hence, a person’s personality cannot be judged by observing
his behavior in any one particular situation.
Research methods have not progressed to the extent that situations can be classified
and studied. However, it is clear that certain situations are more significant than others
in shaping personality. For instance, certain situations impose more constraints on
behavior than others do. For example, a person will attempt to control his behavior in a
meeting with his boss or during a prayer meeting in a religious place, but during a
picnic with family members or friends he will be relaxed and make minimum efforts to
control his behavior.

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OTHER PERSONALITY ATTRIBUTES THAT INFLUENCE


ORGANIZATIONAL BEHAVIOR

In addition to the personality determinants, described above there are some other
personality attributes that help predict the behavior of individuals in organizations. The
first attribute is concerned with one’s perception of the locus of control in a person’s
life. The other attributes are Machiavellianism, self-esteem, self-monitoring, propensity
for risk taking, and Type A and Type B personality. The various attributes that predict
the behavior of individuals in organizations are discussed below.

Locus of Control
The locus of control refers to an individual’s perception of what controls his or her
fate. It refers to the degree to which people believe that they can control their fate or
any situation. Some people believe that they are masters of their own fate while some
believe that their fate is controlled by luck, chance or external forces. The former,
known as internals, attribute an internal locus of control to organizational outcomes.
The latter, known as externals, attribute an external locus of control to organizational
outcomes.
Research conducted on internals and externals revealed some interesting facts. It was
found that externals were dissatisfied with their jobs, showed little commitment to
work and were frequently absent from work. Internals, however, were committed to
their work, had a low rate of absenteeism, and were highly satisfied with their job.
Externals perceived themselves as having minimal control over organizational
outcomes and failed to make attempts to improve the outcome. Internals, however,
believed that they themselves could shape their future. They attributed their success or
failure to their internal abilities, not to external factors. Externals who were unable to
go up the career ladder in their organizations blamed the management and fate for their
failure; however, internals attributed their failure to their own actions and tried to learn
new skills to improve their prospects for promotion or quit their jobs to look for better
ones.
The locus of control of individuals also has an impact on their absenteeism. Internals
perceive themselves to be responsible for their health and take good care of their
health. As a result, incidences of sickness or absenteeism are less among internals.
Externals, however, do not consider themselves responsible for their health and
attribute ill-health to external forces. They fail to take steps to avoid ill-health. As a
result, incidences of sickness and absenteeism are higher among externals. From an
organization’s perspective, internals are more regular and more productive than
externals.
Internals are highly achievement-oriented and search extensively for the required
information before making a decision or taking any action. They make considerable
efforts to control the environment in which they work and turn situations in their favor.
Internals are capable of complex information processing and learning, and perform
effectively in managerial jobs that demand such skills. Externals, however, are
reluctant to take the initiative and prefer to be directed. Therefore, externals are better
suited for jobs involving routine and structured tasks and jobs in which instructions are
given by superiors.

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Machiavellianism
Machiavellianism (Mach) refers to the degree to which an individual is practical in his
approach, maintains an emotional distance from others, and believes that ends justify
the means. Research has revealed that individuals who score high on Mach are good at
manipulating others and try to win by any means. They do not need to be persuaded to
work but instead are able to successfully persuade others. People having a high Mach
perform well in situations that involve face-to-face meetings. They are especially
productive in jobs that require the use of bargaining (persuasion) skills and in jobs that
offer substantial rewards for the achievement of goals.

Self-esteem
The degree of liking an individual has for himself is referred to as self-esteem.
Research has shown that people with high self-esteem are generally confident that they
possess the abilities required for succeeding at work. Such people prefer to take up
unconventional or challenging jobs. Individuals with low self-esteem lack confidence,
look for approval from others, and are not likely to take a stand which opposes others’
views. Thus, they seek lower-level jobs. People who have high self-esteem do not care
about pleasing others and fail to be influenced by external factors. They are not afraid
of taking unpopular stands. People with high self-esteem derive more satisfaction from
their jobs than people with low self-esteem.

Self-monitoring
Self-monitoring refers to the ability of an individual to adapt his behavior to the
demands of the situation. High self-monitors are capable of changing their behavior
according to the situation. They can play multiple and even contradictory roles (Refer
Exhibit 6.2). The way they behave with their employees, boss, clients and suppliers is
entirely different in each case. They make successful managers and tend to get
promoted faster than others. In contrast, low self-monitors find it difficult to disguise
their true feelings, emotions and reactions and cannot adapt quickly to situations. Their
behavior is consistent with the way they feel. Low self-monitors do not advance as far
in their careers as high self-monitors.

Risk taking
This refers to the extent to which an individual is prepared to take risks. People who
are highly risk-taking in their behavior make decisions quickly without searching for
much information. Risk-averse people do not make decisions in a hurry and gather a
lot of information before making any decision. However, research has indicated that
the accuracy of decisions made by both risk-taking and risk-averse people is almost the
same.
In organizations, the suitability of a person’s risk-taking or risk-averse behavior
depends on the duties and responsibilities of his job. For example, the job of a foreign
currency trader requires individuals with high risk-taking propensity, whereas the job
of a clerk or that of a typist requires individuals with low risk-taking propensity.

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Exhibit 6.2
Multiple Roles of the Manager
As a manager, an individual has to play several roles such as a specialist, supervisor, leader, team
member, assistant to the boss, representative, an organization politician, corporate citizen and head of
a family.
Many employees are promoted primarily because of their excellent performance at work. Since such
people derive satisfaction from their work, many of them continue with their work even after being
promoted to managerial position. For example, software engineers promoted to managerial positions
may still like to write programs, i.e., they like to continue in their previous role as specialists. But
because they are in the position of manager, they have to supervise the work of their subordinates.
A manager is responsible for the productivity of his subordinates. He has to plan or approve the plans
related to various projects; he has to provide the right work environment, required resources and able
guidance to his employees; he has to take control measures whenever there is any deviation from the
planned performance; and at the end, he has to show concrete results to his superiors. In the process,
he has to act as a leader. He has to train, develop and motivate the employees as a leader, apart from
planning, organizing and controlling the activities in the organization as a manager. A manager thus
has to switch between the roles of a leader and a manager, depending on the situation. If employees
are discouraged and demotivated with the massive targets set by the organization, the manager has to
act as a leader and create a positive attitude and motivate them to put all their energy and efforts in
achieving targets (as a leader). If the employees report any technical problem in the course of their
work, the manager should be able to resolve the problem using his knowledge and experience.
A manager has to perform a double role as a team leader and a team player. A manager is expected to
lead his team of subordinates as well as cooperate with his fellow managers (other managers at the
same level in the organization) and be a team player. In organizations, generally, different
departments share organizational resources. Sometimes they may have to compete for scarce
resources. Thus, for a manager, cooperation with another manager could mean diminishing his
chances of accomplishing his own department’s goals. However, a manager has to accept the
conflicting roles imposed by the organization – competing and cooperating with the managers of
other units.
Apart from carrying out his own functions, a manager is expected to help his superior perform his
functions. Top managers rely on their immediate subordinates to provide them the necessary
information. Some managers may get closer to their superiors by offering them more assistance than
others in carrying out their responsibilities. This may often result in their alienation from fellow
managers, though they may be rewarded by a promotion later. However, if the superior leaves the
organization before appraisal period, the boss’s assistant will be the loser.
A manager is also expected to play the role of a representative. Though he is primarily a
representative of the management for his employees, sometimes he may have to represent his
employees before the top management. This may be necessary when the top management has taken a
major policy decision that has a negative impact on the work lives of employees.
A manager also needs to play the role of a politician. He has to understand who in the organization
has power and how decisions are made. This will help him approach the right person for obtaining
resources, solving work-related problems, and accomplishing the goals of his unit or department. If a
manager fails to understand the presence of political maneuvering in organizations or keeps himself
away from it completely, he will not be able to achieve his unit’s goals and reach higher levels of
management.
A manager should also participate in community programs and use the contacts developed in the
process to enhance business opportunities for the organization. However, he has to ensure that he
does not spend more time in community activities than organizational activities.

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A manager should devote some time to his family members and do justice to his role as husband and
father (or mother). His family life should not deteriorate because of his/her pre-occupation with
organizational responsibilities.
Hence, a manager has to use his time and energy in the most efficient way among these varied roles
to be a successful manager.

Adapted from Edmond H.Curcuru and James H.Healey, “The Multiple Roles of the Manager,”
Business Horizons, August 1972.

Type A Personality
Individuals who strive continuously to achieve more things in less time, even in the
face of opposition, are said to have a Type A personality. Individuals with Type A
personality are believed to be ambitious and achievement-oriented. Some of the
characteristics of people with Type A personalities are given below:
 They try to be fast in everything they do, whether it is eating, talking, walking, etc.
 The pace at which things generally happen upsets them.
 They try to be involved in more than one thing at a time.
 They are always busy and find themselves unable to cope with leisure time.
 They emphasize numbers and quantity and measure their success in quantitative
terms (e.g. amount of output produced, number of products sold, etc.)
In stark contrast to Type A individuals are Type B individuals. These individuals (Type
B) are not obsessed with the desire to achieve too many things within in a short span of
time. The characteristics of Type B personalities are described below:
 They do not experience a sense of urgency when carrying out tasks and do not get
upset or impatient if the tasks are not accomplished within the specified time.
 They do not consider it necessary to reveal or discuss their achievements unless the
situation demands it.
 They try to make the best use of their leisure time and relax without any feeling of
guilt.
These characteristics of Type A and Type B individuals lead to specific behavioral
outcomes. Type A individuals set ambitious deadlines for themselves and work under
continuous time pressure. Thus, these individuals constantly experience moderate to
high levels of stress. Since Type A managers emphasize quantity rather than quality,
they sometimes end up doing a hasty job that lacks quality. In addition, they tend to
rely on past experience to solve problems and do not feel the need to be innovative in
developing solutions to new problems. Their emphasis on speed prevents them from
spending too much time on any problem. This causes them to make poor decisions.
Since Type A individuals are hardworking by nature, they are suitable for jobs that call
for continuous hard work and struggle such as the job of a salesperson or a business
development executive. Type B individuals, however, are suitable for the top
management positions in an organization since they tend to be wise, tactful and
creative in making decisions.

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THE DEVELOPMENT OF PERSONALITY AND SOCIALIZATION

The development of the personality of an individual is influenced by various factors


such as heredity, environment, maturation, and learning. While personality theorists
agree that human personality development takes place in various physiological and
psychological stages, they disagree about the exact stages and the type of development
that takes place at each stage. Many of them argue that there are no clear-cut stages in
the personality development process. They believe that personality development is a
continuous process and that the level of development depends mainly on the learning
opportunities available. The theories proposed by Levinson, Hall and Argyris, which
support the concept of stages in personality development, are widely used to
understand OB.

Levinson’s Theory of Adult Life Stages


Daniel Levinson proposed that the personality development of an individual progresses
with age. This theory was different from other popular theories of the time which held
that personality development is associated with events such as marriage, parenthood,
and retirement. Initially, Levinson believed that an individual’s development took
place uniformly throughout the adult years. However, he later theorized that the years
of uniform progress are punctuated by (four) periods of stability during which no
development takes place.
According to Levinson’s theory, the four periods of stability occur between the
following ages:
1. Twenty-two to twenty-eight (during which an individual steps into the adult stage)
2. Thirty-three to forty (during which an individual is in the process of settling down)
3. Forty-five to fifty (during which an individual enters middle adulthood)
4. Fifty-five to sixty (a stage where middle adulthood terminates and an individual
approaches old age.)
The four transitional periods identified by Levinson were:
1. Age-thirty transition (takes place between twenty-eight and thirty-three years).
2. Mid-life transition (takes place between forty and forty-five years).
3. Age-fifty transition (takes place between the fifty and fifty-five years).
4. Late adult transition (takes place between sixty and sixty-five years).
Further, according to Levinson, the maximum development in one’s personality takes
place during mid-life transition. He argued that an individual’s attitude towards work
undergoes tremendous change during periods of transition rather than during periods of
stability. However, there is no evidence to prove these postulates.
Since Levinson’s theory was not able to explain the vast individual differences (in
personality) among people of the same age, he redefined the stages as “eras” – early
adult, mid-life and late adult – each of which included a transition-in period, a period
of stability and a transition-out period. While Levinson had previously assumed that
periods of stability and mobility characterized entire stages during the development of
an individual’s personality, he later modified his approach to suggest that every stage
of an individual’s lifecycle is characterized by an interplay of mobility and stability.

Hall’s Career Stage Model


Hall, another popular personality theorist, blended Levinson’s theory with other adult
stage theories to develop a model for career stages. The model suggests that an
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individual goes through four stages during his career – exploration, establishment,
maintenance and decline. In the exploration stage, the individual seeks an identity for
himself, attempts to understand himself and his personality, and tries out various roles
in his career. At this stage, the employee is relatively unstable in his career and less
productive as he keeps switching between various jobs in search of the right one. In the
second stage, the establishment stage, the employee tries to settle down in his job and
interacts with co-workers to develop a good relationship with them. The productivity
of a person increases during this stage. In the third stage, the maintenance stage, the
productivity of an employee reaches its peak and he feels the need to contribute
something to the next generation. He may even act as mentor to his subordinates. At
this stage, the productivity of some people may increase further, while for some the
productivity may remain stagnant. The last stage in the career of an individual is the
decline stage. In this stage, the productivity of a person starts declining. In this stage,
the individual evaluates his life and career and tries to convince himself that he made
the right decisions in his life. The decline stage may undergo drastic changes in the
years to come due to changes in the mandatory retirement laws, advances in medical
treatment and society’s expectations from the older generation (“gray power”).

Argyris’ Immaturity to Maturity Theory


Chris Argyris, a famous organizational behaviorist, proposed that the degree of
development of an individual’s personality can be explained in seven dimensions
(Refer Figure 6.1). He also proposed that just as a human being develops from an
infant to an adult, human personality development too takes place along a continuum
(instead of stages) from immaturity to maturity. Moreover, Argyris pointed out that it
is not essential that all individuals exhibit all the seven characteristics or personality
dimensions on reaching the ‘mature’ end of the continuum. According to Argyris,

Figure 6.1: The Argyris Immaturity-Maturity Continuum

Immaturity Maturity
Passive ……………………………………………………………. Active
Dependence Independence
Behave in few ways Capable of behaving in many ways
Erratic shallow interests ………………………… Deeper and stronger interests
Short time perspective Long time perspective (past and future)
Subordinate position ………………………….. Equal or superordinate position
Lack of awareness of self Awareness and control over self

Source: http/www.accel-team.com/motivation/chris_argyris_02.html

 The seven dimensions reflect only one aspect of an individual’s personality. The
personality of an individual also depends on other factors such as his perception,
self-concept and his ability to adapt and adjust.
 As an individual progresses from infancy to adulthood along the continuum, there
is continual change in the level of development along different dimensions.
 The model can only measure and describe the development of an individual’s
personality but cannot predict any specific behavior of the individual.
 The latent characteristics of personality, which form the basis of the seven
dimensions may be quite different from the externally visible behavior of people.

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Argyris developed the model to study and analyze organizational behavior. According
to Argyris, the personalities of employees in an organization are at the mature end of
the continuum. However, formal organizations fail to consider their employees as
mature and continue to give them passive roles. The employees are not given any
autonomy and, most of the times, the expression of employees’ abilities is suppressed
in formal organizations. Since formal organizations make employees remain in
positions of passivity instead of allowing them to be participative, mature
organizational members feel frustrated. This sense of frustration may lead to the
opposition of the rules and regulations imposed on them by the organization. The
underlying cause of conflict in organizations is the basic incongruity between the needs
of a mature personality and the nature of the formal organization. This incongruity
premise forms the basis on which the concept of person-organizational structure
interaction has been developed. Behavioral scientists are also attempting to match
personality characteristics of individuals with organizational requirements to explain
the job performance and work-attitudes of employees.

The Socialization Process


The process through which an individual’s personality is influenced by his interaction
with certain persons, groups and society at large is referred to as the socialization
process. The socialization process is not confined to a person’s early childhood or a
particular age, but is a continuous process that goes on throughout one’s life. The
socialization of a person begins with his initial contact with his mother during infancy.
Later, he interacts with other family members, close relatives, family friends, and
social groups (comprising peers, friends and colleagues) who influence his personality.
Edgar Schein made significant contributions to the study of the socialization process.
Schein pointed out that the organization in which an individual works also contributes
to socialization. Socialization has a major impact on the behavior of employees in
organizations. Therefore, it is important to analyze and control the socialization forces
in an organization. Different organizations use different techniques for the purpose of
socialization of a new employee. All these socialization techniques help newcomers
adjust to the organization. Socialization helps in reducing role conflict and increasing
job satisfaction and commitment.
According to Schein, the socialization process in an organization is mostly confined to
learning the prevailing values, norms and behavioral patterns. Some of the
characteristics of the organizational socialization of employees are:
 It brings about a change in the attitude, values and behavior of an individual so that
they do not contradict organizational values.
 The process continues for an extended period of time.
 It helps the new employee adjust to new jobs, work groups and organizational
practices.
 The new employee as well as the managers influence each other.
 The initial period of the socialization process is crucial because it determines how
well an employee fits into the organization.
These characteristics of organizational socialization influence the behavior of
employees in an organization. For example, employees learn that they should be
formally dressed when they come to office, should not speak defamatory things about
the organization in public, and so on. Through the socialization process they find out
whom they should approach in case of any problem and learn about the informal
communication networks in the organization that can be relied upon. The socialization
process is particularly crucial when a foreign national joins the organization. He needs
to be socialized to help him adapt to the local culture.

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The socialization of new employees is carried out through the use of mentors or role
models, training and orientation programs and reward systems (rewarding desired
behavior). The following specific steps may also be taken by organizations to socialize
new employees:
 offering them with an interesting and challenging job
 providing them with proper and relevant training
 providing them with objective and timely feedback
 appointing an experienced supervisor to conduct the socialization process
 designing an informal orientation program
 assigning new employees to work groups that are highly satisfied and have high
morale.
Socialization is also necessary when organizational members move up from one
position to another in the organizational hierarchy. When an employee gets promoted
he may have to deal with new colleagues and subordinates. Socialization helps him
quickly adapt to the change.

Table 6.1: Holland’s Typology of Personality and Congruent Occupation


Type Personality Characteristics Congruent Occupations
Realistic: Prefers physical Shy, genuine, persistent, Mechanic, drill press operator,
activities that require skill, stable, conforming, practical assembly line worker, farmer
strength and coordination
Investigative: Prefers activities Analytical, original, curious, Biologists, economist,
that involve thinking, organizing independent mathematician, news reporter
and understanding
Social: Prefers activities that Sociable, friendly, Social worker, teacher
involve helping and developing cooperative, understanding counselor, clinical
others psychologists
Conventional: Prefers rule- Conforming, efficient, Accountant, corporate
regulated, orderly, and practical, unimaginative, manager, bank teller, file clerk
unambiguous activities inflexible
Enterprising: Prefers verbal Self-confident, ambitious, Lawyer, real estate agent,
activities where there are energetic, domineering public relations specialist,
opportunities to influence others small business manager
and attain power
Artistic: Prefers ambiguous and Imaginative disorderly, Painter, musician, writer,
unsystematic activities that allow idealistic, emotional, interior decorator
creative expression impractical

Source: “Making Vocational Choices,” Psychological Assessment Resources, Inc.

Van Mannen (a behavioral scientist), developed socialization strategies such as formal


or informal, individual or collective, sequential or non-sequential and fixed or variable
strategies. For example, in the sequential socialization strategy, a person suited for a
top management position is rotated through a series of important functional specialty
positions before being promoted to the top position.
All these socialization strategies have a major impact on human resource management
and organizational effectiveness.

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MATCHING PERSONALITIES WITH JOBS


John Holland, who proposed the personality-job fit theory, established the relationship
between personality characteristics, the requirements of a job, and job performance.
According to him, the job satisfaction of an individual and his tendency to quit a job
are determined by the extent to which his personality matches with the work
environment and the requirements of the job. He described six different personality
types in this context. Table 6.1 depicts the six personality types, their characteristics,
and examples of congruent occupations.
Holland developed a Vocational Preference Inventory questionnaire with 160
occupational titles. The answers provided by respondents (regarding the occupations
they liked or disliked were used to develop various personality profiles. The research
results were presented in the form of a hexagonal diagram, with each corner
representing one type of occupational personality (Refer Figure 6.2). The figure shows
the similarities or dissimilarities among various occupational personality types. The
closer two personality types are in the hexagon, the more compatible they are. The
personality types that are adjacent to each other are similar whereas those that are
diagonally opposite are dissimilar in nature.

Figure 6.2: Relationships among Occupational Personality Types

Realistic Investigative

Conventional Artistic

Social
Enterprising
Source: http://home.earthlink.net/~akraemer3/guidancelesson.html

It was observed that when an individual’s personality and his occupation match each
other, then the level of satisfaction was high and the person was unlikely to quit the
job. According to Holland’s model, social individuals should ideally be in social jobs,
enterprising individuals in risk-taking jobs, and artistic people in creative jobs. An
artistic person employed in a realistic job is more likely to be dissatisfied than a
realistic person employed in the same job. The significant points made by Holland’s
model are

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 There are some intrinsic differences among individual personalities.


 There are a variety of jobs.
 Those individuals whose personalities match their work environment are more
satisfied with their jobs and are less likely to quit the job voluntarily.

BELIEFS AND VALUES

Beliefs refer to the way in which an individual organizes his perceptions and
cognitions. They refer to some aspect of the individual’s world (some activity, object
or experience) and remain more or less constant throughout the lifetime of the
individual. Beliefs refer to the meaning that an individual attaches to a particular thing
and take into account all aspects of an individual’s cognition of things around him. For
example, an individual may believe in God. Due to his belief in God, the individual
may hold that everything that happens in this world is due to the divine grace of God.
The development of beliefs in an individual is influenced by the cultural environment
in which the individual grows up and the functional factors (needs, demands and
emotions), unique to each individual.
Values refer to the cognition of an individual that a certain mode of conduct or style of
behavior is socially preferable to the other possible modes of conduct or behavioral
styles. Values are judgmental in nature since they convey an individual’s ideas
regarding what is right, good, or desirable. The value system of an individual is
determined by factors such as national culture, parental dictates, teachers and friends.

CONCEPT OF ATTITUDES

Personality describes the whole person and attitude determines the personality.
Attitude is a state of mind of an individual towards something. It may be defined as a
tendency to feel and behave in a particular way towards objects, people or events. The
characteristics of attitudes are described below:
 The attitudes of an individual generally remain unchanged for a prolonged period
of time unless he is influenced by external forces.
 Attitudes are evaluative statements that can be either favorable or unfavorable. For
example, if a person does not like a certain aspect of his job, he is said to have a
negative attitude towards that assignment.
 Attitudes refer to feelings and beliefs held by an individual towards an object (or
event or person).
Attitudes consist of three components – cognitive, affective and behavioral. The
cognitive component indicates the opinions, values or beliefs of an individual about
something. For example, a person, say Rakesh, may believe that taking or giving a
bribe is wrong. This is the cognitive component of Rakesh’s attitude. The affective
component represents the feelings of a person toward something. For example, Rakesh
may not like his colleague Deepak because he takes bribes. The behavioral component
of a person indicates the intention of a person to behave in a particular way. For
example, Rakesh may decide to avoid Deepak.

Sources of Attitudes
Attitudes are acquired from parents, teachers and members of the peer group. The
genetic make-up of a child initially determines his personality and attitudes. However,

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as the child begins his schooling and interacts with people, his attitudes are influenced
by the people whom he admires, respects or fears. Individuals are more willing to
modify their behavior and shape their attitude to align with the behavior of people
whom they look up to. This is the reason why companies have their products endorsed
by popular personalities such as leading cricket players and film stars. Such
endorsement helps develop a positive attitude toward their products among the public.
People are generally not as steadfast about their attitudes as they are about their values.
Thus, the attitudes of people can be easily influenced and altered. Attitudes can be
changed by various means: by providing new information, by coercion or threat, by
resolving differences, and by involving people (dissatisfied with a situation in the
organization) in problem solving. It is only natural for employees to have a hostile
attitude toward change in the organization. However, if the management helps
employees understand the competitive threat the organization is facing and makes them
realize the need for change and organization development, the employees will, most
likely, overcome their hostile attitude and agree to bring about change in the
organization.
Attitudes can also be changed by providing the right type of feedback to employees. If
a manager always makes only negative remarks in his feedback to employees, the
employees may develop a negative attitude towards the job and workplace. The
manager should therefore be trained to give objective feedback (which includes both
positive and negative points) in a manner that does not demotivate employees. This
will help change the attitude of employees towards their job and work environment and
will go a long way in preventing job dissatisfaction and turnover.

Types of Attitudes
An individual may have a number of attitudes regarding different aspects of life, but
the field of OB focuses only on the study of job-related attitudes. OB specifically
focuses on three attitudes: job satisfaction, job involvement and organizational
commitment.

Job satisfaction
In the field of OB, job satisfaction is one of the most important and widely studied
attitudes. Job satisfaction refers to an individual’s general attitude towards his or her
job. It has been described by Edwin A. Locke as the pleasurable or positive emotional
state that results when an individual evaluates his job or job experience. Job
satisfaction results when an individual perceives that his job provides him with what is
important to him. The three important dimensions of job satisfaction are provided
below:
i) Job satisfaction is an emotional response to a job. This response can be inferred
but not seen.
ii) The job satisfaction that an individual derives from his job depends on the extent
to which outcomes meet his expectations. For example, if an employee feels that
he is getting more salary and more autonomy in his company than his friends in
other organizations, he will have a high level of job satisfaction and a favorable
attitude towards his superiors, peers and the work itself. If he feels that his salary
and decision-making power is at par with that of his friends, he will experience
only moderate job satisfaction; and if he feels that he is getting much less pay and
autonomy than his friends, he will experience job dissatisfaction and will develop
a negative attitude towards his work and superiors.
iii) Job satisfaction reflects other attitudes of employees.
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Organizational Behavior

According to P.C. Smith, L.M. Kendall and C.L Hulin, there are six job dimensions
that represent the most important characteristics of a job and elicit favorable or
unfavorable responses from employees:
The work itself
Jobs that include interesting tasks and provide opportunities to the employee to learn
and to shoulder responsibilities bring more satisfaction to the employees than jobs that
do not provide these.
Pay
An employee will have a positive attitude towards his job if the compensation he
receives for the work he does is comparable to that of others in similar jobs in the
organization.
Promotion opportunities
An employee’s level of job satisfaction will be higher in a job that provides him an
opportunity to move up in the organizational hierarchy than in a job that does not.
Supervision
An employee whose supervisor offers him technical help and behavioral support in
times of need will experience more satisfaction in his job than an employee whose
supervisor does not offer any such support.
Coworkers
An employee will experience a higher level of job satisfaction when his fellow workers
are cooperative and able to offer him technical assistance.
Working Conditions
Good working conditions have a positive impact on job satisfaction.

Outcomes of job satisfaction


For years, management researchers and practitioners have tried to find out the impact
of employee job satisfaction on organizational effectiveness. They wanted to know
whether job dissatisfaction would lead to decline in employee output and,
consequently, organizational performance. They analyzed the outcomes of job
satisfaction by studying the relationship between job satisfaction and various other
organizational aspects such as productivity, turnover, absenteeism, etc. These
relationships are discussed below:
Satisfaction and productivity
Though many people assume that there is a positive relationship between satisfaction
and performance, research results have proved that there is no strong relation between
satisfaction and productivity. There are other mediating variables like rewards, that
lead to an increase in productivity. Recent research findings suggest that though
satisfaction may not bring about considerable improvement in individual performance,
it does result in an overall improvement in organizational performance.
Satisfaction and turnover
Research has indicated that only a moderate relationship exists between satisfaction
and turnover. High job satisfaction will not eliminate employee turnover but will only
help reduce the rate of turnover. While job dissatisfaction will encourage employees to
switch organizations at the slightest opportunity for better prospects in other
organizations, the satisfied employees will consider several aspects before leaving the
organization.

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Job tenure (the number of years an employee has worked in a job in an organization) is
another factor that has an impact on turnover. The higher the job tenure of an employee
in an organization, the lower the chances of his leaving the organization.
An individual’s commitment to the organization also affects the relationship between
satisfaction and turnover. Some people are so accustomed to a certain job, colleagues
and work environment that they cannot think of working elsewhere. Therefore, they
continue to work in the same organization, without being concerned about their level of
satisfaction.
A country’s economy and the employment scenario also influence turnover. If the
economy is booming and there are adequate employment opportunities available, even
satisfied employees may leave their organizations and seek better prospects elsewhere.
Though turnover, to some extent, benefits organizations by bringing in new talent, a
high turnover rate is undesirable because the organization loses in terms of productive
time and training costs.
Satisfaction and absenteeism
Research studies have shown that job satisfaction and absenteeism have an inverse
relationship. A high level of job satisfaction leads to low absenteeism and a low level
of job satisfaction results in high absenteeism. However, other variables, such as the
extent to which people consider their jobs important, also have an impact on
absenteeism. A research conducted on state government employees in the US revealed
that the employees who felt that their jobs were important took less leave than
employees who did not feel that their work was important. The research also revealed
that job satisfaction may not necessarily result in low absenteeism, but low job
satisfaction will lead to high absenteeism.
Other effects of job satisfaction
Research has shown that high job satisfaction has an impact on an employee’s life
inside the organization as well as outside the organization. Employees who are highly
satisfied with their jobs have low stress levels (and thus have better mental and
physical health), have less on-the-job accidents, and have fewer grievances. They also
show enthusiasm in learning job-related tasks. Satisfied employees have high morale
and help fellow employees, customers and other people in society by undertaking
social activities.
Thus, we can say that job satisfaction is of value to the overall health and effectiveness
of an organization.

Job involvement
Job involvement is a new concept in the field of OB. It refers to the extent to which a
person identifies himself psychologically with his job, actively participates in it, and
considers that his performance in the job contributes to his self-worth. Employees who
are highly involved with their jobs strongly identify themselves with the kind of work
they do and strive to deliver quality work. Research has shown that high levels of job
involvement lead to lower absenteeism and employee turnover levels.

Organizational commitment
Organizational commitment refers to an employee’s satisfaction with a particular
organization and its goals. An employee who has a high level of organizational
commitment is a strong supporter of the values and goals of the organization, has a
strong inclination to continue being a member of the organization, and wants to strive
hard to achieve the goals of the organization. The organizational commitment of an
employee is affected by a number of personal and organizational variables. Personal
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Organizational Behavior

variables include the employee’s age, his tenure in the organization, and his attitude
towards his job. Organizational variables include the job design and the leadership
style of the superior. Sometimes, even non-organizational factors may influence an
employee’s commitment, such as, the state of the job market and other career options
available to the employee.
John P. Meyer and Natalie J. Allen developed a three-component model to understand
the multidimensional nature of organizational commitment. The three components (or
dimensions) of organizational commitment are:
i) Affective commitment: This is concerned with the employee’s emotional
attachment and involvement with the organization.
ii) Continuance commitment: This is influenced by the costs that could accrue to the
employee if he leaves the organization.
iii) Normative commitment: This refers to the extent to which an employee feels
obligated to continue in the organization.

Antecedents of Work-related Attitudes


Traditionally, behavioral theorists have given considerable attention to the study of
situational determinants of attitude. According to theorists such as Gerald Salancik and
Jeffrey Pfeffer, the feelings and job-related attitudes of individuals are rooted in their
social circumstances. However, more recently, increasing attention has been given to
the personality traits or dispositions of individuals as determinants of their work-
related attitudes.
Dispositions of positive affectivity (PA) and negative affectivity (NA) have been found
to be particularly important antecedents of the work-related attitudes of individuals.
According to Jennifer M. George, negative affectivity (NA) refers to the disposition of
individuals to experience negative emotional states. Thus, individuals having a high
NA are more likely to feel nervous, anxious, jealous, tense, worried, upset or
distressed. Such individuals have a negative attitude not only towards themselves but
also towards other people, and also look at the world, in general, in a negative light. In
contrast to such personalities, individuals having a positive affectivity tend to
experience positive emotional states. Those with a high PA experience an overall sense
of well-being and a positive attitude towards their work. They consider themselves as
pleasurably and effectively engaged in the work they are doing. Managers can relate
the PA and NA states of individuals to their job performance to understand the work
stress that they might be experiencing.

Functions of Attitudes
The study of OB involves a proper understanding of the functions of attitudes.
Attitudes reflect an individual’s work behavior and performance. For example, if an
attitude survey reports that workers are dissatisfied with the management’s decision
against giving them a bonus and that the productivity of employees has begun to
gradually decline, the management may conclude that the negative attitude of the
employees has led to the decline in productivity. According to D. Katz, attitudes serve
four important functions1. These are discussed below:

The adjustment function


People modify their attitudes to adjust to their work environment. When superiors treat
employees fairly and compensate them with equal pay for equal work, the employees
tend to develop a positive attitude towards the organization and their superiors. But if

1 “The Functional Approach to the Study of Attitudes,” Public Opinion Quarterly, 1960, p24.
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Personality And Attitudes

management does not treat them well and fails to give them equitable remuneration for
their services, they will develop a negative attitude towards the organization. Such
attitudes help employees adapt to their environment and form the basis for their future
behaviors.

The ego-defensive function


Attitudes not only enable employees to adapt to their environment but also help them
defend their self-images (the image of themselves). Take the case of a senior executive
who is not a very effective manager and sometimes makes poor decisions. When his
subordinate points out his mistakes, he may not take it in the right spirit. Instead of
admitting his shortcomings and making suitable amends, the senior executive may
become defensive and try to protect his ego. He may accuse the young executive of
giving suggestions without having the required experience. The junior executive too
may try to defend his ego and justify his actions by criticizing his boss for not
performing his job well. In the process, both the executives develop a negative attitude
towards each other, often with detrimental consequences for the organization.

The value-expressive function


People may express their values through their attitudes. For example, if a manager
wants an employee to work harder, he may tell the employee that the company has a
tradition of hard work and that every employee in the company is expected to respect
that tradition and work accordingly.

The knowledge function


Attitudes provide a standard of reference which allows people to understand and
explain their environment. For example, a union leader may have developed a negative
attitude towards management due to the fact that some time in the past management
had tried to manipulate workers by making false promises. Due to that experience, the
union leader may regard anything said by the management as a means to manipulate
the workers. Irrespective of the reality at a given point in time, the leader will try to
interpret any action or promise of management on the basis of standards of reference
(manipulation and false promises) set by himself.

ATTITUDES AND CONSISTENCY

Sometimes, people may change their attitudes so that they do not contradict their
actions. A person may argue with his friends that the quality of a local brand television
is inferior to that of foreign brands. However, when he tries to purchase a television, he
may find that the foreign brand is expensive and not worth the cost. The dealer may
convince him that the local brand has the same features as the imported brand and
functions equally well. On hearing this, the individual may buy the local brand and
begin to tell his friends that local brand televisions are in fact superior to foreign
brands in quality.
Research by behavioral theorists has shown that not only do people try to achieve
consistency among their various attitudes but also try to behave in a manner that is
consistent with their attitudes. In order to appear rational and consistent, individuals
constantly attempt to align their attitudes with their behavior and eliminate any
divergence among their attitudes. They may either change their behavior or attitude in
the process. Despite this, however, if any discrepancy arises, individuals will try to
bridge the discrepancy by developing a rational explanation for the discrepancy.
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Exhibit 6.3
Emotional Dissonance in Organizations
When an employee is expected to express certain emotions that are against his true feelings to
comply with organizational norms, he will experience emotional dissonance. If a person is
aggressive by nature and believes that what he does is always right, he would never want to give an
explanation of his actions. But when he joins a company as a customer service executive he is
expected to be polite and submissive. Suppose a customer comes to him with a problem which, due
to its complexity, takes up a lot of the customer service executive’s time. The other customers
waiting in queue for the customer service executive to attend to them may get agitated. The
frustrated customers may talk in a manner that is intolerable to the executive. To conform to the
norms of the organization, the employee should continue to deal with the customers in a polite and
pleasant manner and hide his true emotions (anger and frustration) irrespective of their behavior. The
employee will experience person-role conflict in this situation and may attempt to resist
organizational norms. He may give sharp responses to customers who express their impatience and
behave rudely. As a result, the organization will increase its pressure on him to conform to its norms.
This will lead to emotional exhaustion and the employee may begin to look out for another job.
Employees in the call center and hospitality industry often experience such emotional exhaustion.
Many traditional theories have recognized the relationship between emotional dissonance and
employees’ intention to quit the job. According to a theorist, William H. Mobley (1977), an
employee constantly appraises his working conditions. If he finds that his job requires him to
compromise his personal values, he will begin to look for other jobs. An employee’s decision to quit
his current job depends on the condition of the job market. If there are plenty of job openings and the
time and costs involved in searching for a suitable job are negligible, the employee will switch jobs
as soon as possible.
In 1999, a study was conducted to study the impact of emotional dissonance on the commitment of
employees to the organization and their intention to quit the job. This research has shown that if an
organization quickly recognizes its employees’ intentions and takes steps to improve their
satisfaction with the job, the rate of turnover comes down.
Traditional theories held that emotional dissonance reduces job dissatisfaction, which leads to
decline in organizational commitment and in turn, stimulates the intention to quit the job. However,
recent research has shown that job dissatisfaction directly leads to employee turnover without the
intermediate step of decline in organizational commitment. This could be because dissatisfied
individuals choose to immediately leave the organization instead of being involved in the slow and
gradual process of reducing their association with the organization.
The research also indicated that high self-monitors experience less dissonance than other individuals
because of their ability to cope with changing expectations. However, sometimes, they may detect
too many emotional cues and may be unable to meet them all effectively.
The study also showed that social support from co-workers reduces the emotional dissonance of
employees and then dissatisfaction with their jobs, thus reducing the turnover rate.

Adapted from “The Impact of Emotional Dissonance on Organizational Commitment and Intention
to Turnover,” Journal of Psychology, July 99, Vol 133, Issue 4, p 441.

Take the case of a sales representative who has to promote the products of his
company. To do so, he should have a positive attitude towards the company. The
salesman himself may believe that the products of his company are of inferior quality
(attitude), but he has to promote the products by convincing people that his company’s
products are of superior quality (behavior). The salesman may seek to eliminate the
discrepancy between his attitude and his behavior by rationalizing his behavior. He
may try to convince himself that no product in the market is devoid of technical
problems and hence it is not wrong on his part to present the better side of his
company’s products.

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COGNITIVE DISSONANCE THEORY

In the late 1950s, Leon Festinger proposed the theory of cognitive dissonance to
explain the relationship between attitudes and behavior. Cognitive dissonance refers to
the incompatibility that an individual may perceive between two or more of his
attitudes, or between his behavior and attitudes. Another type of dissonance, called
emotional dissonance, is also seen in organizations. Emotional dissonance refers to the
conflict between the emotions an individual experiences and the emotions he needs to
express to conform to organizational norms(Refer Exhibit 6.3). Festinger suggested
that individuals are uncomfortable with any form of inconsistency and try to reduce the
dissonance and discomfort that results from such inconsistencies. They seek to obtain a
stable state where there is least dissonance.
However, no individual can completely eliminate dissonance. For example, though a
person knows that it is not ethical to preach to others without actually practicing what
he is preaching, he may still continue to do so. A politician may announce in public
that strict action will be taken against government officers who accept bribes, but he
may accept illegal donations for his party fund. According to Festinger, an individual’s
desire to reduce dissonance depends on the importance of the elements that cause the
dissonance, the degree to which the individual can influence these elements, and the
rewards that the individual is likely to lose as a result of such dissonance. An
individual will make little effort to reduce dissonance if the elements that are
responsible for the dissonance are not important to him.
An individual can deal with dissonance in different ways. Suppose the production
manager of a certain company strongly believes that polluting the environment is a
crime against society. The company may assign him the responsibility of minimizing
the expenditure on anti-pollution measures so that the company’s profitability does not
suffer. The manager observes that his company releases chemical wastes into the river.
To treat the wastes before releasing them into the river, the company will have to buy
some expensive equipment. The manager has to make a trade-off between the
company’s profitability and his personal attitudes concerning pollution. As a result, he
may experience a high degree of dissonance. The importance of the issue is such that
the production manager cannot ignore the dissonance. To overcome it, he has to choose
between the various alternatives available to him. The production manager can adhere
to his values by purchasing expensive equipment to treat the waste generated by the
company and thereby minimize pollution. Or, he can give top priority to the company’s
interests and save costs by allowing the chemical wastes to be released into the river
without treatment. The third alternative, for the production manager, would be to
change his attitude towards pollution. He may start believing that the pollution caused
by his company is not life-threatening in nature. Another alternative may be to believe
that his company’s products offer more benefits to society than the costs the society
has to bear due to the pollution caused by the company.
The desire of individuals to reduce dissonance also depends on the extent of control
they have over the elements causing dissonance. If an individual believes that the
elements causing dissonance are not in his control, he will try to justify his behavior.
For instance, if an individual’s superior directs him to act in a manner that opposes his
personal values and beliefs, the individual would perform the task. He would try to
justify his action by arguing that he would lose his job if he did not obey the orders of
his superior. However, if his job requires him to continuously act against his personal
values, he will attempt to change his attitude. This would help him achieve consistency
between his attitude and behavior.
Thus, the effort made by an individual to reduce dissonance depend on the significance
of the elements that lead to dissonance, their controllability, and the rewards associated
with the dissonance. The greater the dissonance, the higher the pressure on the
individual to overcome the dissonance.
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SUMMARY

The study of personality and attitudes gives insights into the behavior of people.
Personality refers to the way in which a person views and understands himself, and the
way in which he interacts with people and reacts to situations. Self-concept (in
personality theory) refers to the attempts made by people to understand themselves.
Self-esteem is the self-perceived competence and self-image of people. People with
high self-esteem do well in managerial positions. Self-efficacy refers to the self-
perceptions of a person regarding his ability to cope with situations as they arise.
Individuals with high self-efficacy can quickly cope with the demands of tough jobs
(such as sales jobs).
An individual’s personality is influenced by factors like heredity, external
environment, and person-situation interaction. Some of the personality attributes that
have an impact on an individual’s behavior are the locus of control, machiavellianism,
self-esteem, self-monitoring, propensity to risk-taking, and Type A personality. The
locus of control refers to the degree to which people believe that they can determine
their own fate. People high on the locus of control (called internals) tend to move up
the career ladder quickly. Machiavellianism (Mach) refers the degree to which an
individual is pragmatic, maintains emotional distance, and believes that the ends justify
the means. High-Mach people are most productive in jobs which impose minimum
restrictions on the employee, involve persuading others, and offer high rewards. Self-
monitoring refers to the ability of an individual to adjust his behavior to external
situational factors. High self-monitors are capable of changing their behavior and
expressions according to the situation. They progress faster in their careers than low
self-monitors. Individuals vary in their willingness to take chances or risks. High risk-
taking people perform well in jobs such as stock brokers and currency traders.
Individuals who have a Type A personality are continuously involved in the struggle to
achieve more in less time in the face of opposition from other people. But because of
their emphasis on quantity than quality and their poor decision-making skills, they
often do not make good managers. Type B people lay more emphasis on quality of
outcome rather than quantity and have good analytical skills. They therefore make
good managers.
Many personality theorists have tried to explain the development of human personality.
According to Daniel Levinson, an individual’s life can be divided into adult, mid-life
and late adult stages. The personality of an individual, Levinson argues, develops to
some extent at each stage of his lifecycle. Another theorist, Hall, suggested that the
personality development of an employee takes place in four stages: exploration,
establishment, maintenance and decline. Chris Argyris (Immaturity-Maturity model)
proposed that human personality moves along a continuum from immaturity (infancy)
to maturity (adulthood). John Harrold proposed the personality-job fit theory in which
he established a relationship among personality characteristics, the requirements of a
job, and job performance.
Attitudes are evaluative statements (favorable or unfavorable) about objects, people or
events. Attitudes are acquired from parents, teachers and members of the peer group,
apart from the predispositions acquired at birth. The three job-related attitudes are job
satisfaction, job involvement, and organizational commitment. According to Edwin A.
Locke, job satisfaction is the pleasurable or positive emotional state that results when
an individual evaluates his job or job experience. Job involvement refers to the degree
to which a person psychologically identifies with his job, actively participates in it, and
considers that his performance in the job contributes to his self-worth. Organizational
commitment refers to the extent to which an individual identifies with a particular
organization, and its goals and wishes to remain a member of that organization.
Organizations can reduce turnover by taking steps to enhance the job satisfaction of
their employees and increase their job involvement and organizational commitment.

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Personality And Attitudes

Attitudes enable people to adapt to their work environment. They are also used by
people to defend their ego, express their values, and to interpret events. The cognitive
dissonance theory refers to the incompatibility that an individual may perceive between
two or more of his attitudes, or between his behavior and attitudes. The efforts made by
an individual to reduce dissonance depend on the significance of the elements that give
rise to the dissonance, the extent to which they can be controlled, and the rewards that
the individual is likely to lose by not overcoming the dissonance.

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Chapter 7

Motivation
In this chapter we will discuss:
 Definitions of Motivation
 Classification of Motives
 The Content Theories of Work Motivation
 The Process Theories of Work Motivation
 The Contemporary Theories of Work Motivation
 Motivation of Performance through Job design and Goal Setting
 Application of Goal Setting to Organizational System Performance
Motivation

Motivation is a psychological state. Understanding motivation can help in


understanding individual behavior. In general, the causes of behavior are regarded as
motivation. In addition to the perception, personality, attitudes and learning that
characterize an individual, motivation is a phenomenon which helps in understanding
human behavior. People also tend to consider motivation as a personality trait,
although this is not really true. They believe that some people have this trait, while
others lack it. Therefore, some managers assume that certain individuals are always
lazy or lack motivation. However, this assumption is not correct. Motivation depends
on the individual as well as on the situation. Every individual has different
motivational drives, but the situation also plays an important role in determining a
person’s motivational level. For example, a person who can finish reading a novel in
one sitting may find it difficult to read a textbook for even twenty minutes. Therefore,
it should be kept in mind that while different people have different levels of
motivation, for each individual too, the motivation level is different in different
situations.
In this chapter, we first define motivation and try to understand the relationship
between its constituent elements i.e. needs, drives and incentives. Then, we examine
the different types of needs or motives, namely, primary, secondary and general
motives. The final section of the chapter deals with the content and process theories of
work motivation. The contemporary theories of motivation have also been discussed at
length.

DEFINITIONS OF MOTIVATION

There are many definitions of motivation by different management theorists and


practitioners. The term motivation is derived from the Latin word movere, which
means to move.
Stephen P. Robbins defines motivation as “The willingness to exert high levels of
effort towards organizational goals, conditioned by the effort’s ability to satisfy some
individual need.”
Motivation can also be defined as a condition that is initiated by a physiological or
psychological deficiency or need in an individual, which causes the individual to
behave in a certain manner in order to achieve a particular goal or incentive.

Figure 7.1: The Motivation Process

Physiological/ Individual behaves in a Achieves a particular


Psychological deficiency certain manner goal
(NEED) (DRIVE) (INCENTIVE)

Motivation consists of three interacting and interdependent elements – needs, drives


and incentives. Needs form the basis for drives, which in turn seek the attainment of
certain incentives. To understand the process of motivation, we should first understand
the meaning of needs, drives and incentives, and the relationship between them. The
process through which motivation arises is illustrated in Figure 7.1
Needs
A physiological or psychological imbalance leads to the creation of a need. For
example, the need for food or water arises when a person is hungry or thirsty.
Similarly, people who are deprived of the company of other people may look for
friends or companions.

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Exhibit 7.1
Employee Needs and Motivation
The employees of an organization can make the difference between success and failure for the
organization. Therefore, employers must understand the needs, drives and expectations of their
employees and try to satisfy them. They must also be able to motivate their employees to make the
employees perform better. For this, two aspects of employee motivation – inner drives and external
motivators – need to be understood. The inner drive of a person makes him/her choose a particular
line of study, recreation, job, career or organization to work for. These drives urge or push a person
to accomplish a certain task. Employers must understand these inner drives and use them as a guide
in their efforts to motivate employees. External motivators, on the other hand, refer to what the
employer does to fulfill the inner drives of employees. For instance, in order to attract talented and
skilled employees, organizations may give them certain benefits like medical care or bonuses. The
basic needs of workers are to:
1. Earn enough money so that they can provide themselves and their families with certain
basic amenities.
2. Be able to afford some luxuries for comfortable living.
3. Save for old age and unforeseen contingencies.
4. Interact socially with colleagues.
5. Perform well at work and gain recognition.
6. Gain acknowledgement for good work and be rewarded for special contribution and
efforts.
7. Be able to grow in their line of work.
8. Have opportunities for self-development.
9. Develop their skills, knowledge and technical know-how.
10. Be able to realize their true potential.
Employers can fulfill these needs by providing:
1. Pay commensurating with experience and work demands.
2. Some privileges for the employees like flexible work schedules, compressed workweek,
etc.
3. Help in meeting special needs like child care arrangements, transportation, housing, etc.
4. Job security.
5. Clarity in company policies.
6. Well-organized work procedures.
7. A congenial work environment, which is just and fair.
8. Medical coverage and benefits associated with it.
9. A good reward, incentives and recognition program.
10. Opportunities to get promoted.
11. Training and development programs.
12. A well-defined system for obtaining feedback.
13. Two-way system of communication.
14. Guidance and mentoring for realizing the true potential of the employees.
Most of the time, employees do not set out their needs explicitly. The employers should be able to
recognize the needs of the employees and develop a system of communication within the

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Motivation

organization. They should also develop and maintain good relations with employees, and provide
them with relevant training and development programs, which will result in an open, cooperative
and motivating work environment.

Adapted from Claire Belilos, “Understanding Employee Drives and Motivations – The First Step
Towards Motivation at Work,” easytraining.com, CHIC Hospitality Consulting Services,
<http://www.easytraining.com/motivation.htm>

However, psychological needs may sometimes arise without any deficiency or


imbalance. For instance, a person who has a strong need to progress may move from
success to success. Even if a person has several extraordinary achievements to his
credit, he may still feel the need to achieve more. For example, many millionaires
strive to make more and more money, even though they are considered rich by regular
standards.

Drives
Drives or motives (the two terms are used interchangeably) propel individuals to attain
their goals or satisfy their needs. A physiological drive is a condition which causes a
person to work in a particular direction. Both physiological and psychological drives
push an individual towards achieving a certain goal or accomplishing a certain task.
Drives constitute the core element in motivation. For example, the need for food and
water is transformed into the drives of hunger and thirst, and the need to achieve
manifests itself as the achievement drive.

Incentives
Anything that can mitigate a need and decrease the intensity of a drive is called an
incentive. When a person obtains the incentive, the strength of that drive is reduced and
physiological or psychological balance is restored. For example, eating food, drinking
water, or finding friends reduces the corresponding drives and helps in achieving
balance. Here food, water and friends are the incentives.

CLASSIFICATION OF MOTIVES

Psychologists are not in agreement as to how to classify various human motives.


However, most psychologists agree that some motives are learned while others are not
learned, but instead have a physiological basis. Those motives which are
physiologically based are called primary motives. Secondary motives are the motives
which are learned over time. The motives which cannot be classified as purely primary
or purely secondary are called general motives. Like primary motives, general motives
too, are not learned, but they differ from primary motives in that they are not
physiologically based. The different types of motives are discussed below:

Primary Motives
A motive is termed as a primary motive when it satisfies both the criteria – it is not
learned, and it is physiologically based. The most common primary motives are
hunger, thirst, sleep, sex, avoidance of pain and maternal concern. Since all human
beings have the same basic physiological makeup, they all have the same primary
needs. This is not true of the secondary needs or motives, which are learned.
It should be clarified that the term ‘primary’ does not mean that these motives are more
important than the general and secondary motives. Although primary motives take
precedence over the other kinds of motives in some theories of motivation, secondary
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Organizational Behavior

motives do dominate over the primary motives in certain situations. The practice of
celibacy among priests and nuns of some religions, or fasting for religious causes, are
examples of cases where the secondary motives are stronger than the primary motives.

General Motives
General motives include those motives which are neither purely primary nor purely
secondary, but rather something in between. A motive is considered to be a general
motive if it is not learned, but is also not based on physiological needs. While primary
motives induce an individual to reduce the tension within him/her, general motives
stimulate tension within the individual. General motives are, therefore, also called
“stimulus motives.” The motives of curiosity, manipulation, motive to remain active
and to display affection are examples of general motives. To have a better
understanding of human behavior at work, it is important to understand general
motives.
The curiosity, manipulation and activity motives
In their early experiments with animals, psychologists found that their experimental
subjects had an unlearned drive to find out new things, to manipulate objects or just be
active. These drives were displayed to a great extent by monkeys, especially when they
were placed in a novel or unfamiliar situation. Later experiments confirmed the
existence of the curiosity, manipulation, and activity motives in monkeys.
Psychologists generalized the findings of these experiments to human beings. It has
been realized that human beings also have intense curiosity, manipulation or activity
drives, and these can be easily observed in children. Children are generally active, very
eager to explore and have a great desire to manipulate objects.
The motives of curiosity, manipulation and activity are very beneficial for a person, as
they often result in innovations and better ways of doing things. If individuals were
restricted from satisfying these motives, there would be no improvement in the way
things are done, which would result in stagnation. In an organization, if employees are
prevented from expressing their curiosity, manipulation and activity motives, it is
likely to affect their morale, making them demotivated. For instance, if an employee is
not allowed any freedom and he has to stick to his desk for eight hours a day, the
behavior that satisfies these needs is stifled. In such circumstances, the employee will
find the work very boring and monotonous, and will become demotivated.

The affection motive


Affection or love is a somewhat complex general motive. The complexity arises due to
the fact that love is similar to the primary motives in some ways, while in some other
ways, it resembles secondary motives. People sometimes associate the affection motive
with the primary sex motive, and sometimes with the affiliation motive. Therefore, to
avoid confusion, many behavioral theorists place the affection motive in all the three
categories of motives.

Secondary Motives
Secondary motives are the most significant motives in the study of organizational
behavior. Learned secondary motives play a very important role in understanding
motivation in a complex and economically advanced society.
A secondary motive is a motive that has been learned or acquired over time. Some
important secondary motives are power, achievement and affiliation. These are
commonly referred as nPow, nAch and nAff. Apart from these, the security and status
motives are also important secondary motives relevant to the study of organizational
behavior.

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Motivation

The power motive


Alfred Adler, a pioneering behavioral scientist and a close associate of Sigmund Freud,
was a great believer in the strength of the power motive. He proposed a theory which
opposed Freud’s views. Unlike Freud who emphasized the past and gave importance to
unconscious, sexual motives, Adler placed more importance on the future and a
person’s drive to gain power and prove himself superior to others.
Adler proposed the concepts of ‘inferiority complex’ and ‘competition’ to explain the
power motive. He believed that every child experienced a feeling of inferiority. Human
behavior is governed by this feeling of inferiority coupled with an inherent need for
superiority. Therefore, a person tries to compensate for the feelings of inferiority and
also tries to fulfill his innate need for power, which is then reflected in his lifestyle.
Many examples of the quest for power can be seen in modern society. Those who hold
responsible positions in government, business, unions, politics, education or military
exercise a lot of power and also show a strong drive for power. The power motive has
significant implications in various aspects of organizational behavior like leadership
and political aspects of organizations.
The achievement motive
Although the drive for power has been recognized as a motive for quite some time, it is
only fairly recently that substantial research has been carried out on the subject. On the
other hand, although achievement motive has been identified only recently, substantial
research has already been carried out on the subject.
A very effective tool for determining the achievement drive in an individual is the
Thematic Apperception Test (TAT). The test is carried out in the following manner. A
picture is shown to the person taking the test, who is supposed to tell a story about
what he sees in the picture. For example, in the TAT, a subject (employee) may be
shown a picture which depicts a young man working in a field as the sun is about to
set. The subject is asked to interpret the picture, and this interpretation is used to
determine his motivation level. For example, the person who is taking the test may feel
that the man in the picture is feeling sad that the day is coming to an end as he has
more work to do and he wants to finish the work before it is dark. Such an
interpretation would indicate that the subject is a high achiever. On the other hand, if
the subject is happy that the sun is going down, and feels he can now go home and
relax, then he can be categorized as a low achiever.
David C. McClelland, a Harvard psychologist, has conducted extensive research on
different aspects of achievement. According to him, the achievement motive is a
person’s desire to perform excellently or to handle complex or competitive situations
successfully. McClelland has drawn up a profile of a typical high achiever, which is
discussed below:
Moderate degree of risk taking
A person with high need for achievement (nAch) takes moderate risks. Though one
might think that a high achiever would take high risks, research shows that this is not
true. The ring-toss game is generally used to demonstrate risk-taking behavior of
individuals. In the game, the participants can stand at any marked place and toss rings
at a peg. Different participants exhibit different types of behavior while tossing the
ring. Low achievers stand either very close to the peg and toss the rings or stand very
far away and throw the rings wildly at the peg. On the other hand, high achievers try to
determine the distance which would challenge their capabilities. They do not stand too
close because it would not be challenging; nor do they stand too far because it would
mean relying more on luck than on their abilities. From the behavior exhibited in
playing this game, it would appear that low achievers either take low risks or high
risks, while high achievers take moderate risks which challenge their abilities.

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Organizational Behavior

Need for prompt and precise feedback


High achievers who take moderate risks seek immediate feedback. They like to obtain
feedback or information about how they are progressing towards their goal. For
example, high achievers prefer those hobbies and vocations like mechanics and
painting where they get immediate feedback about their work. They would not be
interested in such hobbies as philately, a pursuit that takes considerable time for
development. Similarly, high achievers typically opt for sales or managerial jobs and
avoid teaching and research-oriented jobs, where feedback on performance is usually
vague, inexact and given after a long time.

Satisfaction with accomplishments than with material rewards


High achievers generally do not value material rewards. Instead, they value the
intrinsic satisfaction they derive after successfully accomplishing a task. High
achievers consider money to be a kind of feedback about how they are performing.
When high achievers are given a choice between a simple task with a good payoff and
a challenging task with a lower reward, they generally choose the latter option.

Total dedication towards the task


High achievers give their undivided attention to any task they take up, until it is
successfully completed. They put in their best efforts towards completing the task, and
try not to leave it unfinished. This high commitment and dedication towards work is
often reflected in other aspects of their behavior, which may cause others to have an
unfavorable impression about them. They may be considered to be unfriendly, cold and
reserved. High achievers are realistic about their abilities and do not permit others to
get in the way of achieving their goals. Consequently, high achievers tend to be aloof,
with poor interpersonal relations. They may turn out to be good salespeople, but not
necessarily good managers.

The affiliation motive


Employees, especially those at the lower levels of the organizational hierarchy, have a
strong desire to belong to and be accepted by other employees or the whole group. This
affiliation motive is an important aspect of group dynamics and plays a significant role
in understanding human behavior. People with a high need for affiliation exhibit a high
degree of concern for social relationships. Managers with strong needs for affiliation
tend to create congenial work environments where people enjoy working together.
However, an excessive emphasis on the social dimensions may result in poor
performance of the task at hand. Therefore, managers with high needs for affiliation
may sometimes compromise on the quality of the work because they do not wish to
offend people.

The security motive


Security is an intense motive and is quite prominent in technologically advanced
societies. Nowadays people experience insecurity for a number of reasons such as
having to meet loan repayment obligations, sustaining relationships with friends and
family, competition for higher studies and good jobs, and so on. Job insecurity, caused
by the current waves of mergers, restructurings and downsizings, has a particularly
strong and pernicious impact on organizational behavior. The security motive is based
largely on fear and is avoidance-oriented, i.e. people try to avoid insecurity rather than
attempt to achieve security. The security motive helps individuals safeguard
themselves from various unfavorable developments and avoid situations that would
prevent them from reaching their goals.

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Motivation

Exhibit 7.2
Understanding Motivation
Every manager needs to understand the reality that it is not a simple matter to motivate a person in a
particular direction. For this to happen, the manager has to create the right conditions which make a
person intrinsically motivated. He has to create the conditions that result in an ideal work
environment, which motivates the workforce to put in extra effort and display creativity and
innovation in performing the job. In order to do this, a manager must first understand how to motivate
people.
Ordinarily, people see certain things as motivators, for example, money, competition, recognition and
disciplinary action. However, this is true only in a limited sense. All these things motivate people to a
certain extent and under certain conditions. For instance, everyone needs money to sustain themselves
and their families; nevertheless, if people feel that they are paid only for a certain amount of work,
they will be induced to do only the minimum amount of work to get by. Again, competitive methods
like sales contests, piecework incentives, etc. appear to enhance motivation levels and increase the
productivity levels of employees. But while these may be effective for a short while, the employee
may start losing interest after a period of time. The problem with using competitive methods is that
people work only for the sake of the rewards.
In contrast, when a person is intrinsically motivated, he feels the activity itself to be very rewarding.
Recognition, i.e. appreciating the good work of an employee, is necessary. But, excessive use of
various forms of recognition like praise may result in employees doubting the sincerity of the
employer. Likewise, disciplinary action can make employees apprehensive and doubtful of their
abilities. Disciplinary action may have only limited usefulness in motivating employees to perform in
an effective manner.
How can it be ensured that employees are intrinsically motivated to perform well and achieve a high
level of job satisfaction. Managers can create an environment where intrinsic motivation is high in the
following ways:
1. Ensure that the employees have the relevant expertise and tools required for the job: The
employees must consider themselves competent to handle the job. To make this happen, the
manager must provide them with the right tools, office equipment, skills training or other
relevant inputs which may be necessary for them to perform the job effectively.
2. Ask for feedback: Employees feel valued and their motivation level is enhanced when managers
seek their feedback and try to view things from their perspective. This can be done by conducting
anonymous surveys or by interacting directly with employees.
3. Allow employees a certain degree of freedom: Managers must allow employees to choose the
ways and methods of doing a particular job. This will encourage the employees to be innovative
and try out new ways of doing things.
4. Help employees discover their true potential: Employees feel more fulfilled and satisfied if
managers assist them in discovering their true potential. This can be done by conducting self-
development programs for employees.
These steps can help create an environment where employees are intrinsically motivated. Rather than
working for the sake of rewards or recognition, they work because they find the job satisfying and
rewarding. Thus, the employees become self-directed and begin to perform well in the job. This
would go a long way in improving the productivity of the organization.

Adapted from Jane Miller, “Motivating a Workforce that can’t be Motivated,” Business Know-How,
Attard Communications Inc., <http://www.businessknowhow.com/manage/cantmoti.htm>
Apart from the simple, conscious security motive, there is another type of security
motive that is more complicated. This form of security motive is largely unconscious,
but has a significant impact on the behavior of people. Employers try to address the
simple, conscious security motives of people by means of insurance programs, savings
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Organizational Behavior

plans, and other similar benefits. However, the more complex, unconscious security
motive is not so easily fulfilled and differs from person to person. Though much
attention is given to the simple security motives, a greater understanding of the role of
the unconscious, complex security motive is needed to make effective use of the talents
of the people in an organization.

The status motive


In society today, the status motive is extremely important. These days people tend to
be very concerned with the material things associated with status, like the right clothes,
the latest in accessories, sleek cell phones, the latest computer software, luxurious
vehicles, etc.
Status is defined as the rank a person holds relative to others within a group,
organization or society. As this definition of status indicates, when people are grouped
together, a status hierarchy emerges. Even if two persons belong to the same class, the
status symbols they possess or values they are known to embody will be used by others
to rank them within the status hierarchy. Status does not mean only high status. Status
refers to position or ranking of individuals in a group or organization, which may be
high or low.
Status is influenced by the prevailing cultural values and the importance of different
roles in society. The factors that determine status differ from one cultural set-up to
another. For example, in some countries, older people are given a higher status. In
contrast, in other cultures, the status of a person falls as he grows older. Cultural values
are also volatile and tend to change with time and circumstances. In addition, there are
several subcultures within a society. The values of each subculture may differ from the
prevailing values of the society. Hence, the conferring of status in each subculture will
also tend to differ from the status hierarchy in other subcultures.

THE CONTENT THEORIES OF WORK MOTIVATION

The content theories of motivation attempt to identify and prioritize the needs and
drives that motivate people at work. They deal with the goals and incentives that
people strive for in their work environment. Although these theories have some
limitations and do not always explain motivation and behavior at work successfully,
they have proved useful in providing insights into motivating people.
The earliest content theory of scientific management was pioneered by Frederick W.
Taylor, Frank Gilbreth and Henry L. Gantt. The scientific management theory of
motivation considered money to be the only incentive. Subsequent theories began to
consider factors such as working conditions and work security to be incentives. Still
later, the possibility of satisfying “higher level” needs or motives also came to be
considered as incentives. Examples of such needs are: the needs for esteem and self-
actualization, identified by Maslow; responsibility, recognition, achievement and
advancement as proposed by Herzberg; and growth and personal development as
identified by Alderfer.

Maslow’s Hierarchy of Needs


In his paper, “A Theory of Motivation,” Abraham Maslow proposed a theory which
sought to explain the concept of motivation. Based on his clinical experience, he
concluded that people had a hierarchy of motivational needs. According to his theory,
once the needs at a particular level in the hierarchy of needs are satisfied, they are no
longer a motivating factor. Instead, the needs at the next level in the hierarchy become
the motivators for the individual. The five levels in the hierarchy of needs proposed by
Maslow (represented in Figure 7.2) are described below:

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Motivation

Figure 7.2 A Hierarchy of Work Motivation

(Challenging projects,
opportunities for
Self innovation and creativity,
actualization training)
needs
Esteem needs
(Important projects,
recognition, prestigious
office location)

Social needs
(Good coworkers, peers,
superiors, customers)

Safety or Security Needs


(Job security; benefits like life insurance;
safety regulations)

Physiological needs
(Basic pay, workspace, heat, water,
company cafeteria)

Adapted from Kathryn M. Bartol and David C. Martin, Management, 3rd edition (USA: Irwin
McGraw-Hill, 1998) 385.

1. Physiological needs –Physiological needs, which are needs such as hunger, thirst,
sleep and sex, are similar to the unlearned primary needs discussed earlier in this
chapter. Once these needs have been fulfilled, they no longer motivate an
individual. For example, a thirsty person would be motivated to search for water.
However, once she has drunk water, thirst would no longer be a motivator.
2. Safety needs – Safety needs, according to Maslow, include both emotional and
physical dimensions. Like physiological needs, once the safety needs have been
fulfilled, they no longer motivate an individual.
3. Love needs – This is similar to the affection or affiliation needs. The term ‘love’
used by Maslow has been the cause of some confusion, being misinterpreted at
times for sex, which is a physiological need. The need for love can perhaps be
more appropriately termed as the need for belongingness, or a social need.
4. Esteem needs – These are what were earlier referred to as “higher level” needs.
Esteem needs include the need for power, achievement and status. They refer not
only to developing self-esteem, but also obtaining esteem and respect from others.
5. Self-actualization needs – These needs are at the highest level in Maslow’s
hierarchy of needs. When a person has realized his full potential and is fulfilled,
i.e. his perception of his self has been transformed into reality, he can be said to
have attained self-actualization.
Maslow did not develop this theory in order to apply it to motivation in the workplace.
But it was taken up and popularized by management scholars, like Douglas McGregor,
who described it in his book, The Human Side of Enterprise. This theory has had a
great influence on modern approaches to motivation

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Organizational Behavior

As shown in Figure 7.2, Maslow’s need hierarchy can be converted into a content
model of work motivation. The theory and the content model depicted in the figure
appear to be relevant to motivation in an organizational setting, and they have been
accepted by many researchers and practitioners. However, not much empirical research
has been carried out on the theory, and the little research that has been carried does not
provide much empirical support to the theory. In subsequent works, Maslow himself
proposed modifications to his theory, for example, by suggesting that the gratification
of the self-actualization need may cause it to be increased, rather than decreasing it.
Maslow has continued to stress that human behavior has many determinants, and
human beings are motivated by many causes.

Herzberg’s Two-Factor Theory of Motivation


The two-factor theory of motivation was developed by Frederick Herzberg as an
extension of Maslow’s work. Herzberg carried out a study in which he tried to assess
the job satisfaction or dissatisfaction of the respondents. He interviewed around 200
accountants and engineers employed by firms in and around Pittsburgh, and tried to
find out their attitudes towards their jobs. In order to collect data for his analysis, he
used the critical incident method. The respondents were asked to recall the instances
when they were particularly satisfied with their work and also those instances when
they were particularly dissatisfied with their work. Herzberg asked each respondent
two basic questions pertaining to their job:
1. When did you feel particularly good about your job – what were the incidents in
your job that made you feel satisfied?
2. When did you feel exceptionally bad about your job – what were the incidents in
your job that made you feel dissatisfied?
The results obtained by Herzberg by using the critical incident method were interesting
and fairly consistent in nature. It was found that the respondents associated whatever
good feelings they had about their job to the job content and job experiences. For
example, an accounting supervisor felt proud and happy when he had installed new
computer equipment in his department as he felt that the equipment he was installing
would greatly improve the operational efficiency of his department. The study also
revealed that the respondents attributed whatever negative feelings they had about their
work to job context factors or aspects that were not directly related to their job but
which had an effect on the work environment. An engineer when asked to give an
example of the negative feelings he experienced in his job, revealed that his superior
maintained too hectic a schedule which prevented him from providing his subordinate
with proper training. He also seemed to get annoyed when the subordinate approached
him with questions pertaining to the job. Instead, the subordinate (the engineer) was
only entrusted the task of keeping tabulation sheets and managing the office when his
superior was away. This made the engineer feel frustrated and disappointed with the
job.
After tabulating these reported positive and negative feelings, Herzberg came to a
conclusion that job satisfiers were associated with the job content, and job dissatisfiers
were related to the job context. The satisfiers were termed as motivators, while the
dissatisfiers were termed hygiene factors. While hygiene factors were responsible for
preventing dissatisfaction, motivators were essential to keep the employees satisfied.
Thus, motivators and hygiene factors were the two factors in Herzberg’s two-factor
theory.
Herzberg’s two-factor theory and Maslow’s needs hierarchy are closely related to each
other. The hygiene factors are similar to the lower-level needs mentioned in Maslow’s
needs hierarchy. These factors are preventive, in the sense that they prevent
dissatisfaction.

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Motivation

Exhibit 7.3
Applying Herzberg’s Theory of Motivation
In today’s world, employee satisfaction and retention have become issues of high importance.
Employees who are satisfied are more productive, innovative, and show high levels of enthusiasm
and commitment to their organizations. A high staff attrition rate and absenteeism levels can affect
the financial performance of a company because outsourcing, recruitment and retraining may give
rise to heavy costs for the organization. However, only a handful of organizations understand the true
implications of keeping their employees satisfied.
Applying Frederick Herzberg’s theory to real life is not an easy task. First, hygiene factors have to be
considered in order to create an environment in which employee satisfaction and motivation are
possible. The most important hygiene factors are discussed below:
 Administrative policies of the organization: If the policies of an organization are ambiguous or
do not equally apply to all employees, employees may feel frustrated. Although policies by
themselves cannot motivate employees, dissatisfaction can be reduced by ensuring that the
policies are fair and applicable to all employees. A manual of policies and procedures should be
made available to all employees. An organization should also compare its policies and
procedures with those of its competitors to ensure that its policies are not unreasonably strict. If
the policies of an organization are too harsh, they should be revised.
 Presence of able supervisors: Good employees are not necessarily good supervisors. To be an
able supervisor, a person should be equipped with leadership skills and the ability to treat
employees fairly. Supervisors should be trained to obtain feedback from employees and utilize it
for the benefit of the organization.
 Fair pay: Employees feel happy in their work when they believe that they are being paid well. In
order to ensure employee satisfaction, an organization should offer salaries which are comparable
to other players in the industry. Apart from providing fair pay, an organization should also have
clear policies about salaries, hike in salary and bonuses.
 Good interpersonal relations: Employees should be provided adequate time to socialize with
one another, i.e. during lunchtime, tea breaks, etc. so that they are able to understand each other
well. Such interactions among employees are essential to develop a sense of belongingness and
teamwork. However, inappropriate behavior, disruption of activities, rudeness and offensive
remarks should not be tolerated. When the employee’s behavior is disruptive, he/she has to be
warned and punished.
 Conducive working conditions: People are also influenced by the environment they work in.
They take pride in the work they are doing and feel good if the facilities or equipment provided
to them are modern and in good condition. It would be desirable to allow some personal space
for every employee, like providing a desk, locker or at least a drawer. Overcrowding and
cluttering should be avoided to the maximum possible extent.
Once hygiene factors have been addressed, the organization can make use of motivators to make
people feel motivated and satisfied. The most important motivators are:
 The work itself: The most important thing is to make employees feel that the work they are
doing is important. The contributions of the employees to productivity of the organization should
be emphasized and good work should be recognized and rewarded. The managers should make
employees understand the significance of their tasks and how they contribute to the overall
profitability of the organization. This helps employees develop a sense of involvement in the
work being done in the organization and makes them feel motivated.
 Clear achievable goals: For each position, clear and achievable goals should be set and
managers should ensure that the employees understand these goals. The managers should provide
the employees with timely feedback about their work and help them out when they come across

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Organizational Behavior

problems. Individuals should not be given tasks that are too difficult or impossible for them to
accomplish.
 Appreciation for good work: Every employee wants to be recognized for his/her good
performance. Managers should acknowledge the good work of their employees as this will boost
the employee’s morale. The good work of employees can be appreciated by formal recognition,
publicly praising them, awarding bonus or a written note of praise.
 Giving adequate responsibility to employees: If employees are made responsible for their
work, they will be motivated to do their job well. This involves allowing employees enough
freedom to carry out their work and to use their own methods to perform the tasks. As people
learn on the job, they should be given more challenging and meaningful work. Whenever people
are given additional responsibilities, they should also be given adequate authority and freedom.
 Career growth: Employees who are loyal and perform well on the job should be rewarded with
advancement in their career. They should be given opportunities to put their skills to greater use.
Employees should also be encouraged to pursue further education as highly qualified employees
would be an asset to the organization.
People have different backgrounds, needs and expectations. Further, there is no one right way to
motivate people. Herzberg’s theory helps create a congenial work environment, which promotes job
satisfaction which, in turn, makes employees more motivated, committed and productive.

Adapted from J. Michael Syptak, David W. Marsland and Deborah Ulmer, “Job Satisfaction: Putting
Theory into Practice,” Family Practice Management, American Academy of Family Physicians,
October 1999 <http://www.aafp.org/fpm/991000fm/26.html>

However, presence of hygiene factors does not ensure motivation; instead, they only
serve as a base level for motivation to begin. Only the motivators can help in
motivating employees on the job. Motivators are similar to the higher-level needs in
Maslow’s hierarchy. Therefore, according to Herzberg’s theory, in order to be truly
motivated, a person must have a challenging job.

Contribution of Herzberg’s theory to work motivation


The two-factor theory propounded by Herzberg helped understand the content of work
motivation. Prior to the formulation of this theory, managers considered that hygiene
factors such as an increase in salary, perks and incentives, and better working
conditions were of greater significance to employees and helped boost their morale.
However, they found that even after the hygiene factors were in place, the employees
were not really motivated. Herzberg’s two-factor theory provided an explanation for
this problem. The theory proposed that managers would not be able to motivate
employees if they were to focus only on the hygiene factors. For instance, most of the
employees or managers would agree that they deserved the raise they received.
However, there would be many more employees or managers who would be
dissatisfied that their salary wasn’t increased to the extent they deserved. This example
shows that although hygiene factors are important to prevent dissatisfaction among
employees, they fail to create satisfaction.
To sum up, Herzberg considered hygiene factors to be very important for an
organization to maintain its human resources. However, these were not factors which
would motivate employees. Employees are motivated only if they have a challenging
job which not only gives them an opportunity to achieve something, get recognition,
advance in their careers and grow in the organization, but also allows them to handle
greater responsibilities.

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Motivation

Critical evaluation of Herzberg’s theory


Although Herzberg’s two-factor theory provides a simple explanation for work
motivation, it tends to oversimplify the complexities associated with work motivation.
Further, a rigid interpretation of the two-factor theory should be avoided. When
researchers deviate from the critical incidents method, the two-factor theory will no
longer hold good. For instance, job factors such as pay can result in both satisfaction as
well as dissatisfaction. If the pay is not high enough, it results in dissatisfaction. On the
other hand, if the pay is good, employees regard it as a form of achievement and
recognition and feel satisfied. These findings suggest that a strict implementation of the
two-factor theory is not warranted.
Despite its drawbacks, Herzberg’s theory has made a significant contribution to the
study of work motivation. Herzberg’s theory is an extension of Maslow’s needs
hierarchy and allows managers to apply the concept to work motivation. He realized
the importance of job content factors which were until then, badly neglected and
overlooked. He also developed the technique of job enrichment, which was a very
important contribution to the field of human relations and organizational behavior.
However, Herzberg’s two-factor theory is not a comprehensive theory of work
motivation. It describes only certain aspects of work motivation and fails to explain the
complexities involved in motivating employees.

Alderfer’s ERG Theory


Clayton Alderfer proposed another theory of work motivation as an extension of
Herzberg’s theory, and of Maslow’s needs hierarchy. Alderfer developed a model of
the hierarchy of needs based on some empirical evidence. Alderfer recognized the
importance of categorizing needs and saw that there was a definite distinction between
lower-level and higher-level needs.
According to Alderfer, there are three basic groups of core needs:
i. Existence needs – These are associated with the survival and physiological well-
being of an individual.
ii. Relatedness needs – These needs emphasize the significance of social and
interpersonal relationships.
iii. Growth needs – These needs are related to a person’s inner desire for personal
growth and development.
These needs formed the basis on which Alderfer developed his theory, which he called
the ERG theory. The relationship between this group of needs and the groups proposed
by Herzberg and Maslow is shown in Figure 7.3. However, it should be noted that the
need categories in the ERG theory do not have any strict lines of distinction or
demarcation.
Alderfer proposed a continuum of needs, rather than hierarchical levels as proposed by
Maslow, or two factors related to the predominant needs of an individual, as proposed
by Herzberg. However, Alderfer did not believe that only deprivation was responsible
for triggering a need in an individual and that a higher-level need is activated only after
the lower-level need has been satisfied. In this, Alderfer’s theory differs from both
Maslow’s and Herzberg’s theories, where the fulfillment of a lower-level need leads to
the activation of a higher-level one. According to the ERG theory, a person’s
background or cultural environment may cause the relatedness needs to predominate
over unfulfilled existence needs. It is also possible that the intensity of growth needs
will increase with an increase in the degree to which they are satisfied.
The ERG theory is not supported by a large body of research. Nevertheless, most
contemporary analysts in the area of work motivation support Alderfer’s theory over
the other two content theories. The reason is that it includes the strong points of the

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Organizational Behavior

Figure 7.3 The Relationship between Maslow’s Hierarchy of Needs, Herzberg’s


Two-Factor Theory and Alderfer’s ERG Needs
Maslow’s hierarchy of Herzberg’s Two-factor Alderfer’s ERG needs
needs theory

Self-actualization Work itself Growth


Motivational factors

and fulfillment Achievement


Possibility of growth
Responsibility

Esteem and status Advancement


Recognition

Status

Belonging and Relations with supervisors Relatedness


social needs Peer relations
Relations with subordinates
Hygiene factors

Quality of supervision

Safety and Company policy


security and administration
Job security

Physiological Working conditions Existence


needs Pay

Adapted from John W. Newstrom and Keith Davis, Organizational Behavior – Human Behavior at
Work, 9th edition, (New Delhi: Tata McGraw-Hill, 1997) 128.

other two theories, but is less restrictive and limiting in comparison to them. In general,
content theories do not explain the complexities involved in the process of motivation
and, except for the applications of Herzberg’s theory to job design for individuals,
these theories do not have much practical utility in the field of human resources
management.

THE PROCESS THEORIES OF WORK MOTIVATION


While content theories of motivation determine “what” motivates people at work, the
process theories deal with the “how” of motivation. The process theories of motivation

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Motivation

deal with the cognitive antecedents that go into motivation or effort, and more
specifically, with the way the cognitive antecedents of an individual relate to one
another.

Vroom’s Expectancy Theory of Motivation


The cognitive concepts proposed by the pioneering psychologists, Kurt Lewin and
Edward Tolman, and choice behavior and utility concepts from classical economic
theory form the basis for the expectancy theory of work motivation. Victor Vroom was
the first behavioral scientist to propose an expectancy theory to explain work
motivation. According to Vroom, the content theories of work motivation did not
provide an adequate explanation for the complex process of work motivation.
Therefore, as an alternative, he proposed the expectancy theory of work motivation.
Vroom’s theory became very popular in academic circles and is now the subject of
many research studies. Figure 7.4 gives a diagrammatic representation of Vroom’s
expectancy theory. The theory is based on three variables – valence, instrumentality
and expectancy – and is therefore commonly termed VIE theory.

Figure 7.4: Vroom’s Expectancy Theory

Goals and
Person Possessing Preference Among Associated Outcomes
(Direct and Correlated)

Expectancy 1st Level 2nd Level


Outcomes Outcomes

Motivational Force = walence* Expectancy Action Outcome Outcome


1 1a
Accompanied by Outcome
perceived probabilities 1b
of various actions Outcome
leading to Different 1c
outcomes

Feedback (Modification of preferences)


Net Valence or Values of all
outcomes
(Satisfaction – Dissatisfaction)

*Walence =  Valence  Instrumentality


Source: Dunnette, M.D. (1967) “The Motives of Industrial Managers”, Organizational
Behavior and Human Performance, p.178; adapted from Vroom (1964).

Meaning of the variables


Valence (V) denotes the strength of an individual’s preference for a particular
outcome. Other terms which may be used to refer to valence are: value, incentive,
attitude, and expected utility. (If a person prefers attaining a particular outcome to not
attaining it, then the valence is positive. The valence is said to be zero when the person
is not interested in the outcome, and it is negative when the person prefers not attaining

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Organizational Behavior

the outcome to attaining it.) The second variable of Vroom’s expectancy theory is
instrumentality (I). Instrumentality refers to the degree to which a first-level outcome
would help in attaining the desired second-level outcome. Instrumentality serves as an
input for valence. For instance, the desire to obtain a promotion may motivate an
individual to display superior performance in the job. The superior performance of the
individual is the first-level outcome and is considered instrumental for getting a
promotion, a second-level outcome. The third variable in Vroom’s expectancy theory
is expectancy (E). Expectancy is the probability (ranging from 0 to1) that performing a
specific action would produce a particular first-level outcome or effort. Although the
concepts of instrumentality and expectancy seem to be very similar, they are, in reality,
quite different. Expectancy relates a person’s efforts to the first-level outcome, while
instrumentality relates first-level outcomes to second-level outcomes. The strength of
the motivation to perform a certain act depends on the algebraic sum of the products of
the valence and instrumentality for the outcomes times the expectancy.1
Vroom’s expectancy theory focuses on the relationship between an employee’s efforts,
performance, rewards and personal goals, as shown in Figure 7.5. Three types of
relationships are identified in Vroom’s expectancy theory:

Figure 7.5 Vroom’s VIE Expectancy Theory

M
EFFORT PERFORMANCE OUTCOME O
T
EXPECTANCY INSTRUMENTALITY VALENCE I
Belief that if I try Belief that if I do better, Value of the V
hard I can do I get a better reward outcome to the A
better person vs T
indifference or I
aversion O
N

Adapted from http://www.css.edu/users/dswenson/web/OB/VIE.gif

1. Effort-performance relationship
2. Performance-reward relationship
3. Rewards-personal goals relationship
i) Effort-performance relationship: This shows an individual’s perception of the
probability that a specific level of performance would result if he exerts a certain
amount of effort.
ii) Performance-reward relationship: It denotes the extent of an individual’s belief
that a particular level of performance would result in achieving the desired
outcome.
iii) Rewards-personal goals relationship: This refers to the degree to which an
individual’s personal goals or needs are satisfied by the rewards given by the
organization and his perception of the attractiveness of these rewards.
An understanding of the relationships identified by the expectancy theory helps
managers understand why many workers are not really motivated and put in only
minimal efforts. Managers can assess these relationships between effort, performance,
rewards and personal goals of employees from the employees’ responses to

1
Fred Luthans, Organizational Behavior, 8th edition (India: Irwin McGraw-Hill, 1998) 176.

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Motivation

questionnaires or informal interviews. If the employee is motivated to the highest


extent possible, he/she will give an affirmative response to each of the questions
discussed below.
First: If the employee puts in his/her maximum effort, will it have a strong positive
impact on his/her performance appraisal?
Some employees may answer the question in the negative. This may be because they
lack the requisite skills for the job. Therefore, they may not be able to perform
effectively, although they put in a lot of effort. Sometimes, the performance appraisal
system of an organization may take into consideration only non-performance factors
like loyalty, initiative and courage shown by the employee. In such cases, a person may
not be rated as a high performer even if he invests great efforts on the job. Another
reason for a negative response to the question may be the employee’s perception that
he is disliked by the boss and therefore, he expects to obtain a poor rating from his
boss regardless of efforts. All these indicate that a possible source of low employee
motivation is the employee’s belief that irrespective of his efforts, his chances of
getting a good rating from his superior are low.
Second: Does he/she believe that obtaining a good performance appraisal will result in
organizational rewards?
Many employees do not see a close relationship between performance and rewards
offered by the organization. This is because in many organizations, rewards are based
on many considerations other than the performance of the employee. The rewards may
be based on factors such as seniority, ability to please superiors, ability to cooperate
with others etc. Often, employees feel that their performance has not been adequately
rewarded. Such a mismatch between performance and rewards may demotivate
employees.
Third: If the employee is rewarded, are these rewards personally attractive to the
employee?
An employee may put in a lot of hard work such as working late, taking on extra work,
etc. in order to get promoted, but instead he may be given only a nominal hike in his
salary. It may also happen that an employee may wish to work on an interesting and
challenging job, but all he gets is words of appreciation from his superior. In such
cases, the rewards offered by the organization do not satisfy the needs of the employee,
and hence are not attractive to him/her. Although it is important for organizations to
tailor their rewards to suit employees’ needs, there is a limit to the rewards that an
organization can offer. This makes it difficult for managers to individualize rewards.
Moreover, many managers wrongly assume that all employees wish for the same kind
of rewards. This makes them overlook the motivational effect that a differentiated
reward system has upon employee performance. Such uniform organizational
practices do not motivate employees to the fullest extent.

The Porter-Lawler Model


It is commonly believed that a happy worker is a productive worker. Accordingly,
many early researchers into human relations felt that employee satisfaction has a direct
impact on the employee’s productivity. It was also believed that employee satisfaction
is an antecedent condition that determines the productivity of the employee. Although
all the content theories of motivation assume that increase in employee satisfaction
improves his productivity, later researchers (Vroom, 1964) could not establish a direct
link between satisfaction and performance. On the contrary, many studies actually
found that there is a very remote relationship between the level of satisfaction and the
level of productivity of a worker.
The Porter-Lawler model was developed by Lyman W. Porter and Edward E. Lawler
III as an extension of Vroom’s expectancy theory. Porter and Lawler tried to explore

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Organizational Behavior

the complex relationship between motivation, satisfaction and performance, and


pointed out that efforts put in by an employee did not directly result in performance.
The Porter-Lawler model is a comprehensive explanation of work motivation. It is
illustrated in Figure 7.6. The model holds that performance in an organization is
dependent on three factors:
1. An employee should have the desire to perform, i.e. he must feel motivated to
accomplish the task.
2. Motivation alone cannot ensure successful performance of a task. The employee
should also have the abilities and skills required to successfully perform the task.
3. The employee should have a clear perception of his role in the organization and an
accurate knowledge of the job requirements. This will enable him to focus his
efforts on accomplishing the assigned tasks.

Important variables in the model


The Porter-Lawler model tries to establish a relationship between the efforts,
performance and satisfaction of an individual. The important variables in the model are
discussed below:

Figure 7.6: The Porter-Lawler Motivation Model

8. Perceived
Equitable
Rewards

4. Abilities &
Traits
1. Value of
Reward
7. a
Intrinsic
Rewards
3. Effort 6. Performance

2. Perceived
Effort 9. Satis-
Reward faction
Probability 5.Role
Perception
7b
Extrinsic
Rewards

Source: http://www.neiu.edu/~aserafin/421/motivation/aMotivation/sld006.htm.

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Motivation

Effort: This denotes the amount of energy expended by an individual to perform a


specific task. The effort put in by an individual depends upon how attractive the reward
is and his perception of the probability that his efforts will lead to the reward. An
individual may put in considerable effort if he finds the reward very attractive and also
if he feels that there is a high probability of obtaining the reward through his effort.
Motivation is the force that drives an individual to make an effort to perform a certain
task.
Performance: Motivation causes an individual to make some level of efforts to
accomplish a certain task. However, making an effort does not deliver effective
performance on its own. Often, besides the effort made by the individual, performance
also depends on his abilities and skills and the way he perceives his role in
accomplishing the task. Thus, there is not always a perfect match between the effort of
an individual and his performance. A discrepancy is often observed between the two.
For example, an employee’s desire to be promoted may motivate him to put in a lot of
effort by working late in the office. However, despite his long hours at work, he may
lack the abilities and skills required to efficiently perform the tasks associated with his
job. Further, he may not have a clear perception of his role in accomplishing the tasks
and may not have planned them properly so as to deliver superior performance. Hence,
when his performance is being appraised, the employee may get only a hike in his
salary, rather than a promotion.
Rewards: According to Porter and Lawler’s model, an employee is rewarded based on
his performance. The rewards that an employee gets may be intrinsic or extrinsic in
nature. Intrinsic rewards are those which a person grants to himself for having
performed a task well. This may be in the form of happiness or satisfaction at having
accomplished the task, etc. Since intrinsic rewards are given by the person himself,
they are less likely to be affected by disturbing or negative thoughts and influences of
others. Thus, intrinsic rewards help establish a direct relationship between a person’s
performance and the reward he obtains. Extrinsic rewards are those which are given to
the employee by the organization for performing well in the job. Since these rewards
are given to the employee by an external entity, namely the organization, and not by
the employee himself, they are likely to be subject to other influences. Hence, it may
not always be possible to establish a direct relationship between extrinsic rewards and
employee performance.
The performance-satisfaction relationship of the employee is also affected by what he
perceives as appropriate rewards. For instance, suppose A and B are two employees
working in the same organization but differing in their job performance, with A
performing better than B. If both of them are rewarded in the same manner, A will
naturally be dissatisfied that his superior performance has been rewarded at the same
level as employee B’s inferior performance. Thus the reward offered may not give him
satisfaction.
Satisfaction: Satisfaction depends upon whether the actual reward offered fall short of,
match or exceed what the individual perceives as an equitable level of reward. Porter
and Lawler stated that satisfaction results when the actual rewards exceed the
perceived rewards. Likewise, dissatisfaction results when actual awards fall short of
the person’s expectations.

THE CONTEMPORARY THEORIES OF WORK MOTIVATION

Equity Theory
J. Stacy Adams propounded the equity theory of work motivation. This theory states
that the degree of equity or inequity perceived by an employee with reference to his
work situation plays a major role in work performance and satisfaction. Employees
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Organizational Behavior

compare the outcomes, i.e. what they get from their job in relation to what they give to
the job, i.e. job inputs. Besides the direct contribution that a person makes, inputs also
include other aspects like a person’s experience or previous training, qualifications,
personal characteristics, etc. The various possible outcomes are pay, fringe benefits,
incentives, recognition, promotion, prestige, etc. Employees generally compare of their
outcome-input ratio with that of others. If they perceive the ratio of their outcomes and
inputs to be equal to that of their peers and others, a state of equity exists. However,
when the employee perceives his outcome-input ratio as being unequal to others, a
state of equity tension or inequity exists. This state of negative tension motivates a
person to take the necessary corrective measures.
Equity is represented schematically as:

Person’s outcomes = Other’s outcomes


Person’s inputs Other’s inputs

Inequity is represented as follows:

Person’s outcomes < Other’s outcomes


Person’s inputs Other’s inputs
or
Person’s outcomes > Other’s outcomes
Person’s inputs Other’s inputs

For example, X graduated from a prestigious business school and was selected for a
suitable position in a large and reputed company. The work was challenging and
provided ample opportunities for growth. X joined at a salary of Rs 10,000 per month.
The company appreciated X’s performance and after he had completed a year’s
service, gave him a hike of Rs 1,000. However, after a short while, a new employee
was hired by the company with the same qualifications but no prior experience, at a
salary of Rs 12,000. On learning about this, X perceived a state of inequity, felt
demotivated and began to look for another job.
An important variable in the equity theory is the referent chosen by the employee,
which complicates the equity theory to some extent. A referent is an object of reference
or individual with whom the employee compares himself. The various referent
comparisons used by an employee are:
i) Self-inside: The employee compares his experiences in the present position with
the experiences of those holding a similar position in the same organization. For
example, a research associate working for ICFAI university experience equity or
inequity when he compares his salary with that of another research associate
working with him. It involves a comparison between the same job positions within
the same organization.
ii) Self-outside: The employee compares his experiences in the present position with
the experiences of those holding a similar position in another organization. For
example, a faculty member of ICFAI University comparing his experience with
the experience of a faculty member working for Indian School of Business. It
involves a comparison between same job positions held by individuals belonging
to different organizations.
iii) Other-inside: The employee compares his experiences in the present position with
the experiences of another individual or group of individuals holding a different
position but belonging to the same organization. The other-inside comparison

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Motivation

involves a comparison between different job positions of individuals belonging to


the same organization. For example, a research associate comparing his position
with that of a faculty associate working for the same parent organization, ICFAI
University.
iv) Other-outside: The employee compares his experiences in the present position
with that of another individual or group of individuals holding a different position
and belonging to a different organization. For example, a research associate of
ICFAI University comparing his position to a faculty associate of Indian School of
Business.
The objects of reference or referents used for comparison could be the employee’s
friends, neighbors, peers in the same organization, peers from other organizations or
colleagues from a company where he had worked previously. The basis for choosing
the referent depends upon how much information the employee has about the referent
and on the attractiveness of the referent. There are four variables that influence an
employee’s choice of referent. These are the gender of the employee, length of tenure
of the employee in the organization, level at which the employee is working in the
organization, and level of education or professional qualifications of the employee.
Research studies have shown that both men and women prefer to compare themselves
with members of their own sex. Also, since women are usually paid less (for some
jobs) than men for the same job, and also have lesser expectations than men, when a
woman compares her position with that of another woman, she may be setting herself a
low comparison standard. Thus, it can be concluded that employees whose jobs are
neither male- nor female-dominated will make more cross-sex comparisons than
people in jobs which are either male- or female-dominated. Further, if the employees
have been working in the current organization for a short while, they will not know
much about their colleagues, and therefore, they will tend to rely on their previous
personal experiences. On the other hand, people, who have been in the organization for
a long time, tend to compare themselves with their colleagues. Also, employees
working in higher levels of the organization and those who are highly qualified, tend to
be outward-looking and are well-informed about people in other organizations. Hence,
these employees will tend to compare themselves with people from other
organizations.
According to the equity theory, after comparing his position with that of his referent, if
an employee perceives an inequity, he will make certain choices. The choices that an
employee is likely to make are as described below:
i) Change in inputs: The employee brings about a change in the inputs required for
the job by either increasing or decreasing them. For example, the employee may
reduce the effort he puts into a particular job.
ii) Change in outcomes: The employee may act in a manner that brings about a
change in the outcome or end result. For example, employees who are being paid
on a daily basis may begin to produce more units of lower quality.
iii) Distort perceptions of self: The employee may distort the perception he held about
his own performance. For example, an employee might have earlier considered
himself a moderate worker, but the inequity, he perceives, may make him change
his perception, and start believing that he works harder than everyone else.
iv) Distort perception of others: An employee may change the way he perceives
other’s jobs, positions or productivity. For example, an employee may no longer
find the job held by his colleague as appealing as he had found it earlier.
v) Choose a different referent: The employee may choose a different object of
reference or a different referent to compare himself with. For example, the
employee may stop comparing his performance with that of his brother-in-law and
start comparing it with that of his friend.

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Organizational Behavior

vi) Leave the field: The employee may decide to quit the job in the present
organization and look for a new one.
According to the equity theory, people not only relate their rewards with the effort they
have put in, but also try to relate their rewards with those of others. For instance, an
employee compares his input in performing the job (for example, his effort, experience
and educational background) with the output (for example, salary, raise, promotion,
recognition); he also makes a comparison between his inputs and resultant output and
the input of others and their resultant output. Based on this comparison, he makes a
judgment regarding the equity or inequity of the rewards. If the employee perceives an
inequity or imbalance across output-input ratios, it creates a state of tension in the mind
of the individual. This serves as the basis for his motivation and makes him strive to
reduce or eliminate the imbalance by restoring equity across output-input ratios.
The equity theory proposes four methods by which employees overcome perceived
inequity:
i) If payment is on an hourly basis, the employees who perceive that their rewards
exceed their inputs will experience inequity, when compared to the employees
who perceive that their rewards match their inputs. Hence, over-rewarded
employees will tend to restore equity by producing more than the equitably paid
employees. This may take the form of an increase in the number of units or the
quality of the units they produce.
ii) If payment is on a piece-rate basis, i.e. on the basis of the number of units
produced, over-rewarded employees will tend to increase their output by
increasing either the quality or quantity of units they produce. However, since
producing a larger number of units tends to further increase the inequity of the
employee, the employee will try to restore equity by producing fewer units but of a
higher quality.
iii) If payments are on an hourly basis, under-rewarded employees will try to restore
equity by reducing the efforts they put in. This may be in the form of a decrease in
the number of units produced by them or by reducing the quality of the units
produced.
iv) If payments are made on the basis of the number of units produced, under-
rewarded employees will tend to restore equity by producing a larger number of
products but of a lower quality. They try to increase their rewards by trading off
quality for quantity of output.
Although these methods may hold good for many situations, there are a few
exceptions. For instance, usually, inequity caused by overpayment does not affect
behavior to a great extent. This is because people are more tolerant towards inequity
caused by overpayment than they are towards inequity caused due to being paid less.
Also, not all people are equity-sensitive. Some people prefer their outcome-input ratio
to be lower than the outcome-input ratio of their referent comparisons. Hence, the
conclusions drawn by the equity theory will not hold good for such people.
Although most of the research in equity theory has emphasized the aspect of pay, other
organizational rewards are also taken into consideration by employees when they
compare their outcome-input ratio with that of their referents. Thus, other
organizational rewards such as job designation, fringe benefits, etc. also play a role in
equity or inequity as perceived by the employee. For example, some employees
consider high-status job designations, posh offices, etc. as adequate rewards. Hence,
these factors may affect their perception of equity.
Distributive justice was the focus of equity theory in the past. Distributive justice refers
to the perceived fairness of the manner in which rewards are offered, both in terms of
quantity of the reward received by the individual as well as in terms of the distribution
of rewards between individuals. However, researchers later realized that an

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Motivation

individual’s perception of equity or inequity also took into consideration procedural


justice. Procedural justice refers to the perceived fairness of the process followed in
distribution of rewards. There is evidence to show that although procedural justice has
less impact than distributive justice on employee satisfaction, it significantly influences
the employee’s commitment towards the organization, the extent to which he trusts his
superiors, and his desire to quit the organization. Managers should make sure that the
manner in which rewards are allocated in the organization is transparent, and should
also convey to the employee that the organization follows unbiased and consistent
procedures in rewarding its employees. Such practices contribute to the employee’s
perception of procedural fairness and project a positive image about the organization
and the employee’s superiors. This perception of procedural fairness can be held, even
if the employee is dissatisfied with the pay or other outcomes.
Equity theory demonstrates that employees are motivated significantly by both
absolute rewards as well as relative rewards. However, the theory fails to provide clear
answers to certain questions such as – How do employees define their inputs and
outcomes? How do they make a comparison between these to arrive at a certain
conclusion? How do inputs and outcomes change over time? These issues have not
been addressed clearly by the equity theory. In spite of these limitations, equity theory
satisfactorily explains the concept of motivation and helps in designing compensation
schemes.

Attribution Theory
Attribution theory differs from the other theories of motivation because it identifies
attributions made by people as the basis for their motivation. Attribution theory does
not just explain individual motivation but explains the relationship between personal
perception and interpersonal behavior. Although there are many attribution theories, all
of them share some common assumptions:
i) They try to provide a logical explanation to all that is happening.
ii) They attribute actions of individuals to internal or external causes.
iii) These theories propose that individuals follow a fairly logical approach in making
attributions.
According to Harold H. Kelley, a famous social psychologist, attribution theory deals
with the cognitive processes of an individual, which help interpret his behavior as
being caused by aspects pertaining to the relevant environment. Attribution theory tries
to answer the “why” aspect of motivation and behavior. The theory states that since the
causes and reasons for an individual’s behavior cannot be directly observed, one has to
depend to a great extent on the perception of the individual in order to understand his
behavior. Attribution theory also assumes that humans are rational and motivated
beings. This inherent nature of human beings makes them identify and understand the
reasons for everything that takes place in their environment.
Many cognitive theorists contributed to the development of attribution theory, but the
credit for initiating it goes to Fritz Heider. According to Heider, behavior is determined
by both internal forces or personality attributes such as ability, effort and fatigue, and
external forces or environmental attributes such as rules, weather etc. He emphasizes
that it is the perceived attributes of an individual, which are important in determining
the individual’s behavior, and not the actual attributes. The behavior of people when
they perceive the internal attributes of an individual differs from their behavior when
they perceive the external attributes associated with the individual. This concept of
differential attribution has very important implications for work motivation.

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Organizational Behavior

Locus of control attributions


‘Locus of control’ refers to the chief source of factors that creates a result or gives rise
to an outcome in the employee’s perception. The outcome or result could depend on
either external factors or internal factors. An understanding of the locus of control as
perceived by various employees helps in a better understanding of their behavior at
work. Those employees who believe that there is an internal control for all outcomes
feel that they have the power to change or influence the outcomes by means of their
ability, skills and efforts. But, those employees who believe that there is an external
control for all outcomes feel that they are in no position to control them. In their
opinion, external factors like luck, chance, etc. are responsible for influencing
outcomes. An employee’s perceived locus of control is important in determining
his/her own performance and satisfaction level.
Several researchers have studied employee behavior in terms of the attribution theory -
locus of control model, in work settings. It has been found that employees with an
internal locus of control are usually happier in their jobs, occupy managerial positions
and prefer the participatory style of management as compared with employees with an
external locus of control. Managers with an internal locus of control are, in general,
better performers, considerate towards their subordinates, are not over-stressed, and
follow a strategic approach. Although many studies reveal that employees with an
internal locus of control are better than their counterparts having an external locus of
control, there is contradictory evidence from other studies. For instance, some studies
find that managers with an external locus of control are perceived to take more
initiative and be more considerate than managers with an internal locus of control.
Besides having important implications for managerial behavior and performance,
attribution theory helps in explaining goal-setting behavior, leadership behavior and
employee performance. Further, the process of attribution plays an important role in
the formation of coalitions within organizations. Coalition members have been found
to have strong internal attributions, such as ability and desire, whereas non-members
have a perceived external locus of control and attributed the results or outcomes to
factors such as luck.
Other attributions
As explained earlier, attribution theory helps in a better understanding of
organizational behavior (refer Exhibit 7.4). Therefore, other aspects of attribution by
employees are being studied in order to extend the scope of the theory. Bernard
Weiner, a social psychologist, found that the stability of attribution was also important
in determining motivation. According to Weiner, employees with longer work
experience tend to have stable internal attributions about their abilities and unstable
internal attributions regarding effort. These employees also usually have stable external
attributions regarding the task difficulty and unstable external attributions regarding
luck.
Kelley suggested other dimensions such as consensus, consistency and distinctiveness
having an impact on the type of attributions made by individuals. Consensus denotes
the extent to which others behave in a similar manner in the same situation. The second
dimension, consistency refers to a pattern of behavior, which may be relatively stable
or unstable. This shows whether a person behaves similarly in a similar situation or if a
particular behavior is just an infrequent occurrence. Distinctiveness indicates whether a
person’s behavior is similar for all tasks or whether his behavior differs from one task
to another. Hence, it can be said that distinctiveness pertains to other tasks, consensus
pertains to other people and consistency pertains to time. An individual having high
consensus, consistency, as well as distinctiveness can be expected to make attributions
to external or environmental factors. However, individuals showing low consensus,
high consistency and low distinctiveness, can be expected to attribute outcomes or
results to internal or personal causes.

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Motivation

Exhibit 7.4
Application of Attribution Theory in Organizations
The reasons we attribute to other’s behavior determine or influence how we behave with them.
Many times, it is possible to attribute definite reasons to the behavior of others. However, when
adequate information is not available, one cannot be certain about what causes others to behave the
way they do. In such situations, we tend to derive meaning by filling in the missing gaps in
information or by using whatever information is available.
Since a manager’s job involves evaluating employees’ performance, any misunderstanding or
incorrect analysis of the employees’ behavior can result in a breakdown in communication. This
adversely affects organizational effectiveness. Hence, it is essential that managers understand the
factors that affect how they judge others’ and their own behavior.
According to attribution theorists, there are various factors that influence the reasons we attribute to
others’ behavior. According to these theorists, we tend to assume that either situational or
personality characteristics are responsible for the way others behave. Examples of situational
characteristics include difficulty of the task, presence of rewards/punishment, or luck, while
personality characteristics include skills, traits or efforts of the individual. Situational or personality
characteristics are further divided into two types – stable (difficulty of the task, and ability) and
unstable (luck and effort).
It is common for managers to attribute their own behavior to situational causes and others’ behavior
to personality causes. Thus, their decision style tends to vary with the situation. Managers’
attributions regarding the employee’s success or failure tends to be influenced by certain biases
related to the ease of response and the need to maintain self-esteem. Ease of response tends to make
managers attribute employee’s poor performance to internal causes rather than considering external
factors such as poor organizational structure or job design as responsible for ineffective employee
performance. Further, the manager’s need to maintain self-esteem may cause him to attribute
employee’s success to external factors, such as effective quality of managerial supervision, and
attribute employee’s failure to personality characteristics such as lack of ability and inadequate
efforts.
However, the same rules of attribution do not apply while judging one’s own behavior. While doing
so, we tend to attribute our successes to internal factors and failures to external causes. This is
because taking responsibility for negative behavior tends to lower one’s self-esteem and is therefore
avoided as far as possible. Nevertheless, there are exceptions to the tendency to attribute successes
to internal factors. The gender of an individual influences the extent to which the individual would
attribute success to oneself. Women, for example, are less likely to give the credit to internal factors
for achievement of success in their career, and are more likely to attribute their success to external
factors such as luck. Although neither managers nor employees are aware of the processes involved
in attribution, the reasons they assign to their attributions subsequently influence their own behavior
as well as the way they behave with others in the organization. An understanding of the attribution
processes helps prevent managers from falling into a self-confirming cycle wherein their
observation of employees’ behavior begins to confirm their attributions and beliefs regarding the
employees. Also, an understanding of attribution processes helps managers as well as employees to
take into consideration each other’s attribution processes and to understand why the other is
behaving the way he is. This, in the long run, helps to avoid the misunderstandings that are likely to
arise in organizational settings or workplaces.
Adapted from Bartunek, Jean M., “Why Did You Do That? Attribution Theory in Organizations”
Business Horizons, Vol. 24 Issue 5 (Sep/Oct81), 6p, p66.
Weiner used attribution theory to explain achievement motivation and also to predict
how people feel about themselves and their performance. Some of his findings are
described below:
 Bad-luck attributions, i.e. when people blame their failures to external causes like
bad luck, fate etc., it helps reduce the pain and disappointment associated with
failure. At the other extreme, good-luck attributions, or attributing success to
factors like good luck, chance, etc. reduces the happiness associated with the
success.

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 When people attribute their success to internal factors, their expectations of


success in the future tend to be higher. They set challenging goals for performance
and have greater desire for achievement.
A study of the attribution theory helps managers become aware of the attribution
processes of individuals and how it affects their behavior in the organization. The
managers can reinforce the belief among their subordinates that their success and
progress in the organization is an outcome of their own efforts and abilities. At the
same time, they can discourage employees from attributing failure to external causes
such as difficulty of the task or bad luck.

Other Emerging Theories


Apart from the theories of motivation that are based on cognitive psychology, there are
other theories, such as control theory and agency theory, which have become popular
in recent times.
There are two versions of the control theory. One version states that control is a
cognitive phenomenon. It reflects an individual’s ability to control his life and aspects
associated with his job. Recent studies reveal that people who have personal control are
able to handle unpleasant events with poise and experience less stress as compared to
the individuals who lack such personal control. It has also been proved that such
perceived control enhances job satisfaction and reduces absenteeism.
The other version of the control theory focuses on the control function, which is an
integral part of the management process. While traditional theorists consider control of
both the inputs and outputs of organizations as important for effective management,
recent research indicates that strategic control of human resources is also important.
The agency theory was developed on the basis of some concepts in financial
economics. An agency relationship is said to exist when one or more individuals, i.e.
the principal, engages another person, i.e. the agent, to perform some activity on his or
their behalf. The agency theory assumes that the interests of principals and agents
sometimes conflict with each other. This theory is important in organizational behavior
as it helps in understanding how principals (owners, board of directors, or top
management) can reduce conflicts between their interests and those of agents
(subordinates, middle management, or shop floor employees) by establishing rewards
or incentives for agents when they achieve the desired results. Research is now
providing evidence that indicates that agency theory is applicable in various areas of
organizational behavior. These include areas such as pay for performance,
compensation contracts, foreign subsidiary compensation strategies and variable pay
compensation strategies. Agency theory helps provide insights into the complex
motivation processes of managers in modern organizations.

MOTIVATION OF PERFORMANCE THROUGH JOB DESIGN AND GOAL


SETTING

In this section, we discuss how organizations can motivate performance through


effective job design and goal-setting. The concept of goal setting and the application of
goal setting to organizational system performance through MBO is also discussed in
this section.

Motivating Performance through Job Design


The origin of the concept of job design can be traced to the early twentieth century
when Frederick W Taylor proposed the theory of Scientific Management. This theory
advocated the structuring of work tasks into highly standardized and specialized jobs to

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simplify the process of hiring, training and supervision. The primary objective of this
exercise was to minimize the operational costs involved at each stage of the production
of goods and services. This kind of organizational structure led to a high degree of
control over workers. However, the highly specialized nature of jobs had a negative
impact on the quality of work and employee turnover. This unfavorable outcome led
organizations to realize that the design of a person’s job has a considerable impact on
his/her behavior.
A job can be defined as a grouping of tasks within a prescribed unit or units of work.
“Job Design” can be defined as the process of structuring tasks and responsibilities
into a job in an attempt to make the job more meaningful, significant and satisfying.
Job design therefore, has to consider the technical and social aspects of work in an
organization to derive optimal productivity and performance from the employees.

Approaches to job design


Organizations adopt a variety of approaches to job design to motivate their workforce
to perform well and achieve the desired levels of productivity. In this section, we
discuss a few widely accepted approaches to job design.

Job engineering approach to job design


The job engineering approach to job design evolved from the theory of Scientific
Management and its approach to job design. The job engineering approach is
concerned with issues like plant layout, design of products, processes and tools, and
the measurement and standardization of work processes and human-machine
interactions. Though this approach leads to standardization and achieves a high degree
of job specialization, it unfortunately results in a decline in the quality of work and an
increase in absenteeism and turnover.

Job enlargement approach


The job enlargement approach deals with the horizontal expansion of jobs. Horizontal
expansion of jobs means increasing the number of jobs performed by the worker,
thereby making the job less specialized and monotonous. Unless done with a lot of
care, job enlargement can prove counter productive. Employees may not enjoy the
additional responsibility, and may feel over-burdened and demotivated.

Job rotation
This approach involves the regular switching of jobs among employees. The rotation of
workers between various departments reduces the boredom of performing the same job
activities. The system of rotation of jobs, however, necessitates organizations to
constantly conduct training programs to upgrade the skills of the employees. These
training programs enable the employees to cater to the demands of different jobs.

Job enrichment
The job enrichment approach carries out a vertical expansion of jobs. This vertical
expansion results in an increase in the content of work and requires employees to have
a high level of skill and knowledge. It also facilitates an increase in the level of
autonomy by allowing workers to plan, direct, control and evaluate their own
performance on the job. Job enrichment is discussed in greater detail in the next
section.
Quality of work life and sociotechnical approach to job design
The Quality of Work Life and sociotechnical approaches to job design take a macro
perspective of the design of tasks in an organizational structure. As the name suggests,

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QWL is concerned with the overall climate at the workplace. This approach deals with
the impact of work on the employees and on organizational effectiveness. QWL refers
to the degree to which the work environment enhances or hinders the productivity of
employees. The concept of QWL focuses on the enhanced participation of employees
in the problem solving and decision making activities of an organization.
The sociotechnical aspect of job design aims at creating a harmonious interface
between the human and technological aspects of work so as to enhance the quality of
work life. This approach involves the redesign of work processes and the formation of
independent and autonomous work teams. The successful implementation of
sociotechnical approaches reduces turnover and absenteeism and improves the quality
of work.

Job characteristics approach to job design


The Job Characteristics approach identifies certain features of jobs that result in certain
psychological states. These psychological states strengthen the employees’ need for
growth and achievement. This approach guides the top management to design jobs that
motivate employee performance. This theory, propounded by Hackman and his
colleagues, proposes a three stage process for enhancing the productivity and
profitability of organizations. This is called the Job Characteristics Model.
The core dimensions or characteristics of a job that affect its nature are skill variety,
task identity, task significance, autonomy and feedback. Skill variety refers to the
degree to which a worker is given the opportunity to use his knowledge and his wide
range of skills and abilities, to perform his job. Task identity determines whether a job
has an identifiable beginning and an end. In other words, Task identity refers to the
extent to which an employee is responsible for the completion of a distinct, identifiable
module of the job assigned. Task significance refers to the importance attached to a
specific job in the organization. It determines the contribution of the job and the
worker towards the organization’s productivity. Autonomy refers to the amount of
freedom a worker has in performing his job. This dimension examines the relative
independence, responsibility and accountability of the job in comparison to other jobs.
Feedback refers to any appraisal received by the employee about his performance on
the job after its accomplishment.
Since autonomy and feedback play an important role in motivating employees, they are
the two most important factors to be considered when designing jobs.

Realization of critical psychological states


The dimensions of jobs, discussed above have an impact on the psychological states of
employees. The psychological states discussed below, play an important role in
shaping individual job motivation and satisfaction:
Meaningfulness - This is experienced when an individual feels that he has
significantly contributed to the productivity of the organization and has optimally
utilized his skills.
Responsibility – This is experienced when an employee feels personally answerable for
the consequences of his job-related actions. An employee’s sense of responsibility is
influenced by the level of autonomy granted to him in a particular job.
Awareness of results – This psychological state is achieved when the employee is
informed of his level of performance at the job. In other words, this state is influenced
by feedback.

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When employees experience these critical psychological states, they are motivated to
perform effectively at work. These psychological states serve as an internal reward
system for the employees.

Personal or work outcomes


Favorable job dimensions produce positive psychological states, which create a strong
sense of commitment towards the job thereby resulting in enhanced employee
productivity. Factors like job involvement and motivation and satisfaction at the
personal and work level determine job outcomes. If employees experience positive
psychological states, they tend to become more involved in the tasks assigned to them.
They are thus internally motivated to perform better on the personal and work fronts.
Job enrichment
As explained in the previous section, job enrichment technique vertically loads the job.
In other words, job enrichment results in increasing the responsibility and
accountability of the job rather than simply increasing the number of tasks to be
performed. This type of job design provides employees with the opportunity to plan
and execute their jobs and evaluate their own performance. This in turn enhances the
responsibility and accountability of the employees. As the employee is given the
freedom and autonomy to perform and execute the job at his own pace and in his own
way, he also feels responsible for the outcome of the job. This sense of responsibility
motivates the employee to perform better. And this improvement in performance
provides the worker with more avenues for growth and development in his career.
Studies have found that in most cases, job enrichment enhance employee creativity at
work and increase levels of employee satisfaction. Yet, the job enrichment approach is
not free of problems. The biggest problem with job enrichment technique is that, the
time and reason for its failure can never be accurately predicted in organizations.
Measuring task scope
Task scope refers to a dimension for describing jobs at various levels of the
organization. The task scope encompasses the variety of activities a person has to
perform to complete a particular job. A job, that has a narrow scope, has fewer
responsibilities than a job that has a broad scope. In other words, task scope deals with
the horizontal load of the job. The task scope of a job can be measured in several ways.
It could be as simple as observing the job on hand along the dimension of core job
characteristics. Hackman and Oldham have developed a qualitative method for
measuring task scope. They administer a questionnaire called the Job Diagnostic
Survey (JDS) to employees. Once the questionnaire is administered and scored, the
Motivating Potential Score (MPS) is calculated using the formula given below:
MPS = (Skill variety + task identity + task significance) × autonomy × feedback / 3
The above formula shows the inevitability of the presence of autonomy and feedback
in any effective job design to motivate the workers. If either autonomy or feedback is
absent, the job does not have the potential to motivate the employees.
Redesigning jobs
As discussed in the previous sections, job design has a significant impact on the
various aspects of productivity and motivation. Job design also has an impact on the
attitude of employees towards their jobs, their willingness to perform, productivity,
absenteeism and job stress. Therefore, managers have to put in significant effort when
designing and redesigning jobs to achieve optimal productivity levels.
In this section we present strategies for job redesign that take into consideration, the
characteristics of the job.

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Combination of tasks
This strategy involves the combination of tasks that have become too specialized or
fragmented. This effort improves skill-variety, task identity and interdependence. All
the tasks which are deemed unnecessary and redundant are eliminated. A team may be
formed to accomplish one large piece of work. The members of the team must be made
to rotate jobs at regular intervals. This will provide adequate training to all members of
the team and ensure that they get the opportunity to perform a variety of tasks. This
will also ensure that the duties of the team members are constantly increased and that
they get the opportunity to learn new skills.
Vertical loading of jobs
This basically refers to job-enrichment. Employees are not only given adequate
opportunities to develop their skills, but are also empowered to plan, schedule and
execute activities themselves. The employees are thus made completely accountable
for their performance. The employees need to be made to understand the importance
and implications of the jobs they handle so that they realize the significance of the
same. This process caters to the need for enhancing autonomy at work and enables the
employees to experience meaningfulness and responsibility at their jobs, thereby
raising their levels of motivation.
Introduction of an open feedback system
The importance of the existence of an open feedback system was stressed when
discussing the basic dimensions of job characteristics that affect employee motivation.
As feedback plays an important role in motivating employees to perform well, an open
system of feedback must be established in organizations. The employees should be
informed of the significance of their job and also their level of performance. They
should be given feedback on the positive aspects of their performance to encourage
them to raise their level of productivity. This feedback should be free from the biases
held by the managers. In additional, the feedback could consist of a combination of
appraisals from all the levels of the organizational structure.
Formation of natural teams
The management must encourage the formation of informal, self motivated teams
within the existing structure of the organization. This facilitates interaction among the
various groups of employees, irrespective of the type of work they are involved in. The
formation of such teams enhances skill variety, builds emotional relationships among
employees and facilitates free interaction among them. Teamwork brings about a
shared sense of responsibility between the management and the variety of groups of
employees at different levels of the organization. Team work encourages employees to
solve problems themselves instead of depending on management, thus enhancing the
effectiveness of the organization.
Motivating Performance through Goal Setting
An employee’s performance at work can be affected by factors such as work
environment, job design, organizational structure, work policies and procedures,
manager-employee relationships and most importantly, goals. Goal setting is
extensively used in the field of Organizational Behavior as a motivational technique.
A goal can be defined as the desired consequence of an action. In other words, a goal is
the end towards which efforts are directed. Goals can be explained as objectives,
intentions or purposes of the organization. Goals not only guide organizational efforts
towards a particular objective, but also motivate the employees to accomplish them.
An organization without goals is sure to fail.
The theory of goal setting originated at the turn of the century with the emergence of
the theory of Scientific Management by F W Taylor. The theory was further developed
by Peter Drucker, through his concept of “result-oriented management”. The studies of

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Latham and Locke triggered a series of research studies that suggested that goal
striving was a common element in most motivational theories. The theory of goal
setting as propounded by Locke, Wood and Mento is based on the principle that
difficult goals stimulate performance and commitment. Locke’s theory assumes that
human behavior is purposeful and that goals direct and sustain their behavior in a
particular manner.
Two primary attributes of goals, content and intensity, drive behavior towards the
accomplishment of tasks. The content attribute of goals refers to the level of difficulty
involved in attaining the goal. Researchers have examined the relationship between the
level of difficulty involved in attaining a goal and the performance levels of the
workers. Of the 192 field studies conducted in this area, 175 of them concluded that the
content of the goal and the performance of employees had a linear relation. In other
words, difficult goals stimulate greater effort and performance than relatively easier
ones.
Intensity refers to the process by which a goal is set and accomplished. It relates to
employee participation in goal setting and then commitment towards achieving the
goals set by them. Although it is generally believed that participation in the goal setting
process enhances performance, research has shown that participation has a positive
impact only on the level of commitment to the goal and not necessarily on the
performance. It is therefore believed that managers should assign goals to employees,
but give them the freedom to accomplish those goals in whatever way they choose to
do so. At the same time, employees must be held accountable for the outcomes of their
actions.
Performance enhancement through goal setting
Like job design, goal setting also has the potential to raise the motivational levels of
employees. The performance and motivation of workers can be enhanced by ensuring
that goals have the features described below.

Goals should be specific


Vague and unclear goals result in differing interpretations of the goals by the workers.
Goals should be clear and specific. They should explicitly state the results or outcomes
expected at the end of a given period of time. The managers and the team leaders must
ensure that the goal is clearly communicated to all workers.

Goals should be difficult and challenging


The greater the difficulty of accomplishing a goal, the better the performance. Difficult
goals motivate better performance than relatively easy goals. Challenging goals
stimulate employees to put in more effort. However goals should not be unattainable.
Goals must be owned and accepted
It is generally accepted that employees perform better when they participate in the goal
setting process, although research has disproved this. When employees are actively
involved in the process of setting targets and goals, they feel responsible and hold
themselves accountable for their performance. As a result, they put in their best efforts
to accomplish the task.

Goals must have a specific time frame


A realistic timeframe must be set for realizing goals. Work schedules and deadlines
prevent delays in the achievement of goals. A limited timeframe also keeps the
employees on their toes, thereby raising their productivity levels.

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Goals should be measurable


Goals and outcomes should always be quantifiable. Goals should be measurable both
quantitatively and qualitatively. Only then can the performance of employees be
gauged and rewarded suitably. The rewards received by employees motivate them to
work harder.
Barriers to effective goal setting
As a clear relationship has not been established between performance and goal setting,
organizations are cautioned against the process of goal setting.
Organizations must ensure that the process of goal setting brings the desired
organizational results. The inherent limitations of the theory of goal setting constitute
barriers to effective goal setting. These barriers to effective goal setting are discussed
below.
Lack of top management-support
The participation and commitment of the top management in setting goals and in
achieving them is essential for any successful goal setting activity. Lack of support
from the superiors would demotivate the workers. This attitude on the part of
management would make them feel that they would not be rewarded for their efforts.
Lack of communication
During the process of goal setting, the management must explicitly inform employees
of its expectations of them. If it fails to do so, the workers will not perform well. They
will not only be unclear about the role they have to play, they will also lack the drive to
achieve the goal. In addition, during goal setting, employees should be allowed to
freely communicate their limitations in attaining the goals set by the management. If
this is not allowed, the goal setting exercise will be a failure.
Content of the goal
As discussed in the previous sections, the content of the goal refers to the specificity of
the goal and the level of difficulty or complexity of the job. Research has suggested
that as the level of complexity of the goal is raised, the motivation and the performance
of the workers increased. However, if the difficulty level is raised to an unreasonable
extent, the workers’ level of motivation and performance could decline.
Technical incompetence
Goal setting fails when employees are technically incapable of achieving the set goals.
This technical incompetence would not only lead to the non-attainment of the goals set,
but would also end up demotivating the employees and creating a fear of failure among
them.
APPLICATION OF GOAL SETTING TO ORGANIZATIONAL SYSTEM
PERFORMANCE
The theory of goal setting is usually implemented through a system called
Management by Objectives, popularly known as MBO. The term MBO was coined by
Peter Drucker, who proposed that organizational performance can be enhanced through
a systematic process of mutual goal setting and performance review.
MBO refers to the process of setting goals and objectives through the participation of
the management and the workers. The process includes the appraisal of performance at
the end of a specific timeframe. MBO therefore, is a program consisting of a specific
set of goals to be achieved within a pre-determined time period, an open feedback
system and an appraisal system to measure the degree to which the goals have been
accomplished.
The common features of all MBO programs are goal specification, participative
decision making, an explicit time period for the achievement of targets, and

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performance feedback. The goals which are set should be precise and specific. They
should not be vague or misleading. For example, a statement that the organization
proposes to raise the profitability by 20% by the end of March next year states the goal
in a clear and precise manner; while a statement that declares that the organization will
try to raise the levels of productivity and profitability during the next financial year
states the goal in a very imprecise manner. In MBO programs goals are set jointly by
the management and the employees. They decide upon the goal and sketch out an
action plan to achieve and measure it. This is contrary to the traditional approach in
which the manager decides the goal and the subordinate simply accepts it and strives to
accomplish the targets set. Additionally, in MBO programs, a specific timeframe is
allotted for the completion of each goal. This timeframe is decided jointly by the
management and the workers. Any extension beyond the given timeframe is considered
a reflection of poor performance. MBO programs emphasize the presence of an open
and transparent feedback and communication system. Feedback ensures that employees
are updated on the status of goal achievement and are motivated to achieve the goals
set.
The process
All MBO programs focus on effective planning, participative decision making and the
use of a reward system. An MBO program generally consists of four stages. These
stages are discussed as below.
Consensus on key goals and objectives
The important objectives that are to be accomplished are agreed on at this stage by the
supervisors and the workers. Consensus is arrived at after a series of brainstorming
sessions among the participants. The time period for achieving the set goals is also
determined at this point.
Sketch a plan of action
A plan of action is drawn up and is used as a guide to keep track of the goals set. The
action plan also helps the organization in monitoring and controlling the behavior of
employees.
Control of behavior
During this stage, the behavior of employees is controlled and measures are taken to
correct any deviation from the plan of action. Employees also monitor their own
performance to ensure that it is directed towards the achievement of goals.
Periodic appraisal and reviews
Performance reviews and appraisals are conducted at regular intervals of time to ensure
that organizational efforts are directed towards the accomplishment of the objectives.
These periodic reviews also evaluate the progress towards the attainment of goals.
Corrective measures are taken if any deviation is found .
The concept of MBO, which is a systematic application of goal setting, has certainly
proved to be successful in most organizations. The success of this approach to
management however, depends on the extent to which it is made a part of the
philosophy of an organization.
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SUMMARY

Motivation can be defined as a process that is initiated by a physiological or


psychological deficiency or need, which triggers a specific behavior or drive in order to
achieve a goal or incentive. It consists of three interacting and interdependent elements
– needs, drives and incentives.
Maslow’s hierarchy of needs, Herzberg’s two-factor theory and Alderfer’s ERG theory
are classified as content theories of work motivation. Maslow’s needs hierarchy
suggests that a person’s motivational needs can be arranged in a hierarchical manner.
Once a given level of need is satisfied, it no longer serves as a motivating factor. A
higher level need or one at the next level is triggered and motivates the individual
further.
Herzberg’s two-factor theory identifies two aspects which are necessary for job
satisfaction – hygiene factors and motivators. While the hygiene factors are responsible
for preventing dissatisfaction, motivators are essential to keep the employees satisfied.
Hygiene factors include factors like working conditions, pay, fringe benefits, etc.
Motivators include factors like achievement, recognition, advancement and growth.
Alderfer in his ERG theory identified three basic groups of core needs: the existence
needs, the relatedness needs, and the growth needs. The existence needs are associated
with survival and physiological well-being. The relatedness needs stress social and
interpersonal relationships. Growth needs are a person’s desire for personal
development.
Process theories provide a better theoretical explanation of work motivation than the
content theories. Vroom’s expectancy model and the extension and refinements made
by Porter and Lawler in their theory, help explain cognitive variables and their
relationship with each other in the complex process of work motivation. Porter and
Lawler pointed out that efforts did not directly result in performance, and there was a
complex relationship between motivation, satisfaction and performance. They believed
that performance leads to satisfaction and that performance is dependent on the
person’s motivation levels, his abilities and skills and on role perceptions.
Of late, the equity theory and attribution theory have received much attention. The
equity theory is based on perceived outcome-input ratios. The equity theory states that
employees compare their outcome-input ratio with that of others. If they perceive the
ratio of their outcomes and inputs to be equal to that of their peers and others, a state of
equity exists. Otherwise, a state of equity tension or inequity is created. The attribution
theory uses attributions made by people to explain work motivation. This theory tries
to explain internal and external attributions made by people and contributes to an
increased understanding of the complex cognitive process of work motivation.
Some emerging theories, namely control and agency theories, have been receiving
attention in the recent years. One version of the control theory states that control is
basically a cognitive phenomenon, and determines people’s ability to control their lives
or their jobs. Another version of this theory focuses on the management function of
control. It states that controlling both the inputs and outputs of the organization is
important for effective management. The agency theory assumes that an agency
relationship exists in most organizations. It gives a clear idea as to how the principal
i.e., owners, board of directors, or top management can avoid their interests conflicting
with those of the agents i.e., subordinates, middle management, or shop floor
employees.

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Chapter 8

Stress Management
In this chapter we will discuss:
 Definitions of Stress
 The Causes of Stress
 The Effects of Occupational Stress
 Strategies to Cope with Stress
Organizational Behavior

Factors such as increasing competition, corporate restructuring, and downsizing have


compelled employees to work longer hours to meet their deadlines. Organizations also
try to generate more output from fewer people in a shorter span of time. This trend
pressurizes employees leading to negative consequences such as burnout, high
turnover, aggression and stress. Work stress has become the latest corporate catchword
and is a reason for genuine concern. Forbes magazine estimates that the American
industry will lose $300 billion per annum due to absenteeism, health costs, and stress
management programs. Some of the symptoms of stress are headaches, obesity,
insomnia and depression. These symptoms have an effect on employee performance.
In order to understand the implications of work-related stress, we must first understand
the meaning of stress. We will then analyze the various causes of work-related stress.
Extra-organizational, organizational, group or individual factors may cause stress.
Finally, we will discuss various individual and organizational strategies to cope with
stress.

DEFINITIONS OF STRESS

Completing a project on time, preparing a complicated report, taking a final exam, and
giving a formal speech are some situations where an individual may find himself under
stress. Many behavioral experts agree that stress is an individual’s response to a
physical, psychological or emotional stimulus.
Gregory Moorhead and Ricky W.Griffin define stress as “a person’s adaptive response
to a stimulus that places excessive psychological and physical demands on him or her.”
According to this definition, stress is induced by a stimulus known as a stressor.
Stressors may be physical or psychological in nature, and place excessive demands on
the individual. People adjust or adapt to them in a variety of ways.
Stephen P Robbins defines stress as “a dynamic condition in which an individual is
confronted with an opportunity, constraint, or demand related to what he or she desires
and for which the outcome is perceived to be both uncertain and important.” We will
discuss about job stress since it has special relevance in the organizational context.
T.A. Beehr and J. E. Newman define job stress as “a condition arising from the
interaction of people and their jobs and characterized by changes within people that
force them to deviate from their normal functioning.”

General Adaptation Syndrome


Dr. Hans Selye, an endocrinologist, was also a pioneer in stress research. His research
highlighted that stress is a constant feature of our daily lives. His most important
contributions to the field of organizational behavior are the concepts of ‘eustress’ and
‘distress’ and the phenomenon of the ‘general adaptation syndrome’. Although stress is
generally viewed as a negative emotion, Seyle believes that it can be both positive and
negative. He coined the term eustress to describe the positive side of stress. The word
eustress is derived from the Greek word ‘eu’, which means ‘good.’ Positive stress is a
pleasant form of stress caused by desirable stimuli. Some examples of positive stress
are excelling in an examination, or being offered a job promotion, etc. Positive stress
enhances a person’s performance. On the other hand, negative stress or distress can
cause mental agitation. For example, financial troubles and heavy workload tend to
make a person agitated. Prolonged exposure to negative stress can have many harmful
effects on the individual.

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The general adaptation syndrome (GAS) refers to the defensive reactions designed to
help a person cope with any environmental demand perceived as threatening.1 A person
may feel stressed out due to an illness, excessive work pressure, tight deadlines or bad
working conditions. The GAS outlines three stages in coping with such stress
situations. They are the alarm stage, the resistance stage, and the exhaustion stage. In
the alarm stage, the external stressor causes biochemical and physiological changes in
the body, such as an increase in the secretions of the adrenal and the pituitary glands,
increased heartbeat, blood pressure, and rate of respiration. These changes are triggered
in the body to meet the challenges posed by the stressor. On prolonged exposure to a
stressor, the GAS moves to the second stage, i.e. the resistance stage. In this stage, the
person tries to cope with the stressor or flee the stressor. If the person opts to cope with
the stressor, he will devise a plan to complete the task assigned to him. If he opts to
flee from the stressor, he will delegate the task to someone else. However, if the person
is exposed to the stressor for a longer period, he feels drained and reaches the final
stage of exhaustion. In this stage, the individual is depleted of all energy and may be on
the verge of a breakdown.
When a person does not want to perform a particular activity or is unable to do it well,
he may feel exhausted and frustrated. Prolonged exposure to such a situation may
result in either depression, nervous breakdown, or burnout.

THE CAUSES OF STRESS

There are many causes of stress. Stressors could be present either within the
organization or outside it. In addition to this, individuals could also feel stressed out
due to the influence of various groups that they come in contact with and also due to
certain factors present within themselves. The various causes of stress are shown in
Figure 8.1.

Extraorganizational Stressors
Since organizations are open systems, an employee is affected not only by the things
happening within the organization but also by those which occur outside it. The various
extraorganizational stressors include social and technological changes, family
problems, relocation to a new place, economic and financial conditions, race, class,
residential and community conditions. Let us understand the effect of these
extraorganizational stressors on people.
Societal patterns and technological changes have influenced the lifestyles of people.
These changes have had an impact on their professional lives as well. The advances in
medical science have reduced the threat of many illnesses, increased the life span of
individuals, and, improved the quality of life in general. However, an increase in
urbanization, along with accompanying elements such as time pressures,
overcrowding and fast lifestyles, have reduced the general well-being of individuals
and increased their chances of experiencing stress.
Another stressor that has a significant impact on the employees is their family
problems or crises. Research also states that stress levels are higher in families in
which both the husband and wife work. Relocating to a new place can also act as a
potential stressor. The employee may be stressed out because he has to look for a
suitable school for his children, find a home etc. Adverse financial conditions may also
cause stress amongst employees. At times, employees may need to take up a second
job to make ends meet. Consequently, their primary jobs may suffer due to lack of rest
or inability to spare time for recreational activities and family.

1 Curtis W. Cook, Phillip L. Hunsaker and Robert E. Coffey, Management and Organizational
Behavior, 2nd edition (USA: Irwin, 1997) 498.
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Organizational Behavior

Figure 8.1: Categories of Stress

Extraorganizational Organizational Group Stressors Individual


Stressors Stressors  Absence of Stressors
 Social &  High-stress group  Role conflict
Technological jobs cohesiveness & ambiguity
changes  Job role  Absence of  Type A
 Family problems  Poor working support from characteristics
 Relocation conditions group members
 Locus of
 Economic &  Organizational  Conflicts control
Financial politics related to the
group  Learned
conditions  Poor work helplessness
 Race & Class relationships
 Self-efficacy
 Residential &
Community  Psychological
conditions hardiness

RESULT IN JOB STRESS IN THE INDIVIDUAL

Events that cause sudden changes in life, such as the death of a loved one, a sudden
loss of job, an unexpected breakup in a relationship, etc., also cause employee stress.
While change is inevitable, research has proved that sudden changes in life patterns
affect people more stressfully than gradual ones. Usually, people find it difficult to
concentrate on work soon after a major change occurs in their lives.
Apart from these stressors, certain sociological variables such as race, sex, and class
also tend to induce stress in employees. Employees who belong to minority groups
tend to experience stress because they may feel socially isolated. Similarly, women
holding professional positions feel more stressed out than men because they may feel
discriminated against since their male counterparts get better opportunities despite
possessing lesser talent. Further, women also feel stressed out because they have to
manage both work and family. The social level, region and community to which
employees belong also play an important role in determining their stress levels. For
example, the lack of neighborliness in huge apartment complexes or the level of noise
pollution in a particular region may affect an individual’s stress levels.

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Stress Management

Figure 8.2: Macro-level Organizational Stressors

ADMINISTRATIVE POLICIES AND STRATEGIES


Downsizing
Competitive pressures
Merit pay plans
Rotating work shifts
Bureaucratic rules
Advanced technology

ORGANIZATIONAL STRUCTURE AND DESIGN


Centralization and formalization
Line-staff conflicts
Specialization
Role ambiguity and conflict JOB
No opportunity for promotion STRESS
Restrictive, untrusting culture

ORGANIZATIONAL PROCESSES
Tight controls
Only downward communication
Little performance feedback
Centralized decision making
Lack of participation in decisions
Punitive appraisal systems

WORKING CONDITIONS
Crowded work area
Noise, heat, or cold
Polluted air
Strong odor
Unsafe, dangerous conditions
Poor lighting
Physical or mental strain
Toxic chemicals or radiation

Source: Fred Luthans, Organizational Behavior, 8th edition (India: Irwin McGraw-Hill,
1998) 333.

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Organizational Behavior

Organizational Stressors
Certain macro-level aspects of the organizations also act as potential stressors. These
aspects are distinct and differ from organization to organization. Fred Luthans, who has
written on organizational behavior, has described various macro-level organizational
stressors which can have an effect on the individuals. Some of these stressors such as,
administrative policies and strategies, organizational structure and design,
organizational processes and working conditions have been shown in Figure 8.2.
Other organizational behavior writers like Curtis W. Cook, Phillip L. Hunsaker, and
Robert E. Coffey state that various organizational stressors include:
 high-stress jobs
 job role
 poor working conditions
 organizational politics
 poor work relationships
High-stress jobs are those in which people have hectic work schedules and major job
responsibilities. Such employees are constantly under pressure to perform well and if
they are unable to do so, they may have to face dire consequences. Some examples of
people who work in high-stress jobs are sales managers, project leaders, foremen, etc.
A person may also feel stressed if his job role has certain unpleasant characteristics
such as work overload, insufficient amount of work, role ambiguity, role conflict and
responsibility for the work of others. Work overload occurs when a person is expected
to do much more than what he is capable of doing or accomplish a lot in a rather short
timeframe. Hectic schedules and constant pressure are the most common factors that
cause stress in upper and middle-level managers.
People also feel disgruntled when they do not have enough tasks to keep them busy, or
if their skills and talents are underutilized. Under-utilization of a person’s skills causes
various symptoms of stress, such as fatigue, frequent absence, susceptibility to physical
injury, apathy, and aloofness. Employees experience role ambiguity when they are
unclear about what they are supposed to do, the results expected of them, and how they
are supposed to achieve these results. Managers often experience role ambiguity
because their tasks are not specified. Moreover, they are also not certain about how
they should perform a task because they have a great deal of freedom in choosing their
methods of operation. When a person’s duties or responsibilities conflict with or
contradict each other, he may experience role conflict. Middle-level managers
commonly experience this because they are torn between the demands of the top-level
management and the justifications of lower-level managers. An employee may also
face role conflict when his superior asks him to compromise on legal or ethical
principles in order to perform some task. Finally, a person is more likely to feel
stressed out if he is responsible for the performance of other employees. Therefore,
people in managerial positions would be exposed to greater levels of stress and are
likely to have disorders such as ulcers and high blood pressure.
Working conditions also act as potential stressors. Extreme heat, noise, and
overcrowding can result in stress amongst employees. Similarly, if the workplace is not
properly designed it can create problems for employees as it may either allow no
privacy at all or isolate employees altogether. Other potential workplace stressors are
improper lighting, improper equipment and inadequate work surfaces.

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Stress Management

Another major organizational stressor is the political climate of the organization.


Organizational politics may increase the competition among various groups of
employees and lead to power struggles between them. Many studies carried out across
different organizations revealed that approximately 60 percent of the workforce felt
that the most stressful aspect of their job was their poor relationship with their
immediate superior. Apart from this, bad work relationships with co-workers can also
result in stress. In addition to these problems, women also face other problems such as
sexual harassment, discrimination, the inequity in pay scales, balancing work and
family demands, and role overload.

Group Stressors
Groups tend to have a great impact on the behavior of their members and others who
come in contact with them. Groups can also cause stress. The various group factors
that can act as potential stressors are given below:
Absence of group cohesiveness
It is very important for an employee to feel he is a part of the group. He may feel
stressed out if the task execution is designed in such a way that it does not encourage
group cohesiveness. Likewise, lack of cohesiveness may also occur if the other group
members exclude an employee or if the manager prohibits an employee from being a
participant in group activities. Such exclusion from a group can cause the employee to
feel highly stressed.
Absence of support from other members
Group members count on the support of others within the group. In the absence of such
support, they have no one to share their problems. Consequently, they may bottle up
their feelings and experience high levels of stress.
Conflicts related to the group
Many kinds of conflicts may exist within a group. A group member may experience a
conflict between his personal goals and values and those of the group. Besides such
conflicts, there may be differences between group members and also among different
groups. These conflicts can result in high levels of stress for individual members of the
group.

Individual Stressors
Since each individual is unique, the same stressor will not produce similar reactions in
all individuals. Fred Luthans suggests that a person’s disposition as well as the
demands of the situation are responsible for the way a person perceives stress.
Individual stressors also include role conflict and ambiguity, and various aspects of the
individual’s disposition such as Type A personality patterns, personal control, learned
helplessness, self-efficacy and psychological hardiness. These stressors have been
explained at length in the subsequent pages of this chapter.

Role conflict and ambiguity


An individual is generally a member of various groups such as work group, family,
community, recreational club, etc. He plays a variety of roles in different groups as
well as balances the various roles he plays. Sometimes, these roles place conflicting
demands on the individual. For instance, a person might not be able to devote enough
time to his family because of work pressures, or his work may suffer due to problems
at home. In either of these cases, the person feels pressurized and stressed out.
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Organizational Behavior

Role ambiguity occurs when people do not have complete information or knowledge
about task performance. Lack of proper training, poor communication between
superior and subordinates, and intentional withholding of information from peers or
subordinates are the most common causes for role ambiguity. Role ambiguity is a
severe problem in modern organizations, especially those in which employees have
been laid off. In such a situation, people are not sure what their duties are, whom they
are accountable to, and whether they are performing well or not.

Type A characteristics
Meyer Friedman and Ray Rosenman first categorized individuals into two profiles
based on their personality characteristics. These are known as Type A and Type B
personalities. These personality types exhibit very different behavior patterns. The
Type A individual is very competitive, highly involved in his work, aggressive,
motivated, ambitious and very conscious of time. They have a strong desire to achieve
the maximum possible in the shortest possible span of time. At the other extreme, Type
B personalities have a relaxed and balanced approach to work and life. They have
confidence in their abilities. They are not very competitive and show lesser dedication
towards their work as compared to Type A individuals. Since they have a relaxed
approach to life, they cannot comprehend the urgency of tasks and prefer to carry out
their work at a steady rate.
Generally employees with Type A characteristics are prone to high levels of stress
because they tend to have heavy workloads, put in long hours of work, and are under
constant pressures to meet deadlines. They generally carry work home, and may even
work on weekends. Type A individuals strive to constantly achieve high standards,
which they set themselves. They have little patience with the mediocre efforts of their
colleagues. Consequently, they are often labeled as perfectionists. Studies by Freidman
and Rosenman reveal that employees who have high Type A characteristics are
vulnerable to serious health disorders such as coronary heart disease. However, this
observation has not been substantiated with follow-up research. On the contrary,
another study has revealed that Type A individuals are not likely to have heart disease.
The explanation given by these researchers is that since Type A individuals are very
forceful by nature, they are likely to seek treatment for their ailments at an early stage
and precisely follow the doctor’s instructions.

Locus of control
The degree of control that an individual exercises over his work environment is known
as the locus of control. Individuals who possess an internal locus of control believe that
they have control over their environment. Conversely, individuals who possess an
external locus of control believe that they have no control over their environment. In
other words, if an individual feels that he has no control over his job (an external locus
of control), he is more likely to feel stressed out. Thus an employee can be given
control over his work environment by allowing him to participate in the decision-
making process. Consequently such control will succeed in reducing his stress levels.
Various studies have shown that employees’ perception of control and stress are
interrelated, and this affects both the physical and psychological well-being of a
person. A study carried out by medical researchers at Cornell University revealed that
employees in the lower hierarchical levels of the organization who felt that they had no
control over their jobs were prone to developing high blood pressure. Thus it can be
stated that people with internal locus of control are less vulnerable to stress than those
with external locus of control.
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Stress Management

Learned helplessness
Martin E P Seligman and his colleagues conducted experiments on dogs to learn the
relationship between fear and learning. Instead they accidentally discovered the
phenomenon of ‘learned helplessness.’ In these experiments, the dogs were initially
subjected to a mild electric shock when a bell was rung but they could not escape
because they were restrained in a hammock. The researchers believed that the dogs
would associate the bell with the electric shock and learn to escape or display some
other behavior to avoid the shock. In the next stage of the experiment, they placed a
dog which had been exposed to electric shocks in a shuttle box with a low fence that
divided the box into two compartments. Initially, the researchers rang the bell and
expected the dog to jump over the fence to escape the shock. However, this did not
happen; the dog just lay in its place. Even when the dog was subjected to a small
electric shock, it did not try to escape. The dog had therefore learned to become
helpless although it could have easily jumped over the fence to escape the shock. This
theory of ‘learned helplessness’ can be applied to human behavior as well. It explains
the behavior of certain individuals who become helpless in a stressful situation and do
not attempt to change things. They learn to accept certain stressors as a part of their
work life, and believe that nothing they do can change or alter these stressors.
Researchers found that people were likely to experience such helplessness if they could
not control their work situations. This was especially true if the causes of lack of
control were based on their personal characteristics, were stable and lasting, and were
universal in nature. However, the concept of learned helplessness and its relation with
sense of control has to be studied to understand stress better and to develop
mechanisms to deal with it.

Self-efficacy
According to Albert Bandura, self-efficacy is defined as “the self-perceptions of how
well a person can cope with situations as they arise.”2 People with high self-efficacy,
i.e., people who consider themselves capable, usually are able to cope better than
people with low self-efficacy, i.e., the ones who think they are not capable. In fact,
there is a fairly clear relationship between self-efficacy and performance. It has been
observed that people with high self-efficacy tend to persevere and do a good job
without being stressed out. They remain calm even in difficult situations and have full
confidence in their ability to achieve results.

Psychological hardiness
Psychological hardiness refers to a person’s ability to cope with stress. An individual’s
reactions to stress are quite varied. Some people are able to deal with high levels of
stress in an easy, off-hand manner while others may become very nervous and harried
when faced with minor stressful situations. Therefore, people with high levels of
psychological hardiness have the ability to cope with a tremendous amount of stress.
They have an internal locus of control, i.e., they believe that they are the masters of
their own fate. They are also strongly committed to their goals and receptive to change.
On the other hand, people with lower levels of hardiness are nervous and prone to
stress-related illnesses.

2
Albert Bandura, ‘Self-Efficacy Mechanism in Human Agency,’ American
Psychologist, 37 (1982), 122-147.
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Organizational Behavior

Exhibit 8.1
Managing Behavior to Combat Stress
In the modern corporate world, heavy workload accompanied by impossible deadlines, pressurize
people to achieve more and more within a short span of time. Consequently, they are always on the
run and tend to suffer from burnout. In order to manage stress, people can change their behavioral
pattern so that they are not negatively affected by stress. Individuals can use a few simple steps to
change their behavior so that they can manage stress effectively. These are described below:
1. Making time for leisure: Many people consider leisure time to be a reward for having
completed their tasks. On the contrary, leisure time is a necessity, because it helps in reducing
stress and facing tasks with renewed vigor. People can take up a number of activities to fill their
leisure time. They may go for a walk, listen to music, play games, or simply relax. These
activities make a person feel rejuvenated. However, such activities would serve no purpose if
people were to rush through them. In order to stay healthy and de-stress oneself, one should take
some time off for leisure.
2. Scheduling priorities: It is not humanly possible to do everything. When a person commits
himself or herself to a number of activities, he or she tends to be harried, nervous and is not able
to give his/her best for that particular activity. Therefore, people should work out their priorities
and concentrate on doing those tasks that are very important for their performance.
3. Delegating tasks to others: Certain low-priority tasks can be delegated to other people. This
reduces the stress levels of employees and ensures that they are focusing on the tasks that are
important.
4. Focusing on one thing at a time: People sometimes tend to combine various activities. They try
to carry on a conversation on the phone, while typing a mail or checking a report. This may give
them a sense of satisfaction as they feel that they are making optimal use of their time. However,
in the long run, people feel worn out, fatigued, and overworked. Therefore, focusing on one
thing at a time is more productive and helps a person stay stress-free.
5. Understanding one’s body rhythms: Every person has a prime time during the day, when his
energy levels are at a peak. During such peak periods, an individual should carry out those
activities which are demanding and challenging. The more mundane activities should be
scheduled for those times when a person’s energy levels are the lowest. Thus, an individual can
reduce stress by scheduling his daily activities to match his peak energy periods.
6. Turning down requests occasionally: A person may also feel unduly stressed because he is
overburdened with activities and commitments. At times, it therefore becomes necessary for a
person to refuse to undertake certain activities, which will add to his already heavy workload. He
can also share the responsibilities of a particular project with a colleague if it is not possible to
refuse the project altogether.
7. Identifying the source of stress: People should be able to identify the source of stress so that
they can deal with it effectively. For instance, they may be asked by their superiors to do many
things simultaneously. Instead of panicking they can ask their superiors which of the tasks needs
to be completed first and then tackle them accordingly. Thus, when people are able to pinpoint
the causes of worry and tension, they are in a better position to deal with them effectively.

Adapted from “Tame that Stress,”


<http://66.34.115.97/oite/atf2002/catalogue/exhibiton_catalogue_text02.htm>

THE EFFECTS OF OCCUPATIONAL STRESS

Various research studies have revealed that mild stress, such as a transfer or working
under a different supervisor can improve the performance of individuals. Thus low

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Stress Management

levels of stress have a positive influence on employees, enabling them to think


creatively and look for innovative ways to do things. Mild stress also energizes
employees. Consequently, they are more active, offer minimal resistance to change and
perform well in their jobs. In certain occupations, such as in sales or creative fields,
low levels of stress are beneficial and provide the necessary impetus for enhanced
performance. However, stress may not always prove to be beneficial. High levels of
stress may have an adverse effect on the performance of an individual. The
dysfunctional effects of high stress levels can manifest themselves in various forms,
i.e., the individual may have either physical, psychological, or behavioral problems due
to high stress levels. These problems have been discussed below.
Physical Problems
Since the earliest research related to stress had been carried out by doctors and
specialists in healthcare, they concentrated on the physiological effects of stress on
individuals. Their studies revealed that the early symptoms of stress are
headaches, increase in blood pressure, sweating, hot flushes, loss of appetite,
gastrointestinal disorders, and fatigue. Prolonged exposure to high stress levels can
often result in severe physiological disorders, such as high blood pressure and high
levels of cholesterol, ulcers and heart diseases, which may seriously affect the health of
employees.
Many doctors are of the opinion that stress causes approximately 50 to 75 percent of
illnesses such as ulcers, arthritis, and allergies. Studies also reveal that one of the most
important illnesses related to stress is the coronary heart disease, which is responsible
for a high number of deaths. As the incidence of stress-related illnesses increase,
organizations are losing huge sums of money on resultant problems such as
absenteeism and healthcare costs. According to the American Institute of Stress,
approximately 1 million employees do not come to work because of stress related
problems. Therefore, organizations should try to bring down the stress levels of
employees because the physiological problems related to stress can affect the financial
health of the organizations in the long run.

Psychological Problems

Besides physiological problems, high stress levels can also cause various psychological
problems in people. High levels of stress can make a person feel angry, anxious, bored,
depressed, dissatisfied, tense, and irritated. This can result in poor performance at the
workplace because the individual may not be able to take decisions or focus on the
tasks at hand. Moreover, he may easily get distracted and may not be able to
concentrate on things for extended periods.
Employees who are constantly exposed to high levels of stress tend to become
aggressive or hostile. They may even resent their supervisors or try to sabotage
organizational activities. Psychological problems, in general, lower the self-esteem of
employees, resulting in poor performance and job dissatisfaction.

Behavioral Problems
High levels of stress may change the behavioral patterns of individuals. They may
display any of the following symptoms – sleep disorders, overeating, loss of appetite,
increased smoking or alcohol consumption, use of addictive substances like drugs, rude
behavior, and nervousness in social interactions such as rapid speech and fidgeting.
Behavioral changes can affect a person’s productivity. However, in extreme cases high

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stress levels may result in a person becoming violent at the workplace. In such cases,
he may either physically assault or even kill his colleagues and superiors.
Various researchers have tried to understand the relationship between stress and
performance. They feel that a moderate amount of stress is necessary to improve a
person’s performance. If the person has a stress-free job, he may become bored and
apathetic. If a person faces an optimal level of stress at work, he tends to be more
active and focused in his tasks. After reaching the optimal level, if a person is exposed
to continuous stress over a long period, he may not be able to perform
effectively. Constant exposure to high levels of stress drains a person of energy. A
person’s performance can be seriously impaired by high exposure to stress. For
example, a student may not be able to remember certain topics even though he has
learnt them extremely well. This relationship between stress and performance is
depicted in the form of an inverted U-curve as shown in Figure 8.3.

Figure 8.3 Stress and Performance

High
Too little stress Optimal Stress Too much stress
Low performance High Performance Low performance
Performance

Low Stress Level High

Boredom High motivation Panic


Apathy High energy Collapse
Lethargy Alertness Indecisiveness

Source: Curtis W. Cook, Phillip L. Hunsaker and Robert E. Coffey, Management and
Organizational Behavior, 2nd edition (USA: Irwin, 1997) 515.

STRATEGIES TO COPE WITH STRESS

It is not possible to eliminate stress altogether from everyday life. However, every
individual can learn to manage stress in a productive and satisfactory manner. Various
methods can be used to combat stress at both the individual and the organizational
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Stress Management

level. At either of these levels, stress management follows three basic steps. The first
step in stress management is understanding that stress can have a negative effect on
both a person’s behavior and his performance at work. Therefore, the management as
well as individual employees should realize that poor performance, irritability,
aggression, absenteeism, etc. are all symptoms of a person undergoing stress. The
second step in stress management involves identifying those stressors which affect the
individual’s behavior and performance at work. The final step, which is the most
important, involves taking some constructive measures to help the individual cope with
stress effectively. There are two methods that people as well as organizations can use
to manage stress effectively. In the first method, they should identify the stressors
responsible for their negative symptoms, and either eliminate or modify these stressors
so that the resultant stress is manageable. Such strategies, which try to eliminate or
modify the stressor are called problem-focused strategies. The other way to cope with
stress is by teaching people how to control their emotions so that they are not
negatively affected by stress. Such strategies are termed as emotion-focused strategies.
In the next few pages, we shall discuss some individual and organizational strategies to
cope with stress.

Individual Strategies to Cope With Stress


Individuals are responsible for their reaction to the stress that they face at work.
Therefore, they can do a number of things to cope with it. They can learn to manage
their time well, seek help from others, and, if everything else fails, move onto another
job. Alternatively, they can use various other stress busters such as relaxation
techniques, physical exercise, psychological strategies, and recreation.

Problem-focused strategies
As discussed earlier, these strategies help an individual cope with stress by identifying
the source of stress and determining the course of action that will reduce the stress
levels. For example, suppose an employee is assigned a task which he is not very clear
about and he has to do it within a short span of time. Consequently, he is bound to feel
stressed out. However, feeling tense or panicking will not help him. Instead, he can
discuss his problems with his superiors, and request for help in the form of time,
resources, etc. By doing so, the employee feels relieved and is able to perform his job
in a more effective manner. The most commonly used problem-focused strategies are:
time management, requesting others for help and shifting to another job.

Time management
A major reason for stress among individuals is poor time management. People become
anxious, frustrated, and even panicky when they are not able to manage their time
effectively. Therefore, people learn how to manage their time well so that they can
complete their tasks and meet their deadlines. Some basic principles of time
management are:
 deciding on a daily basis the activities to be carried out along with the time frame
for completing them.
 prioritizing the activities on the basis of their urgency and importance.
 carrying out the important activities first.
 taking care of the demanding tasks during that part of the day when one is very
energetic and alert.
Time management can thus ensure that a person is able to do his job well without
feeling stressed out.

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Organizational Behavior

Exhibit 8.2
Various Techniques for Relaxation
Stress has become an essential feature of daily life. It is important for a person to find out ways of
relaxing so that he does not get worn out in the long run. Relaxation techniques reduce blood
pressure and pulse rate. They also relax the muscles and calm a person’s frayed nerves. The response
to relaxation techniques is highly variable and differs from person to person. A variety of relaxation
techniques are in vogue today, the most popular being deep breathing exercises, muscle relaxation,
meditation, biofeedback, and massage therapy. Although, these techniques do not ensure that a
person will be totally relieved of stress, they can prove very effective in helping an individual control
his emotions and reactions to stressful situations. A combination of various relaxation techniques can
prove to be very effective in helping a person deal with stress effectively. These relaxation
techniques are discussed in detail below.
It has been observed that when a person is under stress, his breathing becomes very rapid. In such
cases, inhaling deeply can have a calming effect on the individual. Deep breathing exercises relax
the individual and therefore prove beneficial in a stressful situation. A similar technique for reducing
tension is muscle relaxation. This is generally used in combination with deep breathing exercises to
cure a person of sleeplessness. In these exercises, a person lies down in a comfortable position and
concentrates on each part of the body, beginning with the head and slowly progressing downward.
First he tenses the muscles and then slowly relaxes them. In the initial stages of trying out these
exercises, one can ask a friend or family member to check out the level of tension in the body. This
can be done by lifting an arm and dropping it. If a person has been able to relax his muscles, the arm
would drop freely. Relaxation techniques are very effective stress relievers and can be perfected
through practice.
Meditation is another important relaxation technique, which helps calm the mind. A person who has
mastered the art of meditation can lower his levels of stress hormones and experience a general
mood upliftment. Various forms of meditation are practiced by individuals. These include
mindfulness meditation, transcendental meditation, and mini-meditation. In mindfulness meditation,
a person focuses on his breathing, and shifts his thoughts away from other matters. Thus, a person
tends to feel relaxed and calm. Transcendental meditation is another technique that uses constant
chanting of certain words such as ‘OM.’ According to some studies, the effect of mood elevation
that accompanies this form of meditation is similar to that of exercise. Mini-meditation tries to make
a person more aware of his immediate environment and thereby, redirects his thoughts from his
worries and anxieties. It involves undertaking a routine activity in solitude and being more conscious
of different sensory experiences, such as colors in the room, sounds in the vicinity, etc. This
technique makes a person aware of the simple things of life, which add beauty to it. Experts
recommend a 20 minute meditation session everyday to calm and relax the mind.
Biofeedback is another relaxation technique that detects changes in body tension by means of
galvanic skin responses. In this technique, electrodes are attached to the head of a person who is
allowed to relax using any of the above-mentioned techniques. The electrodes measure the brain
waves and detect those waves which correspond to a state of deep relaxation. When such waves, i.e.,
alpha waves are detected, an audible signal is emitted. The process is repeated and people soon begin
to relate the signal with a relaxed state of mind. Through this process, people can learn how to
achieve a state of relaxation.
Massage therapy is very popular in many countries. Massage improves blood circulation and makes
a person feel alert and active. Various forms of massage therapy are available these days. They are
being used as effective stress-busters.
All the above-mentioned techniques have proved to be very efficacious in reducing stress levels of
individuals. However, it should be realized that responses to these relaxation techniques can be very
subjective. Some people may respond well to meditation, while others may not. Moreover, these
techniques are not a solution for stress, they only help in managing an individual’s response to
stressful situations.

Adapted from “What are Some Specific Stress Reduction Methods?” Nidus Information Services,
2001, <http://www.ucdmc.ucdavis.edu/ucdhs/health/a-z/31Stress/doc31methods.html>
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Stress Management

Requesting others for help


A person can ask his colleagues or superiors for help in dealing with certain work-
related problems. Such support from peers and superiors goes a long way in reducing
the stress levels of employees. Alternatively, he could request the human resources
department to provide him with additional training. This will help him to update his
knowledge and skill set thereby enabling him to deal with the stressors effectively.

Shifting to another job


At times, employees may not be able to bring down their stress levels despite their best
efforts. In such cases, it may be in the best interests of the individual to either change
the nature of his job or seek employment in another organization. However, before
taking this extreme step, the employee should ask the management to change his job
role if the stress is caused by various job-related problems. If this is not possible, the
employee can look for suitable options in other organizations.

Emotion-focused strategies
Individuals can use emotion-focused strategies to reduce stress to manageable levels.
These strategies are best employed when problem-focused strategies fail to reduce the
levels of stress. These can also be used in cases where people are in high-stress
occupations and they have to get accustomed to the hectic schedules. Emotion-focused
strategies help bring down stress to healthy and comfortable levels by modifying the
way people react to certain stressful conditions. The most common emotion-focused
strategies include relaxation, exercise, psychological strategies, recreation, and
companionship. These are discussed in detail below:

Relaxation
Individuals can reduce their tensions by means of certain relaxation techniques like
meditation, hypnosis, and biofeedback (for more details, see Exhibit 8.2). The purpose
of these relaxation techniques is to make an individual oblivious to his surroundings
and help him achieve a sense of inner peace and tranquility. According to Herbert
Benson, one can feel relaxed by sitting or lying down in a comfortable position in a
quiet place and then focusing on one’s breathing for around 20 minutes. These
techniques lower muscle tension, heart rate, and blood pressure. Various studies
conducted all over the world have revealed that the use of relaxation techniques tends
to improve employee performance and reduce absenteeism rates. In general, it has
been observed that using relaxation techniques helps bring down anxiety, depression,
and hostility. It also allows individuals to cope with stress in a more effective manner.

Exercise
It has been medically proven that physical exercise such as walking, aerobics, jogging,
swimming, cycling, tennis, etc. are very effective in bringing down stress levels. These
activities not only provide a pleasant diversion from the routine grind of daily life, they
also keep a person fit and active, both physically and mentally. Therefore, people who
exercise regularly experience lower levels of anxiety, depression, and stress than those
who do not exercise at all.
Psychological strategies
Certain psychological strategies, such as increased self-awareness and perceptual
adaptation, are used to control the effect stress has on an individual. Increased self-
awareness refers to a person being more aware of how he behaves in his job and in
different social situations. This will make a person perceptive to early signs of stress
and thus help him to manage stress effectively. Moreover, heightened self-awareness
prompts a person to seek help when he is overburdened with work.
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Organizational Behavior

Perceptual adaptation is a strategy that helps an individual to deal effectively with


those stressors on which he either has no control or is unable to eliminate totally. An
individual can reduce tension by visualizing the worst possible outcome of any
situation, and by questioning his ability to cope up with such a situation. This simple
exercise often reduces stress because the individual realizes that even in a worst case
scenario, he can still survive and manage the disastrous situation.

Recreation
If people work incessantly without respite, they are likely to feel stressed out.
Everyone needs hobbies and recreation to take their minds off work and help them
relax and enjoy themselves. Hobbies and recreational activities are a pleasant diversion
from the monotony of daily activities. Depending on their tastes, individuals can
engage in diverse recreational activities and hobbies like reading, dancing, horse-
riding, singing, etc.

Companionship
Loneliness tends to make people feel stressed out. In general, people who have close
and supportive relationships with their families and friends tend to experience lower
levels of stress. Therefore, an individual should look for companions in whom he can
confide his problems and fears. This provides an outlet for his frustration and despair
and reduces his stress levels.

Organizational Strategies to Cope With Stress


Organizational strategies are designed by the management to reduce work-related
stress in employees. Studies have revealed that stress incurs huge costs for the
organization as it results in health disorders, increased absenteeism, and high turnover
rates. Various organizational-level strategies to cope up with stress are discussed
below.

Problem-focused strategies
Organizations can make use of certain problem-focused strategies to eliminate stress
from the work environment or help people cope with it. These strategies are
redesigning the job, proper selection and placement, training, team building and
providing day care facilities.

Redesigning the job


Organizations can carry out a job analysis to determine the reasons for stress and the
problems caused by it. Job analysis can also help in determining if there is role
ambiguity or conflict, if employees are overloaded with work or have too little work,
and whether the working conditions are good or not. Thus a job analysis can identify
those areas where job enrichment would improve performance. This helps the
organization understand what the job requires from an employee and whether a person
has the necessary abilities to fit into that job. Further, the organization can consider
giving their employees the independence to work in flexible shifts so that they can
strike a balance between their personal and professional commitments.

Proper selection and placement


The recruitment and selection policies of an organization should clearly specify what
the educational qualifications, experience, skills and abilities that an employee should
possess to handle a particular job. This will ensure employee-job compatibility.
Personality factors can also be considered to determine whether a person will suit a
particular job or not. For example, a customer service representative should have an

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Stress Management

outgoing, friendly and helpful personality. Employees who suit their job profiles can
handle its complexities without much stress.

Training
Proper training reduces work-related stress among employees. It ensures that
employees will develop the necessary skills to perform their jobs effectively. A
training program should not only develop employee skills, it should also clearly
specify their duties and responsibilities. A clear job description reduces role ambiguity
and conflict.

Team building
The rigid and impersonal work environment prevalent in many organizations is a major
cause of high levels of stress among employees. Organizations can use the team-based
approach to help employees cope with stress related problems. Team building enhances
camaraderie within the team and helps employees cooperate with one another to
achieve organizational goals. Thus it helps reduce the levels of work-related stress
among employees.

Exhibit 8.3
Innovative Measures to Reduce Stress and Improve Productivity
Long hours of work, hectic schedules, and constant pressure to meet deadlines sometimes make the
employees feel stressed out. If stress levels become too high, the productivity of the employees may
decrease and consequently, the performance of the organization may also get affected. Therefore, the
management must provide opportunities for employees to enjoy their work so that they don’t get
burned out. Various companies have adopted different practices aimed at improving the morale of
employees and making them more productive.
For instance, Max New York Life has created a vibrant workplace for its employees, which
motivates them to come to work everyday. The company has adopted various unique initiatives to
show its concern for its employees. For example, when the company started its operations in India,
many of the employees were under tremendous work pressure. To show that the company was
genuinely concerned about the health and well-being of its employees, each employee was given a
salad basket everyday. The company encouraged its employees to showcase their creativity by
decorating their workstation. In fact, prizes were announced for the most artistically done
workstations. The company also designed its cafeteria in a unique manner to ensure that employees
could relax and take a break from their routine activities. The cafeteria was equipped with a
television, table-tennis, and carom boards. Employees could use these facilities at any time of the
day. On Friday evenings, the cafeteria was turned into a dance floor for the employees and their
families.
The company also has a Life Fun and Youth Club, called Lyfun, which organizes various programs
such as quizzes, picnics, movie shows, etc. for the employees. These programs use informal
techniques to keep the employees in touch with the latest trends in their relevant fields. The company
is also planning to introduce some stress management sessions so that the employees can cope with
the pressures of demanding jobs. All the above initiatives make the employees feel less pressurized
and help them let off steam, thereby making them more productive and effective.

Adapted from Preeti Mehra and Ajita Shashidhar, “Dull at the Workplace? No More!,” The Hindu
Business Line Online edition, August 19, 2002, The Hindu Group of Publications,
<http://www.blonnet.com/life/2002/08/19/stories/2002081900100100.htm>

Providing various day care facilities


Employees’ preoccupation with family problems increases the chances of errors and
accidents and causes stress among employees. Therefore, many organizations provide
in-house facilities in which employees can take care of their children and their elderly
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Organizational Behavior

parents or relatives. For example, Texas Instruments conducts a 10-week summer


camp for employees’ children at its Dallas headquarters. This summer camp was
initiated in 1995 and it includes weekly field trips to various locations. The Motorola
office at Bangalore, which is in the process of being built, includes a child-care center
to reduce the anxiety of employees whose children would otherwise be alone at home.

Emotion-focused strategies
When organizational stressors cannot be totally eliminated or brought down to a
manageable level, organizations use emotion-focused strategies to help their employees
cope with high stress levels. Some of these strategies are open
communication, employee assistance programs, mentoring, wellness programs, and
personal time off.

Promoting open communication within the organization


Employees are likely to feel more stressed out when they are unsure about what is
happening within the organization. Ambiguity leads to the percolation of rumors within
the organization and this may cause anxiety and tension among the employees.
Therefore, employees should be kept informed about changes taking place within the
organization and how they are likely to be affected by these changes. Further,
organizations should encourage two-way communication, so that employees feel that
they are an integral part of the organization. This promotes mutual trust and respect
among people across hierarchies, thereby resulting in a more congenial work
environment. Consequently, employees experience lower stress levels and can do
justice to their jobs.

Employee assistance programs


Employee assistance programs try to help employees by offering free counseling
within the organization or by referring them to specialists, who can help them cope
with their problems. Many organizations offer these services because they understand
that stress can have an adverse effect on the employees’ performance. These programs
also display the management’s concern for employees’ problems and its willingness to
help them. Some organizations also provide help for other employee problems not
related to work, such as health, finance, and family because they realize that these
problems also effect employee performance.

Mentoring
Many organizations adopt a mentoring program in which employees with less
experience are placed under the guidance and care of senior and experienced
employees. The senior employees act as mentors. They help the inexperienced
employees understand their job responsibilities and guide them on how to improve
their performance. Thus, mentors reduce the stress levels of new employees as they
clarify matters and guide them on task performance. Mentors also act as counselors
when employees face problems or feel worn out.

Wellness programs and personal time off


Many organizations offer wellness programs to their employees. Wellness programs
are designed by the organization to improve the physical and mental condition of the
employee. Some examples are workshops conducted by organizations to make their
employees quit smoking, prevent drug abuse, control alcohol consumption, and
develop a regular exercise regimen. Some organizations have in-house facilities that
encourage their employees to remain healthy by exercising regularly and relaxing. For
example, the Bangalore office of Motorola will have facilities such as a gymnasium, an

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Stress Management

amphitheater, and a tennis court. These fitness centers located on the organization’s
premises primarily help employees develop a regular fitness schedule and keep them
physically and mentally active. Moreover, they improve the morale of employees and
are also responsible for bringing down absenteeism rates. Such physical fitness centers
help employees stay healthy, thereby reducing the cost to the organization in the form
of compensation claims.
Apart from health care facilities, organizations also allow employees personal time off
to combat stress. Top level executives and other professionals are allowed sabbaticals
or breaks for several months so that they can recover from the side effects of negative
stress.

SUMMARY

In most modern organizations, employees work under the pressure of tight deadlines.
Consequently, stress has become a major cause of concern in such organizations. Stress
has been defined in a variety of ways. Many behavioral experts believe that stress is an
individual’s response to a physical or psychological stimulus. Dr. Hans Selye, a
pioneer in stress research, stated that stress has a constant influence in our lives. His
contributions to the field of organizational behavior include the concept of eustress
(positive stress) and distress (negative stress) and the phenomenon of general
adaptation syndrome (G A S). G A S refers to the defensive reactions designed to help
a person cope with threatening environmental demand. The G A S has three stages:
alarm, resistance and exhaustion. In the alarm stage, there are various physiological
and biochemical changes in the body, which help it to meet the challenges posed by the
stressor. Next, in the resistance stage, the individual either tries to face the situation or
flee from it. Finally, if the individual is exposed to the stressor for a prolonged period,
he enters the stage of exhaustion. This may be manifested in the form of a nervous
breakdown, depression, etc.
Stress causing factors or stressors could be present either outside the organization or
within it. Various group stressors and individual stressors also cause stress. The
primary factors related to groups which cause stress are lack of cohesiveness and
support from group members. Apart from this, conflicts between group members also
cause stress. The personal characteristics that influence the stress levels of a person are,
whether a person is a Type A or Type B personality, his locus of control, self-efficacy,
and whether he is psychologically hardy. Stress levels also depend on whether a
person is experiencing role ambiguity and conflict, and how a person deals with
stressful situations.
Stress can result in a variety of physiological, psychological, and behavioral problems.
Various studies have revealed that high levels of stress can cause serious health
disorders like high blood pressure, ulcers, coronary heart disease, etc. Stress can also
result in psychological problems like depression, irritability, and may even lead to a
nervous breakdown. Various behavioral changes such as sleep disorders, overeating,
loss of appetite, increased smoking or alcohol consumption, drug abuse, rudeness, and
nervousness in social interaction can also be observed as a result of stress. People may
also become violent and assault their colleagues and superiors.
There are various individual and organizational strategies to cope with stress. At both
these levels, there are two main strategies, i.e., problem-focused strategies and
emotion-focused strategies. Problem-focused strategies try to eliminate the stressor or
modify it to such an extent that people are able to cope with them. Emotion-focused
strategies attempt to modify the reactions of individuals to the stressors. The problem-
focused strategies at the individual level include time-management, seeking help from
colleagues or superiors, and if all else fails, changing the job. The emotion-focused
strategies at the individual level include using relaxation techniques, performing
physical exercise, pursuing recreational activities, and seeking companions. At the

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Organizational Behavior

organizational level, various problem-focused strategies include redesigning the job,


using proper selection and recruitment techniques, team building, providing training
and day care facilities for employees. Emotion-focused strategies include facilitating
open communication within the organization, providing employee assistance programs,
and mentoring. The organization can also give employees personal time off and
provide facilities to improve their physical and mental health. All these measures go a
long way in reducing the stress levels of employees and making them more productive
and efficient.

172
Chapter 9

Foundations of Group
Behavior
In this chapter we will discuss:
 Nature of Groups
 Various Types of Groups
 Stages of Group Development
 Group Structure
 Group Tasks
 Group Processes
 Dynamics of Informal Groups
 Dynamics of Formal Work Groups
Organizational Behavior

It has been observed that organizational goals are achieved more effectively and
efficiently when people work in groups. Although people value and try to maintain
their individuality, working in groups is more efficient. A group can be defined as two
or more persons who interact and work with each other to achieve a common purpose.
Working in a group, however, is not an easy task.
Groups are the basic fundamental units of an organization. Groups accomplish more
work in less time than a number of people working individually. The interactions that
take place among the members of a group are referred to as group dynamics.
Within an organization, a work group is usually the primary source of social identity
for employees. The nature of the group to which they belong may affect their
performance at work and may influence their relationships with people outside the
organization.
This chapter describes how groups are formed and takes a look at the various types of
groups that can be formed. This is followed by a study of group structure and the
various aspects that influence group structure (like formal leadership, roles, norms,
status, size and composition). We also discuss group tasks and group processes. Next,
we try to understand the dynamics of informal and formal organizations. Finally, we
end the chapter with a brief discussion on the positive and negative attributes of
committees.

NATURE OF GROUPS

Corporate giants like Toyota, Motorola, General Mills and General Electric were the
first to use groups. Today, most organizations form different types of groups to achieve
specific results. Harold H. Kelley and J. W. Thibaut define a group as “a collection of
individuals.....the members accept a common task, become interdependent in their
performance, and interact with one another to promote its accomplishment.”
In an organization, the members of a group:
 are motivated to participate in the activities of the group;
 view the group as a unified entity of interacting people;
 contribute differing amounts of their time and energy to group activities and
 reach an agreement about a problem by interacting with the other members of the
group through different forms of interaction
The various interactions that take place among the members of a group comprise group
dynamics. The term ‘group dynamics’ was popularized by the management thinker,
Kurt Lewin, in the 1930s.
There are three views regarding the nature of group dynamics. The normative view
describes how a group is to be organized and how its activities are to be carried out.
This view emphasizes democratic leadership, participation of the members, and
cooperation among them. According to the second view, group dynamics consists of a
set of techniques. These techniques include role plays, brainstorming, sensitivity
training, team building, transactional analysis, Johari window and self-managed teams.
Finally, the third view approaches group dynamics from the perspective of the internal
nature of groups. This view discusses how groups are formed, their structure and
processes, and their functioning. It also discusses how groups affect individual
members, other groups, and the organization as a whole. This chapter discusses the
third view of group dynamics and the various aspects pertaining to groups such as
formation of groups, group structure, group processes and tasks.

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Foundations of Group Behavior

Dynamics of Group Formation


People form groups for several different reasons. The classical theories of group
formation attempt to explain why people form groups. According to the theory of
propinquity, people associate with one another due to geographical proximity. That is,
people who are located close to one another tend to form a group. For example,
employees working in the same office are more likely to form a group than employees
working in different offices. Similarly, managers whose offices are located close to one
another are more likely to form a group than managers who work in distantly located
offices. The propinquity theory provides only a very simple, basic explanation of group
formation; it does not explain the complexities of group formation.

Figure 9.1 Balance Theory of Group Formation

Individual A
Gives importance to
 Education C (Share Common
Together Attitudes and Values
 Income influenced by regarding)
 Religion

Influence each other  Politics


 Lifestyle
 Proximity
 Marriage
Individual B
 Work
Gives importance to
 Position
 Designation
 Interests

There are many other theories which try to explain why people affiliate with one
another. According to the balance theory, people who have similar attitudes toward
certain objects and goals tend to be attracted to each other and form a group. In Figure
9.1, individual A interacts and develops a relationship with individual B because both
of them have similar attitudes and share common values (represented by C). Both the
individuals try to preserve their relationship by maintaining a symmetrical balance
between the attraction for each other and the common attitudes and values they share.
An imbalance occurs when either of the following happen: the number of interactions
between the individuals decrease or they cease to share common attitudes and values.
When there is an imbalance, the individuals try to restore the balance by having more
interactions with each other or by trying to find some commonality in their attitudes
and values. Their relationship disintegrates if they fail to restore the balance. Thus,
according to the balance theory, both the propinquity of individuals and the
interactions between them play a significant role in the formation of groups.

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Organizational Behavior

Yet another popular theory of group formation is the exchange theory. According to
this theory, the reward-cost outcomes of interaction serve as the basis for group
formation. The exchange theory states that affiliation or association takes place when
the reward-cost equation has a positive outcome (i.e. rewards are greater than the costs
incurred). Costs make people anxious, frustrated, and embarrassed, whereas rewards
from interactions gratify needs like companionship, esteem, security and social needs,
and make people happy.
The employees of an organization form groups for economic, security and social
reasons. Workers may form a group for economic reasons. That is, they may form a
union to demand higher wages. They may also join a group (like a union) for security
reasons (to fight discrimination and unfair treatment of employees). The most
important reason for joining or forming a group is to satisfy social needs. By becoming
a member of a team, workers fulfill their need for affiliation.

VARIOUS TYPES OF GROUPS

Numerous different types of groups can be identified within an organization.


Depending on the degree of formalization, groups can be classified as formal and
informal groups. Formal groups are formed by the organization to carry out certain
activities. Informal groups are formed by the employees themselves.

Formal Groups
These groups are formed by the organization to carry out specific tasks. The tasks and
responsibilities of the members of a formal group are concerned with achieving
organizational goals. The Board of Editors of a publishing company is a type of a
formal group. The organization forms the group and selects the people who constitute
the group.
Formal groups include command groups and task groups. A command group is
represented in the organization chart and is relatively permanent in nature. The
employees who are members of a command group report to a common superior. Thus,
they have a functional reporting relationship. For instance, the dean of a management
institute and his faculty members form a command group. Other examples of command
groups in organizations are the quality-control department and the marketing
department. All the functional departments in an organization can be considered
command groups.
Task groups are formed to carry out specific tasks. Such groups are temporary in
nature. They are generally dissolved once the task is over or the problem has been
solved. Even though people may be made members of a task group, they continue to
remain members of their respective command groups or functional departments. If a
task group member has to spend a lot of time in carrying out the duties of the task
group, his command group duties may get affected. Therefore, to reduce his burden,
the command group duties are decreased for a short period of time. A command group
may also be considered a task group, but the reverse is not true since task groups cut
across boundaries of functional departments and are not characterized by a functional
reporting relationship. When shopfloor employees, engineers and managers come
together to tackle a particular quality problem, a task group is said to have been
formed.

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Foundations of Group Behavior

Informal Groups
While formal groups are established by the organization, informal groups are formed
by the employees themselves. Since these groups are not formed by the organization,
they are not formally structured. Common interests and the need for companionship,
recreation, growth and support lead to the formation of informal groups. In an informal
group, tasks are not formally assigned as they are in a formal group. A lunch group and
a car pool can be considered as informal groups.
Informal groups are of two types, friendship groups and interest groups. Friendship
groups are more permanent in nature than interest groups. They are formed because of
the cordial relationships that the members share with one another. The relationships in
these groups can be based on similarity in age, ethnic heritage, or views. The members
of the group enjoy each other’s company and like to spend time together. Interest
groups are relatively temporary and are organized around a common activity or
interest. A group of employees coming together to organize a picnic for the department
compose an interest group.
Informal groups primarily satisfy the social needs of their members. Due to task
interactions or the physical location of workstations, employees may start spending
more time together. These informal interactions, which lead to the formation of
informal groups, have a profound effect on the behavior and performance of
employees.
According to Fred Luthans, in addition to formal and informal groups, groups can also
be classified into small and large groups; primary and secondary groups; coalitions,
membership and reference groups; and in-groups and out-groups. Small groups have
only a few members. As a result, face-to-face interaction and communication between
them is possible. In large groups, the number of members is very high. The large size
of the group does not allow frequent personal interaction among the members.
Small groups are often termed primary groups. However, using the terms ‘primary
group’ and ‘small group’ interchangeably is not entirely correct due to a minor
difference between the two. To be termed a small group a group only needs to be
small in size, but to be termed a primary group, a group should not only be small in
size, it should also be made up of members who have similar values and loyalties and
have a feeling of comradeship towards each other. Thus, even though all primary
groups are small groups, the reverse is not always true. Examples of a primary group
are the family and the peer group.
Secondary groups are generally large in size. In such groups, the members share the
same values and beliefs, but because of the size of the group, they do not interact often
with each other. Occupational associations and ethnic groups are examples of
secondary groups.
Coalitions are created by members for a specific purpose. Such groups do not have a
formal structure. They are independent of the formal organization structure and try to
address issues which are important to the members. Membership groups are the groups
to which an individual actually belongs (i.e. the individual is a registered member of
the group). However, the members of such groups may not have a personal relationship
with each other. For example, the only relationship that exists among the members of a
public library is their membership. Reference groups are the groups to which an
individual would like to belong or become a member of, e.g., a prestigious club. In-
groups are the groups that share the values prevalent in society at a certain point in
time, whereas out-groups are those that do not share those values.

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Organizational Behavior

Implications of Group Dynamics on Organizational Behavior and Management


A number of research studies on group dynamics show that groups have substantial
implications for organizational behavior and management. The Hawthorne Studies
(one of the earliest studies on groups) showed that groups had a tremendous influence
on performance and productivity. Other research conducted over the years has shown
that groups have a positive influence on the effectiveness of both employees and
organizations. The effectiveness of an employee refers to his ability to learn new skills,
win rewards and fulfill important social needs. Improvement in organizational
effectiveness refers to an improvement in the skills of the workforce, an improvement
in organizational decision-making and control, reduction in the employees’ resistance
to change, and an increase in stability within the organization. Some of the studies
carried out in the field of social psychology also help us to understand organizational
behavior. One such study carried out by Stanley Schachter helps us understand the
relationship between group cohesiveness and performance.

The Schachter study


Stanley Schachter and his associates carried out a study to determine the effect of
group cohesiveness and group influence (induction) on productivity. They defined
cohesiveness as the average resultant force acting on the members of a group.
Induction refers to the influence of group members on productivity. The independent
variables in the study were cohesiveness and induction, while the dependent variable
was productivity. By manipulating the independent variables, the researchers created
four experimental groups:
(i) Highly cohesive groups with positive induction
(ii) Groups with low cohesiveness and positive induction
(iii) Highly cohesive groups with negative induction
(iv) Groups with low cohesiveness and negative induction
The results of Schachter’s experiments did not show significant difference between the
productivity of positively induced groups with a high degree of cohesiveness and
positively induced groups with a low degree of cohesiveness.
Schachter’s study found that highly cohesive groups could exert either a positive or
negative influence on performance, while less cohesive groups were not so influential.
Studies conducted over the years found that group cohesiveness has a highly
significant and positive affect on performance. Also, how a group is induced
(influenced) has a significant impact on its performance.
If leadership is substituted for induction, it becomes the variable which determines the
performance of employees. Groups which are highly cohesive and have positive
leadership achieve the highest possible level of productivity. But a highly cohesive
group which does not have a good leader will have the least possible productivity.
Therefore, a highly cohesive group can have a very high or very low level of
productivity. Depending upon how a highly cohesive group is led, it can either break
production records or limit the level of production. Groups with a low level of
cohesiveness, however, do not have such wide variations in productivity. Leaders do
not have a significant impact on the performance of such groups. It can thus be
concluded that if productivity is to be maximized, the management should build a
cohesive group and should entrust the leadership of this group to the person who is
most capable of leading the group. Such a group tends to become self-managed over
time.

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Foundations of Group Behavior

The results of Schachter’s study help us understand Taylor’s pioneering work (i.e.,
scientific management) as well as the Hawthorne studies. Taylor did not give much
importance to group cohesiveness. According to Schachter’s study, Taylor’s methods
could not yield the maximum level of productivity. In the case of Hawthorne studies,
the group of workers in the relay assembly room as well as the group of workers in
bank wiring experiments formed highly cohesive groups. While the workers in the
relay assembly room showed high levels of productivity, the workers in the bank
wiring experiments restricted production. This difference in productivity could be
attributed to the type of induction or supervision experienced by the group. In the relay
assembly room experiments, workers had a friendly observer who recorded all that
happened, but there was no supervisor overseeing their work. The group thus became
very cohesive and self-disciplined. The workers in the bank wiring experiments,
however, were closely monitored by a supervisor. The presence of the supervisor made
the workers distrust the intention of the management behind carrying out these
experiments. The workers were suspicious that this could be the management’s ploy to
identify less efficient workers. Thus, the lack of trust of the workers in the objectives
of the experiment made them restrict their production.
Factors that affect cohesiveness have an impact on the performance of groups in
organizations. Factors such as agreement among group members on group goals,
frequency of interaction between them, personal attractiveness of the members, and
healthy competition among the various groups increase cohesiveness between the
members of a group. However, domination by one or more members, disagreement
among members on group goals, large size of the group preventing personal
interactions, and unpleasant experiences with other members of the group can decrease
cohesiveness. An organization can improve its performance by increasing the
cohesiveness among members of the various groups within the organization.
STAGES OF GROUP DEVELOPMENT
Earlier, it was believed that groups followed a specific sequence in their formation.
However, it was later revealed that groups do not follow a standard pattern of
development. In this section, two of the widely accepted models of group development
– the five-stage model and the punctuated equilibrium model – are described.

Figure 9.2: Stages in Group Development


Adjourning /Mourning
Completion, ending or evolution

Performing
Achieving the purpose

Norming
Agreeing purpose and conduct

Storming
Resolving differences

Forming
Initial meeting together

Adapted from Powering Online Communities, Swift Group,


<http://www.sift.co.uk/ppt/crmsem/rd/slides/img004.gif>

The Five-stage Model


The five-stage model became popular in the mid-60s. According to this model, all
groups pass through five stages (Shown in Figure 9.2) – forming, storming, norming,
performing and adjourning. The duration of time that each group spends at each stage
varies. Some groups may even get stalled at a particular stage.
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Organizational Behavior

Forming
At this stage, the individuals that comprise the group are uncertain about the group’s
purpose, structure, tasks and leadership. In this stage, members try to identify what
behavior would be acceptable to others in the group and try to mold their own behavior
accordingly. This stage is considered to be complete when the members begin to
consider themselves as part of a group.
Storming
This stage is characterized by conflict and confrontation within the group. In this stage
of group development, although the members acknowledge the existence of a group,
they may resist the constraints imposed by the group. Disagreements about the
leadership position in the group also give rise to conflicts among group members. The
completion of this stage is marked by the emergence of a relatively clear hierarchy of
leadership within the group.
Norming
This stage is characterized by the development of close relationships and cohesiveness
within the group. Members develop a strong sense of group identity and camaraderie.
This stage is completed when a common set of expectations defining appropriate
behavior has been developed.
Performing
In this stage, the group becomes fully functional and involved in activities aimed at
achieving the goals defined in the norming stage. Although the members may be
involved in independent activities, they are committed to the achievement of group
goals. The productivity of the members is at its peak during this stage. For permanent
work groups, the last stage in group development is the performing stage.
Adjourning
This is the last stage of group development for temporary groups that have only a
specific task to perform (like task groups, interest groups, or temporary committees). In
this stage, the members are concerned with finishing their activities (priority is not
given to high task performance). The feelings of members vary at this stage. While
some may be happy about the group’s accomplishments others may be depressed that
they would be losing their friends after the group is disbanded.
It is presumed that the effectiveness of a group improves as it progresses through the
first four stages of group development. However, this may not always be the case since
group effectiveness depends on many complex factors. A certain amount of conflict is
essential for improving the performance of the group. Also, it is not always necessary
that a group should necessarily progress from one stage to another in the sequence
defined by the model. A group may simultaneously go through more than one stage or
in some cases, even revert back to a previous stage. Thus, the five-stage model
explains only some of the elementary aspects of group formation and does not
contribute greatly to our understanding of work groups.

The Punctuated Equilibrium Model


Although the five-stage model identifies five stages of group development, many
research studies conducted later concluded that a universal sequence of stages of group
development does not exist. However, research studies reveal that the timing of group
formation and the modification in their way of functioning over time stays consistent.
According to the punctuated equilibrium model, the process of group formation is
characterized by long periods of inertia, punctuated or interspersed with brief periods
of activity. These periods of activity primarily take place when the members become
aware of the time and the approaching project deadline.
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Foundations of Group Behavior

According to the punctuated equilibrium model, the first meeting of the group sets the
direction for the group. This direction is unlikely to change during the first half of the
duration of the project. In addition, during the first meeting of the group, a framework
of behavioral patterns and assumptions emerges. This framework determines how the
group will approach its goal. The first half of the project is characterized by a period of
inertia. During this period, no new insights or behavioral patterns develop that
challenge the initial patterns of behavior and assumptions made by the group. Halfway
through the project duration, the members of the group suddenly experience a
heightened sense of awareness of the lapse of time and the lack of progress in the
project. The sudden awareness of the limited time left to complete the project acts as an
alarm and leads to a flurry of activity. This stage marks the transition into the second
phase of the project, wherein a new equilibrium is established among the members and
a revised direction is set for the group. The last meeting of the group just before the
completion of the project is marked by a period of intense activity. During this period,
the group works toward completing the project on time by finishing all the tasks that
remain to be done and resolving all the details pertaining to the project.
The punctuated equilibrium model, though not very predictable or precise, makes more
allowance for complexities than the five stage model.

GROUP STRUCTURE
Groups, unlike mobs, tend to have a definite structure. Group structure helps shape the
behavior of its members, predict the behavior of members of the group and guide the
performance of the group as a whole. Groups are characterized by certain structural
variables such as formal leadership, roles, norms, group status, group size and
composition of the group. Each of these variables has important implications for group
performance.

Formal Leadership
A formal leader, like a department head, supervisor or project leader, is essential for
work groups. The leader’s behavior has a significant impact on group behavior and
performance. The style or behavior exhibited by the leader of the group tends to be
imitated or repeated by the members of the group and has a direct influence on the
success or failure of the group.

Roles
Role refers to the set of behavior patterns which an individual occupying a certain
position in society is expected to display. As every employee in an organization is
required to play diverse roles within and outside an organization, in order to
understand behavior, it is essential to understand the role being currently played by the
individual. In order to understand the roles of an individual, it is necessary to
understand the various dimensions of these roles, such as role identity, role perception,
role expectations and role conflict.
Role identity
The attitude and behavior of an individual gives rise to role identity. When a certain
situation requires the individual to make major changes in his behavior and attitude,
the individual does so in order to fit the role. Take the case of a person who has been
accustomed to working as a team member but is, for some reason, asked to be the team
leader for a particular project. To suit this situation, the person has to change his
attitude as well as his behavior to effectively play the role of a team leader. However, if
the same individual is later made a member of a high profile team working on a
prestigious project, he has to once again modify his attitude and behavior so as to
effectively perform the role of a team member.

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Organizational Behavior

Exhibit 9.1
Principles of Successful Groups
There is an old adage which says “None of us is as smart as all of us.” Complex problems can be
solved in a better manner when people from different backgrounds and disciplines put their heads
together. In other words, when individuals work together as a group, they accomplish far greater
things than when they work alone as individuals. Successful groups consist of individual achievers
who work together to obtain results. A group, in turn, provides these individuals with support they
need and serves as a testing ground for their ideas. The group also helps them resolve the problems
and obstacles that arise during the implementation of their ideas.
Although every successful group is unique in its own way, there are some principles which are
common to all of them:
1. Every successful group has a shared dream: The members of every successful group believe
that they can ‘make a difference.’ The group members are passionate about their work and they
put their best foot forward to achieve team goals. For them, the work they are doing is not merely
a job, but a fulfillment of their shared dream. As a result, they are very cooperative and energetic
in their work.
2. Individual egos are sacrificed in order to achieve the shared dream: In a successful group,
group members place the shared dream ahead of their respective egos. Conflict and
disagreements among members are easily and quickly resolved because they give top priority to
the achievement of group goals.
3. Successful groups have been shielded from the “top brass”: All successful groups dislike
interference from the corporate top brass and are shielded from such interference by a leader
(The leader is not necessarily the same person who has envisioned the goal or mission of the
group). The presence of such a leader helps the group members work without unnecessary
interference from senior managers.
4. These groups have either a real opponent or they invent one: The mission of the group
should be strongly inculcated among its members by identifying a strong opponent. Most
organizations have an implicit mission to wipe out an opponent. This motivates the members of
the group much more than the explicit mission of the group. For example, Apple Computer’s
covert mission (in 1984) was to “Bury IBM”. This mission helped the employees of Apple focus
on the goal while also maintaining their energy levels.
5. The members of these groups are non-conformists: Members of successful groups are usually
non-conformists. They think out-of-the-box and are not concerned about being ‘different’ from
others.
6. Members of a successful group sometimes have to pay a heavy personal price: Sometimes,
the members of a group devote so much time and energy to their work that their personal lives
suffer. Divorces and nervous breakdowns are not unusual after a project has been successfully
completed.
7. Successful groups develop strong leadership qualities in the members of the group: Most
successful groups are open, do not have levels of hierarchy, and treat all members fairly and
equally. These groups generally have strong leaders. Successful leaders are good at finding talent
and nurturing it. In fact, they have been known to transform group members into effective
leaders.
8. Successful groups usually have young members: Many successful groups have had members
who were quite young. The average age of physicists in the Manhattan Project, which produced
the world’s first atom bomb, was 25. Being young, they could work longer hours than other
members. Moreover, their reluctance to believe that certain things were impossible made them
accomplish impossible tasks.

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Foundations of Group Behavior

9. Successful groups are the result of careful recruiting: Careful and meticulous recruitment is
often needed to develop a successful group. It involves understanding the chemistry of the group
members and spotting the right talent for the job. Successful group leaders place the right people
in the right job and ensure that they are able to work with others to achieve the desired results.
10. Successful groups produce some tangible output: The efforts of a group must culminate in the
development of a successful product. As Steve Jobs reminded his employees at Apple, their
work amounted to nothing if they were not able to develop an excellent product. Unless a group
produces something tangible, the assembly of the most talented people can be described only as
a social club.

Adapted from Warren Bennis, “The Secrets of Great Groups,” Leader to Leader, No. 3, (Winter
1997) : p 29-33, <http://www.pfdf.org/leaderbooks/l2l/winter97/bennis.html>

If a shopfloor worker is promoted to the position of supervisor, he has to change his


attitude and behavior accordingly. On becoming a supervisor, the employee has to
change his attitude and behavior from that of a pro-union one to that of a pro-
management one. And, if that same individual is demoted, perhaps due to the
economic problems faced by the company, the individual will again have to change his
attitude and behavior.

Role perception
Role perception involves understanding how one is supposed to behave in a particular
role by observing the behavior of another individual in the same role. External stimuli
in the form of books, movies, television, or meetings with other individuals also
influence role perception. The role is both perceived and interpreted through external
learning before being enacted. For example, in an organization, a new employee
adjusts to the organization and the job by observing how other employees are behaving
in the organization and carrying out their duties. By observing the behavior of other
employees, the new employee is able to form a perception of his role in the
organization and behave accordingly.

Role expectations
Role expectation refers to how an individual is expected to behave in a given situation.
In an organizational context, role expectations are to a large extent based on the role
that has been defined for the individual. For example, both the employer as well as the
employees have certain role expectations regarding the behavior of the other party.
This forms the basis of the psychological contract between the employer and the
employees. The psychological contract, which is an agreement between the employer
and the employees, clearly sets out the expectations that each party has of the other
party. Unlike other contracts, the psychological contract is not an explicitly stated or
written agreement, but something which both the parties are expected to understand
and follow. While employees expect the employer to pay them well and provide them
with good working conditions and timely feedback, the employer too expects the
employees to be obedient, cooperative and loyal towards the organization. Failure on
the part of either side to meet role expectations can have negative consequences. An
employer’s failure to meet his role expectations negatively affects employee
performance and satisfaction, whereas an employee’s failure to meet his role
expectations could lead to disciplinary action by the management in the form of
suspension or dismissal.

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Organizational Behavior

Role conflict
An individual who is required to perform diverse roles in life may find that compliance
with one role hinders his compliance with another role. The divergent role expectations
of an individual lead to role conflict in the individual. Extreme cases of role conflict
can be seen when role expectations contradict each other. Take the case of a
programmer in a software company who has been offered a plum overseas assignment.
Accepting this assignment would mean that he would have to be away from his family
for a long period of time. Although accepting the assignment would boost his financial
and career interests, such a move on his part would impede his role as a parent and as a
husband. Thus, the employee experiences role conflict due to contradictory role
expectations.

Norms
Group members follow standards of behavior that they all agree on. Once these
standards have been accepted by everyone in the group, they become norms. Norms
determine how the members should or should not behave in certain circumstances. The
norms in an organization may be formalized or informal norms. Formalized norms are
described in organization manuals. These norms establish the rules and procedures that
the employees should follow. Although organizations have written norms, most of the
norms in organizations are informal, unwritten and unspecific. The experiences of
individuals regarding the type of behavior that helps or hinders their job performance
and satisfaction give rise to these informal norms. Thus, depending on their
effectiveness, informal norms can be functional or dysfunctional in nature. While
norms of a functional nature help achieve organizational goals, norms of a
dysfunctional nature do just the reverse.
Though every work group has a unique set of norms, there are certain classes of norms
that are common to most work groups.

Norms pertaining to performance related processes


Every member of a group is provided with explicit cues as to how hard they should
work, level of output they should deliver, how they should get the job done, and how
they should communicate. Although initially an individual’s level of motivation and
abilities influence his performance, informal norms of an organization may have a
greater influence on his level of performance.

Appearance norms
How to dress appropriately to work, how to appear loyal to the organization and to
one’s own group, how to appear busy – these are all appearance norms. Some
companies insist on employees following a dress code (this takes the form of a
formalized norm). However, even in companies that lack a formal dress code, informal
norms govern the way employees dress to work. In many organizations, for
appearance’s sake, employees have to show loyalty to the organization and desist from
openly looking for another job.

Norms pertaining to informal social arrangements


Such norms regulate social interactions within the group. They determine the friends
that people make within the group and the people they have lunch with. Lunch groups
in organizations are determined by such norms.

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Foundations of Group Behavior

Norms that regulate the allocation of resources


These norms regulate the assignment of overtime work, the assignment of projects, and
the allocation of new tools and equipment.
Norms develop gradually within a group as group members learn what behavior is
important for the effective functioning of the group. Most norms develop in response
to:
a) Explicit statements made by an influential member of the group
b) Critical events in the group’s history
c) The initial pattern of behavior that emerges during the first meeting of the group
(referred to as primacy)
d) Carry over behavior from past situations.
Conformity to group norms is important for an individual to be accepted by the group.
If a member defies group norms after having become the member of the group, the
group can exert pressure on the member to change his attitude and behavior and bring
it in line with the group’s standards. Since individuals belong to various groups and
since norms vary from group to group, it is not necessary that group members succumb
to all such pressures. They may agree to conform only to the norms of the groups to
which they desire to belong.

Status
Status can be defined as a social position or rank given to groups or group members by
others. Status plays a significant role as a motivator and is thus an important factor in
understanding human behavior. The significant influence that status has on the
behavior of individuals is evident from the behavior that emerges when individuals
perceive a disparity between what they believe their status to be and what others
perceive it to be.
Status may be formally established by offering organizational titles or providing
special amenities. Organizational titles could be something like ‘best sales executive’
or ‘most efficient employee.’ Though organizations would hate to admit it, most of
them have amenities that are not uniformly available to all employees (for example, a
cabin of one’s own, an air conditioner, etc). These amenities represent a certain status.
Status may also be acquired informally by virtue of characteristics such as age, gender,
skill and experience.
Status has some implications on the enforcement of norms and the level of conformity
expected from the members of an organization. High-status people are able to leverage
their status to gain considerable freedom from norms and withstand conformity
pressures. Such high-status individuals enjoy greater freedom than other people in the
organization. However, this freedom is only permitted as long as it is not detrimental to
the organization’s or group’s objectives.
When inequity is perceived in the status hierarchy of a group, it creates a
disequilibrium. This disequilibrium leads to different types of corrective behavior.
People expect rewards to be proportionate to the costs incurred, irrespective of their
status in the group. Thus an individual experiences status-incongruence when his
perceived ranking is not equal to the ranking by the organization. However, groups
generally have an agreement or consent among themselves on status criteria and,
hence, high congruence is usually seen in group rankings of individuals.

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Organizational Behavior

Size
The size of a group has a major impact on the overall behavior of the group, though its
effect depends on certain dependent variables. Research has proved that small groups
are faster at completing tasks than large ones, while large groups are good at obtaining
diverse opinions from its members.
One of the most important research findings regarding group size has been that of
‘social loafing.’ When individuals work collectively or as a group, they tend to expend
less effort than what they would have put in individually. A major part of the time is
wasted in socializing. Thus, it would be wrong to assume that the productivity of a
work group would be equal to the sum of the productivity of its members.
Social loafing may be a caused by various factors. If an employee sees that other
members in his group are lethargic or inept, he may reduce his own efforts as well.
Since there is no measurable parameter for judging an individual’s performance within
a group, individuals may be tempted to put in minimal work and ride on the group’s
efforts.
While collective work situations are desirable for enhancing employee morale and
promoting a spirit of teamwork, managers should also provide the means to identify
individual performance. In the absence of any means to measure individual
performance, management should weigh the potential losses in productivity from using
groups against any possible gains in worker satisfaction.

Composition
Different skills and knowledge are required for most group activities. Thus, a group
consisting of individuals with dissimilar skill-sets and knowledge (a heterogeneous
group) would have diverse abilities, and hence would perform well. Though it is likely
that such a diverse portfolio of members would lead to conflict and slow down the pace
of work, research findings generally support the conclusion that they perform well.
Group demography is another important factor in group performance. It can be defined
as the degree to which members of a group share a common demographic attribute,
such as age, gender, race, and educational level. The extent to which they share a
common attribute has an impact on turnover. Studies on group demography have
concluded that turnover is greater in groups in which the members have dissimilar
experiences. This is because, in such groups, members find it difficult to communicate
effectively with each other. Conflicts and power struggles are likely to emerge in such
groups and make group membership undesirable. As a result, people feel like leaving
such groups.
Thus, the composition of a group may prove to be a critical factor in determining the
performance of the members and in predicting turnover. To a certain extent, diversity
among the group members can lead to higher group productivity. However, large
differences in the composition of the group tend to enforce conflicts and negative
behavior, and result in high turnover.

GROUP TASKS
The tasks that a group undertakes can moderate the impact of group processes
(interdependence, communication, etc.) on its performance and the satisfaction of its
members. The effectiveness of a group is influenced by the complexity and the
interdependence of the tasks performed by its members. That is, the more complex the
task, the more the group will benefit from discussion among members regarding
alternative work methods. Similarly, if there is a high degree of interdependence in
executing the tasks, the members will have to interact frequently with each other. Here,
the effectiveness of group performance would be, to a great extent, affected by the
level of conflict among group members and the quality of communication within the
group.

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Foundations of Group Behavior

The importance of group processes becomes evident when tasks have a high level of
uncertainty – those that are more complex and interdependent and require more
information processing. Thus, if tasks are simple and less dependent, standardized
operating procedures can be used. In such cases, group processes do not play an
important role in the successful achievement of tasks. If the group members are
required to perform simple tasks, group performance is not affected by poor
communication among the members, weak leadership and a high level of conflict
within the group.

GROUP PROCESSES
The processes within a group – the communication patterns within the group, the
behavior of the leader, power dynamics and conflict within the group – are crucial for
understanding group behavior. To understand the significance of group processes in
determining work group behavior, we need to review the concept of social loafing.
According to this concept, group productivity need not always be equal to the sum of
the productivity of its individual members. At times, group productivity is much less
than the productivity of individual members of the group. In other situations, group
processes can also yield positive results. That is, they can create outputs greater than
the sum of the inputs. Such a phenomenon is called ‘synergy.’
The performance of an individual can vary, depending on whether the task is
performed in front of others or in private. This phenomenon is known as ‘social
facilitation effect.’ Although it is not entirely a group phenomenon, the conditions that
enhance social facilitation are more likely to occur when people work in groups. This
is because of the tendency of people to show significant improvement in the
performance of a task when they are performing it in front of others than when they are
performing it in private. It has been observed that people tend to perform a task better
in front of others if the task has been learned well, but if the task has not been learned
well, the performance will be poor when the task is performed in front of others. Thus,
training people to perform simple tasks in groups, and complex tasks in individual
practice sessions can help maximize process gains in organizations.

DYNAMICS OF INFORMAL GROUPS

Informal groups gained prominence as a result of the Hawthorne Studies carried out at
Western Electric. The Hawthorne Studies showed that informal groups are an integral
part of the work situation. As discussed earlier, the term ‘informal group’ refers to a
network of social relationships that are not formally established by the organization,
but arise as a result of natural interactions between people. While formal groups
emphasize position and authority, informal groups emphasize people and relationships.
Another major difference between formal and informal groups is the power held by
these groups. Power in an informal group is primarily personal, while power in a
formal organization is institutional. In spite of these differences, these two types of
groups are inseparable and coexist in an organization. Therefore, every formal
organization has some informal groups and every informal group, over time, gradually
begins to evolve into a formal group.

Norms and Roles in Informal Groups


All groups have some established norms, that is, acceptable standards of behavior
agreed upon by the members of the group. Norms define how the members should
behave in a particular situation. They ensure that people behave in a manner which is
acceptable to the group. The behaviors that norms give rise to have a significant
influence on the survival of the group, the unique identity of the group, and the
prevention of problems among the members of the group.
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Organizational Behavior

Exhibit 9.2
Changing the Norms of Informal Groups
Informal groups are inevitable in an organization. By understanding the dynamics of informal groups,
it is possible to use them to enhance organizational performance. Every informal group has its own
set of norms, and the members of the group adhere to these norms. However, this does not mean that
the norms of a group do not change. Since the environment in which an organization operates is
dynamic in nature, the norms of a group are altered when there is a change in the external
environment. In order to ensure the effective functioning of an organization, the managers must assist
in bringing about a positive change in the norms of informal groups. The process of changing the
norms of a group take place in three stages. In the first stage, the manager observes the group to
identify discernible patterns of behavior. To gain a better understanding of group norms, he also
interviews the group members and asks them to specify the norms of the group. By making the group
members specify the norms, managers can make them aware of norms which are not relevant or
which harm the group’s interests. This process also helps managers identify the norms that could help
the group achieve its goals. The process of changing norms is possible only if the members of the
group realize that some of the norms that they are blindly following are against the group’s interests
or hinder the group’s achievement of goals, and therefore need to be changed.
The next stage involves measuring the norms and developing a norm profile. The norms that
contribute to the effectiveness of the group and the organization should be identified. After
identifying the important norms, each member should be asked to give his opinion about the intensity
of that norm (importance the group members attach to the norms). For this purpose, a nine-point scale
can be used. In this scale, 9 refers to the point that the group would ideally like to reach. The
responses obtained from all the group members are then averaged and plotted in the from of a graph
to obtain the norm profile of the group. The norm profile shows where the group is at present and
where it would like to reach. The gap between the two states is termed as the normative gap, the
identification of which helps to determine a starting point for change to take place.
The third stage is the most important one, where a normative change is brought about by the
following steps.
 The manager demonstrates the role played by norms in increasing the effectiveness of the group
and in improving the performance of the organization.
 All the group members are asked to cooperate with each other to develop positive norms for the
group.
 The members of the group decide how normative change is to be brought about and determine
which changes should be made first.
 The members also prepare a plan of action for implementing normative change.
 The plan is implemented and monitored in order to ensure that the desired change is taking place.
 The plan is reviewed at regular intervals and necessary modifications are made to the plan.
This process has many advantages. Apart from creating positive norms for the group, it also enhances
cooperation between the members of a group and their manager. Moreover, communication and
mutual trust within the group is improved. In addition, the stress and anxiety levels of the members
are reduced as they are able to understand their managers better. Thus, by helping a group develop
positive norms, managers can help them develop good patterns of behavior and improve their
performance.
Adapted from “Team Building – Informal Group Dynamics at Work,” Accel-Team.com,
<http://www.accel-team.com/work_groups/informal_grps_06.html>
Norms serve these basic purposes:
1) They aid in the survival of the group and help it accomplish its objectives. In
accordance with their norms, groups reject deviant behavior which does not help
them achieve their goals or which threaten their survival.
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Foundations of Group Behavior

2) Norms make the behavior of members more predictable. As group members are
familiar with the norms, they can anticipate the responses of other members.
3) Norms help the group avoid embarrassing situations. Usually, group norms
prevent the members of a group from behaving in a manner which can hurt the
image of the group.
4) Norms represent a group’s most important values. They thus establish a distinct
identity for the group.
Stephen P. Robbins defines role as “A set of expected behavior patterns attributed to
someone occupying a given position in a social unit.” A role is a position that is held
by a person in an organization. The content of any role is determined by the norms
prevailing in the group. Therefore, a role consists of a specific set of norms.
Roles within an informal group are highly varied and unstable. Some of the roles found
in modern informal groups are:
1. Shaper – An aggressive achiever role who makes the team action-oriented.
2. Plant– An innovator who brings in fresh and creative ideas.
3. Monitor-evaluator – A critical and careful thinker who determines the feasibility
of ideas.
4. Implementer – A worker who takes practical and efficient action.
5. Team Worker – A moderator with social skills who can defuse conflicts.
6. Coordinator– A facilitator who can organize and coordinate the efforts of other
group members.
7. Completer-Finisher – A careful and detailed examiner who ties up loose ends.
8. Resource Investigator – A person with good social skills who builds good relations
with people outside the group in order to obtain resources and inputs for the group.
9. Specialist – An expert who offers specialized knowledge.
Roles change according to the situation. The same person may have to play different
roles according to the situation he is in. As a team member, he will have to play the
role of a team worker, while as an informal leader of a group of dissident members
working on a project, he will have to play the role of a coordinator, a shaper, and an
implementer.
Group roles that are functional in nature help a group achieve its goals. To ensure its
survival and achieve its goals, a group should have two types of functional roles: task
roles and maintenance roles. Task roles like initiating, providing and seeking
information, and ensuring consensus help the group achieve its objectives.
Maintenance roles help the group establish and maintain good relationships among the
members of the group. Some examples of maintenance roles are encouraging,
harmonizing, setting group standards and providing feedback to the group.
Apart from these functional roles, group members also have personal roles. These are
sets of behaviors that are used to meet the needs of an individual and can prove
detrimental to the effectiveness of the group. Some instances of personal roles are
seeking recognition, dominating others and avoiding responsibilities. The task roles
and maintenance roles of the group members should replace their personal roles to
ensure that the group performs effectively.

Nature of Informal Groups


Building social relationships is a characteristic of human nature. The activities
identified by the formal job description may either fail to keep the employee occupied
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Organizational Behavior

or may fail to fulfill all his needs. In such cases, employees develop relationships with
people other than those defined by the organizational structure. Social relationships
may develop due to the physical location and the presence of common interests. For
example, employees placed together in a work setting may start interacting with each
other, even though they may be from different departments. Common interests and
values, and identical perceptions of their roles further strengthen the interaction among
employees and give rise to a much higher system of social relationships called informal
groups. Informal groups emerge naturally as people associate with one another and are
not determined by formal lines of authority. In informal groups, power is not vested in
anyone by a superior, but is achieved through a person’s charisma. Informal groups are
inevitable in an organization and cannot be abolished. These groups are generally small
in size so that personal relationships can be maintained. Many informal groups exist
both within the premises of the organization as well as outside it. The small size and
lack of stability in informal groups make it difficult for them to replace formal
organizations. They can only supplement the formal organization.
J.L. Gray and F.A. Starke define informal organizations as “patterns of behavior and
influence stemming from human interaction within a formal structure.” In other words,
formal organizations prescribe certain behaviors for particular situations, and when
individuals deviate from these prescribed behaviors, they do so because of the
influence of informal groups. The nature of the informal group depends on the various
drawbacks present in the organizational structure and the lack of opportunities to
satisfy human needs. Informal groups tend to exist within the framework of the formal
organizational structure because of the inherent need of individuals to have stable and
predictable interpersonal relationships. Informal relationships formed through
interactions at the workplace make individuals feel secure and generate a feeling of
belongingness.

Significance of Informal Groups


Earlier, informal groups were considered an obstacle to the achievement of
organizational goals. The Hawthorne experiments revealed that informal groups
coexist with formal organizations. Depending upon the management’s approach to the
social system, informal groups can either contribute positively or negatively towards
the achievement of organizational goals. If the management underplays the importance
of the informal groups, these groups are likely to generate a lot of internal conflicts and
cause problems for the organization. This can hinder the progress of the organization.
But if the management understands the power of the informal group, adopts a positive
attitude towards it, and tries to obtain the direct or indirect cooperation of the informal
group, the effectiveness of the organization can be significantly improved. In order to
obtain the best possible performance, the management should try to blend together
both the formal and informal groups.

Management of Informal Groups


Informal groups greatly influence the behavior of their members and therefore
determine their productivity. As a result, the top management is quite wary of powerful
informal groups, and tries to abolish them. However, many studies on group dynamics
have revealed that informal groups cannot be totally abolished. Therefore, in order to
ensure the smooth functioning of the organization, the management should understand
the dynamics of the informal groups operating within it.

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Foundations of Group Behavior

Informal groups are quite powerful and influential because the members of the group
have a lot in common and depend on each other to carry out organizational activities.
As members of informal groups interact with one another, they develop favorable
opinions about each other and cooperate to achieve results. Over a period of time,
informal groups become a cohesive and powerful entity. However, this does not mean
that powerful informal groups always hinder an organization’s progress. If members of
informal groups perceive that they can achieve their personal goals by contributing to
organizational goals, they act in the best interests of the organization. Thus, the
management should acknowledge the importance of informal groups and try to use
them to achieve the objectives of the organization.

Difficulties and Problems Associated with Informal Groups


Although informal groups play a role in the achievement of organizational goals, they
sometimes present difficulties for the organization. These difficulties are described
below:
1. Prevent organizational change: In some cases, informal groups reject the
introduction of change within an organization. They may not be interested in
trying out new ways of doing things. As a result, they may restrict production.
Informal groups may choose to limit the output regardless of whether the
management is autocratic or democratic.
2. Role conflict: An employee may experience role conflict if the informal group
and the organization place conflicting demands on him. Although eliminating such
conflict totally is not possible, role conflict in employees can be reduced to a great
extent if both the formal and the informal groups develop mutual interests. By
integrating the interests, goals, methods and evaluation procedures of the formal
organization with those of the informal group, the management can ensure higher
productivity and employee satisfaction.
3. Increased scope for rumors: Rumors often start in informal groups and spread
quickly throughout the organization, causing immense damage if they are not dealt
with promptly. The emotional maladjustment of some employees and the lack of
information makes them susceptible to rumors. The best way to handle rumors is
to provide people with adequate information. The leaders of informal groups can
also stop the spread of rumors by providing timely and correct information to the
members.
4. Pressure to conform to group norms: In informal groups, members are often
pressurized to comply with the norms of the group. Conformity to the norms of the
group becomes a problem when the leaders of the group try to manipulate the
members of the group to satisfy their own selfish motives.
The management generally faces three major problems when dealing with informal
groups. These problems are discussed below.
 Problems arising out of conflict between the formal and informal status
systems: When the managerial evaluation of jobs and positions fails to match that
of the informal group, the formal organizational structure comes in conflict with
the informal group structure. To prevent such a problem from occurring,
management should be sensitive to the social aspects of the jobs and positions in
the organization. When designing or modifying the organizational structure,
management should assess the social impact of the proposed design or changes in
jobs or positions in the organization. Lack of sensitivity on the part of managers
towards the social implications of jobs or positions can bring the organization into
conflict with the status system of employees.

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Organizational Behavior

 Employee’s perceptions of distributive justice: The relationship between


employees and management is that of a social exchange, i.e. employees are
rewarded for their contributions. Employees expect their experience to be
acknowledged by the management through higher rewards. However, in many
cases, employees’ contributions may actually decrease due to their age or the
obsolescence of their skills. When the management tries to revise the exchange
relationships on the basis of this change in the level of contribution, employees
may feel hurt and their sense of distributive justice may be offended. The
employees may show their resentment by acting against the goals of the
organization. Hence, in order to avoid such problems, management should ensure
that it does not offend or hurt the members’ sense of distributive justice.
 Problems of status incongruity: Employees may also feel dissatisfied if there is
an incongruity between non-job factors (like age, sex, education, etc.) and on-job
status (like pay, intrinsic satisfaction, working conditions, privileges, etc.). Such
incongruity may give rise to many problems. These problems can be solved by
modifying the reporting relationship, i.e. the informal and formal status systems
should be made consistent with each other.

DYNAMICS OF FORMAL WORK GROUPS

Although group dynamics is generally associated with informal norms and roles,
formally designated work groups also have noticeable dynamics. Some examples of
formal work groups are committees, commissions, boards, teams and task forces.
Although this chapter only examines the dynamics of committees, the same approach
can be used to understand the group dynamics of commissions, boards, and task forces.
In all types of organizations, one can find committees, be it a government, educational,
religious or a business organization. Committees may perform various functions – a
service, advisory, or administrative functions. In some cases, committees may also be
involved in making the final decision on a specific matter. When performing this
function, a committee is said to be acting in a line capacity. Nowadays, many
companies use a committee-based approach for decision-making. In organizations, top-
level committees consist of the president of the organization and the executive vice-
presidents. Earlier, committees were formed only at the top level of the organization.
However, nowadays committees are formed at all levels of the organization.

Positive and Negative Attributes of Committees


Committees have both positive and negative attributes. The biggest advantage of a
committee is that it facilitates the integration of the ideas and opinions of its members.
Committees bring together people with varied experience, knowledge, and abilities to
solve various organizational problems. Committees can help reduce conflicts between
various departments and their specialized subunits. Through discussions with other
committee members, each comes to know more about the other departments and their
problems. The production department gets to know by when the sales department has
promised delivery of goods and the sales department gets an insight into the various
problems faced by the production department (like production scheduling and
inventory holding).
Committees ensure employee participation and result in improved morale and
commitment. Since the individual members have been involved in finding solutions to
a problem, they will be more committed to the implementation of the decisions taken.

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Foundations of Group Behavior

Exhibit 9.3
Developing Effective Committees in Organizations
Many management experts agree that effective organizations are characterized by effective
committees. There are basically two types of committees – standing committees and ad hoc
committees. Standing committees are permanent in nature and are formed by the standing orders,
bylaws, rules and regulations of an organization. Ad hoc committees are committees which are
constituted for a short-term to serve a specific purpose.
A committee is formed to study a particular problem in depth and make suitable suggestions to deal
with it effectively. If used effectively, a committee can save a lot of time for the organization by
making decision-making easier. The use of committees which consist of members from diverse fields
makes the functioning of organizations more efficient.
Committees help ensure the smooth functioning of an organization. However, in many organizations,
there are far too many committees, and the committee members have no idea what their
responsibilities are. Therefore, in order to develop effective committees, the following points must be
taken into consideration:
 The purpose and the authority structure of the committee should be properly defined.
 The tasks, responsibilities and deadlines should be clearly specified.
 The manner of reporting should be clearly defined.
 The role of each committee member should be clearly specified.
 The term of office for the committee members as well as the method of recruitment should be
clearly specified.
 The method of selection of committee members and the budget for the committee should be
established.
 The resources needed for the achievement of the goals of the committee should be determined.
 A reward and recognition scheme should be designed to motivate the members.
Effective committees weigh the pros and cons of organizational issues and give their
recommendations to the management. This saves the top-management considerable amount of time.
In addition, the use of committees facilitates the participation of employees.
Adapted from “Building the Future,” geocities.com, 2001, Metis Nation of the South,
<http://www.geocities.com/metisnation/btf_10901.html>

In addition, committees help in the development and growth of human resources in the
organization. By working with experienced members in committees, young and
inexperienced group members get exposed to different perspectives and learn new
ways of solving problems. Committees thus provide them ample scope for personal
development and growth.
There are also some problems associated with the use of committees in organizations.
Since committees take a long time to arrive at a consensus, using them for decision-
making can be very time-consuming and costly. And when a decision is taken, the
responsibility for the decision cannot be pinned on any one individual. Committees are
characterized by divided responsibility, that is, all the members of the committee are
collectively responsible or accountable for a bad decision or mistake. This lack of
individual accountability may cause individual members to blame other members for
wrong decisions made by the committee. Although committees are expected to arrive
at a decision jointly, the decisions taken often reflect the domination of one group over
another (the minority).

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Organizational Behavior

SUMMARY

The work group is usually the primary source of social identity for employees, and the
nature of the group can affect their performance at work as well as their relationships
outside the organization. There could be many reasons why people form groups. The
propinquity theory of group formation attempts to explain why some people come
together to form groups. Yet another popular theory of group formation is the
exchange theory. According to the exchange theory, the reward-cost outcomes of
interaction are the basis of group formation. In reality, groups and their formation are
much more complex than just the affiliation between two people (a simple dyad
group). Groups can be classified into formal and informal groups, task groups,
command groups, interest groups, and friendship groups. There are also some
generally recognizable stages of group development. Two theories that analyze these
steps are (a) the five stages model and (b) the punctuated equilibrium model.
The structure of a group helps the management predict individual behavior within the
group and the performance of the group itself. Some of the structural variables are
formal leadership, roles, norms, group status, group size and the composition of the
group. All these variables affect the functioning of groups. The style or behavior of the
group leader tends to be imitated or repeated by the members of the group. As
everyone is required to play a diverse set of roles within and outside an organization,
one of the tasks in understanding behavior is grasping the role that is currently being
played by a person. Group members share some acceptable standards of behavior
among themselves, and once they are established, they become norms. Status also has
major behavioral consequences when individuals perceive a disparity between what
they believe their status to be, and what others perceive it to be. Research has shown
that small groups are faster at completing tasks than large ones, whereas large ones are
good for obtaining diverse inputs from members. The composition of a group may
sometimes, prove to be a critical factor in its total performance and turnover.
The processes that go on within a group – the communication within the group,
behavior of the leader, power dynamics and conflict within the group – are crucial for
understanding group behavior. Process gains can be maximized by training people for
simple tasks in groups, and for complex tasks in individual practice sessions. The tasks
that a group undertakes can moderate the impact of group processes on its performance
and member satisfaction. The effectiveness of group performance is to a great extent,
affected by the level of conflict among group members and the quality of their
communication.
Organizations may consist of both formal and informal groups. Committees are an
example of formal work groups. The use of committees in organizations has its
advantages as well as disadvantages.

194
Chapter 10

Understanding Work Teams


In this chapter we will discuss:

 Definition of Work Teams


 Benefits of Work Teams
 Differences between Work Groups and Work Teams
 Types of Work Teams
 Team Effectiveness
 Applying Group Concepts to Teams: Towards Creating Effective Teams
 Teams and Total Quality Management
 Teams and Workforce Diversity
Organizational Behavior

One of the most significant developments in human resource management in recent


years has been the concept of teams. This concept was first used in Japan in the 1950s
and later in America in the 1980s. Many American companies like HP, Xerox, P&G,
and General Motors have used teams to solve problems and make effective decisions.
Many management theorists and experts agree that teams play an important role in
improving the productivity and effectiveness of organizations.
In this chapter we discuss the various aspects of using teams in organizations. First, we
define what a team is and the benefits of using teams in organizations. Then, we
differentiate work teams from work groups. The various types of teams formed in
organizations today are discussed in detail. We then discuss the nature of effective
teams and methods for developing effective teams and making individual workers
good team players. We also discuss how group concepts can be applied to teams to
create high-performance teams. Finally, we discuss Total Quality Management and
workforce diversity in the context of teams.

DEFINITION OF WORK TEAMS

The use of teams is becoming increasingly popular these days. Most of the Fortune
500 companies use project teams, which consist of employees from diverse managerial
and professional backgrounds, working for a specific period of time on certain projects.
What is a “team”? Gregory Moorhead and Ricky W. Griffin define a team as “a small
number of people with complementary skills who are committed to a common purpose,
common performance goals, and an approach for which they hold themselves mutually
accountable.” According to Stephen P. Robbins, a work team is a collection of people
whose individual efforts result in a level of performance which is greater than the sum
of their individual contributions. Teams, therefore, generate synergy by coordinating
the efforts of the individual members.

BENEFITS OF WORK TEAMS

The use of teams in organizations has increased because teams perform better than
traditional work groups. Moreover, work teams provide significant benefits to
organizations. The use of teams have resulted in improvement in organizational
performance, increase in employee benefits, reduction in costs, and improvement in
organizational processes (described in Table 10.1).

Improved Organizational Performance


Teams help organizations improve their performance by enhancing their productivity,
quality and customer service. Teamwork reduces wastage of workers’ efforts,
minimizes workers’ errors, and enables workers to serve customers better. In addition,
teamwork kindles the creative instincts of the workers and encourages them to develop
innovative solutions to existing problems. Moreover, since teams bring together people
from diverse backgrounds, they are able to develop new and more effective ways of
doing a particular job. These improvements are possible when teams effectively
combine individual efforts and continuously look for ways to enhance the productivity
of their organization.

Employee Benefits
A team environment benefits both organizations and employees. Nowadays, employees
are not just satisfied with a good pay and other conventional benefits. For these

196
Understanding Work Teams

workers, teamwork provides a sense of dignity, self-control, self-fulfillment and


satisfaction. Teams allow these employees to manage their work and make independent
decisions instead of relying on their superiors for instructions. As a result, employees
feel that their work is making a difference to their organization and feel valued and
respected. Employees who feel this way enjoy their work, are exposed to lower levels
of stress, and make less use of employee assistance programs.1

Table 10.1 Benefits of Teams in Organizations


Type of Benefit Specific Benefit Organizational Examples
Enhanced performance  Increased productivity Ampex: On-time customer delivery
rose 98%
 Improved quality
K-Shoes: Rejects per million
 Improved customer service dropped from 5,000 to 250
Tennessee Eastman: Productivity
rose 70%
Employee benefits  Quality of work life Milwaukee Mutual: Employee
assistance program usage dropped to
 Lower stress 40% below industry average
Reduced costs  Lower turnover, absenteeism Kodak: Reduced turnover to one-
half the industry average
 Fewer injuries
Texas Instruments: Reduced costs
more than 50%
Organizational  Increased innovation, IDS Mutual Fund Operations:
enhancements flexibility Improved flexibility to handle
fluctuations in market activity
Hewlett-Packard: Innovative order
processing system.

Source: Charles C Manz and Henry P. Sims, Jr., Business Without Bosses (New-York: Wiley, 1993);
Richard S. Wellins, William C. Byham and George R.Dixon, Inside Teams (San Francisco: Jossey-Bass,
1994) ; Gregory Moorhead and Ricky W. Griffin, Organizational Behavior – Managing People and
Organizations, 5th edition (New Delhi: A.I. T. B. S. Publishers and Distributors Regd., 1999) 329.

Reduced Costs
Working in teams makes employees feel valued and committed. Team members feel
that they are responsible for the output produced. Therefore, they try to reduce
wastage, be more regular for work and minimize errors. This sense of responsibility
also leads to a fall in absenteeism and a decline in employee turnover. Due to these
initiatives by team members, organizations have been able to cut costs and reduce
turnover rates. Kodak reduced its labor turnover to half the prevailing industry average
using the team approach. Similarly, Texas Instruments reduced costs by more than 50
percent through its use of teams.

1 Employee assistance programs: These refer to programs conducted by organizations for


employees who have turned to drugs or alcohol due to personal problems. This program
provides counseling and assistance to employees who wish to get themselves rehabilitated.
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Organizational Behavior

Exhibit 10.1
Failure of Japanese Style Work Team Culture in American Firms
Though Japanese firms could achieve significant improvement in their products, processes and
quality management systems due to their team culture, the implementation of the same in American
firms failed to be a success. The following differences in the work culture of the two societies
(American and Japanese) led to the failure of Japanese style team culture in American firms:
 The Japanese believe in consensus. Discussions among team members continue until everyone
is convinced about a certain decision or action to be taken. Americans, on the other hand,
believe in democracy.
 The Japanese believe in surrendering individual goals to achieve team goals. Individual identity
is replaced with team identity. Individual recognition and awards rather than team awards
motivate the performance of the Americans.
 Japanese teams concentrated on products and processes and avoided management issues. The
management had total control over the teams. Therefore, there were no conflicts between the
teams and management. But American firms introduced a slight variation in these teams and
named them ‘self-managed teams.’ The teams discussed management issues and communicated
them directly to the top management, thus sidelining the middle managers in the process.
Adapted from Quentin R. Skrabec Jr., “The Myth of Teams,” Industrial Management, Vol 44, Issue
5, (September/October 2002): p25.

Organizational Enhancement
In large organizations, the gap between employees and the top management can be
reduced by decreasing the number of layers between them. This can be done by using a
team approach to work. The team members feel closer to top management and, as a
result, feel important. Moreover, teams bring in innovation and creativity by forcing
team members to look for newer ways of doing things. Teams also help organizations
adapt to changes quickly, thereby enabling them to withstand competition. Despite the
various benefits, work teams do not always succeed (Refer Exhibit 10.1).

DIFFERENCE BETWEEN WORK GROUPS AND WORK TEAMS


Although the terms group and team are often used interchangeably, they do not mean
the same. As seen earlier in the previous chapter, a group is a collection of two or more
people who interact with one another in such a way that each person is influenced by
the other. These individuals need not have a common goal. For example, people
working under a common supervisor are said to comprise a work group. The members
of a group do not produce a synergy that would result in an overall consolidated
performance greater than the sum of individual performances. Teams on the other
hand, the members of a team are committed to a common objective and work together
to produce a synergy whose outcome is greater than the sum of individual
contributions. In other words, a team is a group that has a common goal. A detailed
description of differences between work groups and teams is provided in Table 10.2.
According to Stephen P. Robbins, a work group is “a group that interacts primarily to
share information and to make decisions to help each member perform within his or
her area of responsibility,” while work team is “a group whose individual efforts result
in a performance that is greater than the sum of those individual inputs.”
Team members have to possess three types of skills to achieve the team’s goals. First,
they should have the technical or functional skills necessary to carry out their jobs.
Second, they should have good interpersonal skills to understand each others’ interests,
provide information and support, and resolve conflicts. Third, they should have
problem-solving and decision-making skills in order to understand the nature of
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Understanding Work Teams

Table 10.2 The General Differences Between Work Groups and Work Teams
Work Groups Work Teams
1. Members have individual goals. 1. Members have common goals.
2. The primary motive of interaction is to share 2. The primary motive of mutual interaction is
information and to take decisions, thereby to perform collectively.
helping each other to perform within his or
her area of responsibility.
3. Performance is nothing but the sum of each 3. The performance in a work team is greater
individual’s contribution belonging to the than the group member’s individual inputs.
group. Thus there is no positive synergy that The synergy is positive which aids the
would create the performance level greater organization to have a performance level
than the sum of individual inputs. greater than the sum of individual inputs.
4. The responsibility is individual. 4. The responsibility is collective.
5. The accountability is of individual nature. 5. The accountability is individual and mutual
in nature.
6. The skills involved are random and varied, 6. The skills involved are complementary in
i.e., the skill of one individual does not nature i.e., the skill of one individual aids
complement the skills of other individuals. the other to use his skills to achieve the
objective.
7. It has a strong and focused leader with clear 7. The leadership is shared among the team
objectives. members.
8. The purpose of work group is same as that 8. The purpose of a team is very specific
of the organization. requiring collective effort.
9. The work group’s products are individual 9. A work team’s products are collective work
work products. products
10. The work group meetings are efficiently run. 10. The team meetings are open-ended and
problem solving, allowing every member to
participate actively.
11. Effectiveness of performance is measured 11. Effectiveness of performance is measured
indirectly, i.e., by measuring the directly by assessing the collective work
performance of the organization (for product.
instance, the financial performance of the
organization). This is so because the purpose
of work group and the organization are
same.
12. In a work group, discussions are carried out, 12. In a work team, discussions, decisions and
decisions are taken and work delegated. real work, all are carried out together (by the
members of the team).
13. Groups can be of any size. 13. Teams are needed to be small.

problems, to decide on alternative courses of action, to prioritize tasks and give


direction to the team. Initially, when a team is formed, the team members may not have
all these skills. As the team develops and the members gain experience, they acquire
the necessary skills.

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Organizational Behavior

Since team members are accountable to each other, they make sure that they do
everything possible to achieve the team’s goals. This accountability gives rise to three
more differences between groups and teams:
 Broad job categories
 Role of the supervisor
 Reward systems

Broad Job Categories


Groups are generally allocated very specialized tasks. To carry out these tasks, workers
require minimal training. Many people in the group have the same job description.
Group members generally do not receive any feedback about their contribution to
organizational effectiveness. As a result, they do not see any relationship between their
efforts and the end result. However, in teams, the members have a number of different
skills that are appropriate for more than one job category. The management is not
concerned about who does the job as long as the team is able to meet its performance
goals.

Role of the Supervisor


In work groups, the supervisor decides who does what tasks. In other words, the
supervisor makes decisions and controls the activities of the workers. But in teams, the
members themselves identify the necessary tasks and the workers who possess the
skills needed for a particular job. Therefore, the team itself decides who will do which
jobs. The supervisor acts as a facilitator and coach, who helps team members make
effective decisions.

Reward Systems
The reward systems used by conventional organizations are not suitable for team-based
organizations. In conventional organizations, reward systems are based on individual
performance of the employees, their seniority and their job classification. In team-
based organizations, however, team members are rewarded for learning a set of skills
which are essential for helping the team achieve its goals. In some cases, team
members are rewarded on the basis of the performance of the team. This reward system
enables team members to remain flexible and be responsive to changes in
environmental factors. Three types of reward systems are used commonly in team-
based organizations:
a) Skill-based pay systems
b) Gain-sharing systems
c) Team bonus plans

Skill-based pay systems


These systems make it compulsory for employees to master a set of important skills,
which are necessary for good team performance. Employees may have to acquire some
additional skills, depending on the requirements of the team or the career needs of team
members. Some programs make it mandatory for team members to acquire some skills
in order to receive additional pay. The employees can increase their pay from a basic
level by a fixed amount for each additional skill learnt. This increase is possible up to a
certain maximum level.

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Understanding Work Teams

Gain-sharing systems
This reward system requires the team to exceed some baseline performance to receive
a share of the profits generated by the organization. Gain-sharing systems reward all
the team members on the basis of the performance of the organization, division or
plant. This reward system keeps employees motivated and propels them to work
harder. However, when business conditions are poor or when some factors beyond
employees’ control make it impossible to show the desired performance, such a system
may make employees feel disappointed and frustrated.

Team bonus plans


This reward system is quite similar to the gain-sharing system. The only difference is
that in a team bonus plan, the team is the unit of performance and pay, rather than a
plant, division or organization as a whole. For this reward system to be effective, each
team should have achieved certain specific performance targets. Some of the
companies which use team bonus plans are Milwaukee Insurance Company and
Colgate Palmolive.
All the three reward systems have the potential to increase the productivity of the
members of a team, thereby enhancing organizational profits. A suitable reward system
should be chosen only after considering all relevant factors. This is because frequent
and unplanned changes in the compensation system of employees might prove to be
threatening to them.

TYPES OF WORK TEAMS

On the basis of their objectives, teams can be classified into different types (see Figure
10.1). The three kinds of teams most commonly found in organizations are:
a) Problem-solving teams
b) Self-managed work teams
c) Cross-functional teams

Figure 10.1: Three Types of Teams

Adapted from Self-managed


“Q lit Ci l

Cross-functional
Source: Paul E. Brauchle and David W. Wright, “Training Work Teams”, Training and Development,
M h 1993/ F d L h O lB h 8th d (I d I M G H ll 1998) 290
Problem-Solving Teams
Problem-solving teams, one of the earliest forms of teams, originated during the mid-
80s. Such teams generally consist of around 5 to 12 employees from the same

201
Organizational Behavior

Exhibit 10.2
Application of Quality Circles in Government Organizations
A quality circle is a small group which consists of around six to twelve employees who are involved
in similar kind of work. These employees come together regularly to find out what improvements
can be made in their respective areas of work by using accepted techniques for analyzing and
solving work-related problems. Quality circles have been successfully used by the Public Works
Department (PWD) of Maharashtra. This department is responsible for the construction and
maintenance of approximately 2 lakh kilometers of roads in Maharashtra. It is also responsible for
the upkeep of a large number of governments owned buildings all over the state. The department
realized that though the user of the road network was the common man, the decisions made at the
top level were not necessarily to the advantage of the user. The top management of the Maharashtra
Public Works Department realized that the lower level officers and the field staff were the best
people to recommend the right course of action for developing and maintaining the road network.
Therefore, it decided to use quality circles to involve them in decision-making. It set up quality
circles on 18th November, 1997. Within a year, many quality circles (involving the employees of
PWD) were formed in different regions of the state to solve various problems.
The Quality circles showed substantial improvements in the following areas:
 Reducing the time gap in the issue of memos after inspection of a particular site.
 Reducing the number of accidents on highways.
 Bringing down the consumption of electricity in government offices.
 Removing encroachments on government land.
 Speeding up the process of filling potholes on roads during monsoons.
 Maintaining service records of employees.
 Maintaining cleanliness and hygiene in government offices.
 Streamlining the process of reservation in government rest houses.
 Improving the conditions at the Government Hospital at Solapur.
Quality circles, therefore, can be used not only in manufacturing firms but also in those
organizations where solutions to various work-related problems can be found through teamwork.
The Public Works Department of Maharashtra has become a trailblazer in finding solutions to
various work-related problems in government departments through the participation of employees.

Exhibit 10.2
A li ti fQ lit Ci l i G tO i ti
department. These employees meet for a specific number of hours per week to discuss
various ways of improving quality, efficiency and the work environment. Problem-
solving teams are temporary teams that deal with some specific problems at the
workplace. Though such teams are asked to suggest solutions to problems, they are
generally not given the authority to implement their suggestions. These teams are
established to make recommendations for others at the workplace to implement. Most
American companies use such teams. A commonly used problem-solving team was the
Quality Circle.

Quality circles
A Quality Circle (QC) is defined as “a small group of employees in the same work area
or doing similar type of work that voluntarily meets regularly for about an hour every
week to identify, analyze and resolve work-related problems.”2 Quality Circles were

2
As defined by Quality Control Forum of India.
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Understanding Work Teams

first formed in Japan. They became very popular in Japan and much of the success of
Japanese firms (particularly their high rate of quality improvements in goods) has been
attributed to the use of Quality Circles. The spectacular success of Japanese firms
popularized the concept of Quality Circles. This concept spread across the globe and is
now practiced in around 50 countries around the world.
The objectives of a Quality Circle are:
 Bringing about a change in the attitude of employees by improving the quality of
work life.
 Teaching additional skills to employees and bringing out their latent potential.
 Developing a team spirit in the organization and reducing conflict between
departments.
 Involving people at different levels in finding a solution to a problem.
 Improving the motivation level of employees.
 Providing employees with a conducive work environment.
The use of Quality Circles is not limited to manufacturing firms only. They can be
used in factories, firms, schools, hospitals, universities, research institutes, banks,
government offices etc (refer Exhibit 10.2). For example, a nine-member Quality
Circle consisting of physicians, technicians and managers at the Norfolk General
Hospital reduced the average X-ray processing time from 72.5 hours to 13.8 hours by
eliminating fourteen unnecessary steps. The Quality Circles formed by the Public
Works Department of Maharashtra studied the reasons for the high accident rate on the
Sion-Panvel Highway. Various solutions for the problem, like carrying out frequent
lane marking, installing caution boards, providing lay-byes for buses, were determined
and implemented at Shirvane and Turbhe. The implementation of the solutions reduced
the number of accidents significantly.

Self-Managed Work Teams


Problem-solving teams allowed employees to make suggestions and recommendations,
but did not involve them in taking work-related decisions. To involve teams in
organizational matters, fully autonomous teams, called self-managed work teams, were
developed (refer Exhibit 10.3). These teams could give solutions to problems,
implement them and be held responsible for the results.
Self-managed work teams consist of around 10 to 15 employees who are assigned the
responsibilities that were formerly being handled by supervisors. These responsibilities
include planning and designing work schedules, making operating decisions, and
handling various work-related problems. Self-managed work teams are totally
autonomous. They select their own members and evaluate their performance
themselves, thereby reducing the role of the supervisor. There are around 100 self-
managed work teams at GE’s locomotive engine plant in Grove City, Pennsylvania.
Generally, most of the decisions regarding maintenance, work scheduling, and
equipment purchases are made by these teams. The supervisor merely plays the role of
a facilitator. Hewlett-Packard, Honeywell, Xerox, General Motors, and PepsiCo also
use self-managed work teams.
Even though many organizations have successfully used self-managed work teams,
some organizations were unable to convince their employees of the value of such
teams. For example, at Douglas Aircraft Company, a division of McDonnell Douglas,
employees opposed the concept of self-managed work teams. They considered being
cooperative to the team analogous to assisting their own executioner. The concept of
self-managed work teams was also opposed by supervisors who did not want to
become mere facilitators.

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Organizational Behavior

Exhibit 10.3
Developing Effective Self-managed Work Teams
In order to become a self-managed work team, all the members of a team must assume a new set of
roles and responsibilities. In a conventional team, these roles and responsibilities were typically
assumed by the managers and supervisors. Therefore, when a work group or team tries to transform
itself into a self-managed work team, many challenges arise. A conventional team or work group
should master some disciplines in order to become a self-managed work team. These disciplines are
discussed below:
1. Determine and communicate the limits of team authority: A self-managed work team’s
charter should clearly determine and communicate the limits of the team’s role and authority.
The charter of the self-managed work team should be communicated to its team members, other
teams, and to the entire organization. Most self-managed work teams fail primarily because they
either do not have a charter which clearly defines the team’s role or because they do not
regularly revise this charter to ensure that it is still relevant.
2. Developing cross-functional skills within the team: The members of self-managed work
teams are a class apart from the members of conventional teams because they have cross-
functional skills. They are familiar with the various activities carried out by the team and have
the ability to perform each of these activities. Therefore, in order to develop self-managed work
teams, all the members should be provided cross-functional training.
3. Critical evaluation of the various aspects of team functioning: Self-managed work teams
should critically evaluate their performance, successes, goals and role in the organization. These
teams continuously examine their processes, environment and results critically and look for
ways to improve them. Critical evaluation of these aspects helps teams improve their
performance.
4. Making team members self-directed learners: Self-managed work teams determine what they
need to learn for effective performance in the future. Unlike conventional teams, they do not
depend on management to identify their learning needs. Self-managed teams work closely with
training personnel to keep abreast of new methods and approaches to find out what the team
needs in order to become long-term, self-directed learners.
5. Managing team performance and human resources: Unlike conventional teams, where
management plays an important role in goal-setting and performance evaluation, self-managed
work teams carry out these tasks themselves. Self-managed work teams must therefore be
trained in various skills like goal-setting, establishing benchmarks, evaluating performance
(against some set standards), and designing plans to improve the performance of the team. Self-
managed work teams are also responsible for the management of their human resources.
Consequently, the team members should have relevant HR skills like recruiting and selecting,
monitoring the performance of individuals, and taking corrective action. These skills are critical
for the team’s long-term success.
However, teams need not try to attain all these behaviors and characteristics of self-managed work
teams. Depending on an organization’s needs and culture, a team can determine how it should
become self-managed.

Adapted from “The Disciplines of Self-Managed Work Teams: Mastery Leads to Self-Management
Success,” RCI Resource Center, Russell Consulting Inc., 2001,
<http://www.russellconsultinginc.com/docs/white/tdosmwt.html>

Studies on the effectiveness of self-managed work teams are highly contradictory. For
example, some studies found that individuals who belonged to such teams were
generally very satisfied with their jobs. However, according to other studies,
employees who belonged to self-managed work teams had a higher absenteeism and
attrition rate than employees who worked in conventional work groups.

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Understanding Work Teams

Exhibit 10.4
Cross Functional Teams at Kodak
Kodak has always recognized the importance of teams and effective team work in its organization.
It has always believed that teams help an organization gain customer focus, improve work
efficiency, achieve successful restructuring and re-engineering of work processes, and foster a spirit
of cooperation and collaboration within the organization.
Forming cross functional teams was just another effort on the part of Kodak’s management to
improve the overall efficiency of the organization. In Kodak’s cross functional teams, people from
departments across the organization pooled their ideas to improve the various work processes and
operational flows in the organizational structure. By forming such teams, Kodak was able to bring
together the skills and ideas of employees working in different departments of the organization.
This enhanced the ability of the organization to solve problems and led to better decision making.
The cross functional teams established at Kodak were successful in the following ways:
 In building a shared vision, and developing shared values and principles;
 In creating a focus on customers;
 In restructuring and re-engineering work practices;
 In identifying the best ways of operating;
 In reducing the costs of operations;
 In assessing business risks and opportunities;
 In dealing with issues in accounting and administration and
 In solving problems in Information Systems and Logistics.
This team-oriented approach has helped Kodak enhance organizational productivity, and encourage
collaboration and participation among people belonging to different departments in the
organization. Eastman Kodak has thus been able to empower not only its people but the whole
organization by the introduction of cross functional teams.

Adapted from “Kodak’s Picture is Changing,” Management Decision, 34, 5 (1996): 2-3.
Cross-Functional Teams
Cross-functional teams consist of employees from the same hierarchical level, but from
different functional areas of the organization. These employees come together to
achieve a specific objective. In the past few decades, many organizations have used
cross-functional teams under different names. In the 1960s, IBM created a large task
force, consisting of employees from various departments to create System 360 (The
System 360 was a huge success). A task force can be considered a temporary cross-
functional team. A committee is also a type of cross-functional team. Committees are
composed of members drawn from different departments. In the late 1980s the use of
cross-functional teams became popular. Many major automobile makers, such as
Toyota, Honda, Nissan, BMW, General Motors, Ford and Chrysler, used these teams
to manage complicated projects. Chrysler used a cross-functional team to develop its
small car, Neon, on its own, without any foreign collaboration (it became the first
American company to do so). Moreover, the model set a record by being developed
within 42 months. The costs involved in developing Neon also set a record by being
the lowest in the industry. Exhibit 10.4 describes how cross-functional teams were
successful at Kodak.
The Industrial Specialties Division of 3M is also a type of cross-functional team. This
division has been extremely successful in sustaining innovation and quality in all the
company’s products. At 3M, cross-functional teams literally manage the whole

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business. These teams consist of members from a cross section of the organization,
including people from R&D, manufacturing, sales and all those involved in the daily
activities of the organization. These cross functional teams efficiently manage both the
operational activities and programs for new product development.
Cross-functional teams allow employees from diverse functional areas within an
organization or from different organizations to cooperate with one another in order to
handle complicated projects, share ideas, and solve various problems pertaining to the
organization. The development of cross-functional teams is not an easy task. It requires
time and patience as the team members need to learn to work with diversity and
complexity. As the members of such teams belong to different backgrounds and have
different experiences and viewpoints, they may not trust each other. Developing
mutual trust and a sense of camaraderie takes time and effort on the part of the team
members.

TEAM EFFECTIVENESS
Many organizations use teams (like Quality Circles, self-managed work teams, and
task forces) to enhance organizational effectiveness. The use of teams has helped
organizations bring down costs, improve quality and productivity, and encourage the
use of innovative and creative methods for solving problems. The team approach has
been used not only in the private sector but also in government agencies and not-for-
profit organizations. Researchers have found that, in general, teams have a positive
impact on organizational functioning. For example, a comprehensive meta-analysis
which spanned seventy studies found that self-managed work teams have a positive
impact on productivity and specific team-related attitudes.
However, there are some problems with the use of teams. An in-depth interview of
around 4500 teams in 500 organizations revealed that teams were often ineffective due
to various individual and organizational problems.
The various individual problems are described below:
 Team members showed resistance to change and were reluctant to adopt the new
practices of team work. All team members did not have the skills, ability or
knowledge necessary to help the team perform effectively. Therefore, some
members contributed more than others. As a result, when these members were
overburdened or absent, the teams did not function effectively.
 Sometimes the employees experienced conflict because their personal beliefs
clashed with the role they had to play as team members.
This study also found that some organizational factors were responsible for the
ineffectiveness of teams. The most prominent organizational problems were the
inability of the organizations to focus on team performance and the inadequate
incentives given for good performance of the team.
Due to these individual and organizational problems, teams may fail to carry out their
tasks in a focused manner. As a result, they would become ineffective. In order to build
effective teams, the top management must pay attention to the development of the right
type of environment.

Essentials for Building Effective Teams


Organizations can build effective teams by nurturing an environment that facilitates
and supports the development of teams. All team building exercises must ensure that
the team members are clear about their roles in the organization and that they possess
the adequate skills to perform their roles. A reward system that recognizes and
encourages team work over individual effort should also be developed.

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Understanding Work Teams

Providing a supportive environment


In order to build effective teams, managers should provide an environment that
supports teamwork. By so doing, the management encourages the employees within
the organization to initiate teamwork. Teamwork builds mutual trust and cooperation
and makes the employees adaptable and flexible. In order to create these conditions,
managers need to develop an appropriate organizational culture.

Relevant skills and role clarity


The team members should have the necessary skills to carry out the jobs they have
been entrusted with and should be willing to cooperate with others in the team. Team
members can work efficiently and effectively only when they understand their roles
and those of other members in the team. When team members are clear about what
each member is supposed to do, they respond to the demands of the situation, instead
of waiting for someone to give instructions. In other words, team members take the
necessary action on their own to achieve the goals set by the team. Consider a surgical
team in a hospital. During an emergency, each team member understands the need for
coordination and cooperation. They understand what the other members can do and are
sure that they will perform their tasks well. Such a high degree of cooperation and
mutual trust is the hallmark of an effective team.

Focus on superordinate goals


The supervisors or managers of teams should keep their team members focused on
accomplishing the overall task, not just on accomplishing their individual tasks.
Effective teams emphasize the achievement of a superordinate goal, thus encouraging
every member of the team to think beyond his individual interests. Therefore,
managers should consider creating superordinate goals for a team. Superordinate goals
are higher level goals which integrate the efforts made by two or more people. The
basic purpose of superordinate goals is to focus the attention of the members and unify
their efforts. However, at times, an organization’s reward systems, policies and record-
keeping requirements discourage teamwork. For example, if a sales representative has
reached his individual target, he may delay the delivery of some products so that those
sales contribute to his target for the next month. He is not bothered if all the other sales
representatives in the district have reached their target or if there is any deficit in the
achievement of the district target.

Team rewards
An effective system of team rewards encourages teamwork. The rewards could be
either financial or non-financial. An organization’s reward system is all the more
effective if the rewards have the potential to motivate employees to perform better.
Therefore, these rewards should be given to employees on the basis of their
performance in the team. Apart from giving recognition to good performance,
organizations should design innovative team rewards, such as giving team members
the authority to select new members, asking their opinion about a new supervisor, or
allowing them to develop rules and regulations for team members.

Shaping Individuals into Team Players


All individuals may not be team players. Some individuals want recognition for their
individual achievements and do not like sharing the laurels they feel they deserve with
a team. Organizations have traditionally encouraged individual achievements by
creating a competitive work environment in which only those employees who show
major achievements are rewarded. Therefore a major barrier to the creation of work
teams in organizations is resistance from individual workers. It is very difficult, and
sometimes impossible, to shape an individual into a team player when,

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Organizational Behavior

 The country’s culture is individualistic in nature, and


 The organization has traditionally encouraged individual achievement.
For example, many companies in the US, such as Kodak and Eli Lilly had traditionally
encouraged individual accomplishments by creating a competitive work environment.
Employees in such organizations were shocked when their organization decided to
shift from an individualistic approach to a team approach. However, in organizations or
countries which have strong collectivist values, like Japanese and Mexican
organizations, it is easier to introduce work teams. It is also much easier to introduce
teams in new organizations.
To achieve effective team work, the members of a team must possess the qualities of
good team players. In the following sections, we discuss the different ways in which
managers can turn workers into effective team players.

Selection
Interpersonal skills differ from person to person. Only those people who possess good
interpersonal skills should be selected for teamwork. Many candidates, especially those
who have earlier worked in organizations where individual achievement was
encouraged, may lack the necessary team skills. If managers have to select from such
candidates, they can either hire a candidate and provide him the required training to
make him a team player; or they can place the candidate in a unit of the organization
where team effort is not required; or they can initiate a recruitment process to search
for more suitable candidates.

Training
It is possible to train individual workers who have worked in conventional
organizations which emphasized individual performance and make them effective team
players. These employees can be trained by specialists, through various exercises, to
experience the satisfaction of teamwork. They can also be trained through workshops
to improve their problem solving, communication, negotiation, conflict management
and coaching skills. Table 10.3 gives a ten-step training model for developing effective
teams.
At Bell Atlantic, trainers helped employees realize the importance of patience in
teamwork, because teams take a longer time than individuals to arrive at a decision.

Rewards
To develop effective teams, the system of rewards should be based on team efforts
rather than on individual efforts. The individuals who constitute a team should be
awarded promotions, pay hikes and other forms of recognition by evaluating their
effectiveness as team members. At the same time individual contributions must not be
ignored. An effective reward system tries to balance individual contributions with
those made for the benefit of the team.
The examples of team-oriented behaviors that can be rewarded are:
 Learning new skills required by the team.
 Imparting training to new colleagues.
 Exchanging ideas and information with other members of the team.
 Assisting in resolving team conflicts.

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Understanding Work Teams

Table 10.3 Ten Step Training Model for Developing Effective Teams
Steps of Training Summary
1. Establish credibility Establish credibility for your knowledge, believability and approach.
2. Allow ventilation Letting trainees ventilate their anxieties early in the training may
prevent frustrations from forming later.
3. Provide an orientation Give specific, verbal directions and provide clear models of
behavior.
4. Invest in the process Early in the training, have each of the trainees’ work groups identify
its problems and concerns.
5. Set group goals Each group should create, through consensus, its own mission
statement. Have trainees identify the goals and guiding priniciples
they think will help them fulfill their mission statements.
6. Facilitate the group The trainees need to understand the group process, the way a work
process group functions as well as techniques, such as nominal grouping and
paired comparison.
7. Establish intragroup A meeting format is established detailing procedures regarding
procedures reporting minutes, making announcements, discussion of problems
and issues, proposing solutions, taking action and making new
assignments.
8. Establish intergroup Although most teams have functional leaders who interact with
processes others on their behalf, formal leaders called group leaders or
spokespersons have to be appointed for some teams.
9. Change your role As teams become more empowered, the trainer should move from
active participation to a more passive role.
10. End your involvement There comes a time when a group is ready to function on its own. It
is ready to set its own agenda, goals, timetables, and methods for
interacting with others in the workplace.

Problem-solving

A team gives its members a feeling of comradeship and satisfaction. To be an


important member of a team provides a feeling of excitement and satisfaction to
individuals. A team also gives its members an opportunity for personal development
and growth. Many employees therefore find the experience of working in a team very
rewarding.
APPLYING GROUP CONCEPTS TO TEAMS: TOWARDS CREATING
EFFECTIVE TEAMS

A variety of group concepts can be applied to create high-performance teams. A basic


knowledge of group processes is essential for creating teams that perform effectively.
The various factors that must be considered when developing teams are the size of a
team, the abilities of its members, the allocation of work roles, the sense of
commitment to a common purpose, the specification of clear and realistic performance
goals, the leadership and structure of the teams, the means for preventing social loafing
and making team members accountable for end results, the implementation of an
effective evaluation and reward system, and the development of trust between the
members of the group. These factors are discussed in detail below.
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Organizational Behavior

Size of Work Teams


Most effective work teams are small in size. In large groups, it is not possible to
develop a sense of cohesiveness, commitment and trust among team members. In such
groups, conflicts and disagreements among team members may arise. This will have a
negative effect on the performance of these teams. Therefore, in order to design
effective teams, managers must limit the number of members in each team to 10 or 12.

Abilities of Members
People need to have certain skills to perform effectively in a team. These skills include
technical skills, decision-making and problem-solving skills, and interpersonal skills.
First and foremost, team members need to have technical expertise to carry out the
activities of their team. Second, the team members should have the ability to identify
problems, generate and evaluate alternatives, and choose a suitable alternative. Third,
team members should have good listening and communication skills, and should be
able to resolve the various interpersonal problems faced by their team. It is essential to
have a right mix of these three skills in order to become good team players. When a
team is first constituted, its members may not have all the necessary skills. So the
members should take up the responsibility of identifying the skills in which the team is
deficient and learn those skills to ensure that the team performs effectively.

Allocation of Work Roles


Different teams are constituted for different purposes. In order to design effective
teams, managers need to identify those qualities which are necessary for performance,
select people with those strengths, and assign work roles that are compatible with that
person’s style. Managers can increase the probability of team members working well
together by matching the individual’s style with the demands of the roles to be played.
High-performing teams consist of people who are assigned different roles, into which
they easily fit.

Strong Commitment to a Common Purpose


Effective teams have a specific purpose which is shared by all members of the team.
This purpose provides direction to the team and makes the members more involved in
the activities of the team. Production teams at Saturn Corporation are united by a
common purpose: to develop an American automobile which is comparable to
Japanese automobiles, in terms of quality and price.
Team members of successful teams put in a lot of hard work in developing a purpose
which reflects both their individual and collective sentiments. The common purpose
provides direction and guidance to the team in any situation.

Specifying Clear and Realistic Performance Goals


The common purpose is translated into specific, measurable and realistic performance
goals by effective teams. Specific and clear goals help teams focus on achieving
results. They also facilitate open communication within the teams.

Good Leadership and Effective Structure


In order to provide focus and direction, a team needs a clearly defined structure and a
good leader. The members of a team should define and agree upon a common approach
for achieving the team’s goals. The team members should also be clear about the role
each of them would be playing to achieve the objective of the team. Clear delineation
of roles would ensure that each team member contributes equally towards the

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Understanding Work Teams

accomplishment of the goal. Team members should set schedules, identify the skills
that the team is lacking, establish methods for resolving conflicts within the team and
the manner in which decisions will be made and modified. This is possible only if the
team has a clearly defined structure and a good leader. The team leader may be
selected by the management or the team members. The leader plays a very important
role in integrating individual skills to achieve goals of the team.

Preventing Social Loafing and Determining Accountability


Sometimes team members may engage in social loafing. Social loafing is the tendency
of individuals to put in less effort while working in a group than when they work
individually. Some members feel that since their individual contributions cannot be
identified, they can get away with less work. This attitude can affect the team’s
performance and over-burden other members of the team. Effective teams make it very
clear to the members what they are responsible for as individuals and as a team. In this
way, effective teams reduce the tendency of social loafing and make members
accountable for the end results.

Proper Evaluation and Reward Systems


Conventional evaluation and reward systems (like individual performance evaluation,
fixed hourly wages, piece-work incentives) are not suitable for developing effective
teams. Instead, the management should use group-based appraisals, profit sharing, and
small-group incentives to strengthen team effort and commitment. This does not mean
that individual contributions should be ignored; they should also be evaluated and
rewarded. The management should blend both individual and team-based evaluation
and reward systems to encourage good team performance.

Generating Mutual Trust among Team Members


A characteristic of highly successful groups is mutual trust among team members. The
team members have faith in each other’s abilities, integrity and character. However,
maintaining these personal relationships and sustaining trust is an arduous task. It takes
a long time for one person to trust another, but a very short time for this trust to be lost.
If the team members distrust one another, the team will not function in a cohesive and
harmonious manner. Therefore, it is important that the members of a team trust one
another.

TEAMS AND TOTAL QUALITY MANAGEMENT


Total Quality Management (TQM) is a management philosophy that focuses on
customer relationships and tries to build an environment of trust and openness. All the
TQM initiatives and techniques necessitate high levels of communication, adaptation,
coordination and sequencing, which is possible only in extremely effective teams. The
concept of TQM therefore requires managers to encourage employees to share ideas by
forming teams.
It has been observed in most cases that TQM through team effort results in better and
quicker solutions to problems, thereby ensuring improvements in processes and
operations. This, in turn, enhances the quality and productivity of organizations.
In the early 1980s, the Ford Motor Company initiated TQM to deal with the problems
faced by the organization. While designing the problem-solving teams, Ford’s
management decided that
a) The size of the teams should be small in order to promote effectiveness and
efficiency.
b) The teams should have properly trained members who possess the required skills
for the job or task.
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Organizational Behavior

c) The teams should be given enough time to work on problems to be addressed.


d) The teams should be authorized to study the problem in depth and implement
remedial action to resolve them.
e) Each team should have a “champion” whose main task is to help the team
overcome various problems as they crop up.

TEAMS AND WORKFORCE DIVERSITY


Teams are formed when people from a cross section of the organization come together
to accomplish a common objective. If an organization has a diverse workforce, its
teams will include people from different groups. This diversity in teams will lead to a
variety of diverse and new perspectives on various issues. Diversity in work teams can
be very helpful when teams are involved in problem solving or decision making tasks.
This is because the ideas and suggestions of members from a variety of different
groups can lead to the development of a variety of creative and innovative solutions to
problems. Though diverse groups find it difficult to work together initially, this
difficulty dissipates over time.
Diversity within teams can lead to behavioral problems and lack of cohesiveness. This
can have an unfavorable impact on employee satisfaction, absenteeism, productivity
and turnover rates. If the problems created by diversity can be overcome and the
members can develop a spirit of camaraderie, employee satisfaction will increase, and
absenteeism and attrition will decrease.
It is therefore suggested that the norms of teams should support and encourage
diversity to gain the benefits of heterogeneity and at the same time enjoy the benefits
of a highly cohesive group. The advantages and disadvantages of diversity in teams are
shown in Table 10.4.

Table 10.4: Advantages and Disadvantages of Diversity


Advantages Disadvantages
 Multiple perspectives  Ambiguity
 Greater openness to new ideas  Complexity
 Multiple interpretations  Confusion
 Increased creativity  Miscommunication
 Increased flexibility  Difficulty in reaching a single
 Increased problem solving agreement
skills  Difficulty in agreeing on
specific actions

Source: Scarborough,”Understanding Work Teams,” (Prentice-Hall Canada


Inc., 1999) < http://www.ucs.mun.ca/~mwithey/chapeigh.ppt>

SUMMARY

The terms work groups and work teams do not have the same meaning, although they
are generally used interchangeably. A team consists of a small number of people
committed to a common purpose and common performance goals. They share the
responsibility and hold themselves mutually accountable for accomplishing the
predetermined goals of the team. The team members possess complementary skills and

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Understanding Work Teams

follow a common approach to achieve their objectives. Unlike traditional work groups,
teams have broad job categories, less formal supervision and different types of reward
systems. Teams help organizations enhance performance and reduce costs, and provide
employees with a sense of dignity and self-fulfillment.
Teams can be classified into three types on the basis of their objectives: problem-
solving teams, self-managed teams and cross-functional teams. A Quality Circle is a
type of problem-solving team. It consists of a group of employees who work in the
same field or perform similar work. They meet voluntarily to identify and resolve
work-related problems. Teams can be effective when the environment is supportive of
collective efforts and when the members of the team possess the requisite skills to
perform their tasks. The presence of an effective reward system enhances the
effectiveness of a team.
All individuals may not be team players. Therefore, managers should select only those
candidates who have the necessary skills and are good team players. It is possible to
shape individuals into good team players through programs and workshops. Also, by
designing effective reward systems, individuals can be motivated to become good team
players.
Various group concepts can be applied to create high-performance teams. Teams can
be effective if
 they restrict the number of members to 10 or 12;
 they ensure that their members have the necessary skills;
 they set specific, measurable and realistic goals;
 they are led by good leaders;
 they have an appropriate evaluation and reward system;
 they encourage mutual trust among the members and
 they discourage social loafing
Total Quality Management (TQM) is a management philosophy that focuses on
continuous process improvement. TQM encourages working in teams, removing
internal organizational barriers, and sharing power. It also emphasizes the continuous
improvement of processes. Diversified teams provide unique and innovative solutions,
but at the same time, they are less cohesive. If the team norms are supportive of
diversity, it can achieve cohesiveness. Studies reveal that teams with high cohesiveness
are likely to be very effective and have low rates of absenteeism and attrition.

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Chapter 11

Power, Authority and


Influence
In this chapter we will discuss:
 Definition and Meaning of Power
 Distinctions between Power, Authority and Influence
 Bases of Power
 The Dependency Factor
 Power Corollary and Faces of Power
 Power vs Exchange Theory and Control
 Power Structure and Blocs
 The Process of Power
 Contingency Approaches to Power
 Power in Groups: Coalitions
 Organizational Politics
 The Ethics of Power and Politics
Power, Authority and Influence

Power is one of the most controversial topics in the study of organizations and of
people therein. So much so, that it has been termed the “last dirty word.” People are
often not comfortable discussing power. People who have power deny it; people who
seek power try to conceal their objectives from others; and those who secure power,
are secretive about how they secured it. Extensive research has been done in OB on
how people gain and use power in organizations. It has been observed that most formal
organizations are highly political and power plays an important role in the way they
work. Power and politics are an important part of the dynamics of OB.
Power relationships are a natural part of any group or organization. It is important for
students of OB to know how power is acquired and exercised. Though there is a
popular saying that “power corrupts, and absolute power corrupts absolutely,” power is
not always a negative concept. Power is a reality of organizational life and it is difficult
to do away with it. Moreover, an understanding of how power works in organizations
can help one become a more effective manager.
In the first part of this chapter we discuss the definition and meaning of power and its
relationship with authority and influence. Later, we examine the bases of power,
namely coercive power, reward power, legitimate power, expert power and referent
power. We also discuss the dependency factor, the power corollary and faces of power,
power vs exchange theory and control, and the structure of power relations. In addition,
power blocs, the process of power, the contingency approaches to power and power in
groups are discussed.
The second half of the chapter deals with the definition of politics, factors relating to
political behavior, politicking, and the relationship between power, politics and ethics.

DEFINITION AND MEANING OF POWER

Power is an important element in motivation. It is required to motivate individuals or


groups to work towards a certain end. In this context, it is also an important aspect in
leadership. Power has been defined in different ways by a number of scholars. Stephen
P. Robbins defined power as “the ability to influence and control anything that is of
value to others.” According to Max Weber, a pioneering sociologist, power is “the
probability that one actor within a social relationship will be in a position to carry out
his own will despite resistance.” Jeffrey Pfeffer, an organizational behavior theorist
who is closely associated with research in the area of power, defines power as “the
potential ability to influence behavior, to change the course of events, to overcome
resistance and to get people to do things that they would not otherwise do.” In other
words, power is the ability of one organizational member to get another organizational
member to do what the latter would otherwise not have done. Power is obtained
through the possession and control of resources that are valued by another party and
which determine one organizational member’s dependence, indebtedness or allegiance
to another.
The most important element in the study of power is dependency. The greater the level
of A’s dependence on B, the greater is B’s power over A in that relationship. Further,
dependence is the function of the alternatives perceived by A and the importance given
by A to these alternatives that B controls. A person can have power over another only
if he has control over something that the other person desires. For example, if you need
to acquire certain skills in which your coach is the only expert available, then the coach
has power over you. Since the alternatives are limited and it is important to you to
acquire those skills, you are dependent on the coach. But once you have acquired those
skills, your dependency on the coach decreases and thus, his power over you also
decreases.

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DISTINCTIONS BETWEEN POWER, AUTHORITY AND INFLUENCE

A person with a high need for power has the need to manipulate and lead others. Power
itself refers to the ability of an individual or group to bring about a change in some
other individual or group in some way. The person possessing power has the ability to
bring about a change or manipulate other people or groups.
Power may or may not be legitimate, whereas authority is the source of power, and
hence, is legitimate. The difference between top-down classical bureaucratic authority
and Chester Barnard’s bottom-up authority (which says that the amount of authority
exercised by a superior depends on the degree of acceptance of that authority by
subordinates) also brings out this difference. According to Barnard, authority is “the
character of a communication (order) in a formal organization by virtue of which it is
accepted by a contributor to or ‘member’ of the organization as governing the action he
contributes.” This definition of authority clearly brings out the difference between
power and authority. Authority has the willing acceptance of the person over whom it
is exercised, whereas power is (generally) uni-directional. It may or may not be liked
by the person over whom it is exercised. According to Grimes A. J., “What legitimizes
authority is the promotion or pursuit of collective goals, that are associated with group
consensus. The polar opposite, power, is the pursuit of individual or particularistic
goals associated with group compliance.”
Influence refers to the ability to modify or change people in general ways, like
changing their performance and satisfaction. It is a broader concept than both power
and authority. Although both power and influence are an essential part of leadership,
influence is more closely associated with the function of leading than power. Another
difference between power and influence is that power has more ‘force’ than influence.
Power gives a person a right to change certain relationships within an organization. It
has the ability to alter reality. Influence, however, can only alter a person’s perceptions
about reality and the relationships in the organization.
Therefore, the difference between power and authority is that authority has legitimacy
and acceptance, whereas power may or may not. And influence differs from power in
terms of scope: it has a broader scope than power. Though influence and power are
different, the two are related and sometimes the terms are used interchangeably. There
is a subtle difference between authority and influence. While authority generally flows
from a higher level to a lower level in a hierarchy, influence jumps levels and in many
cases may flow from a lower level to a much higher level.

BASES OF POWER

Power is of different types, depending on where it is sourced from and how it is used.
Social psychologists John French and Bertram Raven identified five sources of power:
coercive, reward, legitimate, expert and referent. These five sources or bases of power
explain the dynamics of power in an organization and how an individual or a group
influences others.

Coercive Power
Coercive power is based on fear. A person who has the power to harm another person
physically or psychologically, by threatening his job security or punishing him in some
way, is said to have coercive power. Coercive power provides an individual with the
means to physically harm, bully, humiliate or deny something to others. Coercive
power stems from B’s expectation of punishment by A if B fails to conform to A’s
influence. That is, a person behaves in a certain way out of fear of the adverse
consequences that might occur if he does not conform to the wishes of the person who

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exercises the power. Coercive power makes employees strictly follow the rules,
directives or policies of an organization. People pretend to work busily when the boss
walks through that area, only due to fear of punishment, which the boss is in a position
to mete out. In this case, the boss has coercive power and hence can consciously or
unconsciously coerce people to work. Organizational participants are usually coerced
by punishments like reprimands, demotion or termination. Coercive power is negative
in nature. The regular threat and use of negative sanctions creates feelings of hostility
and resentment in employees and may be less functional in the long run than the other
bases of power, which are more positive in nature.

Reward Power
Reward power is based on B’s belief that A has the ability to grant rewards to B.
Reward power has its source in a person’s ability to control the resources used to
reward others. Potential rewards that are valued in an organizational context include
pay increases, promotions, favorable work assignments, new equipment, praise,
feedback and recognition. Reward power gives managers the power to administer
positive reinforcements to others, which encourage repetition of positive behavior. In
terms of Vroom’s expectancy-valence theory, reward power refers to a person’s ability
to administer positive valences to another person and the recognition of this power by
the other person.
Reward power is diametrically opposite to coercive power. Coercive power arises from
the ability to inflict a punishment or withdraw a reward. Reward power, however,
arises from the ability to give a reward or eliminate a negative factor from a person’s
work sphere. People comply with the wishes and directives of managers because
compliance brings about positive benefits; therefore, managers will have power over
their employees if they can give rewards that are valued by the employees. The most
important feature of reward power is that the power is dependent on the recipient.
What the manager perceives as a reward may not hold any value for the employee, and
vice versa. In such a situation, the manager will not hold any reward power. For
instance, a manager may offer his subordinate a promotion with increased
responsibility, but the subordinate may not value it since the promotion is accompanied
by a change of location, which is not convenient to him. In this case, the manager will
not have reward power. But if the subordinate considers it rewarding, then the manager
is said to have reward power. Sometimes managers may not have the authority to
dispense rewards, but as long as their subordinates believe that they do, they possess
reward power.

Legitimate Power
A person’s structural position within a formal group or organization, more often than
not, plays a very important part in determining his access to one or more of the bases of
power. This is known as legitimate power and refers to the power a person receives
because of his or her position in the formal organizational hierarchy.
The person who has legitimate power has the right to punish as well as reward other
people. Thus, legitimate power embraces coercive power and reward power. However,
legitimate power is broader in scope than both coercive and reward power. Legitimate
power closely resembles authority and primarily includes acceptance by organizational
members of the authority of the position. Employees feel the obligation to accept this
power out of deference for the person’s organizational position. Legitimate power can
be derived from three main sources.
 The cultural values prevailing in a society, organization or group determine what
is legitimate in the same. For example, in certain societies, legitimate power
increases with age, and the older a person gets, the more power he possesses. In

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some other societies, gender, job, or functional position may be the criterion for
legitimate power. For example, engineers have more legitimate power in a
company’s ‘operational’ functions, whereas accountants have more legitimate
power in ‘financial’ matters.
 People may derive legitimate power from an accepted social structure that confers
legitimate power on people belonging to a certain class or rank within a society or
organization. For example, blue-collar workers who accept employment in a
company accept the hierarchical structure and give legitimate power to their
supervisors as soon as they accept employment.
 Legitimate power can also emanate from a person’s designation as an agent or
representative of a powerful person or group. The chairperson of a committee, the
board member of a company, the union leader and elected officials hold this form
of power.
All these forms of legitimate power create an obligation to accept power and be
influenced by it.

Expert Power
Expert power refers to the influence a person wields as a result of some special skill or
knowledge that he possesses. The increasingly specialized nature of jobs has increased
the dependence on experts to accomplish goals. Experts are perceived to have
specialized knowledge or understanding in certain well-defined areas. Doctors,
computer professionals, tax accountants, industrial psychologists and other such
professionals acquire power as a result of the specialized knowledge they possess. In
organizations, staff specialists possess expert power in certain specific functional areas
but not in others. For example, an engineer has expert power in the field of production,
but not in areas like finance, human resources, and so on.
For a person to assume expert power, the people over whom power is to be wielded
must perceive the expert to be credible, trustworthy and relevant. To establish
credibility, the expert should not only have substantial knowledge but also show
tangible evidence of this knowledge. Besides credibility, the expert must also have
trustworthiness and relevance. Trustworthiness means that the expert must have a
reputation for being honest and straightforward. In addition, the knowledge of the
expert must be useful and relevant to the situation for the expert to exercise power. For
example, it would not be relevant for a cricket coach to give advice on some other
matters that are not related to cricket.
With increased emphasis being placed on technology and specialization by
organizations, the expert power of organizational members is becoming more and more
significant. This has been recognized formally by many companies who have been
deliberately including lower-level staff possessing expert power in top-level decision
making. The president of a certain high-tech company stated that, “In general, the
faster the change in the know-how on which a business depends, the greater the
divergence between knowledge and position power is likely to be. Since our business
depends on what it knows to survive, we mix ‘knowledge-power people’ with
‘position-power people’ daily, so that together they make the decisions that will affect
us for years to come.”

Referent Power
The base for referent power is identification with an individual who has desirable
resources or personal traits. If individual X admires and identifies himself with
individual Y, then Y can exercise power over X. However, it is not always necessary
for Y to know the power he has over X. Sometimes, Y can influence X even without
being aware of it.
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Power, Authority and Influence

Referent power need not always be linked to a person’s position in the formal
organization. Employees may respect, admire and try to emulate another person, who
may be a superior, peer or even a subordinate. Referent power is similar to charisma. It
is based on the admiration of one person for another and a desire to be like that person.
The admiration can cause a person to change his behavior and attitudes to resemble
those of the person possessing the referent power. Celebrities are handsomely paid to
endorse products in commercials because they possess high referent power. Generally,
in organizations, people who are articulate, domineering, physically imposing, or
charismatic have the ability to influence other people, and hence are said to have
referent power.

THE DEPENDENCY FACTOR

Dependency is the most important element in the study of power. An understanding of


the concept of dependency will help us understand the working of power.
If a person A is dependent on person B, it is implied that B has power over A. When a
person possesses something that others require but he has sole control over, then the
dependency of other people on him increases. This makes the person in possession of
the resource gain power over the people who want it. It should be understood that
dependency has an inverse relationship with the alternative sources of supply. If
something is available in abundance, then the possession of it will not confer any
power. If a person can create a monopoly by controlling information or something that
people consider valuable, then other people become dependent on that person. So, the
more options these people have, the less dependent they are on that person, and the less
power that person has over them. That is why most organizations maintain multiple
suppliers instead of being dependent on a single supplier. The level of dependency
depends on the importance, scarcity and non-substitutability of the resource controlled
by a person.

Importance
The resources that a person controls must be perceived as being important by other
people if a dependency has to be created. For example, the avoidance of uncertainty is
important to organizations. Therefore, those individuals or groups who can absorb an
organization’s uncertainty would be perceived as controlling an important resource. A
study of industrial organizations showed that the most critical uncertainty facing these
organizations was the sale of their products. Therefore, the marketing departments in
these organizations were perceived to be the most powerful. This is because the
marketing department had the ability to control or absorb the uncertainty facing the
organization. Similarly, a company’s negotiating representatives have increased power
during a labor strike. These examples substantiate the fact that the ability to reduce
uncertainty increases a group’s importance and also its power. It should be noted that
this type of importance is situational in nature. It differs between organizations and
even varies over time within the same organization.

Scarcity
When something is available in abundance, possession of it will not increase one’s
power. Only when a resource is perceived to be scarce can dependency be created. This
is why some low-ranking members in an organization who have valuable knowledge
have greater power than high-ranking members who do not have access to that kind of
knowledge. This is also why people who possess such knowledge refuse to share it
with other people. They actively seek to prevent other people from gaining access to
their knowledge.

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Organizational Behavior

The scarcity-dependency relationship is also evident in the power of certain


occupational categories. In those occupations where the demand for people is more
than the supply, compensation and benefit packages are far more attractive than in
those occupations where there is an abundance of people. The bargaining power of
people (in high demand) allows them to negotiate for higher salaries and better
benefits.

Non-Substitutability
When a particular resource does not have any viable substitutes, then the person who
controls that resource will have power over those who require that resource. For
example, when a person has specialized skills that no other person has and which
cannot be substituted by any other skill, then the power he wields will be tremendous.

POWER COROLLARY AND FACES OF POWER


The exercise of power comes at a cost. Every time a person exercises power, he
utilizes some resources, and this proves to be costly for the organization. Further,
different types of power have different kinds of consequences. The consequences of
using power are the costs of using it. The exercise of certain types of power is more
costly than the exercise of other types. For instance, if a person uses legitimate or
coercive power to dismiss an employee, the organization has to bear the cost of losing
an employee, the cost of stoppage of work, and the cost of recruiting a new employee.
The cost of power is lower if the errant employee was simply reprimanded. Likewise,
if an expert assists a member of the organization in solving a certain problem, there is a
chance that the subject might master the expert’s knowledge and use it by himself at a
later stage. This sharing of knowledge reduces the expert’s power. But, if the expert
only passes on a limited amount of knowledge, which would require the subject to
consult the expert every time he needs to use the knowledge, the expert does not lose
his power. Instead he gains referent power in addition to his expert power.
It is important to maintain a balance of power. Every time power is used, it leads to an
imbalance in the power situation. For example, if a manager reprimands an employee
very harshly, the employee may become demotivated and stop contributing positively.
In addition, the manager may also begin to be perceived negatively by other
employees, which would decrease his power over them. Therefore, power should be
exercised judiciously and in such a way that it minimizes the subject’s scope for
counter action.
Research in the field of OB has revealed that power is dualistic in nature. David
McClelland, a prominent social psychologist who did extensive research on the nature
and uses of power in organizations, described the “two faces of power.” His research
concluded that power is of two types – negative power and positive power. Negative
power is based on personal power and is primitive in nature. When a person exercises
negative power over another person, the relationship is based on a win-lose situation
and often has negative consequences. When a manager uses negative power he views
his subordinates simply as a means towards an end and not as individuals. This attitude
often makes subordinates resist the manager’s authority and proves to be counter
productive for the organization.
Positive power, however, is associated with social power and is characterized by
concern for subordinates and commitment to group goals. A manager who uses
positive power exercises power on behalf of, rather than over people. According to
McClelland, positive power is characterized by “concern for group goals, for finding
those goals that will move people, for helping the group to formulate them, for taking
some initiative in providing members of the group with the means of achieving such
goals, and for giving group members the feeling of strength and competence they need
to work hard for such goals.” Managers who use positive power generate feelings of
loyalty and commitment in subordinates.

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Power, Authority and Influence

POWER VS EXCHANGE THEORY AND CONTROL

The Exchange Theory views human behavior as an exchange process. This theory
examines what a person expects for the efforts he puts in and what he actually
achieves. Motivation is the outcome when an individual tries to bring about parity
between the costs he incurs (his efforts) and the rewards he gets (the returns). Lawless,
an OB researcher, related the exchange theory to the use of power.
1. A person who possesses expert or referent power, is in a position to determine and
control the profit or loss another person would bear on the basis of the various
alternatives available in that situation.
2. When a person possesses referent power, his subject experiences satisfaction by
emulating him as much as possible. When the subject is unable to imitate his
referent’s behavior to the extent he desires, he feels dissatisfied and hence suffers a
loss.
3. A subject accepts an expert’s power over himself because he believes that
compliance with the expert’s wishes would lead to a positive outcome or reward.
Non-compliance may lead to dissatisfaction or loss.
4. A subject complies with legitimate power as he incurs a profit by conforming to
accepted standards and procedures. The profit is in the form of acceptance by his
superiors and peers in the organization. Non-compliance with legitimate power
may lead to a loss in the form of a punishment or non-acceptance by colleagues.
Power has also been studied in conjunction with control. Although traditional
organizational theorists believe that power and control must be centralized in an
organization and must be exercised only by a few key executives, behavioral theorists
contend that excessive centralization is unnecessary as well as counter-productive.
Behavioral theorists emphasize decentralization and the sharing of information. They
argue that excessive centralization prevents information sharing and leads to the abuse
of power. Therefore, power should be dispersed within the organization to create a
democratic environment. Such an environment will help the organization achieve its
goals.

POWER STRUCTURE AND BLOCS

Power structures and power blocs within an organization lead to the concentration of
power in the workplace.

Power Structure
The power relationships existing between the members of an organization usually
match their positions in the organizational chart (i.e. a high ranking person has more
power over a low ranking person). The power relationship may be direct or indirect. In
Figure 11.1 the power relationships shown are direct as well as indirect. A supervises
B, C and D individually (directly) in one structure, while in the other structure, he
supervises in an indirect manner. However, his power is equal in both the direct and
indirect forms of supervision.
In Figure 11.2, however, the indirect power of A, B and C is greater than the direct
power they exercise over their immediate subordinates. This is because, A, B and C are
part of a “power elite” and have balanced power relationships between them, although
they work for different departments or different organizations. The relationship
between them stems from casteism, club membership or some other form of common
interest. This relationship ensures that the elite exercise more power in reality than
what they exercise directly over their immediate subordinates. The formation of power
elite arises due to mutual sharing of power.
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Organizational Behavior

Figure 11.1 Indirect Power of A is Equal to his Direct Power

A
A

B
B C D

Adapted from DJ Lawless, Organizational Behavior (NJ: Prentice-Hall Inc, 1979)/


RS Dwivedi, Human Relations and Organizational Behavior – A Global Perspective,
5th edition (New Delhi: Macmillan India Ltd.,2001) 350.

Power Blocs
Power blocs also form an essential part of a social system. Unlike power elites which
supplement the power of people who are already powerful, power blocs are large
groups of people who possess limited individual power. People come together to form
power blocs to increase their collective power and reduce or balance the power of those
on whom they depend. Trade unions are a good example of power blocs. Individual
laborers have limited power, but as a union they possess substantial bargaining power.
The formation of power blocs leads to instability in social interactions. Friction may
develop in the interactions of power blocs, leading to social unrest. When a power bloc
takes a certain action against the people on which it depends, the said people may take
some other action to try and balance the power. If the power struggle continues for a
long time it can lead to unrest and losses to both parties. Therefore, it is necessary to
balance power in such a way that all the parties concerned are satisfied. This can be
achieved through collective negotiations and agreements.

THE PROCESS OF POWER

Different scholars have different views about the nature of power in organizations.
While some of them regard power as a static concept, which gives the holder of the
power the capacity to influence and direct decision making, other scholars (like
Lawless) maintain that power is essentially dynamic in nature. The dynamic point of
view is supported by research findings which proved that power was essentially a

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Power, Authority and Influence

Figure 11.2 Power Elite Among A, B and C, the Heads of Three


Departments.

A B C

D E F G H I J K L

Production Finance Human


Dept. Dept. Resources
Dept.

Adapted from DJ Lawless, Organizational Behavior (NJ: Prentice-Hall Inc, 1979


)/RS Dwivedi, Human Relations and Organizational Behavior – A Global
Perspective, 5th edition (New Delhi: Macmillan India Ltd., 2001) 351.

function of interaction between two or more people, rather than a feature of the person
holding the power. The dynamic nature of power suggests that a person’s power is not
a self contained feature, but is rather dependent on other people. A person can only
assume as much power as his target allows him to. Therefore, power is a two-way
process, which is a function of the interaction between the members of a group or
organization.
The process of power in organizations consists of certain important elements such as
dependency, balancing power relationships, reactions to imbalance and power ploys.
Before understanding the process of power, it is essential to understand the nature of
power in organizations. Stephen Robbins has described three central issues related to
organizational power. The three issues are: ‘Who wants power?’, ‘How is power
accomplished?’ and ‘Why is power sought?’
According to Robbins, power is not uniformly distributed among different members of
the organization. This is mainly because of individual differences in people in terms of
age, education, experience, position and access to resources. Besides physical and
personality factors, people also differ in the strength of their ‘power motive.’ That is,
different people place different values on the acquisition and exercise of power. Some
people actively seek power while others do not give it a lot of importance. Robbins
also argues that people who have a high power motive and those who hold power resist
all changes that are likely to bring about a change in the power structure. Additionally,
if they lose power they make efforts to regain it, either individually or by forming
coalitions.
People who have a high power motive actively seek power. They accomplish power by
acquiring control of certain resources which other people perceive to be important.
They try to increase their power by controlling uncertainty, thus creating dependency
in other people. Such people also try to increase their power by acquiring expert
knowledge, denying access to that knowledge to other people, and by making
themselves irreplaceable in a function or an organization.
The primary motive for seeking power is to gain control over people and situations.
People seek power to be able to get people to comply with their wishes. Holding power
allows people to coerce others into doing something. Although coercion is a negative
function and is often disliked by the targets, it has proved to be effective in some

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Organizational Behavior

situations. For instance, when the reason for a person’s inefficiency is not lack of
ability but lack of motivation, coercion can be an effective tool for making that person
more productive.
In addition to the aspects of power discussed above, there are also some other aspects
which are explained below.

Power Balance
Power is a function of dependency. When the degree of dependency of the target is
equal to the degree of power exercised by the agent, then power is said to be balanced.
When the agent exercises more power than the target’s dependence or vice versa, an
imbalance in power occurs. As long as power is balanced, the relationship is
harmonious. When the balance is lost, there is unrest and disharmony.

Balancing Imbalance
When power is imbalanced, retaliatory action and unrest take place. For example,
union-management relations are balanced as long as the power and dependency of both
groups are matched. When an imbalance occurs, strikes or lockouts take place. These
methods are adopted by the parties concerned to restore the balance of power. In a
situation of imbalance, the party which continuously experiences a loss in the
relationship tries to balance power. There are several methods the party can adopt to
restore balance:
 The party can withdraw from the relationship.
 The party can form an alternative relationship with another party of equal or
greater power.
 The party can form a coalition with another weak party to gain group power.
 The party can achieve a balance of power through status valuation. The greater the
power need of a person, the higher his dependency on his subordinates. Therefore,
a powerful person who wants to maintain his power will avoid antagonizing
subordinates out of fear that they shift their loyalty to others thereby causing a
reduction in his status.
 The party can equalize power through regular and continuous interaction. For
instance, although labor unions and management have different degrees of power,
constant interaction makes them dependent on each other, thus bringing about
equalization of power.

Maintaining Imbalance
In some situations however, it is desirable to maintain an imbalance in power.
Balanced power has the tendency to undermine authority, which may affect the
achievement of organizational goals. Therefore, some organizations make a conscious
effort to maintain an imbalance. This is usually done by creating a psychological
distance between people. For example, a person with legitimate power can be provided
with a separate office, a separate wash room or other additional facilities. This allows
the superior to maintain a distance from subordinates and thus exercise power
effectively.

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Power, Authority and Influence

Exhibit 11.1
Power Sharing
Power plays a very important role in the running of organizations. People who ‘run’ the organization
use power over people who ‘work for’ the organization to get things done by them. Power is
obtained through the control of resources like money, physical assets, and knowledge. In order to
use power to control the behavior of others, the power holder needs to legitimize that power. The
legitimization process involves taking up certain duties and responsibilities towards the people over
whom power is to be exercised. This ensures that the use of power is acceptable to the subjects.
Traditionally, authoritarian organizations used economic power more than any other kind of power.
The relationship between the management (power holder) and the workers (subject of power) was
based on economic necessity. Workers obeyed the management because it had the right to impose
economic sanctions on them. Power was mostly of the coercive or reward type.
In recent times, however, a lot of importance is being given to the development of democratic values
in organizations. Workers are no longer seen as a means to an end. Management has also recognized
that much more can be achieved when motivation goes beyond economic need. As a result, many
organizations now try to create a feeling of involvement, self worth and achievement in workers.
The natural consequence of this increased emphasis on workers has been ‘power sharing.’ Power
sharing is a practice through which management relinquishes monopoly rights over power and the
resources that confer it. The result of power sharing is worker empowerment.
Power sharing between unions and management changes the power dynamics in an organization in
basic ways. Both the parties experience gains and reductions in power. However, the reductions are
offset by the benefits that accrue from a more democratic style of management. Given below are the
dynamics of power sharing between unions and management.
Management Perspective
Reductions in Power
 Loss of power in taking unilateral operational decisions
 Loss of the capacity to react immediately in some situations
 Loss of the ability to dominate negotiations through the use of economic power
 Reduction in the ability to arbitrarily control discipline and grievance procedures
 Reduction in the power and position of plant management positions
Increases in Power
 Increase in the commitment of the workforce
 Increase in the capacity to respond to change and external contingencies
 Increase in the effectiveness of organizational communication
 Increase in the benefits derived from the use of the knowledge, application and motivation
of the workforce
Union Perspective
Reductions in power
 Loss of the ability to react negatively to certain management initiatives
 Having to accept joint responsibility for the wrong acts of the management
 Loss of political power as the union can no longer capitalize on the mistakes of the
management (due to their joint responsibility)

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Increases in Power
 Increased ability to bargain for the security of the workforce
 Increased role in operational decision making
 Increased access to information
 Increased ability to influence the levels of performance
 The ability to conduct professional and objective negotiations which help secure mutually
acceptable agreements
 Improvement in working conditions through participation in QWL programs and
organization design
 Increase in union affiliation by the employees

Adapted from Robert. W. Ahern, “Power Sharing in Unionized Organizations”, www.nlma.org, August
18, 1998, National Labor-Management Association, August 12, 2003, < www.nlma.org/pwrshare.htm>

Reacting to Power
People also react to power in different ways. These reactions are conditioned by a
person’s background and experiences. The reaction to power determines the
achievement of balance in the relationship. For example, when a salesman approaches
a prospective customer for a sale, the customer exercises power. The salesman may
behave in a very friendly manner to overcome the barrier of power and persuade the
customer to purchase the product. In this case, the power is imbalanced, as the
customer exercises more power than the salesman’s dependence. The dependency may
not be very high because there may be other prospective customers. The interactions
between the two will therefore proceed through a series of balances and imbalances,
until a level of balance is reached where a mutually satisfying deal is struck.

Using Power Ploys


Power ploys are the techniques that a person uses to attain and retain power. Power
ploys move in three directions – upward, downward and lateral.

Upward strategies
Upward power ploys are used by a person to impress his superiors and move up in the
organization. He tries to adopt a strategy and style which he knows his superiors will
approve of. He may also try to achieve power by impressing them with his knowledge
and experience in certain areas. In addition, he may try to make his superiors
dependent on him by showing some extraordinary ability or skill.

Downward strategies
Downward strategies are used to gain power over subordinates. An agent can exercise
power over subordinates by forming groups of supporters among the subordinates by
impressing them with his knowledge or personality. The leader can also impress
subordinates and gain their support by empathizing with them, showing consideration
for their needs, and helping them when they have some problems. By so doing, he
makes them feel obliged to him.

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Power, Authority and Influence

Lateral strategies
People use lateral strategies to gain power over peers. A person can gain power over
his peers by impressing them with his knowledge and personality. However, many OB
scholars consider that the best way to gain power over peers is by creating a
relationship of obligation. When a person does another a favor, the recipient of the
favor becomes obligated to the person doing the favor. This obligation gives the former
power over the latter. Power can also be gained by establishing links and relations with
superiors. Having power over peers enables a person to garner support to further his
interests with the top management.

CONTINGENCY APPROACHES TO POWER

Contingency approaches to various theories in management are beginning to gain


importance. Theorists have developed a contingency approach to the theory of power
as well. According to Pfeffer, a behavioral scientist, a person can attain power by being
in the “right place.” He describes the “right place” as one where a manager has or can
gain access to and control over resources like budgets, physical facilities or people and
positions that can be useful in the long run; or where he can attain access to or control
over critical organizational information; or a position or department which confers
formal authority on him.
Further research in the area supports Pfeffer’s conclusions and gives greater insights
into the topic. For instance, a finding suggested that when the professional orientation
of group members is very high, there is a high amount of referent power influencing
them. Also, where higher ranking organizational members do not give sufficient
importance to a task, the lower ranking members are more likely to assume additional
power over that task.

Interdependence and Influencability


The level of interdependency between the various departments of an organization and
the critical importance of a certain department also have a moderating effect on the
extent of power. Another important factor affecting the strength of the power exercised
is the influencability of the target. Influencability refers to the degree to which a target
is influenced by a powerful person. This assumes greater importance because of the
two-way reciprocal nature of power relationships. Influencability depends on factors
like degree of dependency, uncertainty, personality traits, intelligence, age and culture.
These factors are discussed below:
Degree of dependency
The greater the degree of dependency of the target on the person wielding the power,
the greater is the influence on the target.

Uncertainty
The greater a person’s uncertainty in attaining a certain outcome, the greater the
likelihood of that person being influenced by the agent who controls the outcome.

Personality Traits
The personality traits of the target also determine the extent to which he is likely to be
influenced by another person. For instance, a target who has low self esteem or
intolerance for uncertainty is likely to be more influenced by a powerful person than a
target who is confident and certain.

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Organizational Behavior

Figure 11.3: An Overall Contingency Model of Power

Target’s Required
Required Sources of Process of Power
Influenceability Conditions
Power

Reward
Wants to gain a The agent must
Coercive favorable reaction; have surveillance
Compliance
wants to avoid a over the target
Means-ends-control punishing one
from the agent

Finds a self- The agent must


Referent satisfying have salience;
relationship with the agent must
Attractiveness Identification the agent; wants be in the
to establish and forefront of the
maintain a target’s
relationship with awareness
the agent

Expert
Goes along The agent must
Legitimate with the agent have relevance
Internalization because of
consistency
Credibility with internal
values

Source: http://unix.cc.wmich.edu/~mallakl/courses/ime600/ime600-2.pdf

Intelligence
Research in the field of psychology suggests that intelligent people are likely to have
greater self esteem and confidence that those with lower intelligence. Therefore,
intelligent people are unlikely to be influenced by other people.

Age
Age has been acknowledged as one of the most important factors determining the
susceptibility to influence. Social psychologists have proved that children up to the age
of eight or nine are most susceptible to influence. Susceptibility then tapered off till
adolescence, after which it leveled off.

Culture
Research has also proved that culture plays a very important role in determining
influencability. People brought up in cultures which uphold values like individuality,
diversity and independence are less likely to be influenced than people who have been
brought up in cultures which emphasize uniformity and conformity.

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Power, Authority and Influence

It is important to account for the influence of these factors on a person when analyzing
power relationships.

Overall Contingency Model for Power


An overall contingency model can be developed on the basis of the work done by
Herbert Kelman, a social psychologist, and is as shown in Figure 11.3. Using French
and Raven’s sources of power as a basis, Kelman stated that there are three main
processes of power:

Compliance
The target complies with power because he wants to obtain a favorable response from
the agent or because he wants to avoid a negative response. For this condition to exist,
an agent must have it in his power to reward or punish a target for compliance or non-
compliance, as the case may be. He must also be able to monitor the target’s work
regularly. If the agent does not possess this power, compliance will not take place.

Identification
Identification is usually associated with referent power. People identify with and
imitate another person, thus giving him power over them. In identification, there is no
wish for a favorable consequence or fear of an adverse one. The target finds the agent
attractive and seeks to emulate his behavior. Therefore, for an agent to have referent
power, he must be attractive to the people whom he has to influence. As long as he is
attractive, he holds power. The moment he loses his attraction, the target stops looking
up to him and the agent’s power is diluted.

Internalization
When a target internalizes the control of the agent over his actions, he usually does so
because the values of the agent match the internal value system of the target. By
internalizing the control, the target finds it easier to accept the agent’s control.
According to Kelman, internalization is the most effective and long lasting process of
power. In order to attain this kind of power over the target, the agent must have expert
or legitimate power. Most importantly, the agent’s power must have relevance.
The contingency model of power has made considerable contribution to the study of
power, leadership and interpersonal behavior. For instance, it shows that leadership is
not just about making people comply with instructions and that effective leadership
involves identification with the leader and the internalization of the leader’s values and
objectives.

POWER IN GROUPS: COALITIONS

Most people seek power to increase the scope of their influence over other people or to
attain their own ends easily. However, it is not always easy to attain power. Even more
difficult than attaining power is the attempt to retain power in one’s hands. Therefore,
when a person seeks power (or tries to regain it), he first tries to develop individual
power. That is, he tries to better his personal position by acquiring certain resources or
developing some skills. If he is unsuccessful in consolidating his personal position, he
tries to form a ‘coalition’ with some other people who have similar interests and seek
common goals.

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Organizational Behavior

Exhibit 11.2
Whistle Blowing – An Important Aspect of Organizational Politics
The early 21st century will go down in history as the era of corporate scandals. A number of major
companies in the US and elsewhere collapsed under pressure of controversy. This period also saw
several instances of whistle blowing in the corporate world.
The scandals associated with major events such as the Enron accounting scandal, the attacks on the
twin towers of the World Trade Center and the WorldCom scandal, were all brought to light by
people from within the organization. The three women who first blew the whistle on these scandals
are regarded as the heroines of the nation for putting everything at stake – their careers, their privacy
and even their lives – to report wrongdoing.
In the summer of 2001, Sherron Watkins, who was the vice president of Enron, wrote a letter to
Kenneth Lay, the chairman, warning him that the accounting methods used by the company were
improper. This letter was used as evidence by the congressional committee investigating Enron, and
Watkins became a public figure.
In early 2002, Colleen Rowley, an FBI staff attorney, sent a memo to the director of the Bureau,
Robert Mueller, about how the FBI ignored her pleas in early 2001 that Zacarias Moussaoui (who
was later indicted in the September 11 attacks) should be investigated more closely.
That same year, Cynthia Cooper of WorldCom informed the board that the company covered up
losses to the tune of $3.8 billion through improper book keeping.
There have been cases of whistle blowing in India as well. Take the case of Kellogg Company. The
year 2002 was one of the best years for the company in India. A new product launched by it that year
received good initial reports and the company’s figures also improved. Two senior executives who
played an important role in the company’s success were rewarded. Therefore, it came as a surprise,
when, within a few months, both the executives left the company. Later it was realized that another
executive had reported that the two of them had dumped stocks and given extra benefits to
distributors to show enhanced performance. Although they had not benefited financially through this
deed, they had violated the norms of the company to show more success than there really was.
Whistle blowing has become one of the most important occurences in organizations. Although people
are reluctant to talk about it, companies have recognized the role it plays in organizational politics. In
light of the frequency of corporate scandals, the U S legislature passed an Act called the Sarbanes-
Oxley Act in 2002. The Act ruled that the final responsibility for corporate accounts lay with the
CEO/CFO of the company. It sought to bring about more transparency in audit procedures.
Recognizing the importance of internal whistle blowing in preventing public scandals, major
companies like Xerox, Johnson and Johnson, and Heinz have also installed hotlines, toll free numbers
and other systems through which employees can report wrongdoing within the company to higher
authorities. They have realized that it is better to detect and correct wrongdoing when it is still
restricted to the organization rather that have it become public.
People who blew the whistle will tell you that it takes a lot guts. While people recognize that it is
important to stand up to and expose wrongdoing, most of those who actually do it say they would not
do it again. Life suddenly becomes difficult for whistleblowers. Many of them are fired by their
organizations on some pretext or the other. Even if they are not fired, they are ostracized by their
colleagues and doomed to lead isolated lives. If the company is big enough to merit newspaper
coverage, they also lost their privacy. Sometimes, even their lives are at a risk. "There is a price to be
paid," said Cynthia Cooper. "There have been times that I could not stop crying."

Time, December 22, 2002, < www.time.com/time/personoftheyear/2002/poyintro.html> and Seema


Shukla, “Indians can Blow the Whistle too”, The Economic Times, August 1, 2003, <
www.ge.com/in/659.htm>

A coalition essentially consists of a group of people who come together to combine


their resources, with the aim of increasing their bargaining power or bringing about a

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balance in power. Trade unions are a good example of power exercised by a group of
people. Unions are primarily formed to represent the interests of the workers, who do
not have any individual power. As a group, they are in a position to negotiate with the
management (which holds legitimate power in organizations).
A number of OB experts have studied coalitions to predict their formation and working
in organizations. Their views are summarized in the following points:

 Although coalitions have their origin in politics and political science, the
coalitions formed in organizations differ from political coalitions in some basic
ways. In politics, the smaller the coalition, the greater the power. This is because a
smaller membership allows power to be concentrated. In organizations, however,
it pays to have a coalition with a large membership. This difference arises from the
fact that political coalitions in legislatures usually restrict themselves to taking a
decision, whereas coalitions in organizations not only take a decision they also
implement it. Therefore, it is beneficial to have greater support in coalitions in
organizations. Consequently, organizational coalitions aim to represent as many
interests as possible.

 Some of the experts are of the opinion that there is a greater likelihood of
coalitions being formed when there is a high degree of interdependence between
the different departments or sub units of an organization. This interdependence
could be in terms of tasks or shared resources. Where different departments are
more or less self contained, there is very little coalition formation activity.

 The formation of coalitions is also influenced by the nature of the work done by a
group. If tasks are more routine and predictable, people become substitutable for
one another and, as a result, become replaceable. Therefore, to protect their
interests and obtain more security, they are likely to form coalitions. But when
people perform specialized tasks, their dependency is low and, therefore, they are
unlikely to form coalition.

ORGANIZATIONAL POLITICS

Organizational politics is a reality in most organizations of reasonable size.


Researchers and practitioners of OB have also acknowledged the role played by
politics in organizational dynamics. It has been recognized that a certain amount of
political behavior is necessary on the part of managers to succeed in their work and
that politics is sometimes vital to the achievement of organizational goals. Politics has
been defined by a number of scholars of OB.

Definition and Nature of Politics


Organizational politics has often been called ‘power in action.’ Stephen Robbins has
defined politics in organizations as “those activities that are not required as part of
one’s formal role in the organization, but that influence, or attempt to influence, the
distribution of advantages and disadvantages within the organization.” This definition
suggests that political behavior is outside the practitioner’s sphere of work and that it
involves some effort on the part of the practitioner to use the power at his disposal to
influence decision making. According to Bronston. T. Mayes and Robert W. Allen,
organizational politics can be defined as the deliberate “management of influence to

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Organizational Behavior

obtain ends not sanctioned by the organization or to obtain sanctioned ends through
non sanctioned influence means.” This definition also suggests that politics is outside
the regular scope of an employee’s sphere of work. Politics therefore, is essentially
concerned with the acquisition and use of power within the organization to serve one’s
own ends. This use of power to serve one’s own ends is known as politicking.
Robbins has also differentiated between legitimate and illegitimate political behavior.
Legitimate political behavior is that which forms a part of the day-to-day work in an
organization. This includes forming organizational coalitions, networking and
developing contacts within and outside the organization, complaining to superiors on
routine matters, ignoring rules and procedures, adhering to rules strictly, etc.
Illegitimate political behavior, however, is extreme in nature and does not keep to the
accepted level of politicking. Protesting violently against rules, deliberately breaking
rules, not conforming to the accepted procedures, absconding from work, sabotaging
organizational activities, and whistle blowing, are examples of illegitimate political
behavior.
Legitimate political behavior is part of every organization and most of the members
indulge in it at sometime or the other. Illegitimate political behavior, however, is not
indulged in other than in exceptional cases. Excessive indulgence in illegitimate
political behavior usually leads to extreme sanctions and severe punishment.
Involvement in illegitimate political behavior largely depends on the amount of power
a person has. Only a person who has the power to ensure that his behavior will escape
punishment can indulge in it.
Experts in OB feel that politicking can have beneficial effects on an organization. For
instance, when an employee develops a new tool to improve productivity, he may do
politicking to enlist the support of his superiors. If the new tool gets adopted by the
organization, the benefits accruing to the organization may be more than those to the
employee.

Factors Relating to Political Behavior


Political behavior is subjective, i.e., it differs from person to person and organization to
organization. Studies have shown that individuals differ in their orientation towards
politicking. Some tend to be more interested and capable of politicking than others.
Similarly organizations differ in their political orientation. Individual differences in
political behavior are based on environmental difference and personality, whereas
organizational differences are based on the culture and the environment of the
organization.
Individual Factors
Individual politicking is a function of a person’s personality traits, his background and
experiences, and the environment in which he operates. According to researchers, three
aspects of individual personality influence political behavior: the level of self-
monitoring, the individual’s locus of control, and the strength of the individual’s power
motive.
People who are high self-monitors have good social skills and behaviors and are likely
to be more skilled at politicking. This is because they are quick in observing and
learning social cues and conforming to social behavior. People who have an internal
locus of control are also more skilled at controlling the people around them and their
environment. They have a proactive attitude and believe in their ability to control
situations. People who have a high power motive also try to acquire and use power to
their benefit.

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Power, Authority and Influence

Exhibit 11.3
Key Capabilities Required for Effective Politicking
In order to successfully practice organizational politics, managers must cultivate certain abilites.
These abilities are listed below.
Conceptual Capabilities
 An understanding of the nature and working of power and politics, the complexity of the
influence process, and the role of motives
 An understanding of the dynamics of relationships and the barriers for organizational
relationships
 A knowledge of the mechanisms of politicking, such as lobbying, secrecy, etc
 An appreciation of the value of establishing a worthwhile cause for spearheading
organizational change
Personal Capabilities
 Clarity about personal and organizational motives
 An attitude which questions the limits of what is possible in formal organizations
General Organizational Awareness
 Information about the agendas and motivations of the key players in the organization
 Knowledge of who makes the key decisions and how they are made
 An understanding of the environment in which the organization works and the issues
critical to its working
Interpersonal Skills
 Effective presentation skills and the ability to persuade others
 An ability to challenge others to analyze their assumptions about certain issues
 A capacity to observe and analyze the behaviors and motives of other people.

Adapted from David Butcher and Martin Clarke, “Politicking – The Smart Way of Management”,
The Economic Times General Management Review, < www.etgmr.com/gmrjan-mar3/art4.html>.

In addition to personality, factors related to the person’s work environment affect his
political behavior. For instance, when a person has invested a lot in the organization in
terms of future expectations, he is unlikely to engage in extreme political behavior that
would jeopardize his interests. Political behavior also depends on the alternatives
perceived and available to the individual. If a person perceives a large number of
alternatives, he is more likely to risk indulging in extreme or illegitimate political
behavior to further his interests. The more a person perceives that he is likely to
achieve success through the use of illegitimate means, the more he is likely to use
them. Therefore, top level employees, who have special skills and considerable
experience, are more prone to politicking than lower level, inexperienced employees.

Organizational Factors
Research has proved that organizational factors have a greater influence on politicking
in organizations than individual factors. It has been proved that political behavior
thrives when organizations exhibit certain characteristics. Some of these characteristics
are described below.

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Organizational Behavior

 Scarce resources: When an organization faces a scarcity of resources, the


employees are more likely to engage in politicking. They do so to prevent the loss
of resources or to obtain more resources for themselves in the face of competition.
 Ambiguity of goals: When an organization does not have clear goals, it provides
more opportunity to employees to engage in politics in an attempt to turn
outcomes in their favor. Political behavior is also at a high when a non
programmed decision has to be taken, as non programmed decisions also provide a
lot of scope to turn outcomes in one’s favor.
 Role ambiguity: Like goal ambiguity, role ambiguity also encourages political
behavior. When roles are not clear, employees are not aware of the limits to their
behavior in the organization. This encourages them to engage in more political
activity.
 Performance appraisals and rewards: Studies have shown that employees tend to
engage in more politicking when organizations are likely to conduct performance
appraisals or take decisions regarding promotions. Through politicking, people try
to influence outcomes in their favor.
 Culture of the organization: The culture of the organization also determines the
level of political activity. When the culture emphasizes a win-lose approach to the
allocation of rewards (where one party’s gain is another party’s loss), more
politicking is likely to occur to influence the decision in one party’s favor.
 Lack of mutual trust: When the culture is characterized by a lack of mutual trust
and high level of competition, people are likely to do more politicking to protect
their own interests and put down competition. When there is a lack of trust,
political behavior in the organization is likely to be of the illegitimate kind.
 Pressure to perform: When organizations place a lot of importance on performance
and when responsibilities are fixed, people are more likely to engage in
politicking. This is because the pressure to perform creates a high degree of
accountability, which encourages people to disown mistakes.
 Involvement of top management: When lower level employees notice that the top
management engages in political activity and is rewarded for it, they are more
likely to become involved in such activities themselves.

THE ETHICS OF POWER AND POLITICS

Ethics have begun to play a very important role in the study of OB and in the relations
between organizations and the environments in which the organizations work. It has
been recognized that behaving ethically is as important as behaving efficiently and
effectively. A lot of importance has been given to the ethical dimensions of power and
politics in organizations. It has been realized that the misuse of power and the
illegitimate use of politics not only have adverse effects on organizations, they are also
unethical.
It has already been explained that the basic difference between power and politics is
that power is confined to formal authority, whereas politics exceeds the authority
sanctioned by one’s formal role. The use of power is non political as long as it is used
within the boundaries of formal authority, policies, procedures and job descriptions,
and is directed towards the accomplishment of sanctioned organizational goals.
However, power becomes political when it is used outside the area of established
authority, policies, procedures, job description, and organizational goals.
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Power, Authority and Influence

It is not always easy to differentiate between ethical and unethical behavior. The
ethical dimensions of an action vary from person to person and situation to situation.
What may seem unethical in one scenario may be perfectly acceptable and even
desirable in another scenario. Fred Luthans has suggested certain basic guidelines that
a person must consider when determining the ethics of a certain decision or action.
 Self interest vs. organizational interest: Is the outcome of an action aimed at
benefiting a person’s self interest or is it directed towards the benefit of the
organization? For instance, if the head of a particular department spreads rumors
about the members of another department only to make the other department look
inefficient or bad, his behavior is unethical. But if the head of a department
exchanges favors with the head of another department to get his work processed
faster, then his behavior is not considered unethical as it benefits the organization.
 The rights of other parties: When an action violates the basic rights of another
party, it is deemed to be unethical. For example, if a person reads the private
correspondence of another organizational member to obtain critical information
which may be to his advantage, the act is deemed unethical. By reading private
correspondence, that person is violating the other member’s right to privacy.
 Conformity to the standards of equity and justice: When behavior conforms to the
principles of equity and natural justice, it is deemed to be ethical. However, if it
displays qualities like favoritism, misleading others, or deliberately harming
another person’s interest, it is unethical. For example, if a manager deliberately
gives a bad performance review to one of his subordinates and thus harms his
chances of promotion, his behavior is unethical.
It is very difficult to lay down standards of organizational ethics and expect people to
conform to them. Additionally, the implementation of ethical standards is often
difficult due to the ambiguity of standards and the subjective nature of ethical issues.
However, it can be concluded that, when power or political behavior is used in an
organization to harm the interests of the organization or of the people therein, that
behavior is unethical. And, certain actions which may seem unethical at first glance
can be justified if they benefit the larger interests of the organization or its employees.

SUMMARY

Power and politics are among the most important concepts in the study of organization
behavior. Both power and politics are dynamic concepts and are a function of the
interaction between different elements in organizations. Power has been defined as “the
ability to influence and control anything that is of value to others.” It is the ability to
influence the behavior of other people in the organization and to get them to do what
they otherwise would not have done.
Although the terms power, authority and influence are often used synonymously, there
is a difference between them. Power is the ability to effect a change in an individual or
a group in some way. Power may or may not be legitimate. That is, power need not
correspond with a person’s organizational position. Authority, on the other hand, is
legitimate. It is the power which is sanctioned by the organization and is often the
‘source’ of power. Influence is a much broader concept than both power and authority.
French and Raven, social psychologists, identified five sources of power – coercive,
reward, legitimate, expert and referent. Coercive power is based on fear and is the
ability to influence another person through threats or fear of punishment. Reward
power is a positive power which refers to the ability to get things done through others
on the basis of one’s power to grant rewards. Legitimate power depends on
organizational position and authority. It refers to the power conferred by a person’s
organizational position. Expert power is derived from a person’s expertise or

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specialized knowledge of a certain subject that is perceived as important to the


organization. And referent power is based on people’s identification with a certain
individual and their attempt to emulate his behavior. The person who acts as a model
for reference has power over the person who emulates his behavior.
The use of power has a cost attached to it. Whenever power is used, the user utilizes
certain resources and affects the balance of power. When the balance is upset, the party
which is the target of the power tries to retaliate in order to restore the balance of
power. This may lead to adverse consequences. Therefore, power should be used
judiciously.
Power is dualistic in nature and has two faces – positive and negative. Positive power
emphasizes group goals and concern for people. Negative power uses threats and
punishments to get things done through others.
Power is related to the contribution of the individual to the organization and the
rewards he expects for that contribution. Theorists feel that power should be spread
across different levels of the organization instead of being concentrated in certain parts
of the organization.
The power structure of an organization also determines the amount of power exercised
by a person. A person’s power increases when he is a part of a ‘power elite.’ In
addition to power elites, there are also power blocs. People who have very little power
individually, but are in a better bargaining position collectively, come together to form
a coalition or power bloc.
Power originates due to interaction between people. When dependency is equal to the
power exercised, then power is balanced. But when power is greater than dependency,
or vice versa, there is an imbalance. The party affected negatively by the imbalance
will try to correct it by taking certain actions. In some cases however, it is beneficial to
the organization to maintain a power imbalance. People also react to power in different
ways and use various ploys to obtain and hold power. Power ploys may be upward,
downward or lateral.
Dependency is the most important concept of power. The degree of dependence of the
target determines the power exercised by the agent. Dependency is a function of
importance, scarcity and non substitutability of the resources controlled by a person.
Contingency approaches to power are also gaining importance. The contingency
approach suggests that power depends on being in the ‘right place’ at the right time and
the influencability of the target. The overall contingency model combines the theories
of French and Raven with those of Herbert Kelman and identifies the three main
processes of power, namely, compliance, identification and internalization.
When people lose power, they try to regain it individually, or by forming a coalition
with other less powerful people. Organizational coalitions are different from political
coalitions in some basic ways.
Organizational politics is often called ‘power in action.’ Politics may be legitimate
(within sanctioned organizational limits) or illegitimate (exceeding sanctioned
organizational limits) in nature. The degree of politicking engaged in depends on
individual as well as organizational factors. Individual politicking is a function of the
person’s power motive, personality factors and background, and current work
environment. Organizational politicking is a function of culture, goal and role clarity
and the attitude of top management.
Considerable importance has also been given to the ethical aspects of power and
politics. It is not always easy to develop ethical standards because of the ambiguous
and subjective nature of certain actions.

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Chapter 12

Leadership
In this chapter we will discuss:
 Definition of Leadership
 Traits of Effective Leaders
 Leadership Behavior vs Traits
 Leadership Skills
 Leadership Theories
 Leadership Styles
 Roles and Activities of Managers
 Determinants of Leadership
 Task of a Supervisor
 Effective Supervisory Practices
Organizational Behavior

Leadership is probably the most widely researched area of organizational behavior.


This could be because of the crucial role it plays in influencing organizational
dynamics. According to Warren G. Bennis, the founding Chairman of the Leadership
Institute at the University of Southern California, “Failing organizations are usually
over-managed and under-led.” Even if an organization is bestowed with sufficient
resources, in the absence of effective leadership, it will not be able to function
smoothly. Inefficient leadership lowers employee morale, promotes dissatisfaction
among employees and affects organizational productivity and efficiency. This fact was
recognized as early as in the nineteenth century when industrialization was fast taking
place. Therefore, when organizational behavior evolved as an exclusive field of study,
leadership became an integral part of it. In this chapter, we will discuss various
established and emerging theories of leadership that deal with a leader’s traits and
behaviors.

DEFINITION OF LEADERSHIP

Several theorists have attempted to define leaders and leadership. A leader may be
defined as a person who establishes vision, sets goals, motivates people and obtains
their commitment to achieve the goals and realize the vision. All theorists do agree that
leaders influence people and that leadership involves influencing people to work
toward desired goals. However, they do not agree on the ways and means adopted by
leaders to influence people. Some experts believe that leaders use coercion to make
people share their vision while others believe that they do not resort to coercion but
because of their knowledge and care for people (followers) they are able to influence
people. Another issue of contention is whether management is different from
leadership.
Most OB experts believe that leadership and management are quite different. They
have pointed many differences between the two, in the support of this argument.
Leaders take a personal and active interest in achieving goals whereas managers tend
to play a relatively passive role in accomplishing goals. Managers need power to be
entrusted to them by the organization to deal with people. Leaders have power within
themselves and the required drive to lead people and motivate them to work
enthusiastically toward achieving objectives. If managers are required to work alone
without assistance from people they become anxious and tense. However, leaders can
act confidently even if they need to work independently. Mangers limit their
interaction with people to the minimum extent required to carry out their managerial
responsibilities. Leaders interact with people frequently and in a more natural way. In
the process, they inspire people, motivate them and lead them.
Further, according to some experts, management is concerned with coping with
complexity while leadership is about coping with change. Managers concentrate on
developing plans, organizational structures and controlling the deviations from plans.
Leaders focus on developing a vision for the future, communicating the vision to
people, integrating their efforts, helping them overcome hurdles and developing their
abilities to realize the vision.
The source of power can be formal or informal. Most of the managers derive their
power from their position in the organization and the formal authority that comes with
this position. Leaders often arise from a group without any formal appointment and
outside the purview of the organization structure. Moreover, all leaders are not
managers and all managers are not leaders.

TRAITS OF EFFECTIVE LEADERS

Since the beginning of the history, people have been interested in studying the nature
of leadership. They wanted to find the ‘traits’ that distinguished leaders from non-
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Leadership

leaders and successful leaders from unsuccessful leaders. Some researchers believed
that cognitive and psychological factors like intelligence, ambition and aggressiveness
are the traits commonly found in leaders. However, others believed that physical
characteristics like height (more than average), large body structure and personal
attractiveness are important traits of leaders.
Most research studies on leadership suggest that there are certain factors that
differentiate leaders from non-leaders. Some of these include initiative, desire to lead,
integrity, self-confidence, analytical ability, and knowledge of the specific company,
industry or technology. If these factors are supplemented with traits such as charisma,
creativity and flexibility, an individual is likely to be an effective leader. However, this
is not an exhaustive list of the characteristics displayed by effective leaders. The
presence of these characteristics in an individual does not guarantee that he will be an
effective leader. Even if a person possesses these traits, he may not get an opportunity
to use them, or when given an opportunity, choose not to use them.

LEADERSHIP BEHAVIOR VS TRAITS

The type of leadership behavior exhibited by successful leaders was another area of
interest for researchers. According to one school of thought, successful leadership
depends more on appropriate behavior and actions, and less on personality traits. They
believe that though a person may have the traits required to be a leader, unless he
learns to use them effectively (i.e., behave appropriately) to serve a specific purpose,
he cannot be a successful leader. Behavior can be learned and changed whereas traits
remain more or less fixed. Thus, this school of thought suggests that leaders are not
born but they have to be developed.

LEADERSHIP SKILLS

Organizations are increasingly focusing on improving the knowledge and skills of


employees because of the continuous advancement in the technology and changes in
the business environment. Therefore, the researchers studying leadership also changed
their emphasis from personality traits and behaviors to job related skills. A behavioral
expert, Robert Katz, had identified that the leaders primarily use three skills –
technical, human and conceptual skills. Though there is a degree of inter relationship
among these skills, they are discussed separately below:
Technical Skills
A person’s knowledge and ability to make effective use of any process or technique
constitutes his technical skills. The employees at operational and professional levels
are required to have certain technical skills. The performance of an engineer, an
accountant, a data entry operator or an assembly worker would greatly depend on his
or her technical skills. However, as employees are promoted to managerial positions,
these technical skills become less relevant, while other skills become more important
(See Figure 12.1).
Human Skills
An individual’s ability to cooperate with other members of the organization and work
effectively in teams is referred to as human skills. Human skills also involve
developing positive interpersonal relationships, solving people’s problems and gaining
acceptance of other employees. Effective human skills are an essential requirement at
all levels of the organizational hierarchy and especially for people in leadership
positions.

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Organizational Behavior

Conceptual Skills
Conceptual skills refer to the ability of an individual to analyze complex situations and
to rationally process and interpret available information. It also encompasses an ability
to foresee the future consequences of his present-day actions from the organizational
point of view. Further, managers have to define proper organizational structure and
establish long-term plans and goals. Conceptual skills are of least importance to the
employees at the operational level and are of utmost importance to managers at higher
levels.
In essence, technical skills involve handling machines, tools and tasks; human skills
involve dealing with people; and conceptual skills relate to idea generation and
analytical processing of information. From Figure 12.1, we can see that all levels of
management require similar level of human skills whereas the need for technical skills
decreases and the need for conceptual skills increases as we move up the
organizational hierarchy.

Figure 12.1: Leadership Skills Required at Different Organizational Levels

Organizational Levels

Conceptual
Top

Middle Human

Supervisor Technical

Knowledge & Skills required

Source: George R. Terry, Stephen G. Franklin, Principles of Management, 8th edition (USA:
Richard D Irwin Inc., 1994) 7.

LEADERSHIP THEORIES

There are many theories that have attempted to explain the characteristics required by
individuals to be effective leaders. Not all these theories are in agreement with each
other, leading to confusion. There are three important theories that attempt to explain
leadership – personality traits theories, behavior theories and contingency theories.
According to trait theories, leaders possess some personality traits that non-leaders do
not possess at all, or possess only to a small extent. The behavioral theories explain the
behavioral characteristics of leaders.
Though both the trait and behavior theories attempted to explain leadership in simple
terms, they were severely criticized for their unsupported and oversimplified
assumptions regarding the concept of leadership. Further research on leadership led to
the development of contingency theories. These theories tried to overcome the
inadequacies of the trait and behavior theories and eliminate the contradictions
involved in them.

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Leadership

The three important theories of leadership are described below:

Trait Theories
Initial research into leadership concentrated on the traits of leaders. It was believed that
there was something unique about an individual that enabled him to emerge as a leader.
Early researchers studied the personality characteristics that make a person a leader and
concluded that leaders are born, not made. For example, the famous personalities in
history like Napoleon and Alexander, were natural leaders and would have become
leaders even if they were made to face situations different from what they actually
faced. They also suggested that leaders possess some personality traits that are unique
and essential for effective leadership.
One trait theory is the “great person” theory of leadership. According to this theory,
leadership traits can be acquired with training and experience. They may not be inborn.
Unlike the earlier view that leaders are born, the “great person theory” led to a more
pragmatic approach to leadership because it stated that leaders might not be born with
the desired traits. The theory was probably the result of the influence of behavioral
psychologists, who believed that leadership traits could be acquired through learning
and experience.
Research to identify universal traits applicable to all leaders has not yielded significant
results. The only trait that was found to be common among all leaders was intelligent.
Research to identify the physical traits associated with leadership was also equally
fruitless. Researchers were unable to find a link between physical traits such as height
and strength, and leadership. In fact, some researchers found that many followers are
taller, stronger and even brighter than their leaders.
Application of trait theory to organizational leadership yielded even more confusing
results. Researchers could not support the theory with the traits observed in successful
leaders. Therefore, modern researchers have now begun to emphasize on multiple
intelligences of leaders rather than trying to isolate a single most important
characteristic leading to their success. For instance, some researchers who studied the
emotional intelligence of leaders have suggested that empathy, graciousness, optimism
and ability to read non-verbal cues in a social situation are important characteristics of
successful leaders. Some general characteristics found in leaders are ambition, high
levels of energy, desire to lead, honesty, integrity, self-confidence, intelligence, and
job-relevant knowledge.
However, trait approaches only provide a description of leaders; they have little
analytical or predictive value. Though some researchers still embrace the trait approach
to leadership, their emphasis has shifted from personality traits to job related skills.

Behavioral Theories
Since the trait theories failed to establish the relationship between traits and effective
leadership, researchers turned their attention to the behavioral aspects of successful
leaders. They attempted to identify the behaviors that were unique to leaders, and
which distinguished them from non-leaders. This was difficult, because it involved
finding answers to questions such as – “If most of the leaders they study are found to
be autocratic, and distant from their followers, would it mean that this kind of behavior
is a characteristic of all successful leaders?”
There are four important behavioral theories – the Ohio State Studies, the University of
Michigan Studies, the Managerial Grid and the Scandinavian Studies – that have
sought to identify the behaviors of leaders. All the four studies sought to identify the
specific behaviors exhibited by effective leaders. These studies are briefly discussed in
the following section:
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Organizational Behavior

The Ohio state studies


In 1945, researchers from different streams such as psychology, sociology and
economics carried out the studies of leadership at Ohio State University. They used a
specially developed questionnaire called the Leader Behavior Description
Questionnaire to analyze the differences in the behavior of leaders across various
groups (e.g. supervisors on the shop floor, teachers, college administrators, students
and Air Force commanders) and situations. They wanted to identify the different
independent dimensions along which an individual’s leadership behavior could be
studied. Initially, they defined about thousand dimensions, which were later
consolidated into two dimensions – initiating structure and consideration.
Initiating Structure
It refers to an individual’s ability to define his own as well as the subordinates’ tasks
and get these tasks accomplished on time. The people who score high on this
dimension will put pressure on their subordinates to meet deadlines and maintain
certain standards of performance.
Consideration
This refers to the extent to which a leader cares for his subordinates, respects their
ideas and feelings and establishes work relations which are characterized by mutual
trust and respect. Individuals who score high on this dimension are open and friendly
with subordinates, help them solve both personal and work-related problems and treat
all the subordinates as equals at workplace.
The studies revealed that the people who scored high on both the dimensions –
initiating structure and consideration – were able to achieve higher levels of
performance as well as job satisfaction compared to those who scored low on either
one of the dimensions or both the dimensions. Leaders high on initiating structure but
low on consideration faced problems like high absenteeism, high turnover and more
employee grievances. On the other hand, leaders high on consideration but low on
initiating structure faced problems such as poor performance and negative performance
ratings and warnings from superiors.
Consequently, the researchers concluded that a “high-high” type of leadership yielded
the best results. However, they also found some exceptional situations in which this
kind of leadership was not successful.

University of Michigan studies


Research along lines similar to the Ohio State Studies was carried out at the Survey
Research Center at the University of Michigan during the same period. As a part of this
study, twelve high-low productivity pairs of sections were selected and kept under
observation at the Prudential Insurance Company. Each pair consisted of one high
producing section and another low producing section with all other factors such as type
of work, working conditions and work methods remaining the same. During the course
of the study, the researchers interviewed 24 supervisors and more than 400 workers.
The findings of the study were similar to conclusions of the Ohio State Studies. Here
too, the researchers found that leadership behaviors could be categorized along two
dimensions: employee-oriented and production-oriented.
The Employee-oriented dimension emphasizes the importance of inter-personal
relations. Leaders who score high on this dimension take a personal interest in their
subordinates’ needs and accept individual differences among members. It was
observed that the more productive groups had employee oriented supervisors.
Leaders who are high on the Production-oriented dimension are more concerned with
tasks and goals. They consider employees to be means to achieve goals and pay little or
no attention to any problems the employees may face. For them, employees are no

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Leadership

Figure 12.2 The Leadership Grid


(High)

1 1,9 9, 9
Country Club Management Team Management
Thoughtful attention to needs of Work accomplishment is from
2 people for satisfying relationships committed people; interdependence
leads to a comfortable, friendly through a “common stake” in
organization atmosphere and organization purpose leads to
CONCERN FOR PEOPLE

work tempo. relationships of trust and respect.


3

5, 5
Middle of the Road Management
4 Adequate organization performance is
possible through balancing the necessity
to get out work with maintaining morale
5 of people at a satisfactory level.
9, 1
1, 1 Authority-Compliance
6 Impoverished Management
Efficiency in operations results
Exertion of minimum effort to get from arranging conditions of
required work done is appropriate to work in such a way that human
7 sustain organization membership. elements interfere to a
minimum degree.

(Low) 8
1 2 3 4 5 6 7 8 9

(Low) CONCERN FOR PRODUCTION (High)


Source: R. R. Blake, J. S. Mouton, L. B. Barnes, and L.E. Greiner, “Breakthrough in
Organization Development,” Harvard Business Review, (November-December 1964) / James
A.F. Stoner, R. Edward Freeman and Daniel R. Gilbert,Jr., Management (New Delhi: Prentice-
Hall of India Private Limited, Seventeenth Indian Reprint, 1998) 478.

different from machines. It was found that such a leadership style resulted in lower
motivation levels among employees and lower productivity. Groups which exhibited
low productivity tended to have production-oriented supervisors.
The researchers, therefore, concluded that employee-oriented leaders achieve higher
job satisfaction and higher group productivity. Production-oriented leaders achieve
lower job satisfaction and group productivity.

The Managerial grid


Blake and Mouton developed a two-dimensional matrix model of leadership styles
based on their own research and the results of the earlier Ohio Studies and Michigan
Studies. The model consists of nine rows and columns. The rows represent the leader’s
concern for production, while the columns represent the concern for people. With nine
possible positions on each side, leaders can be located at any one of a total of 81
positions on this grid. (Refer Figure 12.2). Blake and Mouton found five intersection
points in this model – 1,9; 1,1; 9,1, 5,5 and 9,9. People whose behavior falls into the
1,1 cell on the grid, called the impoverished style of leadership, exhibit no concern for

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Organizational Behavior

people or for work. Hence, they often fail as leaders. People who follow the 1,9 style
of leadership have high concern for people but low concern for production. This is
referred to as the country club style of leadership. People who exhibit the 9,1 style of
leadership have high concern for production and low concern for people. This is
referred to as authoritarian style of leadership. People whose leadership style fall into
the 9,9 cell show high concern for both people and production. This position on the
grid is referred to as team management style of leadership.
Blake and Mouton suggested that managers who practice a 9,9 style (team
management) of leadership are more effective compared to the 9,1 style (authoritarian),
or the 1,9 style (country club type). Leaders whose behavior falls into the 5,5 style are
also considered to be fairly effective.
One critic of the model is that it provides a framework for conceptualizing leadership
styles but fails to reveal any new facts or establish any new relationships which could
clarify the conflicting views on leadership.

Scandinavian studies
The three behavioral theories discussed above were developed between 1945 and 1965.
This was a period characterized by relative economic and business stability. There is a
school of thought that believes that these studies are not universally applicable,
because they do not consider the dynamic, or even chaotic, environments in which
modern organizations operate. Consequently some Finnish and Swedish researchers
began reviewing the earlier literature in the modern context. Their main purpose was to
verify whether the existing two dimensions could successfully explain leadership or
more dimensions need to be added to factor in the realities of today’s business.
Their research resulted in the emergence of a new dimension called development-
oriented behavior. According to the researchers, development oriented leaders
experiment with new ideas and practices and embrace change. The Ohio State Studies
had recognized aspects like ‘coming up with new ways of doing things’ and
‘encouraging members to start new activities,’ but had not given them much
importance. But in today’s fast changing world, the researchers believe that the aspect
of development-orientation is a significant aspect of effective leadership. The study
also found subordinates consider development-oriented leaders to be more competent
than non-development oriented leaders. The subordinates of development oriented
leaders also showed higher levels of job satisfaction.
The four theories discussed above attempted to explain leadership in terms of behavior.
They succeeded to some extent in identifying the relationships between the behavior of
leaders and the performance of their subordinates. However, these theories did not take
into account one important aspect of leadership, i.e, the situational factors which have a
great impact on the success or failure of leaders. When the context, or situation, in
which leadership is exhibited changes, in order to be effective, leaders need to be
capable of adapting their behaviors to meet the demands of the changed situation..

Contingency Approaches to Leadership


Although the behavioral approaches state that a positive, participative and considerate
style of leadership is the most effective, there is evidence that such a style may not be
successful in some situations. This implies that there is not one style of leadership that
is appropriate for all situations. Contingency theories of leadership postulate that
leaders have to change their style depending on the situation they face. The theories
also suggest that a leader should carefully analyze the nature of the situation before
deciding on the appropriate style of leadership to be adopted. Five contingency models
are discussed below.
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Leadership

Fiedler’s contingency model


One of the earliest models of contingency leadership was developed by Fred Fiedler
and his associates. Their model was an extension of some of the existing theories
relating to task and employee orientation. According to this model, leadership
requirements depend on the situation facing the leader; and the choice of the most
appropriate style of leadership depends on whether the overall situation is favorable or
unfavorable to the leader. The favorability or unfavorability of a particular situation to
a leader is analyzed based on the following parameters:
Leader-Member relationships
This indicates the extent to which a leader is accepted by his subordinates. If a leader
has friction with majority of his subordinates, then he scores low on this dimension.
Degree of task structure
This refers to the degree to which the task on hand can be performed efficiently by
following a particular method.
The leader’s position
It refers to the power, (or formal authority) that the leader is bestowed within the
organization. For instance, a leader has more power if he is in a position to decide the
rewards and incentives for his followers.
A situation is considered to be favorable to the leader if the scores on all the three
dimensions are high. Fiedler proposed that a task-oriented, tough-natured leadership
style is most effective in highly favorable or highly unfavorable situations and a
people-oriented, lenient type of leadership style is most appropriate in moderately
favorable or unfavorable situations. Figure 12.3 describes the model’s findings in the
form of chart.
Figure 12.3: Fiedler’s Contingency Theory of Leadership
Nature of the Situation
Highly Favorable Moderately Favorable Highly Unfavorable
Task motivated leaders Relationship-motivated leaders Task-motivated leaders
perform better when the perform better when the situation perform better when the
situation is highly is moderately favorable situation is highly
favorable. unfavorable.

 Group members and  A combination of favorable  Group members and leader


leader enjoy working and unfavorable factors. do not enjoy working
together. together.
 Group members work on  Group members work on
clearly defined tasks. vaguely defined tasks.
 Leader has formal  Leader lacks formal
authority to control authority to control
promotions and other promotions and other
rewards. rewards.

Rationale Rationale Rationale

Working from a base of mutual Followers need support from In the face of mutual mistrust
trust and relative certainty leader to help them cope and high uncertainty among
among followers about task and with uncertainties about followers, leader needs to
rewards, leader can devote trust, task, and/ or rewards. devote primary attention to
primary attention to getting the close supervision.
job done.
Source: Robert Kreitner, Management, 6th edition (USA: Houghton Mifflin Company, 1996) 477.
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Organizational Behavior

Fiedler’s model suggests that managers must examine the situation in which they
operate in terms of people, task, and organization; they must adapt their style of
leadership to suit the situation. If this is not possible, they must attempt to change the
elements of job to suit their style.
The model has been criticized for its conceptual deficiencies such as its narrow focus
on a single leadership trait and ambiguity in what is actually measured. However, the
model paved the way for subsequent studies on leadership.

Hersey and Blanchard’s situational theory


According to the situational leadership or ‘Life-cycle’ model developed by Hersey and
Blanchard, the maturity level of the subordinate plays a major role in influencing the
leadership style of the superior. The ability of an employee to carry out a particular
task and the extent to which he is motivated to perform the task constitutes the maturity
of an individual. If the manager gives appropriate guidance to an employee, he is likely
to develop the necessary job related abilities in a short time. However, all employees
will not have the same level of competence and commitment to do the assigned tasks.
Therefore, leaders have to adopt different leadership styles to deal with different
subordinates.
According to Hersey and Blanchard, leadership styles can be categorized into four
types – telling, selling, participating and delegating - which vary in the kind of
guidance and support offered by the superior to his subordinate. The leadership style
selected by an effective manager depends on the development level of employee. If an
employee is low in his ability to perform as well as willingness to perform, the
manager needs to adopt the telling style, i.e., he must constantly give directions to the
employee. If an employee is low in ability but high in willingness to perform, the
manager has to use selling style of leadership. He has to give directions as well as the
required support to the employee to perform the task. If an employee is capable of
performing but not willing to perform the task, the manager has to apply participating
style of leadership (Refer Exhibit 12.1). He has to give less direction and more
responsibilities but extend support to the employee in carrying out his responsibilities.
If an employee is capable, and is also willing to carry out the task then the manager can
simply delegate the tasks and responsibilities to the employee. The employee does not
need detailed instructions and extensive support to accomplish the tasks.
The strength of the Hersey Blanchard model lies in its simplicity and intuitive appeal.
Moreover, the model emphasizes on an individual’s capabilities and willingness to
undertake a specific task. This is an important contingency factor which was always
ignored by researchers. However, the model ignores several other critical factors (such
as the leader’s attitude) that determine leadership behavior. Therefore, it is not widely
accepted among researchers.
Leader-Member Exchange theory
Most of the traditional theories of leadership assume that leaders treat all subordinates
alike. But George Green and his associates observed that leaders often act very
differently towards different subordinates. This observation led to the development of
the Leader-Member Exchange (LMX) theory of leadership.
According to the LMX theory, leaders establish a special relationship with a small
group of subordinates, usually early in their interaction. This usually happens due to
the time constraints the leader faces in interacting with all the subordinates. This small
group of subordinates is referred to as the in-group while the rest are referred to as the
out-group. The leaders trust the subordinates, who belong to in groups, give them more
attention, interact with them frequently and offer them special privileges. The out-
group people get less of the leader’s time and attention. Also, the interactions between
the leader and the out-group are less frequent and purely formal.
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Leadership

Exhibit 12.1
Leadership Style of Michael Dell
Michael Dell, the CEO of Dell, always tried to surround himself with the best talent he could find.
He was aware that the leader of a company could not do everything himself. He always believed in
his team and assigned responsibility and accountability to the managers of DELL’s various
businesses. He communicated with managers about the future of the company, employees, customers
and shareholders
Michael believed that for any company to succeed, top management must share power. He believed
that an organization could achieve its goals only by sharing and not accumulating power. He also
emphasized implementation instead of mere planning. He believed that planning helped a company
identify what is necessary for ensuring success and also rallied employees around a few common
goals. He believed that it is critical to know and understand the customers and respond to their needs
and wants. Because of this belief, he developed a system that permitted customers to specify and
design their own systems to meet their needs.
Dell also exhibited some other leadership qualities that are emphasized by many leadership theories.
Dell had a vision. He wanted to change the way business was conducted. He embraced a direct
model of business. The direct model was based on direct selling – with no retail channel or reseller.
The telephone operator takes the order from the customer and his requirements for the system;
sometimes, he even helps the customer select a system that would meet his requirements. Then the
order is passed on to the manufacturing people. When the system is assembled, the PC is delivered to
the customer. Thus, the people at DELL benefitted from real-time input from customers regarding
products and services.
Dell’s ‘direct model’ was criticized from the very beginning. When Dell entered foreign markets
with the same model, critics said that it would not work in those markets because of certain cultural
differences. Though Michael Dell was warned that he would fail badly, he believed that customers
would set their own rules and that the direct model would work cross-culturally. Michael Dell’s
assessment of the situation was correct. By the end of 2001, DELL earned most of its revenues from
global markets.
Michael Dell can be regarded as a development-oriented leader because he did not hesitate to
experiment with new ideas and practices. Though no one else in the PC industry dared to adopt the
direct model of business, Dell firmly believed that it represented the future of the industry and went
ahead with that model and succeeded. The success did not come with ease. Dell had to deal with
some financial problems in the early 1990s. During this time, Dell communicated the company’s
goals to employees in simple terms – liquidity, profitability and growth. Due to his able leadership,
he was able to lead his team and put the company back on the path of success.

Source: ICFAI Center for Management Research.

Although the theory does not explain the basis on which a leader chooses his in-group
members, research has indicated that generally, leaders favor the people who have
attitudes and personality characteristics that are similar to their own, and tend to select
such people as in-group members. The other factors that form the basis of selection
into the in-group include a higher level of competence (than out-group members) and
extroversion. The LMX theory suggests that the in-group people receive high
performance ratings and thus obtain rewards and promotions quickly. As a result, there
is greater satisfaction with the leader and lower turnover among in-group members
when compared to out-group members. Further research in this area has supported the
LMX theory by proving that leaders do differentiate among subordinates not randomly
but on the basis of their competence and performance.

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Organizational Behavior

Leadership-participation model
In 1973, Victor Vroom and Philip Yetton conducted extensive research on leadership
behavior to establish the relationship between leadership behavior and decision making
style. Different situations demand different activities – routine and non-routine - to be
carried out by leaders and thus, according to Vroom and Yetton, leaders have to adjust
their behavior depending on the situation. The leadership-participation model proposed
by Vroom and Yetton is normative in that it provides a sequential set of rules that can
be followed for ascertaining the type and amount of participation required in decision
making in different situations. Initially, the model consisted of a decision tree with
seven contingencies and five alternative leadership styles. Later Vroom worked with
another academician, Arthur Jago and came up with a revised model. The new model
included twelve contingencies instead of seven as in the original model, which are also
called problem attributes.
Problem Attributes
According to the model, the leader should assess a situation in terms of its problem
attributes. The twelve problem attributes can be broadly categorized into two classes–
decision-quality and employee-acceptance. Decision-quality dimensions include cost
considerations, information availability, and nature of problem structure (structured or
unstructured). Employee-acceptance can have dimensions like need for commitment,
their prior approval, congruence of their goals with that of the organization, and
conflict among the employees. Other factors considered in the model are level of
subordinate information, time constraints, geographical distance between subordinates,
leader’s motivation to conserve time, and, finally, the leader’s motivation to develop
subordinates. Even complex and apparently unique problems can be identified and
categorized into known classes, if the problems are analyzed using the above (decision
tree) format.
Leadership Styles: Once the leader identifies the nature of the problem, he can adopt
one of the following five styles of leadership:
a) Autocratic I (A-I) – Using the information available, the leader takes a decision on
his own.
b) Autocratic II (A-II) – The leader obtains relevant information from subordinates
and then attempts to find the solution to the problem. However, he does not reveal
the problem or seek the advice of subordinates in finding a solution or making a
decision.
c) Consultive I (C-I) – The leader explains the problem to concerned subordinates
individually and invites their ideas and suggestions to solve the problem.
However, he takes the final decision.
d) Consultive II (C-II) – The leader meets a group of subordinates, discusses the
problem with them and listens to their ideas and suggestions. Later, he may take a
decision that may or may not be in accordance with his subordinates’ suggestions.
e) Group II (G-II) – After sharing the problem with the subordinates, the leader
initiates a group discussion on alternative solutions, and moderates the discussion
till the group reaches a consensus on the solution to be adopted. In this case, the
leader accepts the solution offered by his subordinates (some other types of leaders
and their characteristic are defined in Exhibit 12.2).
The leader-participation model is based on three important assumptions which are yet
to be proved: Leaders can precisely classify problems by following the decision tree
format; leaders are willing to and capable of adapting their styles to suit the situation;
employees accept the leader’s classification of the situation and changing his
leadership style from situation to situation. If the above assumptions can be proved to
be true then the model would be a very effective tool in selecting a leadership style
appropriate to the situation.
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Leadership

Exhibit 12.2
Transactional Leaders and Transformational Leaders
TRANSACTIONAL LEADER
The different leadership styles of transactional leaders are:
Management by Exception (active): A transactional leader constantly monitors organizational
activities. If there is any deviation from the established rules and standards, he takes the necessary
action to bring conditions back to normal.
Management by Exception (passive): A passive transactional leader intervenes in the day-to-day
operations only if the required standards are not being met.
Laissez-faire: As far as possible, a transactional leader tries to escape responsibilities and avoids
making decisions.
Preference for contingent rewards: A transactional leader believes that people can be motivated by
recognizing their accomplishments and designing rewards appropriate for their level of efforts and
performance.
TRANSFORMATIONAL LEADER
The characteristics of a transformational leader are:
Charisma: They have a vision which they are able to clearly communicate to others. They establish
a mission for their followers and make them take pride in working towards that mission. They gain
the respect and trust of their followers.
Inspiration: They inspire their followers by communicating to them the high expectations the
organization has of them and assure them of their capacity to meet those expectations. They are good
at expressing complicated goals and objectives in simple terms. They may even use non-verbal
communication to communicate with their subordinates.
Intellectual stimulation: They appreciate and encourage rationality and careful problem solving
among their followers.

Adapted from B. M. Bass, “From Transactional to Transformational Leadership: Learning to


Share the Vision,” Organizational Dynamics (winter 1990), p. 22

Path-goal theory
The path-goal theory is a contingency model of leadership developed by Robert House.
It borrows some important elements from the Ohio State Studies and the expectancy
theory of motivation. According to the path-goal theory, the leader should provide
required support and guidance to his followers and help them achieve organizational
goals. He should also establish individual (or group) goals for employees that are
compatible with the broad organizational goals. Thus, the leader defines the path to
achieve goals; he also removes any obstructions that come in the way of employees
achieving these goals.
Further, according to the path-goal theory, the behavior of a leader is acceptable to
subordinates as long as:
i) The subordinates find that the satisfaction of their needs (such as promotion and
rewards) depends on their effective performance, and
ii) They are provided with guidance, support and rewards that are needed for
effective performance.
Robert House suggested four types of leadership with the help of the path-goal theory.
They are

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Organizational Behavior

a) Directive leadership: The leader clearly tells his subordinates what is expected
from them, gives them work schedules and instructs them on ‘how’ to do the task.
This is similar to the initiating structure defined in the Ohio State Studies.
b) Supportive leadership: The leader attempts to address the needs and problems of
his subordinates. This is similar to the consideration dimension identified in the
Ohio States Studies.
c) Participative leadership: The leader discusses problems with subordinates and
seeks their suggestions before making a decision.
d) Achievement-oriented leadership: The leader attempts to develop his subordinates
by giving them challenging tasks and higher responsibilities, and encouraging
them to perform at their best.
As opposed to Fiedler’s view that a particular leader consistently exhibits a particular
behavior which does not change over time or with the situation, House assumes that a
leader behaves in a flexible manner. He suggests that a leader can exhibit any of the
above types of behaviors, based on the situation at hand.
The path-goal theory suggests that the leader’s behavior depends on two contingency
variables – environmental factors (like the formal authority system or the nature of
task), and personal characteristics of the subordinates (experience, capabilities and
locus of control). Job satisfaction and employee performance are likely to be
influenced positively when the leader compensates for things lacking in the work-
environment or in the employee. The theory also proposes that the leader’s behavior
will be ineffective if it is not consistent with the environment and subordinate’s
characteristics. For example, directive leadership, if used with highly capable or highly
experienced subordinates, may prove to be counter productive and lead to employee
dissatisfaction.
Subsequent research in the area has provided empirical support for the path-goal
theory. However, the acceptance and applicability of the theory could be improved by
carrying out further research and incorporating more contingency variables.

LEADERSHIP STYLES

The way in which leaders influence their followers is referred to as leadership style.
The leadership style of an individual is determined by the extent of control he exercises
over his followers and the way he behaves towards them. It also depends on the types
of duties the leader performs and the types of duties and responsibilities he gives his
followers. Sometimes, it becomes difficult to accurately predict the style of a leader
because he may change his style to suit the situation. Behavioral approaches to
management have direct or indirect implications for leadership styles.
The Hawthorne studies indicate the importance of the supervisory style on employee
productivity. Theory X (by McGregor) represents the authoritarian style and Theory Y
represents the participative style. The impact of autocratic, participative and laissez-
faire styles of leadership on followers was analyzed by the Iowa studies. The Michigan
studies found that employee-centered supervision was more effective than production-
centered supervision.
According to the Ohio State studies, extending support to subordinates (consideration)
and directing them in their tasks (initiation) are important functions of leaders.
According to Fiedler’s contingency theory, the style of leadership adopted depends on
the situation in which the leader and his subordinates are placed. The path-goal theory
examines many aspects of leadership-like initiation, consideration, achievement
orientation and empowerment of subordinates.
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Leadership

Autocratic Leadership
Leaders who adopt this style retain all the authority and decision making power. They
do not consider employees’ suggestions, opinions or views. They believe that they are
more competent and intelligent then their subordinates. They instruct the subordinates
on ‘what to do’ as well as ‘how to do’ a job. The subordinates are expected to carry out
all the tasks they are given, be obedient, and abide by the leader’s decisions.
Communication flows only from the leader to the followers and the amount of
information that flows through the channel is controlled by the leader.
The autocratic leadership style is useful when employees are new and inexperienced
and need to be guided. It is also useful when a decision has to made immediately and
the time and situation does not permit consultation and discussion.

Consultative Leadership
Consultative (or participative) leaders encourage employees to participate in decision
making. The leader listens to subordinates’ ideas and opinions, but takes the final
decision himself. The leader delegates some of his responsibilities to his subordinates
and believes that they are capable of carrying out those responsibilities. Generally, the
leader assigns the task to be performed to his subordinates, but doesn’t impose any
particular procedure for carrying out the task. The consultative leader allows both
upward and downward communication. He encourages his subordinates to express
their suggestions, ideas and feelings.
Consultative (or participative) leadership style is useful when subordinates are
competent and capable of working independently with little or no supervision by the
leader.

Laissez Faire or - Subordinate-centered Leadership


In this style, the leader completely delegates the responsibilities, and decision making
power to the subordinates. The leader simply presents the task to the subordinates. The
subordinates discuss the work among themselves and determine the way in which the
task is to be accomplished.
The laissez faire leader shows respect for subordinates and encourages them to express
their views and opinions freely.
The Laissez Faire style is useful when subordinates need a high degree of
independence to perform well and when the leader has complete confidence in the
subordinates’ capabilities.

Bureaucratic Leadership
In this style of leadership, leaders set certain rigid rules and regulations and
procedures. Both leaders and their subordinates obey these rules. The subordinates are
thus obliged to carry out their tasks in a particular way alone. They carry out their tasks
in a mechanical way, without a sense of commitment towards the organization. The
rules indirectly indicate the minimum level of performance to be exhibited by the
employees to remain in the organization. Therefore, employees put in only the
minimum amount of effort required to secure their jobs. They identify the loopholes in
the rules so that they can defy a rule under the pretext of conforming to another rule.
The employees constantly look for ways to express their resentment towards the rules
laid down by the organization. If a mistake occurs, they pass on the blame to other
employees.
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Organizational Behavior

Manipulative Leadership
In this style of leadership, leaders believe that employees should be manipulated to get
them to behave in the way the leader wants them to behave. The leaders identify the
needs and desires of employees and use this information against them to achieve their
goals. The leader may promise rewards for good performance. The employees, lured
by the rewards, are motivated to put in their best efforts and achieve the set goals.
However, the leader may offer very few or no rewards at all for their performance.
This leads to a high level of dissatisfaction and resentment among employees.
This style of leadership is used to motivate employees to perform on projects of short
duration. But it is highly ineffective in creating a long-lasting relationship between
subordinates and the leader.

Expert Leadership
In this leadership style, a person with a high level of knowledge and abilities leads the
group. To maintain his leadership position, the leader should continuously demonstrate
his expertise. However, if the situation changes and the current leader’s skills are no
longer relevant, he will be replaced by another person with knowledge and expertise in
the desired area.
This style is useful when the survival of a group is in question or the group members
feel that they need to be guided by an expert.

Likert’s Four Systems of Management


Professor Rensis Likert and his associates at the University of Michigan studied the
patterns and styles of leaders and managers over three decades and developed certain
ideas and approaches for understanding leadership behavior. According to Likert, an
effective manager is one who is strongly oriented towards subordinates and relies on
communication (to a great extent) to keep all the departments or individuals working in
unison. He suggested four systems of management.
System 1 Management: This style is called the “exploitive-authoritative” style. It
represents dictatorial leadership behavior. All the decisions are made by the managers,
and there is little employee participation. These autocratic managers do not trust
subordinates, use negative motivation tactics like fear and punishment, and retain all
decision-making powers.
System 2 Management: This management style is called the “benevolent-
authoritative” style. Though the managers behave in a patronizing manner, they have
confidence and trust in their subordinates. They permit upward communication to a
certain degree and ask for participation from subordinates. Managers in this system use
both rewards and punishment to motivate employees. They allow subordinates to
participate to some extent in decision-making, but retain control over policy matters.
System 3 Management: This style is referred to as the “consultative” style. Managers
in this system do not have complete confidence and trust in their subordinates. Though
they seek advice from subordinates, they retain the right to take the final decision. In
this management style, managers (i) motivate employees through rewards and
occasionally punishment (ii) make broad policy and general decisions but leave
specific decisions to the lower levels, (iii) Use both upward and downward
communication flow, and (iv) act as consultants in order to resolve various problems.
System 4 Management: This style of management is called the ‘participative
leadership’ style. In this system, managers trust their subordinates completely and have
confidence in their abilities. They always ask the opinions of their subordinates and
make use of their ideas. They encourage the participation of employees at all levels in
decision-making and use both upward and downward communication. The managers in
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Leadership

this system work with their subordinates and other managers as a group. The
involvement of employees in setting objectives and achieving goals is financially
rewarded.
Likert found that those managers who adopted the system 4 approach had the greatest
success as leaders: they were most effective in setting goals and achieving them, and
were generally more productive. Likert and his research team concluded that high
productivity is associated with systems 3 and 4, while systems 1 and 2 are
characterized by relatively lower output.

ROLES AND ACTIVITIES OF MANAGERS

Henry Mintzberg conducted observational studies (a process in which researchers


observe the activities of the group under study by themselves instead of relying on the
responses given by participants to a questionnaire) on the roles of managers in
organizations. They concluded that managers performed three roles – Interpersonal,
Informational and Decisional roles.
Interpersonal role
In this role, the manager acts as a figurehead for the organization. He conducts talks
with important clients and suppliers and makes formal announcements to the public on
behalf of the organization. He motivates and encourages his subordinates to
accomplish work-related goals as a part of his leader role. In another interpersonal role
called liaison role, he interacts with people outside his unit or outside the organization
and tries to improve his relations with them.
Informational role
This role of managers consists of three other roles – the monitor, the disseminator and
the spokesperson. The manager constantly examines the environment (internal and
external) to keep himself updated on the latest information. He also attempts to gather
information from his superiors, subordinates and other contacts. He disseminates
information to employees who need it and also to people outside the organization
(suppliers, partners, stakeholders and customers).

Decisional role
In this role, the manager has to play a number of different roles. The manager initiates
a change program or a project in the organization and acquires the resources needed for
their implementation in his entrepreneur role. In his role as a disturbance handler, the
manager handles crisis situations and prevents them from affecting the functioning of
the organization. For example, if a major supplier of a particular material/component
fails to deliver the goods on time, the manager will try to locate an alternative supplier.
The manager allocates resources to his subordinates according to their requirements in
his role as resource allocator. The manager also assumes the role of negotiator as he is
constantly in the process of negotiation with superiors, subordinates, clients and
suppliers.
Mintzberg thus classified the functions that are actually performed by managers/leaders
in organizations apart from the ones that are formally laid down. However, he did not
identify the fundamental functions performed by managers and the challenges and
dilemmas faced by them.
Some recent research studies have suggested that managers/leaders also play the roles
of vision setter, motivator, analyzer, task master, mobilizer, ambassador, driver,
auditor, etc.

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Organizational Behavior

The activities performed by managers can be placed under the following categories:

Communication
Managers are constantly in the process of exchanging information. They receive
information from various sources and distribute information to people who need it.
They have to process a variety of reports (like results of meeting, financial reports, etc)
and discuss them with superiors and subordinates.

Traditional Management
Managers have to develop future plans, make important decisions and take corrective
measures in case of deviation from planned performance. They set goals and objectives
for employees, determine the tasks needed to achieve those goals, and assign different
tasks to different employees, depending on their capabilities. They provide guidance to
employees in carrying out the tasks, listen to their problems, suggest solutions, address
operational problems, initiate preventive maintenance and also monitor employee
performance.
Human Resource Management
Managers recruit people, train them, motivate them, manage conflicts and maintain
discipline. They also monitor the performance of employees, give them feedback on
their performance and reward high performers. They initiate changes in job
descriptions and act as a coach or mentor for employees. They also socialize with
employees to provide them an informal and friendly work environment.
Networking
Managers interact with business partners, suppliers and customers and to develop a
good working relationship with them. They attempt to leverage these relationships in
achieve the goals of the organization.
Mintzberg found that successful managers devoted more time and effort to networking
than the other activities mentioned above. Success was measured in terms of the time
taken by a manager to obtain subsequent promotions and go up the ladder.
Mintzberg also found that effective managers gave more importance to communication
and human resources management than networking and traditional management
activities. The effectiveness of a manager was defined in terms of the performance of
his unit and his subordinates’ satisfaction and commitment to work. Effective
managers keep their work-groups updated on latest happenings in the organization,
obtain their feedback on major policy decisions, provide feedback on their
performance, and recognize their good work. In other words, effective managers
motivate employees to perform better and help the organization meet the challenges of
global competition.
Hence, organizations should establish reward systems that make effective managers
successful and discourage managers from relying on networking to move up the
corporate ladder.

DETERMINANTS OF LEADERSHIP

The effectiveness of an individual as a leader can be determined by two variables:


 The quality of subordinates/followers
 The nature of the situation

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Leadership

Exhibit 12.3
What it Takes to be an Effective Leader
Effective leaders influence people to do things the way they want them done. Relationships
play a major role in having the desired level of influence over people. Therefore leaders
constantly attempt to build, maintain and expand their network of relationships. They take
the following measures to enhance their relationships and thus their ability to influence
people:
 They invest time in building and maintaining relationships with people. They consider the time
spent in maintaining relations an investment for the future.
 They try to strengthen their relationships with people by helping them achieve their personal
goals.
 They ignore the negative aspects of a person if these aspects are less than his positive aspects.
 They do not look for immediate results from relationships. They patiently maintain relationships
with people (without expecting anything in return for their favors) for as long as 15-20 years in
order to accomplish long-term goals.
 They recognize that individuals differ in their needs, goals and wishes, and therefore modify their
behavior from one relationship to another accordingly.
 They encourage people to recognize their hidden talents and capabilities.
 They ignore criticism by opponents on their emphasis on relationships.
 To maintain a relationship, both parties have to extend cooperation. If the leader finds that the
other person is not willing to cooperate, he puts an end to the relationship with that person,
because the relationship is not worth maintaining.
 They strive to maintain enthusiasm and energy in all their relationships. Their high energy levels
motivate other people.

Adapted from Nelson Searcy, “Key to Influence,” March 1, 2000 (An excerpt from Tom Peters, “The
circle of innovation,” pp. 86-87) http://www.smartleadership.com/magazine/view.asp?i

Quality of Subordinates
The contingency theory (or followership theory) states that the quality of subordinates
is a primary indicator of effective leadership. An effective leader always builds a
strong team consisting of people who are independent and self-motivated (Refer
Exhibit 12.3). Lack of initiative on the part of subordinates and overdependence on
their leader indicates that the leader is ineffective.
The Nature of the Situation
According to the situationist viewpoint, different individuals are effective in different
situations. The situationist theory proposes that an individual who has the background
and knowledge relevant to a given situation will come forward by himself to lead the
group when that situation arises.
Suppose that management observes that the company’s sales figures are falling year
after year. And suppose, a task force consisting of a production manager, a marketing
manager and a sales manager is formed to find a solution to the problem of low sales.
If they discover that a defect in the company’s product is responsible for the decline in
sales, the production manager will play the lead role in finding the solution. He may
note down suggestions from customers, redesign the product based on the basis of
those suggestions, obtain the approval of the top management for the new design, get
the product manufactured and introduce it into the market.
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Organizational Behavior

Consider another example: Suppose a corporate airplane carrying some employees and
managers from one business unit to another crashes and survivors find themselves on
an island. The survivors may include pilot, a production manager, a computer engineer,
a lawyer and a shop floor worker (who has expertise in making boats). The necessity of
the situation will make the worker to come forward to lead the group.
Researchers are exploring the possibility of training individuals to adapt their behavior
to suit different situations and become effective leaders in all situations.
In addition to the situationist viewpoint, leadership style has also been explained by
Fiedler’s contingency model which suggests that organizations should analyze the
situation and select leaders having an appropriate style of leadership rather than
attempting to modify their behavior to suit organizational requirements.

TASK OF A SUPERVISOR

Supervisors are lower level managers who manage workers on the shop floor. In large
organizations, there may be different levels of supervisors, i.e., first line supervisors,
second line supervisors and third line supervisors. The first line supervisors supervise
the work being done by workers. Their other responsibilities include developing work
schedules, communicating them to workers, and making decisions regarding day-to-
day operations. Supervisors are given different designations like foreman, chief clerk
and section engineer. Supervisors give training to new employees, plan production
schedules, provide employees with necessary equipment and tools to carry out their
tasks, create a proper work environment and ensure that workers achieve the targets set
by management.
Second line and third line supervisors also perform more or less the same activities.
They may resolve the problems referred to them by their subordinates, interpret the
rules and policies of the organization, and act as a link between their subordinates and
management.
Supervisors play a crucial role in organizations because they are responsible for
implementing the management’s plans on the shopfloor and achieving the desired
results. Therefore, the performance of an organization depends on the effectiveness of
its supervisors.

EFFECTIVE SUPERVISORY PRACTICES


Research conducted by the University of Michigan indicated that the following four
supervisory practices were effective:
 Devote more time to planning and supportive functions: It was observed that the
work groups in which supervisors spent more time on planning and other
supportive functions were more productive than the groups in which supervisors
performed the same work as their subordinates. The supervisors of highly
productive groups gave on-the-job training to employees, helped them interpret
organizational policies and procedures, and recommended incentives and
promotions for high performers.
 Avoid close supervision: It was observed that in productive groups, supervisors
provided necessary instructions and then allowed workers to perform the work in
the way they wanted. This boosted the morale of employees and improved their
productivity.
 Concern for employees: The groups led by employee-oriented supervisors were
more productive than the groups led by task-oriented supervisors. Employee-

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Leadership

oriented supervisors empathize with employees’ feelings, give them emotional


support, use punishment less frequently, train them in new skills, and prepare them
for promotion.
 Promote Group Cohesiveness: The productive groups were led by supervisors who
promoted cooperation and coordination among group members.

SUMMARY

There is no agreement among management theorists on the definition of leadership.


Though most of them do agree that leadership involves influencing others, the
disagreement arises on the issue of how this takes place. Another issue of contention
among experts is whether managing and leading are equivalent. According to some
experts, managers and leaders are different. Managers generally devote their time to
developing plans, organizational structures and controlling deviations from the plans.
Leaders focus on developing a vision for the future, communicating the vision to
people, integrating the efforts of their followers, helping them overcome hurdles and
developing their abilities to realize the vision. Managers derive their power from their
position in the organization. Leaders do not need any formal authority but derive
power from people who follow them because of their abilities.
Leadership is the ability to influence people and drive them toward the achievement of
goals. The research on leadership has led to the development of three types of theories
– Trait, behavioral and contingency theories. According to trait theories, some traits
such as extroversion, aggressiveness, self-confidence, honesty and integrity and
intelligence differentiate leaders form non-leaders. According to the behavioristic
school, successful leadership depends more on appropriate behavior and skills, and less
on personality traits. The three broad types of skills used by leaders, as identified by
Robert Katz, are technical, human and conceptual skills.
Four different behavioral theories – the Ohio State Studies, the University of Michigan
Studies, the Managerial Grid and the Scandinavian Studies – sought to identify the
different behaviors adopted by leaders. The Ohio State Studies concluded that leaders
who score high on the dimensions of initiating structure (task orientation) and
consideration (concern for people) achieve superior subordinate performance and
satisfaction, compared to those who score low on either one of them or both. The
Michigan Studies found that an employee-centered style of leadership is more effective
than a production-centered style of leadership. The Managerial Grid proposed by
Blake and Mouton suggested that leaders who have equal concern for people and
production are most effective. The Scandinavian studies resulted in the emergence of a
new dimension called ‘development-oriented’ behavior. According to these studies,
leaders who embrace change and encourage new ideas and practices are successful.
The contingency theories deal with the situational aspects of leadership styles. Some of
the well known contingency theories are Fiedler’s contingency model, Hersey and
Blanchard’s situational theory, Leader-Member exchange theory, Leader Participation
model and the Path-Goal theory. Fiedler’s model suggests that the leader should
choose his style of leadership depending on the favorability or unfavorability of the
overall situation. Hersey and Blanchard’s situational theory states that the most critical
factor that influences the selection of a leader’s style is the maturity level of his
subordinates. The Leader-Member exchange theory suggests that leaders try and
establish a special relationship with a small group of subordinates; this small group
would constitute an in-group, with all the rest of subordinates being in an out-group.
The in-group members get more attention from the leader and enjoy special privileges.
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Organizational Behavior

The Leader participation approach provides a sequential set of rules that can be
followed for identifying the type of situation and determining the amount of
participation that should be demanded from subordinates for decision making.
According to the Path-Goal theory, the leader should guide his followers in achieving
the organizational goals, and also establish individual and group goals that are
compatible with the broad organizational goals.

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Chapter 13

Managing Communication
In this chapter we will discuss:
 Definition of Communication
 Historical Background of the Role of Communication
 Importance of Communication
 The Two-way Communication Process
 Problems Associated with Two-way Communication
 Nonverbal Communication
 Downward Communication
 Upward Communication
 Lateral Communication
 Interactive Communication
 Barriers to Effective Communication
 Communication Technology
Organizational Behavior

In all organizations, individuals and groups attempt to exchange ideas, feelings and
emotions. This communication is essential for sharing information and coordinating
action.
Communication is essential for achieving managerial and organizational effectiveness.
Without communication, employees will not be aware of what their co-workers are
doing, will not have any idea about what their goals are, and will not be able to assess
their performance. In the absence of channels of communication, supervisors will not
be able to give instructions to their subordinates and management will not receive the
information it requires to develop plans and take decisions. In other words, the basic
management functions of planning, organizing, directing and controlling cannot be
carried out without communication.
Good communication helps employees become more involved in their work and helps
them develop a better understanding of their jobs. Clear, precise and timely
communication of information also prevents the occurrence of organizational
problems. Effective communication is essential for achieving organizational goals, but
ensuring such communication has been a major problem for most organizations.

DEFINITION OF COMMUNICATION

Although the word “communication” is often used, there has been no consensus among
communication experts regarding the definition of communication. In general,
communication may be defined as the process by which information is exchanged
between individuals. The process includes the use of written messages, spoken words
and gestures. The field of organizational behavior seeks to examine the impact of
communication on the behavior of employees within organizations.
Figure 13.1 depicts a continuum showing the increase in sophistication of
communication. Simple nonverbal communication falls at one end of the continuum
while sophisticated communication technology falls at the other end of the continuum.
Interpersonal communication occupies the middle ground. This increasing degree of
sophistication in the communication process makes it possible to study communication
under three categories: nonverbal communication, interpersonal communication and
communication technology.

Figure 13.1: The Continuum of Communication in OB

Nonverbal Interpersonal Sophisticated


Communication Communication Communication
Technology

Increase in Sophistication

HISTORICAL BACKGROUND OF THE ROLE OF COMMUNICATION

Classical management theorists did not completely integrate communication with


management theory. They examined only formal one-to-one communication between
the superior and the subordinate based on the principle of ‘chain of command.’
Communication along the chain of command can, however, lead to restricted

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Managing Communication

communication. In addition, if an organization strictly adhered to this approach to


communication, the message may not reach its intended audience. Take the case of an
organization, that has a general manager at the top level of management; a production
manager, a marketing manager and a personnel manager at the second level of
management; a deputy production manager, a deputy marketing manager and a deputy
personnel manager at the third level of management; a production executive, a
marketing executive and a personnel executive at the fourth level of management; and,
finally, supervisors and the workers at the lowest level of the organization. According
to the principle of chain of command, the superior must pass on information to his
subordinate. If the general manager conveys a piece of information (e.g. regarding an
increase in the price of raw material) to the production manager, he will pass it on to
the deputy production manager, who will, in turn, pass it on to the production
executive. From the production executive, the information will pass to the supervisor
and the production employees. Thus, even if the GM wanted the information to be
conveyed to the marketing executive (so that he does not give heavy price discounts),
the information would not reach the marketing executive until the GM conveyed it to
the marketing manager. Henri Fayol, one of the famous management theorists,
attempted to provide a solution to the problem of such restricted communication.

Henri Fayol’s Contribution to Communication


In formal organizations, the design of communication channels is based on the
assumption that all the divisions and departments are self-contained and do not
facilitate communication among employees at the same level (horizontal
communication). This poses a serious problem when circumstances demand such
communication. If an individual wants to convey some message to an individual from
another department, the message has to be passed up to the highest managerial level
and then down to the individual. The reply from that individual is also received in a
similar way, leading to huge delays. As can be seen from Figure 13.2, if F wants to
communicate with P, the communication has to pass through E-D-C-B-A-L-M-N-O-P
and back. Fayol proposed a ‘gangplank’ mechanism (horizontal communication
system) to bridge the communication gap between individuals and departments (see the
line joining F and P in Figure 13.2). This requires the managers of these individuals to

Figure 13.2: Fayol’s Gangplank Concept

A
B L
C M
D N
E O
F P
G Q

Source:
http://www.bdk.rug.nl/medewerkers/h.w.m.gazendam/WebBDK/Documents/1993/Con
ceptual%20Analysis%20and%20Specification%20of%20Fayol’s%20Management%2
0Principles.pdf

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authorize them to communicate with each other. The employees would then report the
results of their discussion to their respective managers. The gangplank mechanism
would thus simplify the process of communication in organizations.

Chester Barnard’s Contribution to Communication


Chester Barnard felt that communication played an important role in shaping
organizations. According to Barnard, communication forms one of the three primary
elements of an organization, the common goals and willingness to serve customers
being the other two elements. Communication links the members of an organization
with the organization’s goals and facilitates and enhances cooperative action among
the individuals and departments of the organization. Communication, whether written
or oral, helps an organization attain its goals, but it can also give rise to problems. For
instance, if a particular message is misinterpreted, an inappropriate decision may be
taken. This decision may result in losses to the organization in the long-run.
Barnard related communication to the concept of authority. According to Barnard, for
authority to be delegated from a manager to a subordinate, all communication
originating from the manager must be clearly understood by the subordinate. He
believed that a manager should try to understand the meaning of the message before
communicating it to his subordinates. Barnard identified seven communication factors
that help establish and maintain objective authority in an organization:
i. The members of an organization should be aware of all the available channels of
communication.
ii. Every member of an organization must have access to a specific formal channel of
communication.
iii. Communication with an organization must follow the shortest and most direct
path.
iv. All communication should involve the use of the entire, formal line of
communication.
v. Competent persons should serve as communication centers.
vi. There should be no interruption in the line of communication during the
functioning of an organization, and
vii. All communication should be authenticated.

The Modern Perspective


Although many articles and books have dealt with interpersonal and organizational
communication, most of them are not based on any systematic research findings.
However, the “Real Managers Study” (conducted by Fred Luthans, Richard M.
Hodgetts and Stuart A. Rosenkrantz) is based on original research in communication.
The researchers observed managers at work in various organizational settings and also
studied the self-reports submitted by them to understand the process of communication
in organizations. Then, with the help of managers, they prepared reports on the ways in
which they tried to communicate in various situations. They developed a managerial
communication model (depicted in Figure 13.3), which shows the different styles of
communication used by managers and provides a framework for understanding how
managers communicate in organizations.
The first dimension of the managerial communication model shows a continuum
extending from the humanistic interactor to the mechanistic isolate. Humanistic
interactors are managers who frequently communicate with superiors as well as
subordinates (i.e, both upwards and downwards in the organizational hierarchy). They

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Managing Communication

Figure 13.3 Managerial Communication Model

Informal Developer Formal Controller


Managers who Do not communicate and
communicate with interact freely with
everyone in the subordinates.
organization.

Humanistic Interactor
Managers who frequently Mechanistic Isolate
communicate with Managers who
superiors as well as communicate only when
subordinates. needed.

involve themselves in people-oriented activities and help employees solve work related
problems. Mechanistic isolates represent managers who communicate only when
needed, and limit their communication only to people whom they need to interact with.
The other dimension of the managerial communication model is also a continuum
extending from the informal developer to the formal controller. Informal developers
are managers who communicate with everyone in the organization. They act as a coach
or mentor to their subordinates and try to develop their skills. Formal controllers
adhere strictly to their official schedules, do not communicate and interact freely with
subordinates, and restrict themselves to monitoring and controlling activities or other
activities that form a part of their job duties and responsibilities.

IMPORTANCE OF COMMUNICATION
Communication is vital for the functioning of organizations. In the absence of channels
of communication, supervisors will not be able to give instructions to employees and
employees will not be able to understand what the management expects of them.
Employees can perform well and be involved in their work only when they understand
their job duties and responsibilities. The absence of communication can threaten the
very survival of organizations. When software companies reduced the salaries of their
employees to cope with the slowdown in the IT industry, their managements had to
communicate to employees that the reduction was temporary and that salary cuts had
been made to avoid layoffs. If this had not been communicated to the employees, they
would have become hostile towards management. In the absence of such
communication, management would not have been able to carry out its basic functions
of planning, organizing directing and controlling.
In the early stages of the industrial evolution, information was tightly controlled by top
level managers in organizations. However, the managers of modern organizations have
realized that it is more beneficial to have open communication than restricted
communication within organizations. Unless the organization’s key goals, values and

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Organizational Behavior

strategies are communicated to employees, they will not work in that direction. Some
managers hold back negative feedback because they fear it will have a negative impact
on employee morale. However, withholding such feedback prevents employees from
improving themselves and harms their personal development as well as organizational
development in the long-run. Some managers try to hide organizational problems from
employees because they do not want to demoralize their workforce. But if they shared
information and discussed problems with employees, the employees would be
motivated to extend their cooperation and help the organization solve the problems and
overcome the threats. Open communication of problems and difficulties can help
organizations muster the support of employees.
Managers have to interpret the information they receive and communicate the same to
employees. To do so, managers should have good communication and interpretation
skills. Consider the case of the manager of a department who receives a lengthy report
on certain changes that have been implemented in the organization by the top
management. Instead of circulating the report among all the employees of the
organization, the manager could prepare a one or two-page summary of the report and
circulate the same among the employees. However, doing so has its drawbacks. The
employees’ interpretation of the report depends on how correctly the manager has been
able to understand and interpret the original report and how well he has been able to
communicate it.
Managers often need to take decisions that have a major impact on the organization
and its employees. The availability of accurate and timely information helps them
make sound decisions. The presence of several links in the chain of communication
increases the time it takes for information to reach managers. And the distortion of
information at any of these links affects the accuracy of the information being
communicated. The probability of distortion increases with the length of the
communication chain. Many organizations have reduced the number of managerial
levels in the organizational hierarchy (due to economic recession and for competitive
pressures), especially at the middle management level. This reduction in levels has
decreased the number of links in the communication chain, thus improving
communication within organizations.
Figure 13.4: The Communication Process
TRANSMISSION
Reception
Transmitting of the
The Message Message

Encoding
the Decoding
Message the
Message

Developing Noise
Acceptance/
an Idea
Rejection of
the Message

SENDER Using the


Giving Information
Feedback
RECEIVER
FEEDBACK
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Managing Communication

THE TWO-WAY COMMUNICATION PROCESS

The two-way communication process involves the transmission of a message from a


sender to a receiver and back. Communication may take place through speech, hand
signals or other form. All communication involves eight steps (as shown in Figure
13.4), regardless of the form used.

Developing an Idea
The sender should perceive that he has some important message to be conveyed to the
receiver. The sender should have a clear idea of what he wants to communicate to the
receiver.

Encoding the Message


The sender codifies the message. He selects appropriate words, charts or other symbols
in this step, to convey his idea as clearly as possible. He also decides on the medium of
transmission so that the words and symbols constituting the message can be arranged
in a suitable manner.

Transmitting the Message


This step involves the transmission of the message using an appropriate medium of
communication such as memo, phone call or personal interaction. While transmitting
the messages, the sender tries to ensure that the timing of the message is right. The
sender also takes care that the transmission of the message doesn’t encounter any
barriers or interference which may impede the flow of communication. Ensuring that
the communication channel is free from barriers or interference increases the chances
of the message reaching the target audience and holding its attention.

Reception of the Message


In this step, the receiver, the person for whom the message is intended, receives the
message. If the message is communicated orally, the receiver has to be a good listener
to avoid loss of information during the transmission of the message.

Decoding the Message


In this step, the message is decoded and understood by the receiver. The receiver has to
understand the message exactly as intended by the sender. The communicator of a
message can make the receiver listen to him, but understanding has to be achieved by
the receiver alone. This aspect of understanding is referred to as “getting through” to a
person.

Acceptance or Rejection of the Message

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Organizational Behavior

The receiver is free to accept or reject a decoded message. The receiver can not only
choose whether to accept a message, he can also choose whether to access the message
in toto or in part. The acceptance decision of the receiver is influenced by factors such
as his perception regarding the accuracy of the message, the authority of the sender,
and the implication of accepting the information.

Using the Information


This step involves the use of information by the receiver. The receiver may use the
information, discard it, or store it for future.

Giving Feedback
Feedback occurs when the receiver sends back some response to the sender or
acknowledges the receipt of the message. The communication loop is complete only
after feedback has been provided.
Feedback is essential for finding out whether the message has been properly received,
decoded, accepted and used by the receiver. The two-way communication process can
be compared to the back-and-forth pattern of play in tennis and badminton. The players
adjust their shots depending on the response of the opponent. Similarly, as
communication progresses, the sender adjusts his or her message according to the
previous response of the receiver. Two-way communication leads to the accurate
transmission of information and improves the quality of the decisions and actions
dependent on that information.

PROBLEMS ASSOCIATED WITH TWO-WAY COMMUNICATION

Two-way communication may result in friction, especially when two people hold
different views on the same subject. At the same time, two-way communication can
help people understand each other’s viewpoints.
This type of communication can also lead to cognitive dissonance (discussed in
Chapter 6). When people receive information that questions their value systems,
decisions, or judgments or contradicts other information they received earlier, they
experience internal conflict and anxiety. This is referred to as cognitive dissonance.
People try to eliminate or minimize the discomfort caused by dissonance by obtaining
new information, interpreting the information in a different way, reversing their earlier
decision, or by compromising their values.
The sender should be very careful when communicating a message since
communication is a form of self-revelation. When a person speaks, people not only try
to understand the content of the speech but also try to assess his personality. A person
unable to deliver his message in an appropriate way loses credibility. Therefore, a
person involved in the communication process always seeks to preserve his self-image.
While communicating, people try to preserve their self-image. The self-image of a
person is threatened when he receives communication that may be verbally abusive.
Although the sender may have unintentionally conveyed such a message, such
communication usually generates bad feelings towards the sender. These negative
feelings strain the relationship between the sender and the recipient and cause it to
deteriorate.

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Managing Communication

NONVERBAL COMMUNICATION

A message need not always be conveyed in the verbal forms; it can be sometimes
expressed without the help of words. Nonverbal communication is the process of
communicating without the use of words. According to Don Hellriegel, John Slocum,
Jr. and Richard W. Woodman, nonverbal communication can be defined as “non-word
human responses like facial expressions and gestures and the perceived characteristics
of the environment through which the human verbal and nonverbal messages are
transmitted.” Nonverbal communication is also known as ‘silent language.’ It involves
Exhibit 13.1
Nonverbal Communication in Japan
“If speech is silver, silence is golden.” – the Japanese strongly believe in this saying. During business
meetings, a Japanese executive may suddenly stop talking and fall silent. The other people at the
meeting are expected to wait patiently till he resumes talking. It is considered rude behavior if a
person attempts to break the silence and starts talking. Japanese use silence to think and develop a
proper response. They do not talk at length about any particular issue, but instead expect the listener
to understand the implicit meaning of what they have said. They do not even consider it necessary to
specify the subject (like who or what) in every sentence they speak. The listener is expected to
understand this in the context of their conversation.
Nonverbal communication in Japan also includes the following expressions and behaviors:
Uncommitted Face: The Japanese prefer not to explicitly express their emotions in public. They try
to conceal their emotions, particularly, negative emotions, from others and present a blank face,
making it difficult for others to understand their feelings.
Smile: The Japanese attempt to conceal their emotions by smiling even in situations of
embarrassment, pain or anxiety.
Eye-contact: Japanese executives do not make direct eye contact with their counterparts because
such behavior suggests that they are challenging the other party. Looking down rather than making
eye-contact while talking to a person is considered a sign of respect.
Touching: The Japanese maintain some physical distance between themselves and their business
counterparts. They do not appreciate physical contact such as patting on the back, hugging or kissing
in public.
Showing respect: When a business executive hands over his business card, the Japanese do not fold
it or write over it. When they receive gifts, the wrapper is not crushed but handled gently and neatly
folded back. The guests’ coats are not thrown on tables and chairs, but are hung neatly. And guests
are expected to use the furniture appropriately. They should not sit on a table or lean on a desk.

Adapted from Time Square Travels, “A Guide to Japan,” http://www.shinnova.com/part/99-


japa/abj17-e.htm

the use of cues, gestures, vocal characteristics, facial expressions, and spatial
relationship between the sender and the receiver to convey a message (Refer Exhibit
13.1). For instance, a smile, glance, stare or a frown convey different meanings.

Body Language and Paralanguage


Nonverbal communication takes many forms. The most common form of nonverbal
communication is the use of body language (Refer Exhibit 13.2). The study of body
movement is known as kinesics. Body movements include gestures, facial expressions
and other physical movements. Every body movement conveys a certain meaning. For

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Organizational Behavior

example, raising an eyebrow conveys disbelief, rubbing the nose indicates puzzlement
and shrugging shoulders shows indifference. When a person is eager to hear
something, he sits with his feet under the chair, toes pressed to the ground, and leans
forward on the desk; when a person is listening carefully, he maintains eye contact and
frequently nods his head and so on. Body language coupled with verbal
communication gives more meaning to a message.
Dress and physical appearance are other important forms of nonverbal communication.
It is believed that physical appearance determines the success a person will attain at
every stage of his life.
Other important forms of nonverbal communication include the attitude toward time
and the spatial relationship maintained between people.

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Managing Communication

Exhibit 13.2
Body Language
While speaking, people tend to use some body movements, without even knowing that they are
doing so. Their facial expressions and the way they stand (posture), make gestures with their hands,
and move their eyes and eyebrows send visual signals to the listener. It is important for everyone,
whether he is a sales executive, a top manager or a politician, to be aware of their body language and
to control their body movements to be successful in their respective careers.
Posture: When a person is presenting his ideas, his posture forms an important part of the
presentation. He needs to look relaxed and comfortable to the audience.
Some people have the habit of rocking while talking. They should try to get rid of this habit as it is
distracting to the speaker as well as the audience. Rocking can be prevented by standing with feet
spread apart and putting the body weight on the heels. The other postures that speakers should avoid
when making a presentation are:
i. Keeping hands crossed in front of oneself: This makes the person look weak and timid.
ii. Keeping hands behind oneself: This makes the person appear too relaxed.
iii. Keeping hands on hips: This gives the impression that the person is doing the audience a favor
by making the presentation.
iv. Keeping arms crossed: It makes the person seem uninterested in the presentation.
v. Keeping feet crossed: This makes the person look diffident.
vi. Putting hands in pockets: This gives an impression that the person is nervous.
vii. Leaning back in the chair (if seated): This gives the impression that the person is ready to make
a judgement.
A speaker should relax both his hands, keep his chin raised, and stand straight so that he looks and
feels relaxed and is able to make the right gestures and convey the right message.
Gestures: These include the movement of hands, arms and head. A person should not repeat the
same movement again and again because if he does so, the audience will focus on that movement
rather than his speech.
Eye-contact: One should not keep looking at the same person for a long time (when addressing a
group) because he/she may begin to feel uncomfortable. Instead, one should make eye contact with
people in a ‘Z’ pattern and not look at any person for more than a few seconds.
In cultures where eye-contact is not considered appropriate, one should avoid it altogether.
Facial expression: One should attempt to give a light smile and appear pleasant. In addition, one
should avoid making negative expressions such as raising eyebrows, frowning or looking grim.
Negative expressions discourage communication from taking place between individuals.
As body language speaks louder than words, one should be very cautious when making body
movements.

Adapted from Marjorie Brody, “Does Your Body Language Stop A Sales Presentation Before It
Starts?,” http://www.powerpointers.com/printarticle.asp?articleid=18

Cultural norms affect nonverbal communication. In some cultures, it is considered rude


to arrive ahead of time while in other cultures it indicates politeness and a positive
attitude. In some countries, close physical distance may mean aggressiveness or sexual
interest, while in some countries maintaining a close distance may be essential to
appear business-like.

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Organizational Behavior

Paralanguage refers to the voice quality, volume, pitch, speed and nonfluencies (like
‘ah’, ‘um’, or ‘uh) used to convey a message. It helps to convey information about the
attitude of the speaker. Sometimes there may be a contradiction between what a person
says and what his actions indicate. In such cases, the person’s actions can be regarded
as a truer picture of his feelings and ideas.

Understanding Nonverbal Communication


The following guidelines can help individuals understand nonverbal communication in
a better way:
 Observe keenly what is happening – When nonverbal behavior involves an
emotional response (for example, tears rolling down the checks or eyes becoming
red), it clearly conveys the message to the other person.
 Consider the differences between verbal statements and nonverbal behavior – If
there is any discrepancy between what a person says and what his body language
indicates, then the situation should be studied closely. It is believed that actions are
more accurate than words. For instance, a slight hesitation before saying “yes” may
mean coercive acceptance.
 Look for subtleties in nonverbal behavior – Through careful observation, one can
differentiate between a fake action and a genuine action. For instance, a sarcastic
smile can be differentiated from a genuine one.
Culture has an enormous impact on nonverbal communication. Physical proximity is
acceptable in Latin America, but it does not constitute acceptable behavior in South
Asian countries. The ‘thumbs up’ gesture is widely used in western countries, but in
Australia, the gesture is disapproved. In Japan, keeping the gesture is disapproved. In
Japan, keeping hands in one’s pockets while talking (to a superior or elderly person) is
considered a sign of disrespect, while in the US, it is not considered so.

DOWNWARD COMMUNICATION

Downward communication is one of the important processes of organizational


communication. The downward communication process establishes linkages between
people (interpersonal linkage) by facilitating the flow of information between them.

Purposes of Downward Communication


There are five purposes of downward or top-to-bottom communication in an
organization.
i. To give instructions to employees regarding their jobs and specific tasks.
ii. To provide information about the procedures and practices followed in an
organization (to new employees).
iii. To explain the rationale for a job to a new employee.
iv. To provide feedback to subordinates about their performance on the job.
v. To give information required by different teams and departments for the
achievement of goals.
In the past, organizations gave attention to only the first two purposes, but modern
organizations emphasize all five purposes. If the communication process fails to
achieve these purposes, the employees will not receive all the information they require
about their jobs and will not be aware of the importance of their work. They may
consider their job to be of little significance in the organization and may not show
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Managing Communication

interest in them. They may carry out their tasks only because they have been asked to
do so by their boss. This kind of attitude on the part of the employees will have a
negative impact on organizational performance. It will promote an authoritative
atmosphere which will adversely affect the upward and horizontal flow of information.
It is therefore important to communicate to all employees how their jobs will
contribute to the achievement of organizational goals and how their poor/excellent
work performance will affect the other jobs in the organization. Thus, the objective of
downward communication should be to help employees understand their jobs better
and align their goals with organizational goals.
The downward communication system generally depends on different types of print
and oral media to disseminate information. Handbooks, manuals, magazines,
newspapers, bulletin-boards, notices, posters, reports and memos are the different kinds
of written media used by organizations. Organizations like GE, HP and United Airlines
bring out monthly employee newsletters to convey information. Direct orders or
instructions from top executives, speeches, meetings, public address systems,
telephones and closed-circuit television programs are examples of the oral media used
for downward communication.
In downward communication, the quality of information suffers if the sender attempts
to communicate the maximum amount of information to the receiver. Experiments in
social psychology have revealed that people tend to ignore useful information and
retain irrelevant information. In order to overcome this information optimization
problem, many organizations have begun to use communication technologies
(discussed later in the chapter).
The biggest drawback in downward communication is the lack of importance given to
the receiver. Research has shown that lower level employees can improve their
performance provided they obtain the right information at the right time. Managers
should therefore understand the impact of communication on subordinates and take
appropriate measures to make their communication effective.

UPWARD COMMUNICATION

Upward communication is also an interpersonal process like downward


communication. The classical organization structure provides for both upward and
downward flow of information. The upward communication process is non-directive in
nature, unlike the downward process which is directive. Effective upward
communication is possible only when organizations empower their employees and
allow them to participate freely in decision-making.
In the past, when the bureaucratic approach was more prevalent than the participative
approach, upward communication was discouraged. Employees feared to communicate
information to their superiors, especially unpleasant information.

Methods of Making Upward Communication More Effective


The techniques described below are used to promote upward communication in
organizations.

The grievance redressal procedure


The grievance redressal procedure enables employees to appeal to management and
seek redressal of their grievances. It enables employees to bring their work-related
problems to the notice of top management and protest against the arbitrary actions of
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Organizational Behavior

their immediate superior. Companies such as General Electric and Federal Express
have set up peer review boards to address the grievances of employees. These peer
review boards consist of three representatives from employees and two representatives
from management. Peer review boards accept grievances from employees, hear the
arguments of both parties, and then arrive at a decision. The parties concerned are then
bound by these decisions.

Open-door policy
This is an organizational policy that allows employees to approach managers at any
time and discuss their problems with them. Most of the times, this policy is not actually
implemented in organizations.

Counseling, attitude questionnaires and exit interviews


The personnel department can conduct nondirective counseling programs to help
employees deal with their work-related problems as well as work and family conflicts.
Attitude questionnaires may be administered periodically to find out employees’
attitudes towards the workplace and the work-load. Exit interviews may be held for the
employees quitting the organization to find out their reasons for leaving and their
suggestions for improving the workplace. Valuable information can be obtained
through these methods.
Participative techniques
Participative decision-making techniques enable employers to obtain inputs from
employees. This can be achieved through formal participation programs like union-
management committees, suggestion boxes, junior boards and quality circles or
through the informal involvement of employees. Research has shown that the
employees who participate in these programs are more satisfied with their job, show
greater commitment towards the job, and perform better than non-participating
employees.

The ombudsperson
The position of an ombudsperson is created to receive and respond to inquiries,
complaints, requests for policy clarifications, or allegations of injustice by employees.
Through an ombudperson, employees can have their problems resolved quickly
without going through lengthy channels (eg. approaching the supervisor, then the shift
in-charge, then the HOD, then the personnel manager, and so on). This position had
been initially created in Scandinavia as an outlet for people who felt that they had been
treated unfairly by the government bureaucracy. Ombudpersons are now being used in
government organizations and universities in the US. They can also be used in business
organizations to help management improve upward communication. The ombudperson
technique can be an effective substitute for the open-door policy since the manager
may not always have the time to meet employees and solve their problems.
Managers can improve upward communication by developing good listening habits.
Some of the ways in which they can improve their listening skills are described below:
 Maintaining attention: The speaker should be assured that the listener is paying
due attention to what he is saying. If possible, one should switch off the mobile
phone and sit far away from land phones to avoid distractions.
 Using restatement: The listener can repeat the speaker’s words and ideas to ensure
that he has accurately understood what the speaker wants to convey to him.
 Empathizing: The listener should attempt to understand the feelings and emotions
of the listener.

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Managing Communication

 Probing: The listener should ask the speaker further questions and attempt to find
out the finer details of the speaker’s message.
 Encouraging: The listener should encourage the speaker to express his opinions
fully.
 Understanding when to speak and when to let the other person speak: The
listener should not interfere when the speaker is describing something. However,
when the listener finds that the speaker wants to tell something but is unable to put
it in words, the listener may help him express himself. If the speaker wants to
convey something but hesitates to express himself, the listener could say something
to put him at ease.

LATERAL COMMUNICATION

Lateral communication is also known as cross-communication. In lateral


communication, managers communicate with people in other departments outside their
own chain of command (across the chain of command). This form of communication is
often practiced by managers in organizations, perhaps because they prefer the
informality of lateral communication to the formality of the vertical communication
process. They also perhaps prefer to use lateral communication because it facilitates
coordination of work among departments.
Employees who are actively involved in lateral communication are known as boundary
spanners. They have strong communication links within as well as outside their
department. This gives them access to large amounts of information, which they filter
and communicate to others. Therefore, boundary spanners command greater status and
power in organizations. Managers working in Research and Development, quality
control and legal departments need to engage in lateral communication to obtain the
required help from other departments (for eg. an R&D manager may require the
cooperation of the production manager to experiment with a new production
procedure) and be informed of the latest developments in the organization and the
industry.

INTERACTIVE COMMUNICATION

Many classical theorists have felt the need to supplement vertical communication with
some form of horizontal communication (Fayol suggested the gangplank concept).
Horizontal communication is necessary to ensure that all the departments in an
organization act in a coordinated manner to achieve organizational goals. The need for
such communication is more obvious in complex organizations with hundreds of
departments and sub-divisions. This type of communication is also necessary in
organizations that have downsized and flattened their structures. Modern organizations
are thus adopting project and matrix organizational designs and formally incorporating
horizontal communication into their organization structure. Companies like General
Electric, DuPont, Xerox, and Motorola have adopted horizontal communication a part
of their organization structures.
Even when horizontal communication is formally permitted, the key to its effectiveness
lies in people and their behavior. In other words, organizations should emphasize
interactive communication rather than vertical or horizontal communication. In
interactive communication, there is no restriction on the flow of information unless it is
against organizational interests. In most organizations, where only vertical or
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Organizational Behavior

horizontal communication exists, the flow of information is confined to a specified


path. But in organizations where interactive communication is allowed, the flow of
information takes place spontaneously among people, irrespective of their levels, and
does not follow a specified path. The horizontal and vertical flow of information
constitute formal channels of communication, which form only a small part of the
communication process in an organization. In contrast, interactive communication
constitutes an informal channel of communication and has a central role to play in
organizations. The interactive process has many behavioral implications.
Communicating with peers provides social support for an employee. An employee
feels more comfortable discussing his problems with a peer than with a superior or a
subordinate.
Interactive communication may prove to be beneficial or harmful for an organization.
It is beneficial when communication is necessary between peers involved in tasks that
require coordinated efforts. However, interactive communication between peers who
are not involved in tasks requiring coordination among them only results in reducing
the productivity of the personnel, thus harming the organizational interests. Moreover,
at times, interactive communication among peers may also affect vertical
communication in a negative way. Employees at each level may communicate freely
among themselves but fail to communicate upward and downward.
The main aims of interactive communication in an organization are:
i. Task coordination – The heads of various departments can meet at regular
intervals to discuss how each department can contribute to organizational goals.
ii. Problem solving – The members of a department may get together to brainstorm
and solve a common problem.
iii. Information sharing – Employees from different departments may interact with
each other to share information.
iv. Conflict resolution – Members of a department may meet to resolve differences
within the department or with other departments.
In the past, only departmental or interdepartmental meetings served each of the above
purposes, but now teams also serve these purposes. Teams may consist of individuals
from a certain department or from several departments. Teams enhance co-ordination
among employees in organizations. Effective teams deliver a performance that is
greater than the sum of the individual performances of its members. Interactive
communication among team members is crucial for achieving such results.
Departmental and interdepartmental meetings and teams are thus methods of
interactive communication.
Computer technology, has had a major impact on interactive communication.
Companies like Hewlett-Packard, Satyam Computers and Dr. Reddy’s Labs use
computers to communicate with employees working at different geographical location.
Videoconferencing technology is used to conduct meetings with participants from
different locations. Technology thus not only facilitates interactive communication, it
also saves organizations time and money (required to bringing together all participants
at one place).

Role of Interactive Communication


When individuals from different departments (not having any formal relationship)
meet, they tend to exchange a lot of organizational information. Thus, informal
contacts form an important means of interactive communication. This informal system

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of communication can be effectively used to supplement the formal channels of


communication. In this system, information passes quickly from one individual to
another so that all the organizational members obtain the information in a short time.
The management may use this system to convey information regarding a particular
decision (such as the decision to cancel the annual bonus), and observe the immediate
response of the employees before actually implementing the decision. This approach
helps management handle employee reactions to their decisions in a better manner.
One drawback of the informal system of communication is its strong personal
orientation. Individuals pass on only that information which serves their personal
interest and ignore the rest. Another drawback of the informal system of
communication is that it may result in the spread of rumors and other negative
information about the organization which may threaten and demotivate people across
the organization. Hence, the managements of organizations should be cautious in their
use of the informal system of communication.

Types of Interactive Communication


The two main forms of interactive communication are networks and grapevine
communication.

Networks
A network is a group of people who develop and maintain contact with each other to
exchange information of common interest in an informal manner. A person who is
actively involved in information exchange is said to be networking. Networks can be
both internal and external to a company. Internal networks consist of employees from
different departments and business units. Networks that extend beyond the company to
business partners, customers and sometimes even competitors are external networks.
External networks are formed when employees attend social clubs, professional groups
and other similar associations.
Networks enable employees to widen their interests and get information relating to
recent developments in their field. A good networker can get access to powerful and
influential people if they have certain interests in common. For instance, if an
employee is good at tennis and plays for a city club, he will get to know many
corporate executives who come to the club. An active networker will try to develop a
friendship with them and will leverage the relationship to obtain valuable information
that will help him perform his job better and also contribute to organizational
performance. Effective networks can thus help develop productive working
relationships that may result in enhanced job performance.

Grapevine communication
Grapevine communication supplements the formal channels of communication and
provides information which is not communicated through the latter. It provides
information on the unwritten rules of the organization and important management
decisions (well before they are implemented). Managers generally do not use the
grapevine as a source of information. However, they try to keep track of the
information passing through grapevine through their loyal subordinates. This helps
managers identify the issues that cause anxiety to employees. They can then send a
message that alleviates their fears and reduces their anxiety. Managers thus use the
grapevine as a filter and feedback mechanism to eliminate rumors and prevent their
negative impact on organizational performance.
The important characteristics of a grapevine are:
 It is beyond the control of management

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 It is considered more reliable by the employees than the formal communication


channels, and
 It is mostly used by employees to serve their personal and social interests.

BARRIERS TO EFFECTIVE COMMUNICATION

A number of obstacles may restrict the receiver’s understanding of a message. These


interruptions act as barriers to communication, which may totally prevent
communication, or delete a part of the message, or convey the wrong meaning. Some
of the barriers to effective communication are discussed below:

Filtering
This refers to the manipulation of information by the sender so as to obtain a favorable
opinion from the receiver. An employee is said to have filtered information when he
updates his superior about the projects in which there is significant progress but does
not inform him of the projects that are lagging behind. Information is condensed and
synthesized at different levels in an organization before it reaches senior executives.
This is done to ensure that the top personnel are not overburdened with information.
The process of filtering information takes place at each level in the organization and
may sometimes affect the quantity as well as the quality of information that reaches
the top management. The amount of information that gets filtered increases with the
number of vertical levels in the organizational hierarchy. Filtering may lead to
problems in the long-term. As only pleasant information is allowed to pass up
(unpleasant information is withheld at lower levels), the top management may not
come to know about a problem till it assumes serious proportions.

Selective Perception
A person perceives information on the basis of his needs, values, experience, and
background. His personal interests and expectations influence the way he decodes
information. For instance, if an interviewer believes that women give more priority to
their family than their professional career, he is likely to perceive this characteristic in
all female applicants, regardless of whether the applicants feel that way or not.

Defensiveness
People intentionally attempt to block communication when they feel that the other
person is threatening their self-image and prestige. They react in a defensive manner by
making sarcastic comments, by passing judgement on others, or by questioning the
motives of the other party. This type of defensive behavior impedes effective
communication. Take the case of a meeting being held between workers and
managersto negotiate a wage-hike. At the negotiation table, the workers may threaten
to go on an indefinite strike if their demands for a pay-hike and reduction in daily
production targets are not met. The manager may become defensive and attribute the
workers’ demands to their laziness and their desire to get more pay for less work. Such
comments by the manager could disrupt the communication and hence affect the
negotiation.

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Exhibit 13.3
Improving Cross-cultural Communication Skills
Managers in multinational companies need to acquire cross-cultural communication skills to
perform successfully in overseas assignments. They may improve their knowledge of other cultures
by reading books and travelling to other countries during holidays. They should always seek to find
out what their culture has in common with the culture of foreign countries. This will help them adapt
quickly to new cultures. Before going to a foreign country, they should read books describing the
culture of that country and the communication methods used there. They should also read news
pertaining to that country to learn more about it and avoid sounding ignorant. In addition, they
should try to learn the language of the country they are assigned to or at least become familiar with
commonly used words. Communication assumes great importance when there are major differences
between cultures. On entering a foreign country, managers should try to interact with the local
people, attend social gatherings and understand their culture. This will help them adapt to the local
culture.
International managers should never react to a situation or a person’s remarks/response by
comparing it with their own values and feelings until they consider the situation and interpret the
meaning of the response in the context of the cultural background to which the person belongs.
Suppose a manager is a direct communicator (telling facts irrespective of the other person’s feelings
like “good work” or “bad work” or “possible” or “impossible”) who expects his employees to give
an honest and accurate response to his questions. However, the employee may have come from a
culture which believes in indirect communication (avoid saying things that do not appeal to the other
person). He may expect the manager to read between the lines and pick up nonverbal clues. When
the manager asks the employee whether he can complete his task before the deadline, the employee
may nod his head politely. But his facial expression may indicate that he cannot actually complete
the task. If the manager fails to understand the employee’s culture, he may misinterpret his behavior
and consider him insincere, and undependable. In fact, the employee may be honest and
hardworking, but may have missed the deadline because of some technical difficulties. Such
misunderstandings can lead to workplace conflicts. In this case, the manager could have avoided
conflict by attempting to understand the employees’ culture. Cultural differences can also lead to
conflicts among employees. Managers can adopt the following methods to resolve conflicts among
employees:
 Initiate training programs for employees to create awareness among them about various cultures
and their differences and teach them the various approaches that can be used to resolve conflicts.
Employees should also be encouraged to learn each other’s conflict resolution styles and use
them to solve problems on their own.
 Ask a senior employee to act as an intermediary and help employees resolve their conflicts if the
employees do not wish to resolve their conflicts themselves.
 Inculcate the culture of give-and-take among employees in order to resolve a conflict.
 Attempt to find solutions which meet the objectives of both the employee and the organization.
An international manager is one who respects cultural differences, attempts to learn about the culture
of a country where he is posted, mingles easily with locals, and has little difficulty in dealing with
employees in a foreign country. He is not only a Roman in Rome but a universal citizen who
understands and appreciates the cultures of the world. Only such managers can deal with the
growing diversity of employees in organizations.

Adapted from Lee Gardenswartz, “Cross-Cultural Awareness,” HR Magazine, March 2001 and
Professional Manager, September 1999.

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Organizational Behavior

Language
Words convey different meanings to different people. Age, education and cultural
background (Refer Exhibit 13.3) are the major factors that influence the use of
language by people and the meanings they associate with words. For example, the
language of an illiterate person will differ from that of a sophisticated businessperson.
Again, the language spoken by a scientist differs from that of a manager in an
organization. The words used by a poet and a newspaper reporter to describe the same
situation (such as drought) will be entirely different.
Organizations consist of employees from varying backgrounds. Each employee may
have a different meaning or pronunciation for the same word. The business units of a
company operating in different geographical territories may also use terms and phrases
in a unique way. Language problems may also arise due to the presence of different
levels in the organizational hierarchy. People at one level in the organization may
develop a common jargon which may be totally unfamiliar to people at a different
level. For example, the shopfloor workers may not understand the management jargon
of the top executives. Hence, the sender has to modify the style of communication
depending on the people he is addressing (workers, clients or business partners).

COMMUNICATION TECHNOLOGY

The application of information technology to the communication process has increased


the effectiveness of communication in organizations. Some of the advances in
technology and their impact on organizational communication are discussed below:

Management Information Systems (MIS)


A management information system is a system that gathers, organizes and summarizes
data and then presents it in a format customized to the situation and the individual
using the information. In other words, MIS generates, processes and transmits
information to the right person in the right format at the right time. In most
organizations, management information system is computerized. A manager can use
MIS to obtain information on certain technological developments in the organization or
the industry or to obtain expert advice to solve organizational problems. To enable
managers to interact with experts located across the globe, MIS extends beyond the
intranet to the extranet and Internet. MIS can also be used to improve customer service
and to develop strategic plans.
Two applications of communication technology, namely, electronic mail and
telecommuting have revolutionized the way organizations manage the process of
communication.

Electronic Mail
This is a computer-based communication system which allows people to exchange
messages across the world within a few minutes. Messages are stored in a mail box till
the recipients open them and read them on their computer screens. The recipients can
send their responses later at any time, according to their convenience. Some electronic
mail systems can also translate a message from one language into another language.
Electronic conferencing is very popular with business organizations and governments.
In this type of conferencing, one party (eg. an organization or government) initiates a
discussion on some topic (such as environmental pollution) and requests comments
from customers or the general public. People located at various places can send their
comments to the initiator and share their views with other participants. This enables
“the initiator of the discussion” to build on the ideas of others and come up with
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innovative ideas for new products and processes. Speed and convenience are the main
advantages of electronic mail. Its main disadvantage is the absence of face-to-face
communication.

Telecommuting
Telecommuting is also known as teleworking, the electronic cottage, or worksteading.
It involves the accomplishment of all or part of a person’s work at home through
computer links to the office.
Studies have revealed that telecommuting increases personal productivity by 10 to 25
percent. It gives a person freedom from the distractions of the workplace, enables him
to save time and money, and allows him to devote more time to family and personal
work. Organizations also benefit from telecommuting since it reduces their
requirement for office space. As commuting decreases, society will benefit from
reduced environmental pollution. Telecommuting increases the morale of employees as
they feel that the employer trusts them to work from home and increases their
commitment towards work and the organization.
However, telecommuting may also cause certain problems. The employees working
from home may not be considered for promotion because they do not interact directly
with the manager. The employees may also feel isolated as they cannot talk to their
fellow employees and share their thoughts, views and opinions. In addition, they do not
have access to intellectual stimulation from their peers. In an effort to prove that they
are very productive, they may work for extra hours and experience burnout. Though
technology has revolutionized communication, it cannot be implemented in
organizations without some human cost. Organizations which seek to adopt
communication technology should take additional care of their employees, maintain
regular contact with them, and extend emotional support to help them overcome
problems associated with working in isolation.

Telecommunication Explosion
The convergence of computing and communication equipment is referred to as the
telecommunication explosion. It is also referred to as the “second communication
revolution.” This revolution enabled communication networks to compute and
computers to facilitate communication between individuals. The telecommunication
explosion has changed the work lives of people. They no longer need to remain at their
desks to be accessible to people. Wireless technology allows managers to carry mobile
phones so that they can be instantaneously contacted even when they are on the move.
A person’s desk phone can also be linked with his mobile phone so that all incoming
calls to the phone are automatically transferred to the mobile phone.

Voice Messaging
Voice messaging is a form of telephone communication. It differs from normal
telephonic conversation in that it allows the receiver to listen to the message long after
it has been transmitted. Voice messaging helps the caller avoid the problem of calling
the receiver at the wrong time when it is inconvenient for the receiver to receive the
call.
Voice mail provides the caller with a user-friendly menu of commands which makes it
easy for the caller to edit information before finally sending it across to the receiver.
Though voice mail is easy to use, most people feel uncomfortable talking to a machine.

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Organizational Behavior

SUMMARY

Communication, in general, may be defined as the process by which information is


exchanged between individuals using written messages, spoken words, or gestures. It is
a dynamic, interpersonal process in which an individual modifies his response on the
basis of the behavior of the recipient of the message. Henri Fayol and Chester Barnard
have contributed greatly to the field of communication. The more recently proposed
managerial communication model is based on the modern research findings on
communication.
Managers need timely and appropriate information to make sound decisions.
Therefore, communication is essential for the effective functioning of organizations. In
the two-way communication process, a sender or speaker transmits a message to a
receiver through a proper medium and gets feedback from him. Downward
communication is the primary means of organizational communication and is directive
in nature. Upward communication is less frequent and non-directive in nature. Lateral
communication or cross-communication involves communication across the chain of
command. Interactive communication helps employees coordinate their work to
achieve overall organizational objectives.
Communication need not always involve the exchange of words. Nonverbal
communication refers to the use of nonword human responses like facial expressions
and gestures and the perceived characteristics of the environment through which the
human verbal and nonverbal messages are transmitted.
There may be a number of interruptions in the communication process that act as
barriers to communication. These barriers may totally prevent communication, filter a
part of it, or convey the wrong meaning. Filtering, selective perception, defensiveness
and linguistic differences are some of the barriers to effective communication.
A network refers to a group of people who develop and maintain contact with others to
exchange information of common interest in an informal manner. The grapevine is an
informal network in which information moves freely in all directions, goes beyond the
chain of authority and satisfies the social needs of organizational members.
Information technology has, to a great extent, revolutionized the communication
process in organizations. A computerized MIS facilitates faster and efficient
communication in organizations. Electronic mail is a computer-based communication
system which allows messages to be exchanged instantly. Telecommuting involves the
accomplishment of all or part of a person’s work at home through computer links to the
office. Though telecommunication benefits employees, organizations and society in
many ways, it can lead to the social isolation of employees working from home.

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Chapter 14

Conflict and Collaboration


In this chapter we will discuss:
 Sources of Conflict
 Classification of Conflict
 Organizational Conflict
 The Conflict Process
 Negotiation
 The Negotiation Process
 Issues in the Negotiation Process
 Intergroup Relations
 Approaches to Conflict Management
 Collaboration
Conflict and Collaboration

An organization consists of people with different backgrounds; as these individuals


differ in their opinions and attitudes, interaction among them often leads to conflicts.
Conflict, which can occur at individual, group or organizational levels, discourages
people from cooperating with each other. While some degree of conflict is desirable in
organizations so as to promote the spirit of competition among employees, it
jeopardizes the effective functioning of the organization if it is allowed to persist for a
long time. Therefore, it becomes essential to resolve conflicts quickly. Though there
are several methods available to resolve conflicts, the ideal way is through negotiation.
Thus, in order to be effective, it is important that managers possess adequate
negotiation skills.
In this chapter, we discuss the types of conflicts, stages of conflicts and how
negotiations can be used to resolve conflicts. The significance of intergroup relations
and the ways to manage these relations for effective resolution of conflicts is also
explained. Various approaches to conflict management and the concept of
collaboration are also discussed.

SOURCES OF CONFLICT

Conflict may be defined as the disagreement between two or more individuals or


groups over an issue of mutual interest. Conflicts may arise between two parties when:
one party (an individual or a group) feels that the actions of the other party will either
affect its interests adversely or obstruct the achievement of its goals; the goals of both
the parties differ significantly or are interpreted differently; or the basic values and
philosophies of the two parties are different. Conflicts can range from small
disagreements to violent acts.
A variety of factors can lead to conflicts. Some of these are:
 Organizational change: Organizations undergo changes due to new technological,
political and social developments that affect them or due to changes in the
competitive forces. As people may hold different views about the change and the
future direction of an organization, conflicts may arise.
 Personality clashes: Individuals’ personalities differ widely due to differences in
their levels of maturity, emotional stability and their behavior. When they do not
recognize or appreciate these differences, conflicts occur.
 Differences in value sets: Different people have different opinions, values and
beliefs. When people with contradicting values and beliefs interact with each
other, conflicts are likely to occur. These conflicts are often irrational and difficult
to be resolve.
 Threats to status: Most individuals associate their identity with their status in
society or the organization. When an individual feels that another person’s acts
may harm or damage his image, which in turn may affect his status, conflict is
likely to arise.
 Perceptual differences: People perceive different things, issues and their
environment differently. When they act as though their perception is the only
reality, without attempting to understand or accept another person’s view,
conflicts arise.

CLASSIFICATION OF CONFLICTS

Conflicts are common in all organizations and occur when people fail to arrive at a
consensus regarding the organizational goals or the means to achieve them.
Organizational conflicts can be classified as follows:
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Organizational Behavior

Intrapersonal Conflict
According to most behavioral theories, people are motivated to achieve a goal either
when meeting the goal results in the satisfaction of a need, or when the incentives for
achieving the goal are attractive. However, this is not as simple as it seems. An
individual may have conflicting needs or he may have to overcome many barriers to
achieve his goals. Thus, the process of achieving goals is a complicated one. In the
process of achieving his goals, an individual may experience stress and frustration and
may face internal conflict. This is referred to as intrapersonal conflict.
In organizations, intrapersonal conflict can result from role ambiguity. If an
employee’s roles and responsibilities are not defined clearly or if he has more than one
boss who may issue conflicting orders, he may find it difficult to prioritize his tasks.
This may also lead to intrapersonal conflict. Further, sometimes superiors and
subordinates may have conflicting expectations from an employee. This is especially
true in the case of middle managers. Subordinates expect the manager to present their
views and support them before the top management while the top management expects
him to support them before the subordinates. Such situations also lead to intrapersonal
conflict.

Interpersonal Conflict
People always try to maintain their image and respect. When someone threatens their
self-concept1, they try to retaliate and this leads to interpersonal conflict. Different
individuals have different tolerance levels, and this depends on their personalities.
Individuals with low tolerance levels get into interpersonal conflicts frequently. Often,
interpersonal conflicts are the result of differences in perception and gaps in
communication.

Intergroup Conflicts
In an organization, people from different departments compete for limited resources
such as funds, personnel and support services. This competition often results in
conflict. Sometimes, conflicts occur when one group attempts to take the entire credit
for the successful completion of a task, to the completion of which another group may
have also made significant contributions. Perceived inequitable treatment in matters of
working conditions, rewards and status, in comparison to other groups can also lead to
intergroup conflict.

ORGANIZATIONAL CONFLICT

Conflict in an organization is dependent on the extent to which resources are shared


and tasks are interdependent in the organization. The chances of organizational conflict
arising are low if the organizational goals are consistent, and require employees to
perform tasks that are less interdependent and do not involve much sharing of
resources. On the other hand, the chances of organizational conflict are high if the
organizational goals are inconsistent and require employees to perform tasks that are
interdependent and involve a greater sharing of resources.
Organizational conflict can be divided into two categories: institutionalized conflict
and emergent conflict.

1
Self-concept refers to how an individual views himself and his attempts to understand
his personality.
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Conflict and Collaboration

Institutionalized Conflict
Institutionalized conflicts arise due to the division of work. When two departments
have mutually incompatible goals, conflicts arise between employees in these
departments. Similarly, within a department, people compete for rewards, leading to
conflicts among them.
Institutionalized conflicts can be divided into five categories: individual versus
individual; individual versus organizational; hierarchical; functional; and line versus
staff.

Individual versus individual conflict


This type of conflict is very common in all organizations. When two people in an
organization are fighting for one post, one will win and the other will lose. This win-
lose situation gives rise to conflict between the two individuals. Individual versus
individual conflicts arise when people try to get a larger share of organizational
resources, or money, power or status.

Individual versus organizational conflict


Such conflicts arise when personal and organizational goals are incongruent. For
example, an individual may look for employment and financial security while his
organization follows a hire-and-fire policy. Such differences between an individual’s
expectations and the organization’s policies can give rise to conflict between the
individual and the organization.

Hierarchical conflict
The roles and responsibilities of personnel at different hierarchical levels in an
organization are different. At lower levels, tasks are specialized and responsibilities are
fixed, while at higher levels, the tasks are broader in nature. This difference in outlook
and focus at different hierarchical levels may result in conflict.

Functional conflict
When an organization has a functional organization structure, conflicts may arise
between the different functions. In most manufacturing organizations, conflict between
the finance and marketing functions is fairly common. While the finance function
would want to minimize the advertising and other marketing expenses, the marketing
function would want to spend more on advertising and other marketing expenses.
Similarly, the production department usually presses for standardized products, when
the marketing department looks for product variants to meet the needs of different
customer segments. Such differences in functional objectives can give rise to conflicts
between different functions.

Line versus staff conflict


Conflicts are common between the staff function and the line function. The genesis of
these conflicts lies in the different perceptions that each function has of the other, and
the different ways in which they are evaluated. While line personnel consider staff
personnel as over-qualified, impractical and inexperienced, the staff personnel consider
the line personnel as inflexible and unimaginative. Further, while staff personnel are
evaluated on the basis of profession-orientation, line personnel are evaluated on the
basis of the results they achieve.

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Organizational Behavior

Emergent Conflict
Emergent conflicts arise due to social and personal reasons in an organizational
environment. They have been classified into four categories: individual versus informal
group conflict; formal-informal conflict; status conflict; and political conflict.

Individual versus informal group conflict


This type of conflict arises when an individual tries to satisfy his needs through the
informal group of which he is a member. Consider a situation in an organization in
which the wages of employees are determined on the basis of a piece-rate system.
There might be an individual who wants to earn more money by making extra efforts;
however, for this, he may have to defy the group norms which set production targets
low. The informal group of workers who have fixed the daily production target might
not like the individual’s attempts to exceed the target.

Formal-informal conflict
Formal and informal systems and cultures exist within an organization. Sometimes,
there might be a conflict between the two systems. For example, a formal system in an
organization may have certain economic expectations from its employees, such as
expecting them to maximize their efforts in return for the monetary remuneration they
receive. However, the informal system or culture in the organization may set an
acceptable, rather than the maximum achievable, level of output so that the employees
can save their energy for leisure activities. The demands of the informal system on the
employee are different from the organizational expectations, thereby leading to
conflict.

Status conflict
This type of conflict arises when an experienced person has to work under a person
with less work experience. This usually happens because of rapid advancements in
technology. Seniority and age are no longer the criteria for moving up the organization
ladder. Young people with specialized knowledge may move up in the organization
faster and supercede senior people. Therefore, senior and aged people may experience
conflict while working under younger and less experienced persons.

Political conflict
This type of conflict arises when an individual tries to move up in an organization by
adopting any means possible. In an organization, when an individual tries to get
promoted by adopting measures which depart from the formal system of merit,
performance and seniority, he may be eliminating the chances of a more senior or more
deserving employee to get promoted. Such an attempt of an individual or a group
might give rise to political conflict.

THE CONFLICT PROCESS


The process of conflict consists of the following five stages (see Figure 14.1):
 Potential opposition or incompatibility
 Cognition and personalization
 Intentions
 Behavior
 Outcomes

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Conflict and Collaboration

Figure 14.1 The Conflict Process

Stage I Stage II Stage III Stage IV Stage V


Potential Cognition and Intentions Behavior Outcomes
opposition or personalization
incompatibility

Conflict-handling Overt Increased


Antecedent Perceived intentions conflict group
conditions  Competing performance
conflict  Party’s
 Communication  Collaborating behavior
 Structure  Compromising  Other’s Decreased
 Personal Felt  Avoiding reaction group
variables conflict  Accommodating performance

Source: Stephen P. Robbins, Organizational Behavior – Concepts, Controversies, Applications, 8th


edition (New Delhi: Prentice Hall of India Private Limited, 1998) 437

Potential Opposition or Incompatibility


This is the first stage in the conflict process. For a conflict to arise, the conditions that
lead to the conflict should be present. Although the presence of these conditions may
not always lead to conflicts, conflicts cannot occur in their absence. The conditions (or
causes) that lead to conflict may be broadly classified into communication, structure
and personal variables. If any one of these conditions is present, it can give rise to a
conflict.

Communication
Barriers to communication are one of the major sources of conflicts. Semantic
difficulties, noise and disturbances in the communication channel and failure of the
sender to convey the required amount of information to the recipient are some of the
barriers to communication which can lead to conflicts. Semantic difficulties arise due
to differences in interpreting things or different meanings being perceived by different
individuals. These result from individual differences in training, a tendency to judge
things based on selective perception or due to people having inadequate information
about other individuals. Non-availability or excessive availability of information may
also lead to conflicts. When surplus information is available, people may differ in their
opinions regarding which aspects of the information are critical and which are non-
critical. Consequently, there is scope for conflicts to arise.

Structure
The size of the work groups, degree of specialization of employees, role clarity of
individuals and departments, leadership style, and diversity of goals and reward
systems constitute structural variables. These variables have huge potential to cause
conflicts. As the size of work groups increases, possible differences in opinions
increase, increasing the possibility of conflict.

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Organizational Behavior

In a financial company, in order to maximize sales, the sales manager may approve the
applications of most of the customers who request personal loans from the company.
But the credit manager, after going through the personal details of the applicants, may
reject many of the applications, so as to minimize the losses from bad loans. Here, the
differences in the goals of the sales manager and the credit manager lead to conflict
between the two. Similarly, if the roles of individuals/groups are not clearly defined
and their responsibilities overlap with those of others, conflicts become inevitable.

Personal variables
The differences in personalities of individuals and their value systems are also a source
of conflict. People who are highly aggressive and authoritative and people who have
low self-esteem are more likely to be involved in conflict. A boss may favor those
subordinates whose tastes and preferences and style of thinking are similar to his own.
An employee may think that he deserves a higher salary for the work he does, but the
opinion of his supervisor may be quite different. Such differences in thinking between
the subordinate and his superior can give rise to conflicts.

Cognition and Personalization


This stage occurs only if the conditions discussed in the previous stage have a negative
impact on the interests of an individual (or a group) and the individual (or the group)
perceives this impact. During this stage, the affected individual (or group) develops a
sense of opposition towards the other party responsible for the situation. Though the
conflict is perceived, it need not be ‘personalized’ at this point. If the perceived
conflict is prolonged, the cognition of the individuals regarding the conflict may reach
the felt level where personalization may begin. The individuals may then become
emotionally involved and both the conflicting parties will experience tension, anxiety,
frustration and develop hostility towards each other.
There are two important aspects that need to be taken into consideration at this stage –
clearly defining the issues of conflict and examining the role of emotions. If the issues
of the conflict are clearly identified, it would be easy to determine the outcomes and
the means to settle the conflict. For instance, the HR manager in an organization
informs everyone in the organization that the team or group that is the most productive
would be given double the bonus given to other groups and the least productive group
would be given only half the bonus. Some employees may resist the proposal because
while their individual productivity may be above average, they fear they will be
punished if they belong to a less productive group. Here, the issue of conflict is the
reward system. Such a conflicts can be resolved if the organization takes appropriate
steps to modify the reward system.
Similarly, emotions influence an individual’s perceptions. For example, negative
emotions in an individual can lead to a negative interpretation of another person’s
behavior, reduce trust and increase the seriousness of conflict. But positive emotions
enable individuals to analyze problems rationally, explore possible solutions and
resolve conflicts quickly.

Intentions
In this stage of the conflict process, individuals decide on the action that is to be taken
to deal with the conflict. The individual attempts to discover the intentions of the other
person so as to choose an appropriate action in response to that person’s behavior. One
has to be careful in inferring others’ intentions because wrong inferences can intensify
conflicts rather than resolve them. The behavior of an individual should not be used as
a cue to his intentions because there is often a mismatch between one’s intentions and
behavior.

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Conflict and Collaboration

Primarily, there are two dimensions that should be considered while attempting to
resolve conflicts – assertiveness (satisfaction of one’s own interests) and
cooperativeness (satisfaction of other’s interests). Five types of conflict-handling
intentions can be applied using these two dimensions as shown in Figure 14.2:
Competing (assertive and uncooperative); avoiding (unassertive and uncooperative),
accommodating (unassertive and cooperative), collaborating (assertive and
cooperative), and compromising (partial assertiveness and partial cooperativeness).

Figure 14.2 Dimensions of Conflict-Handling Intentions

Accommodating Problem Solving


High

External Focus Compromising

Low
Avoiding Dominating

Low High

Internal Focus

Source: John M. Ivancevich and Michael T. Matteson, Organizational Behavior


and Management, 4th Edition (Irwin: USA, 1996) p 334.

Competing occurs when each party tries to satisfy its own interest at the expense of the
other party. Avoiding takes place when one of parties to a conflict recognizes the
existence of a conflicting situation, and tries to avoid the other party. Accommodating
takes place when one party tries to satisfy the interests of the other party by sacrificing
its own interests. Collaborating takes place when all parties to the conflict fully
cooperate with each other but do not let go of their own interests in doing so. This
result in the parties ultimately coming up with a win-win solution which benefits all the
parties involved in the conflict. Compromising occurs when the parties to the conflict
give up some of their demands in order to resolve the problem. The outcome that
results from such intentions gives incomplete satisfaction to all the parties involved in
the conflict. The above intentions suggest the ways available for individuals to deal
with a conflict situation. However, people may or may not have fixed intentions. Some
people may initially choose to adopt one intention to deal with a particular conflict and
finally end up using another intention to resolve the conflict. The change in intention
could be due to their viewing the situation from a different perspective or due to a
change in their behavior in response to the behavior of the other party. However,
research has shown that individuals develop preferences for one of the intentions
described above and consistently use it to resolve conflicts.

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Organizational Behavior

Exhibit 14.1
Conflicts Need not Always be Unproductive
Conflict is generally regarded as a destructive process that has to be eliminated from the workplace.
There are two views of conflict at the workplace – Dysfunctional view and Functional view.
Dysfunctional view:
This view of organizational conflict assumes that organizations adopt structures that clearly define
the duties, responsibilities and authorities involved in each job in order to achieve their goals.
According to this view, organizations should give importance to stability, discipline and orderliness.
They should prevent members from getting involved in any type of conflict. If any conflict occurs, it
should be suppressed.
Conflicts in an organization are regarded as an indication of defects in the design and structure of the
organization. Therefore, efforts should be made to define jobs more clearly, clarify authority and
responsibilities, intensify disciplinary activities and increase the use of power in order to control
conflicts.
However, the attempts to close the ways in which disagreement can be expressed curtail creativity
and due to rigid disciplinary rules and structure, the organization loses its agility. This reduces its
competitiveness.
Functional view:
The functional view of organizational conflict assumes that organizations need innovation, agility
and responsiveness to change in order to achieve their goals-not structure, discipline and orderliness.
This modern view suggests that organizations should encourage conflict because it enables
employees to express their views, opinions, and ideas freely and enhances their creativity and
productivity.
According to this view, conflicts in an organization provide feedback to management about its
policies and procedures. Conflicts provide an opportunity for management to identify what is wrong
and take appropriate measures to rectify it.
The functional view also holds that organizations should not suppress conflicts, but should learn to
manage them effectively. Conflicts can be used as a positive force to stimulate creative thinking and
enhance the knowledge and skills of employees.
In order to leverage the positive aspects of conflicts, management should avoid the following
approaches:
Not taking action to minimize or manage conflict. Non-action escalates conflicts to the extent that
they become a destructive force.
Delaying conflict resolution by postponing meetings (between conflicting parties) on the pretext of
not having sufficient data or complete documents.
Maintaining secrecy as long as possible. While this may be useful, the consequences can be
disastrous.
Using power and coercion to suppress conflict.
The above approaches suppress conflict for a short period of time, but increase the intensity of the
conflicts and their potential to destroy organizations.

Adapted from Robert Bacal, “Organizational Conflict – The Good, The Bad & The Ugly,”
http://www.performance-appraisals.org/Bacalsappraisalarticles/articles/orgconflict.htm

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Conflict and Collaboration

Behavior
This is the fourth stage of conflict. In the initial stages of conflict, the existence of a
conflict may not be visible to outsiders. However, as the conflict continues between the
parties, they tend to express it in the form of statements, actions and reactions. Because
of this explicit behavior, the conflict becomes obvious to outsiders as well. Such
behavior may be considered as an attempt by one party to implement its intentions.
However, in additions to the intentions, this behavior also acts as a stimulus to the
other party, who tries to interpret the intentions of the first party from his behavioral
cues. However, if the intentions are misinterpreted, the conflict is likely to escalate.
Behavior is a dynamic process of interaction between individuals. For example, Mr. X
(employee) blames Mr. Y (colleague) for the delay of a particular task; Y responds by
arguing; X threatens Y; Y retorts; and so on. Conflict behavior can range from minor
disagreements and subtle remarks to aggressive physical attacks. If conflict behaviors
are displayed on a continuum, disagreements, negative remarks and challenging fall
along the lower side of the continuum. Behaviors such as verbal attacks, threats and
ultimatums, physical attacks and attempts to destroy the other party come on the upper
side of the continuum.
As conflict behavior escalates, the conflict becomes dysfunctional and unproductive
(Refer Exhibit 14.1). Efforts should be made to bring down the level of conflict. If the
conflict behavior is on the lower side of the continuum, the conflict could be healthy
and productive. If the conflict level is too low and insufficient to be resolved, the level
of conflict needs to be increased. For instance, some amount of conflict in necessary to
induce healthy competition among the employees and improve their performance.
Managers use ‘conflict management’ techniques, such as ‘stimulation’ and ‘resolution’
methods to control the level of conflict between individuals and work groups in
organizations (see Table 14.1). Conflict management is discussed in greater detail later
in the chapter.

Outcomes
Outcomes constitute the last stage of the conflict process. Outcomes are the
consequences that result from interaction among conflicting parties. An outcome may
have a positive or negative impact on the organization. Accordingly, outcomes are
classified as functional and dysfunctional.
Functional outcomes
Functional outcomes are the constructive consequences of a conflict, on the
performance of a group or an organization. Functional outcomes thus improve the
group or organizational performance and result from constructive conflict.
Constructive conflict prevents the group from passively accepting decisions based on
inaccurate assumptions, inadequate consideration of attributes and flawed decisions,
and thereby helps improve the performance of the overall group. Constructive conflicts
improve the quality of decisions by encouraging the group members to be creative and
innovative in their ideas and provide a means by which the group members can put
forth for consideration even unusual ideas or ideas proposed by a minority section of
the group. Intellectual disagreements that characterize constructive conflict facilitate
self-assessment among group members and make them responsive to change.
Functional outcomes are also possible if the group is characterized by cultural diversity
or heterogeneity of its members. Differences in the cultural background of group
members facilitate the generation of diverse solutions to problems. Not only does this
improve the quality of the solution, but it also enhances the creativity of the group
members, thereby improving their productivity and that of the organization.

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Organizational Behavior

Table 14.1 Conflict Management Techniques


Conflict Resolution Techniques
Problem solving Face-to-face meeting of the conflicting parties for the
purpose of identifying the problem and resolving it through
open discussion.

Superordinate goals Creating a shared goal that cannot be attained without the
cooperation of each of the conflicting parties.

Expansion of resources When a conflict is caused by the scarcity of a resource – say,


money, promotion opportunities, office space – expansion of
the resource can create a win-win solution.

Avoidance Withdrawal from, or suppression of, the conflict

Smoothing Playing down differences while emphasizing common


interests between the conflicting parties.

Compromise Each party to the conflict gives up something of value.

Authoritative command Management uses its formal authority to resolve the conflict
and then communicates its desires to the parties involved.

Altering the human Using behavioral change techniques such as human relations
variable training to alter attitudes and behaviors that cause conflict.

Altering the structural Changing the formal organization structure and the
variables interaction patterns of conflicting parties through job
redesign, transfers, creation of coordinating positions, and
the like.

Conflict Stimulation Techniques


Communication Using ambiguous or threatening messages to increase
conflict levels.

Bringing in outsiders Adding employees to a group whose backgrounds, values,


attitudes, or managerial styles differ from those of present
members.

Restructuring the Realigning work groups, altering rules and regulations,


organization increasing interdependence, and making similar structural
changes to disrupt the status quo.

Appointing a devil’s Designating a critic to purposely argue against the majority


advocate positions held by the group.

Source: S. P. Robbins, Managing Organizational Conflict: A Nontraditional Approach


(Upper Saddle River, NJ: Prentice Hall, 1974) pp 59-89

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Conflict and Collaboration

Dysfunctional outcomes
Dysfunctional outcomes are the destructive consequences of a conflict on the
performance of a group or an organization. Dysfunctional outcomes thus impede group
or organizational performance and result from destructive conflicts. When certain
members of a group strongly oppose the views of some of the other members and no
one is willing to give way, the situation gets out of control and conflict intensifies.
Among the remaining members, some may support one view while the others may
support another view. This weakens relations between the members, causes a
breakdown in communication and may even threaten the survival of the group.
Dysfunctional outcomes thus manifest themselves in the form of reduced
communication, lower group cohesion, and the undermining of group objectives by
giving precedence to personal interests.
Research suggests that the more routine the tasks performed by a group, the higher the
probability of destructive conflict occurring. For example, routine tasks such as
assembly line operations do not require the group members to be creative and
innovative. In doing such tasks, disagreement among workers on how best to perform
the task only results in a slowdown of work (a dysfunctional outcome). In contrast,
tasks that are non-routine such as the development of new products, formulation of
innovative marketing strategies or launch of unique promotional campaigns increase
the chances of constructive conflicts arising. In such a situation, disagreements among
the group members on how to accomplish the task generate new ideas that may lead to
novel approaches and improvements in the final outcome.
Conflicts are common and sometimes necessary in any organization. Managers should
encourage constructive (functional) conflict among the organization’s members which
will not only increase the productivity levels of individual members but also the overall
productivity of the organization. An understanding of the five stage process of conflict
helps managers to identify the intensity of conflict and take timely corrective steps.

NEGOTIATION

Negotiation is a process in which one party agrees to exchange a product or service


with another party in return for something. Negotiations are common in day-to-day
life. In an organizational context, the most common example of negotiations is that of
collective bargaining between labor unions and management. Management may agree
to increase the wages of the workers by a certain amount on the condition that workers
improve their productivity. Stephen Robbins, in his book Organizational Behavior,
uses the terms ‘negotiation’ and ‘bargaining’ interchangeably. Other examples of
negotiations include the talks that take place between managers and subordinates, sales
people and customers, and purchasing professionals and suppliers. The importance of
negotiations has considerably increased in recent times with the emergence of work
teams and matrix structures (Refer Exhibit 14.2).
Two widely used approaches to negotiation are distributive bargaining and integrative
bargaining.

Distributive Bargaining
This approach involves dividing a fixed amount of resources among the negotiating
parties. The significant feature of this method is that it operates under zero-sum
conditions - if one of the parties to the negotiations gains a certain amount in the
bargaining process, the other party suffers an equivalent loss. For example, when a
purchasing officer of an organization is contacted by a raw material supplier, the
supplier may quote a price which is not acceptable to the purchaser. The purchaser will
then negotiate with the supplier over the price.
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Organizational Behavior

Exhibit 14.2
Negotiation and HR Skills
Negotiations take place frequently in organizations on issues ranging from mergers between two
organizations to subcontracting of small components. Though negotiation teams consist of managers
from different streams, the HR manager generally plays the lead role. HR professionals are
responsible for improving the effectiveness of negotiations and the performance of the organization.
HR managers, in their role as lead negotiators, perform the following functions:
Prevent conflicts from escalating: If disagreement between two parties (especially between
employees), increases beyond a certain level and develops into a serious conflict, the managers need
to mediate the conflict and take control of the situation. This results in unnecessary waste of their
time.
HR managers emphasize the importance of negotiations and encourage and empower employees to
resolve conflicts on their own through negotiations. This eliminates the need for mediators and
managers in resolving minor conflicts. Moreover, solving their own problems helps employees devote
more time to their core activities in the organization, (that is, to develop new products, deliver
customer satisfaction and increase profitability of the organization).
Developing the negotiating skills of employees: Negotiating skills are essential at all levels of the
organization, whether it is the senior management level, middle managerial level, supervisory level or
the junior sales executive level. An effective negotiator should have multiple skills. He should be able
to envision the things he wants to accomplish, communicate his views clearly, and persuade the other
party to consider his proposals. He should be confident, patient, willing to listen to the other party and
empathize with their views. He should be able to bear criticism of his proposals, take bold decisions,
and be willing to take risks to a certain extent. When he finds that the other party disapproves of his
proposal, he should not lose hope and should continue to explore possibilities for alternative
solutions.
The HR manager should analyze the processes and outcomes of various negotiations held in the past
and identify strategies used by the conflicting parties to obtain favorable outcomes. He should pass on
this knowledge to his employees to prepare them for future negotiations.
Putting into practice what is being taught to other employees: HR professionals are constantly in
conflict with employees over inequities in pay, performance appraisals and disciplinary actions. They
should therefore possess good negotiation skills to resolve conflicts amicably and set an example for
others. By carrying out effective negotiations with union leaders regarding compensation packages
and personnel policies and procedures, HR personnel can help the organization hire the right kind of
personnel. And by using and demonstrating their skills, HR managers can set an example for other
organizational members.

Adapted from “Another Hat for HR: Negotiator-in-Chief,” HR magazine, June 2003, Volume 48,
Issue 6, p 118.
If the purchasing officer manages to reduce the price by Rs 5 per kilogram, the supplier
will have to forgo Rs 5 per kilogram from his profits. Thus, this is a form of a win-lose
or zero-sum situation for the purchasing officer and the supplier. Another example of
distributive bargaining is that of labor-management negotiations over wages. Since the
total resources available to the organization are fixed, every additional rupee bargained
for and obtained by the workers reduces the money available to the management for
other uses. Therefore, each party bargains aggressively and treats the other party as a
rival or competitor.
In the distributive bargaining approach, each party to the negotiation has a target point
which it hopes to achieve. Each party also has a resistance point, which represents the
lowest outcome that it would be willing to accept. If the outcome appears to fall below
its resistance point, the party would prefer to break off negotiations rather than accept
the outcome. The area between the target the resistance points represents the aspiration
range of each of the negotiating parties.
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Conflict and Collaboration

Table 14.2 Characteristics of Negotiation Styles


Bargaining Compromise Win-Win
Controlling orientation exists (us Recognition that it is Problem orientation exists (we
versus them). impossible to control other versus the problem).
party.

One party’s gains are viewed as Recognition of linkage Mutual gain is viewed as
other party’s losses. between one’s own goal attainable.
and satisfaction of other
party.

Argument over positions leads to Parties accept one Seeking various approaches
polarization. another’s positions, even increases chances for agreement.
though grudgingly.

Each side sees issue only from its Partial understanding of Parties understand each other’s
own point of view other party’s position. point of view.

Short-term approach focuses only Recognition of need for Long-term approach seeks good
on immediate problems. civil outcome. relationship.

Only task issues are usually Focus on task issues. Both task and relationship issues
considered are considered.

Source: Sheila Udall and Jean-Marie Hiltrop, The Essence of Negotiations (UK: PrenticeHall
International Ltd. 1995).

Integrative Bargaining
The integrative bargaining approach is based on the assumption that there exist one or
more solutions to a problem that could result in a win-win situation. This is in contrast
to the distributive bargaining approach which assumes that there can be no solution
that satisfies both parties and if one party has to win, the other has to lose (win-lose
situation). An integrative bargaining approach is always preferable to a distributive
bargaining approach since it helps develop long-term relationships between the
negotiating parties, and eliminates differences between them so as to ensure the
cooperation of the other party in the future as well. However, there are certain
prerequisites for this type of negotiation to be successful. Some of these are: the parties
should be sensitive to each others needs; they should be honest about their concerns
and should trust each other; and they should be willing to be flexible. Since these
prerequisites are usually never satisfied in most organizations, the distributive
bargaining approach is used more widely than integrative bargaining approach. Table
14.2 describes the features of three important negotiating styles.

THE NEGOTIATION PROCESS

Like the conflict process, the negotiation process too consists of five stages as shown
in Figure 14.3. These stages are discussed below:

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Organizational Behavior

Preparation and Planning


Before beginning negotiations, the negotiator should understand the nature and
background of the conflict and the circumstances that have led up to the negotiation
situation. The negotiator should also identify the goals he wants to achieve for his party
from the negotiation process. Putting the goals in a written form ensures that the
negotiator will not be distracted from his primary objectives during the process of
negotiation. Likewise, the negotiator should also attempt to identify the goals that the
other party is seeking to achieve through the negotiation process.
By collecting information related to the opponents, their objectives, possible demands
and arguments, the negotiator can develop the strategy to be adopted at the negotiation
table. Each party to the conflict will have certain high priority objectives. The party
will not agree to any negotiation agreement which does not satisfy these objectives.
The agreement that satisfies these objectives is referred to as BATNA (Best Alternative
To a Negotiated Agreement). If the negotiator wants his BATNA to be accepted by the
other party, he should be able to offer a negotiation proposal that is equivalent to or
more attractive than the BATNA of the other party.
Figure 14.3 The Negotiation Process
Preparation and Planning
Understand the nature and background of the conflict and
identify the goals to be achieved.

Defining Rules
The negotiating parties formulate their individual negotiation
strategy and lay down the rules to be followed during
negotiation.

Clarification and Justification


Both parties clarify and explain the rationale for their demands
with the help of supporting documents.

Bargaining and Problem solving


Both parties try to arrive at an integrative solution that benefits
both of them.

Closure and Implementation


The mutually acceptable agreement arrived upon is formally
written and signed by both the parties, and procedures
established to implement it.

Defining Rules
In this stage, the negotiating parties arrive at the negotiation table, each with its own
negotiation strategy. They discuss the basic rules and procedures to be followed in the
negotiation process. If there are several members in a negotiating party, the person who
will represent the party in the negotiations is identified. The issues that should be
discussed, the order in which they should be taken up and the time limit for discussing
each issue are also decided. They also determine the strategy to be adopted in case
there happens to be a deadlock over any issue. The parties then put forward their list of
demands and proposals.

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Conflict and Collaboration

Clarification and Justification


After each party presents its list of demands to the other party, they study each other’s
demands. Both parties attempt to clarify any doubts that may arise with regard to the
demands proposed by their opponents. The parties may then explain the rationale for
including certain demands in their list. They may also present documents in support of
their position. This stage in the negotiation process which involves the justification of
their demands by both the parties is not necessarily confrontational.

Bargaining and Problem Solving


The length of the list of demands submitted by an opponent should not unduly worry a
negotiator. The initial list of demands is often intentionally made lengthy and is likely
to include both important and unimportant demands, as during negotiations, each party
will expect to sacrifice some of its demands in the form of concessions. During this
stage of the process, rather than trying to gain at the expense of the other party, both
the parties should try to arrive at an integrative solution that benefits both of them.
The negotiator should always be willing to listen to the members of other party and
understand their concerns. He should also avoid using words and phrases that can
aggravate the situation and make it difficult to resolve the conflict.
When the negotiator finds that a certain issue is critical in nature, requires tough
bargaining and takes a long time to settle, he may set that issue aside and take up other
issues which can be settled quickly. The more critical issues will then be negotiated
later. Also, if it appears that the conflict is getting intensified and the negotiators are
beginning to get involved in heated arguments, the negotiating parties should take a
break from negotiations so that when they meet again, tensions would have reduced
and the climate become more conducive to peaceful negotiations. This will also give
the parties time to think over their negotiation strategies and modify them if necessary.

Closure and Implementation


Finally, both the parties arrive at an agreement that is mutually acceptable. The
agreement is the result of several rounds of discussions and reciprocal concessions
between the parties (Refer Exhibit 14.3). The negotiation agreement is formally written
and signed by both the parties. This is often followed by the establishment of
procedures to implement and monitor the implementation of the agreement.

ISSUES IN THE NEGOTIATION PROCESS

The negotiation process may progress smoothly in some cases whereas progress may
be very difficult in others. The process may be influenced by various factors such as
biases in decision-making of individuals participating in the negotiation, their
personality traits, cultural backgrounds, and the nature of the mediator (in case of a
third party, or mediator, being involved in the negotiations). These issues are discussed
below:

Biases in Decision-Making
Often, biases of the individuals involved in the negotiation process affect their
decision-making ability and prevent them from arriving at a mutually acceptable
agreement. Some examples of these biases are described below:
a) Assuming that there exists only win-lose solutions
b) Frustrations arising from the belief that the initial demands made by the opponent
are his final demands
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Organizational Behavior

Exhibit 14.3
Pre-requisites for Agreements
Negotiations and agreements are a common phenomenon in organizations. Explicit (clear,
comprehensive and well written) agreements improve productivity and enhance collaboration among
employees. Implicit agreements (unclear and poorly written), however, lead to confusion and chaos
in organizations. The following factors can guide managers in framing explicit agreements:
 Specify goals: The major goals that have to be accomplished by the team or the department in
the organization must be defined clearly. When people have common and clearly defined goals,
they are more committed to work in cooperation toward the attainment of the goals.
 Clarify roles: The functions, duties and responsibilities of each employee should be specified
clearly.
The duties and functions should be determined through an organization-wide discussion, and all the
employees should participate in the discussion.
 Demonstrate commitment to take action: All agreements made in the organization, should be
written ones so that they can be referred to. Written agreements also help identify gaps in
activities and give an idea as to ‘who’ does ‘what.’ All the tasks agreed on should have clear
deadlines. The agreements should clearly state what an employee will get in exchange for the
completion of a particular task. The incentives should be appropriate and should be designed in
collaboration with employees so that they are acceptable to them. In addition, the agreements
can be used later to determine whether the desired results can be achieved using the activities
listed in them. More activities can be added if required.
 Measuring satisfaction: As far as possible, the goals set for each individual should be specific,
measurable, attainable, and timebound. This ensures that there is no disagreement between the
superiors and subordinates regarding goal accomplishment. It will also reduce conflicts in the
organization.
 Expressing concerns: When people discuss various issues, they express their opinions freely.
As a result, differences will surface. These differences can then be sorted out and conflicting
parties can arrive at a consensus. This will strengthen the relationship between them. If they
find that the differences in opinion are too wide to be bridged, they may discontinue their
partnership.
 Reconducting the negotiations: As environmental factors (economic, political, etc.) change
from time to time, it becomes necessary to repeat negotiations and to sign new contracts to suit
the prevailing conditions. If a person finds that his partner is not in favor of continuing the
relationship, he should allow the partner to exit from the partnership (because an indifferent
partner is unlikely to cooperate in achieving the goals of the organization).
 Specify consequences: The agreement should not only specify what the partners are required to
do but also specify the consequences of ‘not doing’ the things they are expected to do.
 Resolve differences: During the course of negotiations, it is natural for the negotiating parties
to have differences. One should learn how to resolve these differences and pave the way to new
agreements.
 Ensure
Adapted a control
from Stewartsystem: An employee
Levine, “Managing should
by beAgreement
made responsible
– Thefor ensuring that the
New “MBA”,”
agreement is strictly followed
http://www.refresher.com/!slmba.html and the desired results are obtained.
 Finalize the agreement: Managers should work on the agreement until they are completely
satisfied with it and are confident that the outcome of the agreement would benefit the
organization.

Adapted from Stewart Levine, “Managing by Agreement – The New “MBA”,”


http://www.refresher.com/!slmba.html

296
Conflict and Collaboration

c) Making decisions based on whatever information is available rather than looking


for relevant information
d) A ‘Know-it-all’ attitude and making commitments without considering their
feasibility
e) Believing that women negotiators are soft and make more concessions than their
male counterparts

Personality Traits
It is tempting to assume that the negotiating strategy of an opponent can be predicted if
his personality traits are known. For instance, one would assume that people who are
risk averse would also be less aggressive in negotiations, and more willing to offer
concessions.
However, studies on the personality-negotiation relationship have shown that
negotiation strategies as well as the outcomes of negotiations are unaffected by an
individual’s personality traits. Therefore, while preparing for the negotiation process,
one would be better off focusing on the bargaining issues and the situational factors
rather than on the opponent’s personality traits.

Cultural Differences
Negotiation styles differ from country to country. Research has shown that the French
are more combative, and tend to be indifferent to what their opponents think of them,
with the result that negotiations with them tend to get prolonged. The Chinese and
Japanese also tend to negotiate at length. They believe in building long-term
relationships and attempt to work out minute details of the agreement and obtain
commitment from the other party to work together. Americans are impatient and
attempt to end negotiations as quickly as possible. A research study found that North
Americans depended on objective facts and logic to support their arguments and
persuade the opponents, while Arabs used subjective feelings and emotions to achieve
the same ends. Russians tended to use examples to support their arguments. While
North Americans gave utmost importance to time and deadlines, Arabs gave moderate
importance to these factors, and Russians did not consider them important.

Third-Party Negotiation
Sometimes, direct negotiations between the parties involved in a conflict fail to result
in a satisfactory outcome. In such situations, the two parties turn to a third party to help
them arrive at an agreement. The third party plays different roles such as mediator,
arbitrator, conciliator, and consultant to clear the differences between the conflicting
parties and find a feasible solution.
As a mediator, the third party uses logical reasoning and persuasion techniques to
convince the parties to arrive at an agreement. The mediator also suggests alternative
solutions that can be adopted by the parties to resolve the conflict. Mediators are
mostly used in union-management negotiations and civil court disputes.
Mediation is effective only when the conflict is at a moderate level. The success of this
approach also depends on the extent to which both the parties perceive the mediator to
be unbiased and reliable, and mediator’s ability to persuade the parties to adopt a
solution.
When the third party takes on the role of an arbitrator, he has the authority to enforce
his decision on the conflicting parties. The arbitration process may be chosen
voluntarily by the parties or, in some cases, it may be imposed upon them by law. The
advantage of arbitration over mediation is that it always results in a settlement. But the
settlement may not be mutually acceptable and may leave one or both the parties
dissatisfied. Therefore, the conflict may resurface later.

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Organizational Behavior

A conciliator serves as an informal communication link between the conflicting


parties. He is trusted by both the parties and therefore able to persuade them to arrive at
an agreement. He tries to find a solution that is acceptable to both the parties.
A consultant is a skilled person who uses conflict management techniques to resolve
the differences between the parties in a dispute. He encourages them to understand
each other, develop a positive attitude and build long-term relationships. He uses his
communication and analytical skills to motivate the parties to find creative solutions to
resolve their problems. He does not specify solutions but acts as a facilitator while the
two parties attempt to find a solution. Because they arrive at the agreement themselves,
the parties are more likely accept and implement it.

INTERGROUP RELATIONS

Just as there are relationships and interactions between people in groups, there are
interactions and relationships between groups in organizations. In an organization,
different groups specialize in different functions. If the organization is to function
efficiently and effectively, the activities of these groups must be properly coordinated.
The nature of intergroup relations has a significant impact on the coordination between
the groups, which in turn affects the performance of the groups and the organization.

Factors that Affect Intergroup Relations


When different groups are required to work together, the success or failure of their
efforts is dependant on the cordial relations and the coordination achieved between
them. Some of the factors that influence relations between groups are discussed below:

Interdependence
The extent to which a group is dependent on another group in the organization
determines the degree of interaction and the type of relations that exist between them.
Interdependence between groups can be classified as pooled, sequential and reciprocal,
the classification being characterized by an increasing degree of interaction between
the groups.
Pooled interdependence
When two or more groups function independently but their output needs to be
combined to achieve the overall objectives of the organization, the groups are said to
have pooled interdependence. For example, the product development department and
dispatch department of an organization have pooled interdependence. The departments
work independently but both are necessary for a company if it has to develop new
products and deliver them to consumers.
The degree of interaction and coordination between groups is lower in the case of
pooled interdependence than in sequential or reciprocal interdependence.
Sequential interdependence
This kind of interdependence exists when one of the groups is dependent on the other
for some input, but the reverse is not true – i.e., when Group B is dependant on Group
A for some input, but Group A is not similarly dependant on Group B. For example, in
all manufacturing companies, the production department is dependent on the purchase
department for its inputs. If the purchase department fails to procure a particular raw
material, the production department may have to halt its operations; but a failure in the
operations of the production department does not have any impact on the functioning
of the purchasing department. The degree of interaction is greater in ‘sequential
interdependence’ than in ‘pooled interdependence.’

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Reciprocal interdependence
This exists when there is an exchange of inputs and outputs among groups. For
example, the marketing and product development departments show reciprocal
interdependence in the sense that the former depends on the latter to develop
‘marketable’ products and the latter depends on the former for information regarding
needs and preferences of customers.
This mutual dependence between the groups leads to high degree of interaction and
coordination between them, when compared to pooled or sequential interdependence.

Task uncertainty
Group tasks may range from highly routine to highly non-routine. In case of routine
tasks, groups will have standardized operating procedures to be followed. For example,
the tasks performed by work groups in an automobile assembly unit are highly routine
and consequently these groups need little information or suggestions from other
groups. On the contrary, the tasks performed in the marketing research or product
development divisions are non-routine (or unstructured) tasks. The groups working in
these divisions have to follow a customized approach for each task. They need to
obtain information from various groups within (engineers, salespersons, etc) and
outside the organization (customers, regulatory bodies, etc.). Moreover, they are often
faced with unique problems that require unique, one-of-a-kind responses. This compels
them to coordinate with other groups for information and advice. Therefore, groups
performing non-routine tasks tend to interact more frequently with other groups when
compared to groups performing routine tasks.

Orientation of time and goal


In organizations, due to increasing specialization and differentiation of tasks, the nature
of the tasks performed differs greatly from one work group to another. Thus, the time
and goal orientations also differ from group to group. For example, manufacturing is
concerned with daily production schedules, whereas the design and development group
is unconcerned with daily or even weekly schedules. Since it often takes more than a
year to develop new products, the product development group will have a much longer-
term focus in comparison to the manufacturing group. Similarly, the objective of the
sales team is to achieve sales targets and hence they seek to sell as much volume as
possible regardless of the paying capacity of customers. The sales team’s objective
clashes with that of the credit department which would like sales to be made only to
creditworthy customers. Thus, differing goals and objectives of the groups within an
organization create problems in coordination between them.

Managing Intergroup Relations


Intergroup relations can be managed using various coordination methods. Figure 14.4
displays seven such methods, arranged in order of increasing cost. The methods at the
higher end of the continuum do not substitute, but rather supplement the methods at
lower end. Therefore, managers generally use a combination of higher order and lower
order methods. The seven methods for managing intergroup relations are briefly
discussed below.

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Figure 14.4: Me thods to Manage Inte rgroup


Re lations
High
Cost

Low
Planning

Liaison
Hierarchy

Teams

Departments
Procedures

Task Forces
Rules and

Roles

Integrating
Methods

Rules and procedures


In this method, organizations formally establish rules and procedures that specify the
way members of different groups should interact with each other. This is the simplest
and least expensive method for managing intergroup relations. In large organizations,
when a specific material is required for manufacturing a product, a ‘material
requisition form’ specifying the type and quantity of material required is sent to the
stores department. If the material is available, it is issued to the indentor; if it is
unavailable, stores will send a ‘purchase request’ to the purchase department to buy the
material. Thus, the interactions among these departments are largely controlled by
predetermined rules and procedures. This method minimizes the need for interaction
and verbal communication among the employees in different departments.
However, this method works only when all the possible interactions among the groups
can be anticipated. Also, the type of interaction must occur frequently enough, to make
it worth the organization’s time and effort to frame rules and procedures. In situations
where the likely interactions among the groups are not known beforehand or are
subject to frequent changes, rules and procedures alone cannot bring about effective
coordination.
Hierarchy
Sometimes, rules and procedures may not help in resolving differences among the
groups. In such cases, the problem may be resolved by a common superior. For
example, a financial firm’s rules and procedures may specify that all loans must be
approved by the credit department. The sales manager and the credit manager may
disagree about the creditworthiness of some clients . They may then approach a higher
authority such as the Vice-President, Finance, to resolve the issue.
This method is effective in resolving intergroup differences but it consumes valuable
time of the top management, distracting them from issues of strategic importance.
Further, the conflicting parties have no choice but to abide by the decision taken by the
common superior.

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Conflict and Collaboration

Planning
In this method, the goals of each group are clearly specified so that members of all the
groups know what is expected of them. For example, in a hotel, the work groups in
reception, housekeeping and food & beverages clearly know their objectives and work
towards achieving them. Reception has to ensure that customers are received well and
all their queries are answered; housekeeping has to keep the hotel clean and tidy; and
the food & beverages department has to ensure that the food is served to suit
customers’ tastes and preferences. As each group carries out its responsibilities,
intergroup conflicts decrease and coordination increases. However, this method will
fail if the goals for each group cannot be clearly defined.

Liaison roles
In this method, a capable person is assigned a liaison role and has to ensure effective
communication and coordination between two interdependent work groups. For
example, a finance manager with an engineering background is likely to understand the
problems of accounts as well as production groups. Therefore, such a person is
appointed as a liaison officer to resolve conflicts and improve relations between the
accounts and the production teams. The success of this method depends on the ability
of the person chosen for the liaison role to skillfully resolve disputes, promote
communication and establish amicable relations between the conflicting groups. This
method is likely to fail when the information flow between the departments is too high
and the interaction between the groups is too frequent to be handled by the person in
the liaison role.

Task forces
To solve complex problems that demand multiple perspectives in order to arrive at a
proper solution, task forces may be formed by selecting representatives from different
departments. A task force is generally a temporary group that exists only till the
problem is solved. The task force method is useful when a project requires
coordination among many groups, for a short duration. Task forces are commonly used
to solve political disputes. Once an effective solution is formulated, the task force is
disbanded. Task forces will be not effective when the problems to be solved keep
getting bigger or cannot be solved within a short time.

Teams
Increasing complexity of tasks, delays in decision making and extended lines of
communication create their own complexities which often make the coordination
methods discussed above ineffective. If the top management were to address these day-
to-day operational issues, it would prevent them from concentrating on the strategic
issues facing the organization. Permanent teams are set up to deal with such problems.
Teams are cross-functional in nature and consist of members from various departments
of the organization. Team members have dual responsibilities, towards their own
departments and towards the team. Whenever the problem for which a team has been
formed occurs, the team members attend to the problem, leaving aside the primary
responsibilities to their departments. Once the team is successful in resolving the
problem, the members return to their respective departments.

Integrating departments
Integrating departments are used in situations where the relationships between groups
are too complex for the above methods to be successful. These are permanent
departments which seek to integrate the various groups in the organization. These

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departments are especially useful when groups have conflicting goals, face non-routine
problems and when inter-group decisions have a considerable impact on organizational
performance. Integrating departments are commonly used when organizations are
downsizing. At such times, organizations have to allocate the available resources
equitably among the departments which remain after the downsizing. Since conflicts
usually arise in such situations, integrating departments are set up to ensure
coordination among the groups.

APPROACHES TO CONFLICT MANAGEMENT

As explained earlier, conflicts are inevitable in organizations and arise from different
sources. While several techniques to manage conflict are available, these are often
classified and explained differently by different management theorists and writers. In
addition to the approaches described earlier in this chapter, we consider one more
perspective on managing interpersonal and intergroup conflict. The techniques for
conflict management, according to this viewpoint, are described below.

Dominance
If one party dominates, or even eliminates the other party, the conflict can be resolved
easily. In this technique, an individual can demonstrate his strength by inflicting
damage on the other party. In such a case, the party which loses withdraws from the
conflict. For example, a manager can show his dominance by dismissing an unruly
subordinate. This technique is suitable for people-oriented conflicts rather than
organization-oriented conflicts.
Another way of acquiring dominance is through coalition between two or more
individuals. The coalition can consolidate power and force the other party to withdraw.
Similarly, a majority consensus can also be used to show dominance. When the
majority of people reach a consensus on an issue, the nonconforming party will have to
withdraw.

Avoidance
In this approach to conflict management, the conflicting parties attempt to resolve the
conflict either by withdrawal or by disguising the incompatibilities between their goals.
Either one or both the parties may withdraw from the conflict situation. When only one
of the conflicting parties withdraws from the conflict, the other party wins by virtue of
becoming the sole contender for the goal. On the other hand, the withdrawal of both
the conflicting parties involves a mutual redefining of goals, and the establishment of
non-overlapping goals. When withdrawal is unsuccessful in resolving the conflict, the
parties resort to disguising the incompatibilities between their goals by withholding
information that could lead to an escalation in the conflict. However, both withdrawal
and disguising of incompatabilities are only techniques to avoid conflict; they do not
help in resolving the conflict.

Smoothing
In this technique, differences between both the parties are ignored or played down,
while similarities are highlighted. This helps both the parties understand that there is a
way for them to work together towards achieving a common goal. However, this serves
only as a temporary measure to resolve conflicts. The conflicts may resurface later.

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Compromise
In this technique, an attempt is made to reach an amicable solution, which is acceptable
to both the parties. Both the parties make offers and counter-offers to reach a solution
which is acceptable to both. The success of this technique depends on the relative
strength of both the parties. It is appropriate when both the parties have equal power.

Hierarchical Decision-Making
In this technique, both the parties in conflict ask a formal superior to make a decision
for them to resolve the conflict. Both the parties are likely to accept the decision made
by the superior, even if it does not result in an agreement between them. To a certain
extent, the effectiveness of this technique depends on the capability of the superior to
understand the issue and the extent to which the conflicting parties respect the opinion
of the superior. This technique is also only a temporary measure to resolve conflicts.

Appeal Procedure
This technique is usually used when an individual feels that his problem has not been
adequately addressed by his immediate superior. Therefore, he makes an appeal to the
higher-ups in the management. This step may worsen his relationship with the
immediate superior. A grievance committee or an independent arbitrator may be
appointed by the management to resolve his problem.

System Restructuring
Structure has a great impact on the way in which human relationships and patterns of
interaction are established in the organization. Managements can restructure
organizations so that organizational stress is minimized. The following techniques may
be used for system restructuring:
 Avoiding role conflict by clearly defining the roles and responsibilities of
individuals.
 Job rotation for people from interdependent departments so that they can
understand the differences that arise from perceptual distortions. By working for a
time in departments other than their own, people will be in a better position to
understand others’ values, beliefs and criteria for performance evaluation.
 Wherever resources are shared, management can minimize the interdependence by
creating a buffer inventory of shared resources. Each department will be given
control over the resources that it needs. This will reduce the dependence of one
department on another for the resources and thus minimize conflict. However, this
technique has serious cost implications.
 A buffer can also be created by creating a position of integrator or coordinator. He
can facilitate communication between conflicting groups. The role of the
integrator is stressful and he should be a person who is able to withstand pressure.
 Developing duplicate facilities can help decrease the dependence of one
department on other departments. For example, a research department can set up a
small pilot manufacturing facility to manufacture prototypes, thus reducing its
dependence on the production department. However, this technique can lead to
wastage of resources.
 A matrix type of organization structure can also help resolve conflict through
recognition and conciliation. A matrix structure creates an environment in which
knowledge and skills of specialized staff can be applied in interdisciplinary
programs and people can freely express their opinions.

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Altering Human Variables


If the perceptions, values and beliefs of employees can be changed, the sources of
conflicts can be reduced. OD interventions such as sensitivity training can alter these
human variables. Through sensitivity training, employees develop empathy and
interpersonal skills.

Problem-solving
In this technique, both the conflicting parties come together to solve the problem. They
discuss their doubts and misunderstandings, analyze the problem and try to understand
each other’s viewpoints. This technique is effective in resolving conflicts arising from
semantic misunderstandings, i.e., conflicts due to differences in interpretation and
perceived meaning, but fails miserably in resolving conflicts due to differences in
value systems.

Bargaining
In this technique, both the parties understand their dependence on each other and work
together to resolve the conflict. As explained earlier, bargaining can be of two types –
integrative and distributive. In integrative bargaining, the two parties assume that both
can gain by resolving the conflict, but both need to be honest in their dealings and
claims. In distributive bargaining, both the parties assume that the gain of one party
will be the other’s loss.
Another bargaining technique to resolve conflict is mediation. This has been described
earlier in the chapter.

COLLABORATION

Collaboration refers to social behavior in which two or more individuals or groups


come together for the achievement of common goals. Collaboration is a win-win
condition for all the parties involved and they are all benefited.
Mutual trust between the parties is essential for collaboration to be effective.
Collaboration may be functional or dysfunctional. Functional collaboration is the
tendency to willingly collaborate in a joint effort for the attainment of common goals.
In dysfunctional collaboration, one party acquiesces to or conforms to another party’s
demands, to please the other party, or to avoid stressful or demanding tasks. In some
organizations, dysfunctional collaboration can be seen in the efforts of lower level staff
to please their superiors in order to seek their favor and to lessen their workload.

Bases of Collaboration
Collaboration, as discussed in the previous paragraphs, refers to a social behavior in
which a group of individuals or teams work together to accomplish a common
objective. It facilitates a collective, cooperative effort among various people working
towards achieving a common, pre-identified goal. It not only leads to mutual trust,
concern and respect but also enhances self-worth among the individuals of the
organization as well.
We will now discuss the factors contributing to the development of collaboration.

Collaborative motivation
Human beings have the basic tendency to be of help and support to the people around
them. This common human urge forms the basis for collaborative motivation.
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Individuals in a team or in society, help others whenever required. This tendency is


also known as “extension motivation,” and forms the basis for collaboration among
individuals and teams. However, if collaboration motivation is to be sustained, other
individuals too must reciprocate in the same manner.

Norms of the group


Group norms are standards of behavior that all group members are expected to follow.
These norms therefore shape the behavior of the group. They can either facilitate or
hinder effective collaborative and cooperative efforts. For example, if high
collaboration is a group norm, group members will try to increase collaborative
motivation in members whose motivation levels are low. The reverse is also possible.
Group norms therefore form a basis of collaboration within the organization.

Rewards for collaboration


Attractive rewards and high pay-offs encourage collaboration within the team and
between different teams in an organization. Rewards for active participation in a team
have the power to motivate and stimulate effective collaborative efforts. Rewards may
range from simple gestures of appreciation to promotions. Other rewards could be
monetary benefits, more challenging and satisfying work, or better opportunities for
growth and development. The importance of rewards in creating and sustaining a
collaborative environment cannot be ignored.

Imposition of superordinate goals


Goals that are perceived as achievable only through the collective participation of two
or more parties are called superordinate goals. These goals cannot be achieved by a
single individual or a single team. These goals should be attractive and appealing to all
the members of the team. The development of superordinate goals reinforces
collaborative efforts.

Perception of power
Perception of the power held by organizational members also plays an important role
in creating a collaborative environment. The power of each member of a team should
be clear and explicit to all group members. Such mutual awareness of individual power
domains will allow even highly competitive and non-cooperative individuals to work
together.

Mutual trust
Since groups and individuals differ from one another, effective collaboration can be
sustained only if they trust each other. They must also believe that the group or team
members will not use their powers against each other. In addition, they must also
believe that the final goal or reward can be shared by all the collaborators.

Effective communication
With open channels of communication between individuals or groups, chances of
collaborative efforts increase. This is because free communication among the members
builds trust and allows them to share opinions and ideas. Communication is therefore
an important prerequisite for successful collaboration.

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Fait accompli
This term refers to the process by which individuals or groups working together
develop a better understanding and appreciation of each other’s strengths. This leads to
a further evolution of desirable group norms, and better working relationships between
members.

Risk taking
Individuals working a group are often forced to forgo one or more of their personal
values or beliefs, in order to conform to the group norms and beliefs. When an
individual collaborates with others, he risks losing his power. Such risk-taking requires
mutual trust among the members and an understanding of mutual powers. By
exhibiting such risk-taking behavior, the individual helps initiate a process of change
within the organization towards collaboration. Such initiatives towards increasing the
flexibility of the organization form a basis for effective collaboration.

Interventions for Collaborations


An understanding of the bases for collaboration gives us an insight into the various
interventions that can promote collaboration in organizations. Such interventions
would aim at improving and enhancing the effectiveness of collaborative efforts in
organizations.
Interventions or approaches to promote collaboration can be broadly classified into two
categories – process interventions and structural interventions. While process
interventions demonstrate the effect of collaboration through experiments or
demonstrations in simulated work environments, structural interventions actually
reinforce and sustain collaborative efforts in the workplace.
The basic purpose of process interventions is to make people appreciate the effect of
collaboration in real work situations by experimenting with collaboration in simulated
conditions. Once they are able to understand the benefits of cooperative work, it is
believed that they would be motivated to implement them in real work environments.
In other words, the employees are educated about the advantages of collective team
work in comparison to individual effort. On the other hand, structural interventions
bring about a positive change in the behavior of an individual by reinforcing his
collaborative efforts in the actual workplace.
A few other interventions for collaboration from the standpoint of bases of
collaboration are discussed in the following section:

Intervention by development of motivation


This is a variation of process intervention. The technique involves educating the
organizational members about the advantages of collaboration by means of
experimentation in laboratories and simulation exercises. During the process, an
attempt is made to help people realize their levels of extension motivation and also
analyze whether they are satisfied with that degree of extension motivation. In other
words, they are made to understand their propensity to help others while at work. They
are also given an opportunity to discuss the extent to which their job enables or
discourages extension motivation, and their own fears about collaborating. They are
shown explicitly, the various aspects of collaborative effort and are thereby encouraged
to adopt and adapt to a collaborative workplace.

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Norm building interventions


These interventions aim at sustaining collaboration in organizations by introducing
new norms or by modifying existing norms. In such cases, people are made to discuss
the problems they face in their workplace and come out with solutions. Accordingly,
new norms are developed or the existing norms are reset so as to encourage a
collaborative environment. Some times, task groups are formed in order to establish
norms of collaboration.

Intervention by reinforcement
Appraisal and reward systems have the potential to foster a spirit of collaboration
within an organization. Reinforcing interventions include modifying the appraisal
system to include criteria to measure an individual’s team-building and collaborative
efforts, his ability to facilitate the development of a collaborative environment in the
organization, and his contribution to the growth of his subordinates. Such behaviors are
to be adequately rewarded so that cooperative actions are encouraged in the work
culture.

Interventions in power related issues


Power related interventions are measures which increase perceived and actual power of
the people in an organization. These include: power laboratories which enable
participants to analyze their sense of power or the lack of it in the organization; role
negotiation which allows participants to mutually negotiate the power associated with
their roles and to assess the extent of their empowerment; role substantiation to help
people who feel they are powerless in the organization; and role efficacy laboratories
which aim at inculcating a sense of self-control (in terms of exercise of power) among
the participants so as to define the limitations of the various roles in the organization.

Intervention for creating superordinate goals


Such interventions involve joint-goal setting, and work or organizational redesign, so
as to facilitate the development or clarification of superordinate goals which are
important in creating and sustaining collaboration.

Trust building interventions


Mutual trust among members of a team is essential to enable them to effectively
participate in a collaborative effort. The assumption underlying trust building
interventions is that once an individual understands why he trusts or does not trust
people, he will be able to trust others more easily and in turn generate trust in himself.
Interventions like T-groups, non-verbal exercises and simulation techniques fall into
this category. While T-groups help identify the various dimensions of trust building,
simulation exercises make people understand the consequences of not trusting others.
All these interventions aim at generating mutual trust among the people in an
organization, thereby developing a collaborative atmosphere within teams as well as
the organization.
Intervention by communication
Open communication systems facilitate collaborative efforts in an organization.
Communication interventions involve the introduction of feedback systems wherein
people give and receive feedback on a variety of aspects pertaining to their work. This
form of intervention not only aids in knowing the shortcomings in one’s own
performance but also helps people empathize with each other, thus nurturing the habit
of collaboration.
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Organizational Behavior

Team building interventions


Team-building exercises can play an important role in developing a collaborative
workplace since teamwork is the ultimate result of collaboration. Team-building
laboratories, data feedback, process review, image sharing and role-linkage are
examples of team building interventions. Team building laboratories involve programs
in which the participants together engage in simulation exercises, work on various
tasks and receive theoretical inputs. In the data feedback process of team building, the
data obtained from interviews conducted by an external consultant is used as a basis for
team building. In process review, the participants express and share their feelings and
build on the emerging insights. The aim of image sharing is to attempt to learn and
share information about the image that each individual or team has about other
individuals or teams.
Collaboration, thus, is a highly complex process in itself and the interventions
discussed above attempt to initiate and sustain a highly collaborative workplace,
thereby enhancing organizational effectiveness.

SUMMARY

Conflicts are common in all organizations. They may arise as a result of a


disagreement over goals or on the means to be adopted to attain them. Conflict is also a
perceptual issue. Individuals or groups may have differences of opinion, but if either of
the parties is unaware of these differences, conflict will not arise. Once the parties
involved recognize the differences, conflict surfaces and the parties look for ways to
resolve the differences.
Conflicts may be classified into intrapersonal, interpersonal and intergroup conflicts.
The conflicts that take place within an individual are referred to as intrapersonal
conflict. Incompatability between needs of the individual and the goals of the
organization, and the absence of role clarity lead to intrapersonal conflict. If two
individuals get into conflict over an issue, such conflict is called interpersonal conflict.
Such conflicts may arise because of incompatibility between individuals or when an
individual perceives that his image is under threat because of the actions of another
individual. The conflicts between groups are referred to as intergroup conflicts. They
may arise because of differences in viewpoints or competition for scarce resources.
The conflict that takes place in organizational settings is known as organizational
conflict and can be classified into institutionalized conflict and emergent conflict. The
division of work in organizations forms the basis for institutionalized conflict and it is
further categorized into individual versus individual, individual versus organizational,
hierarchical, functional and line versus staff conflict. Emergent conflicts in an
organizational environment are caused due to social and personal reasons and are
categorized into individual versus informal group, formal-informal, status and political
conflict.
The process of conflict has five stages – potential opposition (incompatibility),
cognition and personalization, intentions, behavior and outcomes. In the first stage, the
presence of certain conditions like barriers to communication, the size and structure of
work groups, or differences in personalities stimulate conflict. If the conditions have a
negative impact on the interests of an individual, he will develop hostility towards the
individual or group responsible for the situation and the conflict reaches the second
stage (cognition and personalization). In the third stage (intentions), the parties to the
conflict decide upon the action to be taken to deal with the conflict. The conflict may
or may not be evident to outsiders at all these stages. In the fourth stage (behavior), the
conflict becomes obvious because of the behavior of the conflicting individuals. In the
fifth stage (outcomes), the parties interact with each other and the outcome may have
either positive or negative impact on the organization.

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The best way to resolve conflicts is through negotiations. The two negotiating
approaches that are generally practiced in organizations are distributive bargaining and
integrative bargaining. Distributive bargaining leads to win-lose situations whereas
integrative bargaining leads to win-win situations. The negotiation process consists of
five stages: preparation and planning, defining ground rules, classification and
justification, bargaining and problem solving, and closure and implementation. In the
first stage, the negotiator prepares the strategy to be adopted at the negotiation table. In
the second stage, both parties arrive at the negotiation table and establish the basic
rules and procedures that will guide the negotiation process. In the third stage, both
parties exchange their demands and justify them. In the fourth stage, the parties start
bargaining with each other, and each party gives some concessions to the other. In the
fifth stage, the bargaining process is complete and the final agreement is written and
signed. Some common issues that interrupt the negotiation process are: biases in
decision-making, role of personality traits, gender differences, and cultural differences.
Effective management of intergroup relations is essential to avoid dysfunctional
conflict and improve organizational performance. Interdependence, task uncertainty
and time-goal orientation are the three important issues that influence intergroup
relations. Coordination methods that are widely used for managing intergroup
relations, in decreasing order or complexity, are: integrating departments; teams; task
forces; liaison roles; planning; hierarchy; and rules and procedures.
There are various approaches to conflict management such as dominance, avoidance,
smoothing, compromise, hierarchical decision-making, appeal procedure, system
restructuring, altering human variables, problem solving and bargaining.
Collaboration is a form of social behavior in which two or more individuals or groups
work together to achieve a common goal. Collaborations can be functional or
dysfunctional, depending upon whether they are effective or ineffective. Factors that
influence the development of collaborative efforts include collaborative motivation,
norms of the group, rewards for collaboration, imposition of superordinate goals,
perception of power, mutual trust, effective communication, fait accompli and
flexibility.
Interventions for collaboration aim at improving and enhancing the effectiveness of
collaborative efforts in organizations. Interventions for collaboration can be broadly
classified into process and structural interventions. These include intervention by
development of motivation, norm building interventions, intervention by
reinforcement, interventions in power related issues, trust building interventions,
intervention by communication and team building interventions.

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Chapter 15

Organizational Structure
In this chapter we will discuss:
 Understanding Organization Structure
 Classical Organization Theory
 Modifications of Bureaucratic Structure
 Modern Organization Theory
 Modern Organization Designs
Organizational Structure

An organization is defined as a group of people working together to achieve common


goals. The top management establishes an organization’s goals. These goals are then
redefined to obtain measurable performance targets. Such measurable parameters help
the management monitor employees and ensure that they are on the right track. The
management also develops strategies that will help the organization meet its goals. The
implementation of these strategies requires a formal structure of authority and
responsibilities. A well designed organization structure facilitates coordination among
the activities of employees and enables an organization to accomplish its goals and
objectives.
In this chapter, we will discuss the various factors that influence the structure of an
organization, various organization theories and types of organizational structures.

UNDERSTANDING ORGANIZATIONAL STRUCTURE

Organization structure may be defined as the framework of tasks, reporting and


authority relationships within which an organization functions. According to Stephen P
Robbins, “An organizational structure defines how job tasks are formally divided,
grouped and coordinated.” According to Fred Luthans, “Organization structure
represents the skeletal framework for organizational behavior.”
In the past, the structure of organizations was based on classical theories. In recent
times, the increase in global competition, consumer awareness, demand for superior
quality products and advancement in information technology have influenced the
structure of the organizations to a great extent. To suit the changing times, new theories
have been formulated to replace traditional theories. Modern theories recognize the
need for flexibility in organization structures and interaction between technology and
people. According to one of the modern organization theorists, “Organization structure
is a pattern of interactions and coordination that links the technology, tasks and human
components of the organization to ensure that the organization accomplishes its
purposes.1“ Modern theories also emphasize the importance of structure in facilitating
innovation, learning, change and preparation for future.
Let’s first discuss the classical organization theories and other concepts that form the
basis for organizational structure before studying modern organizational theories and
designs.

CLASSICAL ORGANIZATION THEORY

Classical theories promoted bureaucratic structure for organizations. Almost all the
organizations including leading global companies like IBM adopted the bureaucratic
model. When organizations attempt to restructure, bureaucracy becomes a major
barrier to change. Therefore, let us discuss the bureaucratic model, without which, the
discussion on organization structure will be incomplete.

The Bureaucratic Model


Max Weber, one of the pioneers of modern sociology, formulated the bureaucratic
model in the early 1900s. Weber held the model to be rational and so was consistent
with Western culture which valued rationality. He believed bureaucracy as an ideal
structure for organizations.
The characteristics of the ideal organization structure suggested by Weber are
discussed below:

1
Fred Luthans, Organizational Behavior, 8th edition (India: Irwin McGraw-Hill, 1998) 171.
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Organizational Behavior

Work specialization and division of labor


Weber suggested that the duties and responsibilities of all the employees should be
clearly defined. Also, the area in which the employees are expected to perform their
duties and responsibilities should be clarified to avoid confusion. Along with the
assignment, employees should be given the necessary authority to carry out the task.
Division of labor has its own advantages and disadvantages. It gives enough scope for
employees to obtain expertise in a particular skill. This increases the productivity and
efficiency of an organization. But repetition of the same task gives rise to boredom,
fatigue and stress in employees. Division of labor also divides people into blue collar
(workers) and white collar employees and widens the gap between them, both in the
organization and the society.

Abstract rules
Weber proposed that an organization should have well defined rules and regulations
which ensure that employees work in a co-ordinated manner to achieve the goals of the
organization. For example, some of the rules could be coming to office on time,
meeting project deadlines, obtaining prior approval for expenditure exceeding certain
fixed amount, etc. Even if some of the employees leave the organization, the new
incumbents will learn and follow the established rules and procedures. This ensures
consistency and coordination in activities of all the employees in the organization.
Though rules and regulations are necessary to instil discipline in the employees and
overall functioning of the organization, too many rules and regulations, that are formed
in a bureaucratic set up, can hinder organizational performance. Sometimes, the
management ends up spending more time on unproductive activities. For example, in
some organizations, plant managers are required to help staff and top management in
carrying out their functions. Too much involvement in such activity prevents the
managers from focusing on the plant operations and production targets.

Impersonality of managers
Weber opined that a manager should be immune to feelings like affection, enthusiasm,
hatred and passion so as to remain unattached and unbiased towards his subordinates
and makes rational decisions and judgments based purely on facts. Though it is an
ideal characteristic, it is practically impossible for a person to be devoid of feelings and
emotions. Researchers have also pointed out the drawbacks of the impersonal
characteristic of bureaucratic structure. Man is a social animal and individuals cannot
work in an environment that discourages social interactions. The impersonal behavior
of superiors can prove to be counter productive in organizations.

Hierarchy
Weber advocated a hierarchical structure for organizations in which the activities of
employees at each level are monitored by employees at higher levels. Thus the
bureaucratic structure ensures that each member in the organization is accountable for
his actions to his superior. Herbert Simon and some other organization theorists
supported Weber’s opinions. According to these theorists, hierarchy is natural and can
be seen in biological and physical systems as well. For instance, in human beings, the
digestive system consists of organs such as stomach, intestine, etc. consisting of
tissues, cells and cell components.
Hierarchy ensures unity of command in the organization. It bestows power upon a few
people to control and coordinate the activities of lower level employees. Hierarchy
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Organizational Structure

generally encourages vertical communication. Vertical communication includes both


upward and downward communication. Due to excessive emphasis on power and
authority, the upward communication is nominal in bureaucratic organizations.
Subordinates always look up to their superiors for approval of their ideas and opinions.
This promotes dependency and creates ‘Yes men.’ It also discourages creativity and
entrepreneurship in organizations. Organizations that adopt rigid hierarchical structure
cannot promptly respond to dynamic changes in market conditions and would lose
ground to competitors.

MODIFICATIONS OF BUREAUCRATIC STRUCTURE

A pure bureaucratic model does not help an organization function with optimum
efficiency. Therefore, organizational theorists and practitioners devised an improvised
model that can be adopted with greater efficacy. Vertical analysis suggested changes in
the principles of centralization and decentralization as well as flat and tall structures. It
was found that a flat and decentralized organizational structure was more efficient than
a tall and centralized one. All these characteristics are in fact, modified versions of the
classical principles of delegation and span of control.
The concepts of departmentation and line and staff agencies form a part of horizontal
structural analysis. The principle of work specialization in the bureaucratic structure
forms the basis for these concepts. The modified bureaucratic structure acknowledged
that simple, mechanistic organizational structures, that ignore people, should be
replaced by structures that give greater importance to people.

Centralization
Centralization and decentralization are the most widely used terms in organization
theory and design. Centralization refers to the concentration of power and authority at
the top most level of the organization. There are three types of centralization:
geographic centralization, functional centralization and the third type refers to the
analytical use of centralization. In geographic centralization, all the operations of an
organization are performed in one geographic region. In functional centralization, there
is a separate department for each function and it carries out that function for all the
business units of the organization. The analytical use of centralization refers to the
extent to which centralization is actually implemented in the organization. For
example, when a manager in a centralized organization, delegates a few of his
responsibilities to his subordinates, decentralization takes place.

Decentralization
Decentralization means delegation of authority and decision-making power to different
levels of the organization. In geographic decentralization, business units in each
geographical region perform all the operations (such as production, finance, marketing,
human resources) related to them. In organizations following functional
decentralization, there are no departments that exclusively perform a particular
function. All the functions are performed by the subsidiaries and business units. For
example, the production, finance and marketing departments may perform the
functions of human resources department like recruitment, selection and training. The
analytical use of the concept of decentralization again depends on the nature of
managers rather than the formal policy of the organization. For instance, if an
organization policy supports decentralization but if a particular manager in the
organization doesn’t trust people and avoids delegation, then it leads to centralization.

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Organizational Behavior

Tall Structures
In order to understand flat and tall structures, we need to know about the span of
control. Span of control refers to the ratio of managers to (immediate) subordinates.
The number of subordinates who are directly under the control of a manager differs
from organization to organization.
In organizations having tall structures, the span of control is very small, i.e., each
manager is assigned very limited number of subordinates (usually not more than five).
This allows managers to exercise tight control over their subordinates. But the number
of layers of management is so high that it leads to a complex organization structure.
This is the typical characteristic of bureaucratic organizations. As communication
passes through several layers, the messages get distorted and the chances of employee
receiving accurate information are low. If the manager at the lower level attempts to
implement certain decision, he has to obtain approval from all the layers above him. As
a result, decision-making is very slow in the organizations having tall structures. Since
the responsibilities are generally disseminated among managers at several layers, they
do not find the need for delegation. Therefore, employees have little opportunity to
develop entrepreneurial skills.
One positive aspect of tall structure is that it provides an opportunity for high level of
interaction between the manager and the subordinate, due to less number of
subordinates under managers’ control.

Flat Structures
In organizations having flat structures, the span of control is large, i.e. each manager
has to manage a large number of subordinates. Large number of subordinates under the
managers makes management more difficult. The number of levels in the hierarchy is
fewer leading to a simple organization structure. There is smooth flow of
communication that enables employees to receive information quickly and accurately.
Since there are many employees at the same level, the efficiency of communication in
flat structures depends heavily on the horizontal channel. Unless there is a high level of
cooperation among employees, communication may not flow quickly.
Decision making tends to be fast in flat structures because of the limited number of
layers. As there are only few managers to handle a lot of responsibilities, they are
compelled to delegate some of them to their subordinates. This encourages
decentralization. In order to ensure that performance does not suffer as a result of
wider spans, organizations have to invest heavily in employee training.
As the wider span of control prevents managers from closely monitoring individuals,
individuals have opportunity to take self-initiative and exercise self-control.

Departmentation
The process in which jobs are grouped together to bring coordination among the
organizational tasks is called departmentation. The jobs are grouped on the basis of
either function, product, geography or customer.
Departmentation by function: This is the most widely used method of
departmentation. The method involves grouping people with similar skills into one unit
which helps organizations utilize employee skills efficiently and achieve economies of

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Organizational Structure

scale. A manufacturing concern may have departments such as production,


maintenance, finance, personnel, purchase and marketing. Production department
consists of people skilled in working on machinery, maintenance departments have
people with expertise in handling breakdown equipment and machine maintenance.
Similarly, finance, marketing and personnel departments consist of people with
accounting, sales and human resource skills respectively. Hospitals may have
departments such as patient care, housekeeping, public relations, personnel and
medical research. Patient care department consists of nurses and doctors.
Housekeeping department comprises of people who take care of cleanliness, hygiene
and aesthetics of hospital surroundings. Public Relations (PR) department consists of
people with PR skills while personnel and medical research departments have people
with HR and research background respectively.
Most organizations are conducive to departmentation by function. However, this
method often leads to conflicts between different functional departments because of
their conflicting interests. For example, finance department wants to minimize credit
sales while sales division finds it difficult to achieve sales targets on condition of down
payment of cash.
Departmentation by product: This method involves breaking down an organization
into small, independent units called Strategic Business Units, each of which produces a
particular product or service. This helps big organizations reap the benefits from small
size organizations. The method is generally adopted by large and complex
organizations with a diversified product portfolio, such as DuPont and General
Electric.
This method reduces the conflicts that occur in functional departmentation. Moreover
creation of independent departments widens scope for personal development and
growth of employees. The product departments can be easily added or removed
without disrupting the overall structure of the organization.
Departmentation by geography: This method involves the grouping of jobs on the
basis of territory (Refer Exhibit 15.1). For example, product development departments
may be set up for European countries, North America, South America, North East Asia
and South East Asia. Different marketing departments may also be set up for each
region. This helps organizations customize their products to suit the customers’ tastes
and preferences and formulate strategies depending on the intensity of competition in
the region.
Departmentation by process: In this method, the organization is divided into
departments based on processes performed there. For example, organizations that
manufacture alloys have several processes such as hot rolling, cold rolling, casting,
pressing, etc. There will be a separate department for each process in these
organizations. This method facilitates categorizing activities uniformly.
Departmentation by customer: This method involves dividing the organization into
different departments based on the types of customers they serve. For example, an
organization may have different departments to serve corporate customers, individual
customers, and overseas customers.
Departmentation helps an organization achieve better coordination in by grouping
together common tasks. Some organizations may use more than one type of
departmentation to carry out their operations. For example, an organization can
organize its manufacturing units around processes and other divisions along functional
lines.

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Organizational Behavior

Exhibit 15.1
Ford Reorganizes its Structure in Thailand
Ford had different subsidiaries for different functions that were geographically spread out in
Thailand. The subsidiaries included Ford Operations, Ford Sales and Services and Ford Leasing. In
February 2003, Ford reorganized its organization structure in Thailand. All the subsidiaries were
consolidated into one subsidiary and was renamed as Ford Thailand. The president of Ford
Thailand, Chatchai Bunnag told press that the new structure would enhance the efficiency of the
company. It would also help the company demonstrate to competition its unity and strength as well
as assure customers of its long-term commitment to serve automotive industry in Thailand.
Ford brought all the functions together under the same roof. It ensured that each functional division
was headed by able and experienced professionals so that each division performs to its optimum
capacity. Experienced automotive professionals in the industry were appointed in executive
positions such as Vice President (VP) for customer services, VP for marketing and sales and
General Manager of sales. Ford also restructured its business units to improve the agility and
functional efficiency of the organization. Sales and marketing was divided into three areas – cars,
Sports Utility Vehicles (SUVs) and trucks. A brand manager was assigned in each area. These
managers would develop sales and marketing plans for different parts of the country in
collaboration with the dealers in the respective areas. Ford also attempted to strengthen its strategic
marketing division. It developed a new strategic marketing team consisting of a product planning
manager, a corporate event manager and a communications manager, headed by Steven Tan, who
was appointed Director for strategic marketing, in-charge of corporate image and marketing. It also
appointed a new president for the Ford Dealer Council, who was entrusted with the responsibility of
coordinating dealer network across the country and intensifying efforts to increase the market share
of the company.

Adapted from “Ford Thailand: All Eggs in One Basket,” Nation (Thailand), WorldSources Inc,
February 24, 2003.

MODERN ORGANIZATION THEORY

Some critics say that Weber did not consider classical bureaucratic model as an ideal
organizational structure. He had merely used bureaucracy as an example in his work
and his opinion was misinterpreted by writers. In fact, some of the classical theories
may have formed the basis for the evolution of modern organization theory.
Chester Barnard was one of the pioneers of the modern organization theory. According
to him, a formal organization is a system of “consciously coordinated activities of two
or more persons2.” This definition indicates the importance of people in the
organization. Barnard criticized the classical theory because it described only
superficial things. The classical theory suggested the flow of authority should be from
the top level to the lowest level of the organization. But, Barnard opposed this view
and held that authority should flow from the bottom to the top. He was also critical on
classical theory’s emphasis on power and authority. He held that an organization is a
cooperative system which depends on the ability and desire of individuals to
communicate with each other and work together to achieve organizational goals. So,
the emphasis should be on people and cooperation rather than on authority. It is people,

2
Chester I Barnard, “The Functions of the Executive,” Harvard University Press, Cambridge,
Mass, 1938, 73.
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Organizational Structure

not positions that form an organization and so people are crucial for the organization’s
existence and long-term survival.
While Barnard’s work marked the beginning of modern organization theory and
demonstrated the importance of the human element in the organization, the subsequent
theories attempted to consider many other aspects such as external environment,
culture and situations that influence organization structure. The theories are discussed
in the following section.

Organizations as Open Systems


The open-systems concept is applicable to almost all systems in the universe –
biological, human, social, technical and economic systems. The open systems approach
to organization attach is the importance to external environment and the inputs it
provides to the organization. The theory holds that an organization is an open system
whose boundaries allow social, legal, technical, economic and political inputs from
external environment to pass through them. An open system consists of three
fundamental elements – an input, transformation process and output.
Input: Inputs can be of different types. One kind of input produces a big impact on the
entire environment once it enters an organization. The magnitude of change brought
about is quite high. Another type of input has a relatively small impact on the internal
system of the organization. It simply adds to the system. Some inputs enter the system
as replacements to the components that leave the system. Such replacement is vital for
the survival of the organization. The most common inputs that make their way into the
organization are men, money and material.
Transformation process: It consists of a series of logically networked subsystems
which convert inputs into outputs.
Output: Output is the outcome of the complex transformation process that takes place
in an organization. The common outputs of an organization include products, services
and profits or losses.
Of all the above mentioned elements, the transformation process is considered to be the
most important factor in an organization structure. An important point to be noted in
this context is the closed nature of the transformation process as opposed to the open
system of which the process is a subsystem. The interrelated organizational subsystems
of structure, processes and technology necessitate closed system approach to be
adopted by the transformation process. The productivity and efficiency of an
organization depends on how it organizes the subsystems.

Contingency Theory
The contingency theory of organization lays stress on environment more than other
organization theories. It establishes the relationship between organization structure and
environment. It attempts to explain how an organization structure can be modified to
suit both the external and internal environments. Contingency theory states that
organization should adopt such structures and mechanisms that enable them to cope
with dynamic changes in the environment. It also suggests that proactive steps help the
organization to obtain better adaptability to environmental changes .

Ecological Theory
The ecological theory is also known as population-ecology approach to organization.
This approach makes following propositions:
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Organizational Behavior

 The emphasis is on ‘groups’ of organizations rather than ‘individual’


organizations. The environment affects organizations belonging to the same group
in the same way. For example, a recession in the software market results in the
decline in business of all software vendors.
 In the long-term, only effective organizations (which adapt to environment quickly
and sustain their competitive advantage) will survive.
 The survival of an organization depends more on environmental factors than
management influence. At times (especially in the short run), organizations go
completely beyond the control of management and are influenced totally by the
environment.
 The environment has limited capacity and thus can accommodate only select
organizations. Therefore, in the long run, only efficient (which are able to produce
quality products and customer service in a cost-effective manner) and effective
organizations survive while others, perish.

Learning Theory
According to this theory, organizations need to learn how to ‘learn.’ This is called
generative or double-loop learning. Organizations have to be proactive to predict
change, prepare strategies to cope with the change and stay ahead of competitors.
Learning and innovation are essential for organizations to obtain a competitive edge.
At times, they become the very basis of survival of organizations.
Learning organizations facilitate learning among employees at all levels of the
organization and encourage them to think creatively. In such organizations, employees
continuously enhance their capabilities to create better results for the organization.
Learning organization seeks to alter itself all along to meet the changes in the
environment. The transformation process is a collaborative effort of all the employees
who work collectively, share values and are committed to the goals of the organization.

Information Processing View of Organizations


The information processing view of organizations theory was formulated in the
transitory phase between the systems theory and the contingency theory. This theory is
based on the following assumptions:
a. Organizations are open systems and are subjected to external and internal
uncertainties. External uncertainties are caused due to changes in environmental
factors, such as technological, economic and political conditions. Internal
uncertainties result from non-availability of sufficient information to perform a
task. Therefore, organizations have to adopt appropriate structures and develop
mechanisms to deal with uncertainties.
b. As uncertainties can originate from any source, organizations should be able to
collect, process and use the information from different sources quickly and
efficiently. This calls for an appropriate structure in which various departments or
work units are configured with the right jobs and the inter-departmental links are
designed in such a way that they facilitate smooth flow of information.
c. Each department or sub-unit of an organization has its own goals and objectives,
different time frames to achieve these goals, different technologies and different

318
Organizational Structure

perspectives regarding various organizational issues. Therefore, organizations


should attach importance to the design of sub-units with the optimum utilization of
resources. The structure should facilitate coordination among all the units.
Michael L Tushman and David A Nadler carried out extensive research and formulated
the following propositions in support of the above theory:
 The level of uncertainty differs from one department (or sub-unit) of an
organization to another.
 The increase in uncertainty of task leads to an increase in the need for information,
which in turn compels the organization to increase its ability to process information.
 The information processing capacity differs from one organization structure to
another.
 If the structure of an organization is able to collect and process all the information
required to accomplish various tasks and achieve organizational goals, it can
function effectively.
 When organizations or sub-units have to face different conditions over time, the
effective ones will adjust their structures and adapt themselves to meet the changed
information processing requirements.
It is observed that the information processing view of organizations focuses on the
significance of information to organizations, the ability of the organization structure to
process information in the light of the uncertainties facing the organization. The above
propositions also relate the theory with other theories such as open systems,
contingency and organizational learning.

MODERN ORGANIZATION DESIGNS

As modern organizations face challenges from environmental uncertainties, they are


increasingly finding the need to be agile, adaptable, creative and innovative to cope
with these uncertainties. Managers found that classical structures or adapted classical
structures (with minor modifications) were too simplistic to solve the complex
problems of the modern business environment. To overcome the differences in
classical structure, organization theorists and practicing managers introduced dynamic
changes to classical structures, to instill in them the characteristics needed to cope with
changing environmental conditions. Some modern organizational designs are discussed
below.

Project Design
Organizational structures based on project design have their origin in the aerospace
industry and the defence industry (manufacturing defence equipment). This structure
was soon adopted by all those industries which attach importance to meticulous
planning, research and coordination. Modern organizations are increasingly focussing
on projects. Project design lends itself well to those organizations which tend to
channelize huge amounts of their resources (both physical and human), into a certain
project goal for a certain period of time (Refer Figure 15.1). Software companies are a
good example of project design in modern times. In addition, sectors like financial
services, healthcare and education can also adopt the project design effectively.
However, it must be noted that the project organization usually coexists with the
functional structure.

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Organizational Behavior

Figure 15.1 Project Design

GENERAL
MANAGER

Java Project
.Net Project

Business
Analysis
Business
Analysis

Training

Testing
Coding
Training

Testing
Coding

Quality Analysis
Quality Analysis

Implementation
Implementation

Organizations need to check the following aspects of a project before implementing it:
 Whether the outcome of the project can be defined clearly.
 Whether the project requires management to make unique efforts for its
completion.
 Whether the project requires the inputs of different experts to complete the project.
 The tasks to be performed for the accomplishment of the project are complex and
interdependent. The outcome of the project is crucial to the organization.

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Organizational Structure

Figure 15.2 Matrix Structure

Product A Product B Product C

Marketing

Human Resources

Customer Care

Information Tech.

Source: ‘Matrix’ ing your operations – A lesson in organizational structure,


http://www.prophix.com/pdfs/The_Matrix_Model.pdf
If the above conditions are met, then organizations can benefit by adopting the project
structure.
There are different types of project structures – individual, staff, intermix and
aggregate. Organizations can adopt any of these structures depending on the type of
projects being implemented by them. In individual project design structure, there is no
employee who reports directly to a project manager. In staff project design structure,
some employees (staff) assist the project manager in carrying out the project related
tasks. But the primary tasks are performed by line departments. In intermix project
design, some staff as well as a few functional heads are under the direct control of the
project manager. In the aggregate project design, the project manager is provided with
sufficient number of personnel and functional heads to complete the project.
Project design is generally adopted by organizations to supplement the functional
structures that they already have. The project design is clearly distinct from the
functional approach and is especially useful in areas (such as R&D) where (healthy)
conflicts contribute positively to improve performance and decision making in
organizations.
Project design is dynamic and temporary and the structure changes from one project to
another whereas traditional structures (eg. functional design) remain constant over
time. While the traditional structures strictly follow unity of command3 and scalar
principles4, project design ignores them.

Matrix Design
Matrix structure is another modern organizational design. It is a structure which
combines the features of a project design with those of a functional one (Refer Figure

3 It is an organizing principle which holds that an employee should report to only one superior.
4 It is another organizing principle which holds that authority should flow from top to bottom in
an unbroken line.
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Organizational Behavior

Exhibit 15.2
Matrix Structure at ABB
Asea Brown Boveri Limited (ABB) is a global electrical engineering group having business interests
in electrical power technologies, automation technologies, and oil, gas and petrochemicals business.
The CEO Percy Barnevik (1988-1996) intended ABB to be “global and local, big and small,
radically decentralized but with central control.” (“Managing across borders,” by Christopher A.
Barlett and Sumantra Ghoshal, 260) In an attempt to achieve this objective, he created a matrix
structure.
The matrix structure consisted of four management levels, with clearly defined responsibilities at
each level. The first or top level of the matrix structure comprised of the Group Executive
Management, whose members included the President & CEO – Barnevik, Deputy CEO and eleven
ABB Executive Vice Presidents (EVPs). The primary task of the Group Executive Management
(GEM) was to devise global strategies and periodically review the performance of ABB’s eight
business segments spread over 28 business regions. The members belonged to different nationalities
and met once every three weeks to discuss business developments.
The second or middle management level of the matrix structure consisted of business area managers
(BAMs) and country managers. The BAMs reported to the Executive Vice President of the
concerned business segment. They managed the worldwide operations of the business area allotted to
them. The responsibilities of BAMs included formulation of global strategies for the allotted
business area, ensuring appropriate quality and cost standards in ABB’s front line operating
companies (FLOCs), allotting the export markets to FLOCs under their business area and providing
them with logistic support.
The country managers headed the national holding companies of ABB. ABB had national holding
companies (NHCs) in each of the countries in which it had operations.
The third or lower management level of the matrix structure consisted of the heads of the front line
operating companies (FLOCs) of ABB. ABB’s business operations were carried out by a federation
of 1300 FLOCs. The FLOCs were duly incorporated in the countries concerned under the umbrella
of the national holding companies.
The profit center managers formed the fourth or lowest layer of ABB’s matrix structure. The
operations of the 1300 FLOCs were split into 3500 profit centers.
ABB adopted decentralized matrix structure. The FLOCs were accorded the status of distinct legal
entities. They even generated their own financial statements, and sourced their own debt
requirements. The involvement of the top management in the local country operations was minimal.
The management of ABB decided that the companies could retain 30% of their earnings. On an
average, each company had 200 employees and generated revenues worth $85 million. On the one
hand, the heads of the operating companies reported to the concerned business area managers, while
on the other, they reported to the country managers where the company was located.
The decentralized matrix structure enabled ABB to respond quickly to changes in market conditions.
For example, in 1994, the government of Norway called for bids to build an airport in Oslo. The
country manager of ABB Norway quickly spotted the opportunity and appointed an airport project
leader, who in turn convinced the management of ABB’s 20 businesses in Norway to co-operate with
him in fulfilling the project. This enabled ABB to bag 70 airport contracts estimated to be worth
$300 million.

Adapted from “Reorganizing ABB – From Matrix to Customer-centric” Organization Structure (A),
ICMR Case Studies.

15.2). It is popularly used in sectors characterized by a high degree of specialization


along with emphasis on projects and other specific goals such as R&D organizations,
consultancies, advertising agencies, hospitals, universities, etc. Functional

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Organizational Structure

departmentation helps the organization gather specialized resources from each function
(finance, production, marketing, etc.) and makes them available for all the projects.
Project design, on the other hand, facilitates coordination among various specialists by
identifying employees with the requisite skills and bring them to work together to
achieve on-time completion of tasks. The matrix structure combines the strengths of
the two designs while eliminating their weaknesses (Refer Exhibit 15.2).
The main advantage of the matrix structure is that it facilitates coordination between
the various complex functions of the organization. It also enables the organization to
allocate functional specialists among different departments in an effective manner.
However, the matrix structure is not devoid of weaknesses. The structure violates the
principle of unity of command, due to which the employees report to two (or more)
bosses. This could give rise to conflicts between the managers. For example, product
managers have to fight to get the best specialists allotted to their products. This may
eventually end up in a power struggle between two or more product managers.
Sometimes such struggles may also develop between the functional and product
managers. The conflicts, if allowed to continue without resolution, can demotivate
employees, reduce their loyalty and preclude them from identifying themselves with
the organization. Matrix design is also criticized for the confusion it creates and the
amount of stress it places on individuals. Reporting to more than one superior leads to
role conflict and ambiguity among employees, which can increase their work-stress. As
the superior changes from one project to another, superior-subordinate relationships
also gets weakened. As the matrix structure embodies two structures, it often leads to
duplication of activities resulting in increase in costs.
Despite its drawbacks, many large organizations which use complex technology are
increasingly adopting matrix structure. It could be mainly because of the multiple
benefits offered by matrix structures. Matrix structures enable organizations to make
optimum utilization of employee skills, ensure that knowledge is available to
employees in all the departments and projects, facilitate quick response to changes in
customer demands and project requirements, and help organizations reduce costs and
improve performance. The success of the structure depends on how effectively
managers overcome the deficiencies of the structure and leverage its positive aspects.

Horizontal Organizations
As opposed to classical organizational structures which focussed on vertical analysis,
modern designs like the project and matrix designs give due importance to the
horizontal dimension of the organization. Horizontal structure plays a very important
role in facilitating communication between employees at same hierarchical level,
enhancing cooperation among them and fostering teamwork. The characteristics of a
horizontal organization are:
 It gives more importance to process than task. The structure of the organization is
based on a few select core processes rather than functions. Each process will have a
process head and performance goals in contrast to the traditional structure where
there are functional heads and goals.
 It reduces the hierarchical levels in organization. This is achieved by streamlining
the processes in the organization. The processes are streamlined by eliminating non
value added tasks and bringing together fragmented activities. The various
activities under each process are also restricted to the minimum.

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Organizational Behavior

Figure 15.3 Integrated Network

Distributed,
specialized
resources and
capabilities

Large flows of
components,
products, resources,
people,
and information
Complex process of among
coordination and cooperation interdependent units
in an environment of shared
decision making

Source: Bartlett Christopher A. and Sumantra Ghoshal, Managing Across Borders-The


Transnational Solution 2nd Edition (Massachusetts:Harvard Business School Press, 1998) 102.

 It attaches importance to customer satisfaction rather than profits and shareholder


equity. Customer satisfaction becomes an important measure in assessing
organizational performance and immediate measures are taken if the level of
satisfaction shows a decline, although there may be an increase in profitability.
 It empowers teams to manage various projects. Self-managed teams work for a
common purpose, measure their own performance and take control measures to
ensure that organizational goals are achieved.
 It encourages team culture by rewarding team performance rather than individual
performance. Further, employees are encouraged to develop multiple skills instead
of remaining confined to a particular area.
 It helps in optimizing contact with suppliers and customers. The representatives of
customers and suppliers are invited to work with employees (of the organization)
whenever it is possible so as to help them understand more about the organization
and strengthen relationships with them. This can also improve co-operation and co-
ordination between the organization and its customers and suppliers.
 It lays less stress on communication and makes an effort to provide employees with
all the information they would require to work effectively. No attempt is made to
filter the data being passed on to the employees. Employees are also trained in
analyzing data and using it to make decisions.

Network Design
As the intensity of competition increased, organizations found that the classical,
hierarchical, functional and horizontal structures did not help them acquire the desired
agility. The structures restricted their ability to serve dynamic markets. To meet the
324
Organizational Structure

Exhibit 15.3
Networked Virtual Organizations
The organizations, that adopted the Networked Virtual Organizations (NVO) model (such as Cisco,
Wal-Mart and Toyota), have emphasized the importance of the following principles based on their
experience:
Focus on customer: All the participants in the NVO must adopt a customer-oriented approach. They
should establish real-time collaboration among themselves as well as with the customers so as to
improve their response to the market and offer products according to customers’ tastes and
preferences.
Standardize processes: The advancement in technology has enabled data, voice and video to be
received over a single network. This way, all the participants in the NVO can obtain all the
information from single source. It ensures that all the participants use the same process for the same
activities and all of them are updated simultaneously of any changes in the processes.
In-house vs outsource: The participants of NVO model should continuously evaluate their activities
with respect to changes in the business environment and determine which activities constitute the
primary and secondary activities of their business. The primary or core activities should be performed
in-house and secondary or non-core activities can be outsourced.
Companies may outsource any number and kind of activities but should never relinquish their control
over the process in which the activities are performed. Otherwise, in the long run, it could affect the
quality of company’s products and services. Therefore, the companies that adopt NVO business
model should establish real-time communication with the outsource service providers, continuously
interact with them and retain their control over the outsourced activities.
A good example of NVO model is E-bay, an online auction site. E-bay creates only a platform for
buyers and sellers to meet and carryout transactions. It entered into partnership with service providers
such as i-shipment, mailboxes, UPS who take care of the delivery of goods transacted at the e-bay
website.

Adapted from John Sifonis et al., “The Networked Virtual Organization: A Business Model for Today’s
Uncertain Environment,” iQ Magazine, March-April 2003,
http://business.cisco.com/prod/tree.taf%3Fpublic_view=true&kbns=1&asset_id=89983.html#Three%20
Essential%20Principles and Remo Hacki and Julion Ligton, “The Future of Networked Company,”
McKinsey Quarterly 2001, No 3

dynamic changes in market conditions many organizations (Nike, AT&T, Dell, etc.)
moved towards the network design. In this structure, the different business units of an
organization act as independent units. However, each unit establishes linkage with
various other units that supplement their skills and competencies (Refer Figure 15.3).
They concentrate only on their core competencies and perform those activities with
which they can add value to the value chain. They outsource rest of the activities from
other organizations that take specialized activities and have their core competencies
developed around them.
In a network design, each business unit develops its own capabilities and core
competencies. The business units of some network organizations interact with each
other in the same way as they would with external organizations. They provide services
to each other at the same price as they would to outsiders. This approach is called
“insourcing” and has been adopted by firms like Asea Brown Boweri (ABB).

The Virtual Organizations


A virtual organization may be defined as a temporary network of companies each
having expertise in certain skills and specialized operations. In other words, different

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Organizational Behavior

organizations come together for a specific purpose, to accomplish a specific goal. The
following are the important characteristics of virtual organizations:
 Different organizations with varying skills and core competencies enter into short-
term partnership to exploit market opportunities and disperse once the mission is
accomplished.
 Organizations located at different geographical locations enter into partnership and
use information technology for communication and other transactions.
 As suppliers, customers and even competitors sometimes collaborate with each
other, it is difficult to define the boundaries of virtual organizations.
 Companies share critical information with each other as they work together on a
project. Therefore, the relationships are based on mutual trust and cooperation.
 As the best companies enter into partnership and contribute their best in certain
sphere, virtual companies can produce superior quality products and services.
Ford, ABB and Cisco are some of the global firms that have adopted this structure.
Apart from the above designs, a hybrid design called networked virtual design is
becoming popular among many organizations. This design is a combination of network
and virtual designs. Organizations that take up the design are called Networked Virtual
Organizations (NVO). NVOs seek to derive the benefits of both the design and meet
the challenges of today’s uncertain business environment. NVOs go for advanced
technologies and are highly flexible and efficient (Refer Exhibit 15.3). Infact, the NVO
model is not a new concept. Wal-Mart and its suppliers are using NVO model for many
years to replenish inventory in the Wal-Mart stores. Toyota has also been using the
model for years for producing just-in-time products to its customers.

SUMMARY

Organizational structure may be defined as the framework of tasks, reporting and


authority relationships within which organizations function. Broadly, there are two
main theories that form the base for the organizational structure – classical theories and
modern theories. Classical organization theories advocated bureaucracy as an ideal
structure for organizations. Max Weber was a great supporter of this model. He
suggested division of labor, establishment of rigid rules and policies, impersonal work
culture and hierarchical structure as some of the characteristics of the ideal
organization structure. Herbert Simon and some other organization theorists supported
Weber. But organization theorists and practitioners who found certain deficiencies in
pure bureaucratic model worked on its improvement. According to them, the gaps in
bureaucratic organizations can be filled by replacing centralization with
decentralization and tall structures with flat structures. While centralization involves
retention of power at managerial levels, decentralization involves empowering
employees. While tall structures involve high level of supervision and control over
subordinates, flat structures require minimum supervision and control over
subordinates. The researchers also came out with the concepts of departmentation. The
process of grouping jobs together on the basis of function, product, geography and
customer is called departmentation.
The classical organization theory was then followed by modern organization theory.
Modern organization theories include open systems, contingency, ecological, learning
and information processing view of organizations. The open systems consider
organization as an open system which accepts input from external environment,
processes them and produces output. The contingency theory states that organizations
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Organizational Structure

should adopt a structure that helps them cope with dynamic changes in the
environment. According to the ecological theory, efficient organizations survive while
inefficient organizations fail and cease to exist. The learning theory advocates
continuous learning culture in organizations. The information processing view of
organizations realizes the significance of information in organizations, the need for
organizations to process information and use it to cope with uncertainties.
The organization theorists and practicing managers found that minor modifications to
the bureaucratic structure were not effective. Therefore, they developed modern
organization designs by introducing dynamic changes to the classical structures.
Modern organization designs include project design, matrix design, horizontal
organizations, network design and virtual organizations. In project design, employees
from different departments work together until a project is completed. A matrix design
is a combination of a project design and a functional design. In a horizontal design,
organizations encourage horizontal communication. In a network design, an
organization establishes a network with different organizations and leverages their
expertise and competencies to accomplish its goals. A virtual organization is a
temporary network of organizations. These organizations come together to work on a
specific project. Another design called networked virtual organization model (NVO), a
combination of network design and virtual organization is used by organizations to
derive the benefits of both the designs.

327
Chapter 16

Organization Development
and Change
In this chapter we will discuss:
 Forces for Change
 Managing Planned Change
 Resistance to Change
 Approaches to Managing Organizational Change
 Organizational Development
 Techniques of OD
 Prerequisites of Organizational Development
 Steps in Organizational Development
Organization Development and Change

The dynamic nature of the external environment in which organizations operate,


requires them to take a proactive approach to change. Change is inevitable in the
business world and the survival of organizations depends on their adaptability.
Therefore, it becomes necessary for them to predict change and be prepared for it.
This has made it imperative for managers to undertake comprehensive change-related
programs in organizations. Organizational change programs require a great deal of
planning before implementation. Change is often met with resistance from the people
in the organizations as well as organizations themselves. The management has to take
steps to overcome such resistance in order to implement change successfully.
Another important element in the study of organizations is organization development.
It is important for organizations to keep pace with changes in the market. Practitioners
have developed an array of interventions over the years to help members of
organizations address various problems efficiently.
In the first section of this chapter, we will discuss the forces that necessitate change in
organizations, employee resistance to change and the different approaches to
managing organizational change. In the second section, we will discuss the different
approaches and techniques adopted by organizations as a part of their organization
development programs, the various factors that should be considered before
implementing these programs, and the steps in organization development process.

FORCES FOR CHANGE

In the context of business, Curtis W. Cook, Phillip L. Hunsaker and Robert E. Coffey
define change as “the coping process of moving from the present state to the desired
state that individuals, groups and organizations undertake in response to dynamic
internal and external factors.” Change, in general, indicates any act of making
something different. Given the rate at which competition is increasing in business,
organizations have learnt that change is necessary not only to compete, but to survive
in the business. There are many factors that propel change in organizations. These
factors may be broadly categorized under people, technology, information processing
and communication, and competition.

People
Increase in globalization has widened the diversity of workforce. Organizations have
to accommodate people coming from various cultural backgrounds. People differ in
their attitude towards work, expectations of rewards and methods of conducting
interpersonal relations. Organizations have found it necessary to change their human
resource policies in order to attract and retain a diverse workforce. Managers tend to
be prejudiced against their colleagues and subordinates due to racial, regional, age and
gender differences. This is called stereotyping. They have to overcome their
prejudices to accommodate multicultural workforce.
The expectations of customers from organizations have also increased. They want
high quality products at reasonable prices. They want prompt delivery of customized
products at their doorsteps. They expect a high level of customer service and support.
They want organizations to be ethical, and socially responsible.
The organizational structure, work relationships, customer relationships and job
definitions are undergoing drastic changes to keep pace with increasing and changing
demands of the customers. Therefore, organizations are also investing heavily in
training their employees to upgrade their skills so as to help them adapt to these
changes (Refer Exhibit 16.1).

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Organizational Behavior

Exhibit 16.1
Adaptability: The Mantra for Organizational Survival
For present day organizations, adaptability is essential for survival. Organizations should change in
response to external influences, just as an amoeba changes its shape and direction on the basis of
external influences. Companies that have been around for years are those that are sensitive to the
external environment and know how to adapt and evolve to fit ever-changing conditions. How can
companies become more adaptable to cope with changes in the environment? This question becomes
more important as the life span of the products becomes shorter and technological advances become
faster.
Adaptable companies act very differently from rigid, command and control organizations. Business
in adaptable organizations is not conducted in the old fashioned way where there is rigid functional
division and top-down decision-making. Instead, in adaptable organizations
 Employees are given more freedom in decision-making
 Management sets broad goals and objectives. By setting broad goals and objectives, as opposed
to determining specific tasks, executives allow employees to respond to an opportunity in a way
that makes the best sense at that time.
 Executives regularly conduct scenario planning. Adaptable companies integrate scenario
planning into their management practices.
 Managers create accountability around projects, not positions. Today, employees are more
likely to be working in groups to complete projects than working alone to complete individual
tasks. For this reason, employees should be held accountable for the projects they take on, rather
than the tasks they were hired to complete.
 Organizational learning is ongoing. A fundamental characteristic of all adaptive organizations is
their ability to constantly receive feedback from their environment. They use sound intelligence-
gathering processes to anticipate the moves their competitors will make.
Clearly, to become more adaptable to ever-changing market conditions, companies must rethink how
they set goals, organize work and manage employees. In addition, all functional units within a
company, including the finance function, must change the way they operate. In the financial
processes,
 Opportunities are evaluated from multiple perspectives. Instead of relying on one stable way of
evaluating financial data, companies need flexible financial systems that allow them to
aggregate along different axes.
 Adaptable companies understand that costs and revenues must be assignable to all the
dimensions so that the potential for profitability can be identified.
 Develop more open accounting systems by giving more people access to financial information.
 Track different metrics that will give managers a better sense of what the future holds. The
metrics may include such things as measures of customer satisfaction; the amount of business
customers do; the average length of time a customer stays with the company; and the percentage
of revenue from products that didn’t exist two or three years ago.
Adapted from Shari Caudron, “The Amoeba Corporation,” Business Finance (April 2000) p.54,
<http://www.bfmag.com/archives/appfiles/Article.cfm?IssueID=324&ArticleID=13545>

Technology
Advancements in technology are reshaping jobs and industries. Many jobs that were
performed manually are now being computerized. This has enabled organizations to
manufacture and deliver products in a fraction of the time it took them earlier. The

330
Organization Development and Change

emergence of technology that facilitates the transmission of voice, data and video over
a single transport network has reduced the gap between industries. Thus, industries
that were considered distinct previously, are beginning to converge now. For example,
the telecommunications and entertainment industries are converging to form the
multimedia industry. Moreover, many companies in the IT industry are now offering
media services. These developments have brought organizations to a situation where
they need to consider not only the firms in their industry but also the firms in the
related industries, before formulating their strategies.
Technological developments are taking place at such a fast pace today that yesterday’s
technology becomes obsolete by tomorrow. Organizations that fail to keep up with the
pace will lose their customers to competitors. They have to establish and maintain
strong networks through which information from various sources can be received
quickly, processed and distributed to all the units of organizations. This calls for a
major structural and behavioral change in employees.
Information Processing and Communication
The areas of information processing and communication too have witnessed rapid
advancements. Every new generation of computers are designed to bring an additional
increase in processing power. Data transmission is done by satellite systems. Now,
people can even carry their telephones, portable computers and pocket-size televisions
along with them.
A time may come when people don’t have to necessarily work from offices. They can
work from their place of convenience on computers and communicate through new
data transmission devices. Virtual organizations are becoming a reality bringing in
new challenges for organizations. They may find it difficult to foster organizational
commitment, loyalty and team spirit among employees working from remote places
without any direct interaction with each other.
Competition
Though competition is not new to organizations, its nature and intensity has changed
over years. A fall in the costs of transport and communication, coupled with an
increase of orientation to exports have made markets global. Increased emphasis on
global markets widens the scope of the company, but brings in new competition as
well. Politico-economic developments and trade agreements like NAFTA (North
American Free Trade Agreement) and WTO (World Trade Organization) have also
changed the economic relationship between the countries of the world. With the
developing countries getting concessions and support through international
multilateral agreements, they are fast emerging as a force to reckon with. Companies
in developed countries now have to face competition not only from other
industrialized and developed countries, but also from developing ones. This has
increased the scope and intensity of competition. Organizations have to continuously
look for new ways to produce newer, cheaper and higher quality products than their
competitors to succeed in international markets. It becomes even more demanding in
the context of competition from developing countries, as they have an edge over other
developed countries in terms of cheap labor and abundant natural resources.
Companies like Nokia, ABB and Daimler Benz had already fallen victim to
competitive change and had to undertake a large scale change process to cope with
global competition. Organizations that are not willing to initiate or adopt change will
find it difficult to survive in the long run.
Apart from the above factors, changes in economic, social and political conditions
could also stimulate change in organizations. Organizations have realized that change
is inevitable and that it has been the only constant element in organizations for the last
few decades.

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Organizational Behavior

MANAGING PLANNED CHANGE

Change is concerned with changing status quo or making things different. The
changes that occur in organizations suddenly without any significant effort or
involvement on the part of the employees or management are called unplanned
changes. On the other hand, when organizations initiate change activities deliberately
and consciously in order to accomplish certain organizational goals, it is known as
planned change or managed change. There are two basic goals of planned change:
 To enhance the ability of organizations to adapt themselves to the changes in the
external environment: For example, if competitors introduce innovative products,
organizations may respond by initiating a competing project. This initiation of a
competing project may be supported by other activities like encouraging
employees to think creatively and introducing team culture and self-managed
teams to face tough competition. All these are deliberate activities undertaken by
organizations to adapt to new changes in the environment.
 To change the behavior of employees: Sometimes organizations may have to take
up change activities aimed at changing attitudes or behavior. For instance, when
organizations find that they have lost a business opportunity because of slow
decision-making resulting from their centralized structure, they may decentralize
the structure and reduce red tapism at various managerial levels. Such a step may
also train its lower level managers to improve their decision-making skills and
reduce their dependency on superiors.
Planned change can be described in terms of magnitude. The magnitude of change can
be either large or small, fast (abrupt, revolutionary) or slow (evolutionary). Based on
magnitude, planned change can be divided into two types – First-order change and
Second-order change.

First-order Change
When the new state of things have the same basic nature as the old state of things,
except for some moderate adjustments to the existing structure of the organization, the
change is known as incremental or first-order change. In this type of change, only
minor adjustments are made to a few processes in the organization; major changes are
not made. Generally, first order change is easily reversible. The best example of first
order change can be seen in Toyota and other Japanese companies. They adopted this
type of change to improve their production processes and organizational efficiency.

Second-order Change
When the new state of things have a completely different nature from the old state of
things, it is known as fundamental, quantum or second-order change. This change is
initiated when the organization needs to be restructured and the fundamental nature of
the organization is being changed. Thus, the restructured organization differs
completely from the old fundamental structure of the organization. Second-order
change is revolutionary in nature and involves a major reinvention of the organization.
Second-order change is generally irreversible and it is impossible to return back to the
previous state once the change process is complete.
While first-order change is linear, unidimensional and continuous, second-order
change is a multilevel, multidimensional, discontinuous and radical change process
that involves the reframing of assumptions about the environment in which the
organization operates. The people responsible for managing change in the
organization are called change agents. Change agents can be managers, non-
managers, or outside consultants. Generally, senior executives act as change agents in
the organization. For example, in AT&T, CEO Bob Allen was the chief change agent

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Organization Development and Change

and in Ford, CEO Donald Petersen was the chief change agent. But these days, in
many organizations, top managers seek the help of outside consultants with
specialized knowledge in change management. The main advantage of having
outsiders as change agents is that they take a more objective view and so can suggest
better solutions. But, a major disadvantage in seeking suggestions from these outside
consultants is that they have an inadequate understanding of the organization’s
history, culture, operating procedures and employees. This is especially so when the
initiation of second order changes have negative repercussions. Due to lack of
thorough knowledge they may not be able to efficiently handle the problems. But as
far as managers and internal specialists are concerned, they have in-depth knowledge
of their employees and so can implement change programs in less offensive way.

RESISTANCE TO CHANGE

Resistance to change goes hand-in-hand with change activities. Extensive research in


the field of individual and organization behavior has proved that change efforts are
often met with resistance. Resistance may come from individuals or from the culture
and structural elements of the organization. Although resistance to change has often
been viewed as dysfunctional, researchers are now beginning to realize that resistance
has positive effects as well. For example, employees’ resistance to certain change
effort will call for a discussion on the reasons for resistance. The discussion can then
lead to a thorough analysis of the issue and throw light on important points that were
overlooked earlier. This will give the management another chance to consider the
issue from a different angle before a decision is taken. Similarly, if employees are
convinced that managers are right in introducing change, they will co-operate with the
management. Therefore, resistance can sometimes lead to better decisions and
favorable outcomes. Nevertheless, unjustified resistance leads to dysfunctional
consequences and hampers the progress of the organization.
There is no standard form in which resistance can be observed in the organization.
Resistance may be explicit (overt), implicit (covert), immediate or deferred. Explicit
and immediate resistance that occurs after the implementation of a certain change
initiative is rather easier to manage than implicit or deferred resistance. For example,
when employees are not satisfied with a new organization policy, they may criticize
the policy openly and immediately. The management may then adopt a conciliatory
approach and resolve the conflict. Dealing with implicit or deferred resistance is much
more complicated. When resistance is not open, the management does not even have
an inkling of the resistance of its actions by employees. The resistance is subtle and
may be expressed in the form of rampant absenteeism, increase in errors, decline in
quality and quantity of work, etc. Employees may cease to identify themselves with
the organization, lose their feelings of loyalty and feel themselves demotivated.
Deferred resistance can be dangerous too. Employees may not react immediately to a
change initiative and keep resistance bottled up. As the management makes further
changes in the organization, the resistance keeps accumulating and finally reaches the
saturation point. Eventually, employees may react violently to a minor change. In such
a situation, the management may find it difficult to understand why a small change
should lead to such violent resistance and so may fail to deal with resistance
effectively.
Therefore, management should never underestimate the possibility of resistance to its
change initiatives. Though a change may seem to have caused no resistance in the
initial stages in the case of implicit and deferred resistance, it may take on a more
intense form later. So, it is essential on the part of the management to establish formal
communication channels through which it can encourage employees to give their
feedback on change initiatives. The management should also respond to this feedback
to maintain its credibility.
333
Organizational Behavior

Figure 16.1 Sources of Individual Resistance to Change

Individual Resistance to Change

Habit Economic Security Fear of the Selective Social Factors


Factors Individuals Unknown Information People resist
The People resist People fear Processing change when
habits tend to change if it the unknown Individuals they anticipate
developed resist is likely to and process that the change
by an change that decrease uncertainty information might affect
individual threatens their associated selectively to their status in
are their safety income or with it and make it the society
difficult and sources of hence resist compatible with adversely.
to change. security. earnings change. their
perceptions.
Organizations can face resistance from various sources. The sources of resistance can
be classified into individual and organizational sources.
Individual Source of Resistance
The needs, perceptions and personalities of people form the basis for individual
resistance to change. Individuals may resist change because of the following reasons
(shown in Figure 16.1):
Habit
Human beings tend to develop habits. A person may need to make several decisions
every day. Instead of considering all the possible alternatives for each decision, he
depends on habits for most of his responses. These habit-based responses are also
called programmed responses. When change is implemented, it may require
employees to forgo or change some of their habits. This is often met with resistance
because changing one’s habits is a painful task. For example, an employee may be
habituated to busy life style in the city. It is very natural for him to resist, if he is
transferred to a branch located in some rural area.
Security
People are generally concerned about their security and resist any change that
threatens their safety and security. For instance, when a company introduces new
sophisticated machinery or equipment that are likely to replace manual labor, its
employees will feel insecured about their jobs and resist the company’s automation
efforts.
Economic factors
Employees would resist change if it is likely to decrease their income or sources of
earnings. For example, if an organization undertakes restructuring and job
redesigning, workers (who are paid piece-rate wages) may resist it out of fear that it
will decrease their productivity and affect their remuneration.
Fear of the unknown
People associate change with uncertainty. They fear the unknown and the insecurity
resulting from it. They are anxious about their ability to adapt to the requirements of a
new system. For example, when computers replaced manual systems, many people
developed a negative attitude towards computers for the fear of not being able to
acquire the necessary computer skills.
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Organization Development and Change

Selective information processing


Individuals form their own perceptions about people and the world around them and
like to stick to these perceptions. They do not like to receive any information that
contradicts their perceptions. Therefore, individuals process information selectively to
make it compatible with their perceptions. They hear only the information that they
want to and ignore the rest that contradicts their perceptual world. For example,
employees may listen to their colleagues who tell them about the negative
consequences of automation but ignore what managers say about the benefits of
computerization. This means, employees perceive that automation is a threat to their
jobs and therefore accept only the information that supports their perception.
Social factors
People also resist change when they anticipate that the change might affect their status
in the society adversely. In the context of organization, when some jobs are
redesigned, the affected employees may develop a sense of insecurity regarding their
position in the organization and consequently resist the effort.
Organizational Resistance
In addition to individual resistance, there are organizational resistance too.
Organizational resistance can best be seen in public sector undertakings in India. The
current development may call for a change in their services, yet they prefer to retain
their structure and traditional practices. Employees strongly resist if any attempt is
made to bring about a change in such organizations. Therefore, change agents need a
great deal of patience and perseverance to initiate change in these organizations. Not
only commercial organizations, even educational institutions, whose purpose is to
encourage people to learn new things and challenge established practices, resist
change. In most of the institutions, the framework of syllabus and teaching methods
remain the same for many years.
Some of the significant sources of organizational resistance to change are discussed
below and represented in Figure 16.2.
Structural inertia
Organizations always attempt to maintain a steady and balanced state that is
conducive to employees. They have inbuilt mechanisms to achieve that state of

Figure 16.2 Sources of Organizational Resistance to Change

Organizational Resistance to Change


Limited Focus of Change

Threat to Established

Threat to Established
Power Relationships

Resource Allocation
Threat to Expertise
Structural Inertia

Group Inertia

335
Organizational Behavior

equilibrium. For example, if a good number of employees and managers leave the
company for various reasons, the work load on the remaining employees and
managers will increase. There will be chaos and confusion among employees due to
lack of direction and disturbance in the state of balance in the department. To fill the
vacancies, the human resources department initiates a recruitment process and selects
new employees. But the new and old employees may find it difficult to work together
because of differences in their cultural backgrounds and work behavior. Training and
other socialization techniques are used to administer the required job skills and shape
the behavior of the new incumbents in the desired way. In this way, the organization
gains back its stability. But, when a change program is initiated in the organization,
the structural inertia created by these inbuilt mechanisms offer strong resistance.
Limited focus of change
An organization consists of many sub-systems that are interrelated and
interdependent. Due to the interdependency of subsystems, change in one subsystem
will affect other systems as well. Therefore, one cannot introduce change in a
subsystem without considering its impact on the rest of the system.
Group inertia
Sometimes, group norms may prevent an individual from adopting change. For
example, an individual employee may favor a proposal of change from the
management, he may not accept it until the union (of which he is a member) approves
it.
Threat to expertise
The expertise of specialized groups may be threatened by changes in organizational
patterns. For example, a general manager may prefer to make crucial decisions
himself rather than delegating them to his subordinates due to the fear that
decentralizing the process of decision-making would threaten his expertise.
Threat to established power relationships
When an organization initiates a redistribution of decision making authority, by
removing the additional layers in the hierarchy and implementing participative
decision making, it is usually resisted by middle level managers and supervisors. This
is because, such a change takes away the power and authority which they enjoyed in
the bureaucratic system.
Threat to established resource allocations
An individual (or a group) who controls a significant amount of resources in the
organization would generally consider any change as a threat. It is because of the fear
that change will bring an adverse impact on the pattern of resource allocation and will
put him at a disadvantage.
In order to overcome resistance to change, organizations adopt any of the following
tactics:
Educating employees: The management must attempt to educate employees about
the benefits of change. When employees understand that change is not only inevitable
but also beneficial, they will come to terms with it and can accept it more easily.
Communication channels may also be improved to update employees about the latest
happenings in the organization.
Employee involvement: Employees are also invited to participate in the planning
and implementation of change programs. Since employees themselves are involved in
the change program, they will be committed to the decisions taken and are unlikely to
resist change. Participation instills a sense of confidence in employees. Thus,
involvement is likely to make them more open to change.
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Organization Development and Change

Facilitation: Organizations can take help from professional change agents and
psychologists to train employees in new skills as well as counsel them to overcome
their fear and anxiety as a result of change program. Since resistance is generally a
result of anxiety, reduction in anxiety will enable employees to accept change in a
better way.
Negotiation: The management negotiates with employees or their representatives in
the organization by providing additional concessions (like better` work environment)
in return for their co-operation in change program.
Manipulation and co-optation: Management manipulates employees’ acceptance
to change by distorting facts and manipulating information. The leaders of employee
groups/union are also given important roles in the change implementation program to
prevent them from resisting change. This is called co-optation.
Coercion: Coercive measures such as threats of demotion, reduction in benefits, or
transfers are used as the last resort to get employees acceptance to change.
Nevertheless, coercion may not always result in whole-hearted cooperation.
APPROACHES TO MANAGING ORGANIZATIONAL CHANGE
Organizations adopt several approaches to manage change. Two popular models are
discussed here:
Lewin’s Three-step Model
The model, proposed by Kurt Lewin (the founder of modern social psychology),
suggests that organizations should use three steps to introduce permanent change –
unfreeze, movement to a new state and refreeze (Refer Figure 16.3).
Unfreeze
In this step, employees are educated about the external and internal factors that make
change imperative. Sometimes, people are content with the existing work
environment, organizational rules and procedures and therefore are unwilling to
change. Such people or groups should be told about the benefits that change can bring
so that their level of satisfaction increases and level of satisfaction with existing
condition decreases. This will motivate employees to welcome change to enjoy the
new benefits.
Movement to change
After the resisting employees are convinced or prepared for change, the actual change
process begins. This involves doing away with old practices and adopting new
methods. For example, as part of the change program, advanced equipment is
installed, production process or layout is changed, or job duties are redefined. This

Figure 16.3: Lewin’s Three Step Model


Resistance to change
Level of performance

Change
P2

P1

Forces for change Forces for change


Time
Source: www.ln.edu.hk/mgt/staff/robin/People/ChangeSlides.ppt
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Organizational Behavior

stage involves implementing the change.


Refreeze
After change has been implemented, it has to be assimilated into the organizational
processes. The third step involves reinforcing change so that the organization does not
revert to old state of things. For example, if the change process involved acquiring
new skills, the new skills and behaviors have to be made a permanent part of the
organization. To achieve this, employees are asked to demonstrate their new skills
before they return to their jobs. They may also be asked to do role play and show how
they would apply their new skills at the workplace.
However, most employees prefer to use their old methods when they return to the
workplace. Therefore, repetition and constant reinforcement of new work techniques
is essential to sustain change.

Action Research
Action research is one of the popular models to manage change. According to Stephen
Robbins, Action research is “a change process based on the systematic collection of
data and then selection of a change action based on what the analyzed data indicate”.
Wendell French and Cecil Bell define action research as, “research on action with the
goals of making that action more effective while simultaneously building a body of
scientific knowledge.” Action research follows a scientific methodology for managing
change. It includes the following five steps:
Diagnosis: In this step the change agent attempts to determine the underlying causes
of an organization’s problems. In other words, attempt is made to diagnose the
problems of an organization. To diagnose the nature and magnitude of the problems,
critical information about the organization is collected by interviewing the employees,
browsing through organizational records, and listening to employee concerns.
Analysis: In the second stage, the change agent analyzes the information collected in
the diagnostic stage. Through analysis of the collected information, the change agent
is able to sort out the different and similar kinds of problems being faced by various
employees. He observes the kinds of problems being faced by various employees and
the similarities and differences between them. He then classifies the information into
three categories – the primary concerns, the problem areas and the possible actions to
resolve them.
Feedback: An essential feature of action research is the constant involvement of the
people, who are going to be affected by the change program, in determining the
problems and finding solutions. Therefore, feedback results form an important part in
the process. In this step, the change agent shares his observations and conclusions
from diagnosis and analysis of information. He then seeks their active participation in
developing action plans for bringing the desired change in organization.
Action: In this stage, the employees and the change agent work together to implement
the measures that they consider solutions to the organization’s problems. The actions
are problem oriented and are aimed at correcting specific problems.
Evaluation: Finally, the change agent evaluates the effectiveness of the actions taken
by measuring the outcomes of those actions. If the outcome is found to be
unsatisfactory, the above mentioned steps are repeated. The outcome is measured in
terms of the initial data collected. The process is continued until a satisfactory
outcome is obtained.
Action research model has the following advantages
 It finds and implements solution which is specific to the problems faced by the
organization in question instead of trying to implement a generic solution which
worked in other organizations with similar problems. Since the solution is

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specific to the problem and the result of scientific analysis, it is usually more
effective.

Exhibit 16.2
Preventive Steps to Avoid Failure in the Implementation of Change Plan
After developing a change plan for implementing change in organizations, the following steps may
be taken to avoid failure:
Step I: Clarify the purpose of the change effort and understand how it can improve the competitive
position of the organization. Ensure that the change implementation plan is in accordance with the
goals of the organization. Define the change plan for implementation as an integral part of business
strategy.
Step II: Some organizational change plans take several years to be implemented. Ensure that the
resources allocated for the change implementation program are not diverted to other activities.
Conduct status discussions periodically to prevent the program from losing its significance. Prepare
the work schedule in a way that the efforts to implement change program do not adversely affect the
day-to-day operations.
Step III: Divide the change implementation program into phases that can be implemented one after
the other. Success in one phase would encourage employees to adopt the next phase.
Step IV: Identify the major stakeholders of the organization. Involve them in the change
implementation program to get their support. Share the costs as well as payoffs of the project with
them.
Step V: Ensure the presence of key players in the change implementation program. The key players
include the change agent (who trains and advises managers on the change implementation methods),
the project manager (who coordinates activities of various teams and acts as a liaison between them),
project teams (who implement the plans), a team leader (who ensures completion of the project on
schedule time), content experts (who give advice on policies and work procedures of the
organization) and the steering team (which handles all the problems related to the change
implementation program). They should be well aware of their roles.
Step VI: Prepare a list of sub-goals and sub-tasks to evaluate the progress of the change program,
Determine the people who will carry out the tasks, deadline for the completion of the tasks and
person accountable for incomplete tasks. Also, establish measures to quantify the results of the
change program.
Step VII: Design reward systems to encourage employees to actively participate in the change
program. The reward system should not only consider the employees’ appraisal based on their duties
and responsibilities but also their efforts towards the completion of a project.
Step VIII: Redesign jobs to include activities related to the change program. Obtain inputs from line
supervisors about the shortfalls of the proposed job design and define new standards of performance.
Step IX: Integrate change into management systems such as business planning, compensation
programs, succession planning and employee training.
Step X: The key players (change agent, project managers and the steering team) should constantly
monitor the change program. In case of any obstacle coming on the way of smooth working of
change program, the key players should not only remove it, but should also take measures to prevent
it from recurring.

Adapted from Martin E Smith & Pierre Mourier, “Implementation: Key to Organizational Change”,
Oct-Dec 99, 27, Issue 6.

 Employee resistance to change is also minimized because employees are closely


involved throughout the process of change. The association of employees at every

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stage of the change process ensures their easy acceptance to change as they have
a better understanding of the problems and their implications.
 No matter whatever approach an organization adopts to implement change, it has
to take measures to overcome problems in implementation (Refer Exhibit 16.2).

ORGANIZATION DEVELOPMENT

Organization Development (OD) is a unique organizational improvement strategy that


emerged in the late 1950s. OD has its base in the theories related to planned change
and their application in the context of organizations. The objective of OD is to
improve the performance of individuals and groups in organizations. OD is a
multidisciplinary field that draws its subject base from behavioral sciences such as
psychology, social psychology, sociology, anthropology, systems theory,
organizational behavior, organization theory and the management practice. Kurt
Lewin played a crucial role in the development of OD.
OD deals with a range of “people problems” in organizations such as poor morale,
low productivity, poor quality, interpersonal conflict, intergroup conflict, poor team
performance, poor customer relations, poorly designed tasks, etc. Apart from this, OD
helps individuals, teams and organizations to realize their full potential.
There is no single accepted definition of OD. Different authors have defined it in their
own ways. Some of the definitions of OD are given below:
W. Warner Burke and Harvey A. Hornstein in their book, titled The Social
Technology of Organization Development, defined OD as “A process of planned
change – change of an organization’s culture from one that avoids an examination of
social processes (especially decision making, planning and communication) to one
which institutionalizes and legitimizes this examination.”
Christopher G. Worley and Tom G. Cummings, (in their book – Organization
Development and Change) have defined OD as “A system wide application of
behavioral science knowledge to the planned development and reinforcement of
organizational strategies, structures, and processes for improving an organization’s
effectiveness.”
Wendell L. French and Cecil H. Bell, in their book, “Organization Development,”
have given a comprehensive definition of OD. According to them, OD is “A long-
term effort, led and supported by top management, to improve an organization’s
visioning, empowerment, learning, and problem solving processes, through an
ongoing collaborative management of organization culture – with special emphasis on
the culture of intact work teams and other team configurations – utilizing the
consultant-facilitator role and the theory and technology of applied behavioral science,
including action research.”
Keeping in view the definitions given by various scholars in the field, the
characteristics of OD may be summarized as follows;
 OD is a system of planned change
 OD takes a holistic or systemwide approach to change
 OD targets organizational processes, rather than content
 OD is problem oriented
 OD focuses on relationships, human, social as well as structural

TECHNIQUES OF OD

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OD techniques, also known as OD interventions are defined by French and Bell as


“The planned activities clients and consultants participate during the course of an
organization development program.”1 They are essentially a set of planned activities,
which are introduced to bring the desired change in the organization. In this context,
OD interventions are said to be the action component of organizational development.
OD interventions attempt to improve the “fit” between the individual and the
organization, between the organization and its environment and among the different
organizational components like strategy, structure and processes. OD practitioners do
not believe in power, control, conflict and coercion. They attach importance to
collaboration, confrontation and participation. Some of the OD interventions used by
change agents are discussed in this section:
Sensitivity Training
Sensitivity training is also called T-group training. A T-group consists of ten to twelve
members and a professional trainer called facilitator. The facilitator is generally a
professional behavioral scientist. The group usually meets over a period of two weeks
but not regularly. They may meet once a day, once every few days, or for some days
in each week. The purpose of sensitivity training is to sensitize people to perceptions
and the behavior related aspects of themselves and others. The sessions are generally
unstructured, without any agenda. As the members interact with each other, the
facilitator moderates the discussions and provides an opportunity for each participant
to express his/her opinions, beliefs and ideas. He also takes a note of the expressions
and reactions of the participants during the interactions and at the end of the sessions,
provides them feedback on their behavior. The feedback helps members of the group
to know more about themselves as well as of others and learn about group dynamics
(such as how a group comes into existence, forms its norms and grows). This kind of
training helps them to improve their listening skills, learn to talk openly and accept
individual differences. T-group training is basically used in organizations to reduce
interpersonal conflicts, enhance group cohesiveness and improve organizational
productivity and efficiency. It can also improve the interpersonal and leadership skills
of employees, because employees understand the behavior and perception of others,
and are able to empathize with others.
Survey Feedback
In survey feedback technique, data is collected systematically from a large sample of
employees at all levels of the organization or an organizational unit. Collection of data
is usually in the form of attitude or (organizational) climate surveys, which reveal
critical information about the organization and the problems faced by it. The collected
data is then fed back into the system ensuring that all the participants of the
information collection process receive the data. Data feedback is usually done in
feedback workshops which are attended by all the participants. All the participants are
then asked to analyze and interpret the data and present their views on it. A meeting is
conducted by the head of the organization or the head of the unit with immediate
subordinates to discuss the details of data. Both the head of the organization (or unit)
and the immediate subordinates interpret the data, exchange their views and try to
identify the areas that need change. They also chalk out plans about the manner in
which the change should be introduced. This is followed by the introduction of the
data to the next level of employees for further discussion. Generally, these meetings
are conducted with the help of professional change agent. What is important in survey
feedback is that it transfers the ownership of the data from the change agent to the

1
Wendell L. French and Cecil H. Bell, “Organization Development – Behavioral
Science Interventions for Organization Improvement”, 5th edition (New Delhi:
Prentice Hall of India Private Ltd., 1996)

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participants. The participants also play a key role in developing solutions to the
problems.

Process Consultation Interventions


Process consultation, like sensitivity training, assumes that the major reason
underlying the ineffectiveness of organizations is dysfunctional interpersonal conflict.
Therefore, this technique seeks to resolve interpersonal problems and increase the
participation of employees in problem solving process. But what makes process
consultation different from sensitivity training is that, it has a very specific goal of
improving a particular process of the organization whereas sensitivity training has
broader scope but no specific goals.
In process consultation, greater emphasis is laid on understanding organizational
processes. The processes include flow of work, flow of communication, roles and
responsibilities of employees, group problem solving and decision-making, co-
operation and competition among groups, etc. In this technique, the external
consultant helps individual employees or work groups understand process events,
human and social processes and the consequences of these processes. According to
Edgar Schein (one of the founders of organizational psychology who made significant
contributions to the field of organization development), a process consultant should
help the client organization set an agenda for meetings, present feedback on
observations to members of the client organization and offer coaching and counseling
to organizational members (about the change process, performance improvement and
so on). He should educate teams on the mechanism by which processes can be
changed. Though he does not actively participate in the discussions he should make
suggestions if the teams fail to find any solution. This is because the process
consultant is expected to play the role of a resource person and not an expert. He does
not lead work teams but only facilitates their attempts to analyze the processes in their
units, diagnose the problems and determine the processes that need improvement.

Team Interventions
Team interventions are the techniques used by OD practitioners to improve the
performance of work teams. In general, groups and teams are considered synonymous,
but technically there are some differences between them. A group is a number of
people gathered, placed or working together, whereas a team is a form of group
which is characterized by a higher degree of cohesiveness, interdependency and
interaction between members, and a commitment to common goals. Team building
interventions cover four substantive areas in the working of organizational teams,
namely, problem diagnosis, task accomplishment, maintaining team relationships, and
improving team and organization processes.
Some of the team building interventions used in organizations are discussed below.
The formal group diagnostic methods
The main purpose of the formal group diagnostic method is to analyze the reasons for
the existence of the team, the objectives of the team and how the team plans to
accomplish those objectives. It is a general critique of the team. In this method, the
team leader and the consultant first discuss whether there is a need for a diagnostic
meeting in the first place. If they find such a need, the leader discusses the issue with
his team members. He asks his members to identify the strengths of the team, the
problems that need immediate attention, their perceptions on where the team is
heading, interpersonal relations within the team and the ways to improve performance
of the team.
If the team members find that their performance needs improvement they may decide
to have a formal diagnostic meeting. In the meeting which is usually of a half-a-day or

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a day’s duration, the main focus is on gathering as much information as possible and
analyzing it. Information is collected either in a total-group discussion (where the
whole group interacts), or by forming sub-groups or pairs of individuals. The method
mainly depends on the size of the group and among all the groups, forming sub-
groups is the most popular one. The whole group or the sub groups discuss all the
aspects and problems of the team intensively. After the discussion, whole group is
informed of the issues. The issues are then classified into different categories such as,
role ambiguity, goal ambiguity, planning problems, etc. The team then discusses the
actions to be taken to resolve the problems. Then the team prepares a plan for
implementing the actions.
Formal diagnostic meetings offer greater efficacy when teams are newly constituted
are a result of mergers and acquisitions. They offer great potential for streamlining the
activities of teams and guiding them towards the achievement of goals.
The formal group team-building meeting
A team-building meeting is aimed at improving the relationships between team
members and their effectiveness as a team. A team-building meeting may be initiated
by the manager or by the team members. Regardless of who initiates the session, the
most important element necessary for its success is cooperation and understanding
between team members. The duration of the meeting may range from one to three
days depending on the nature of problem being addressed.
The team building meeting is usually conducted under the supervision of an external
consultant. Prior to conducting the team-building meeting, the external consultant
meets all the team members and the leader. The consultant tries to garner their
opinions on the working of the team, the strengths of the team, its problems and the
barriers that come on their way of better performance. The data is usually collected
through personal interviews with the members. The consultant then categorizes the
collected data into different themes and presents them as topics for discussion to the
team members during the meeting. The team members rank the topics in the order of
importance. These ranks determine the priority of different themes and form the
agenda of the meeting. During the discussions on the topic, some other issues may
also come up. The team examines them also. The team members decide on the actions
to be taken to resolve the problems. They also determine the activities to be
undertaken by each team member and the time period allotted for each activity.
The teams review their own performance, analyze the methods and procedures they
use to perform and attempt to develop strategies to improve their problem-solving
procedures. Team-building sessions are held away from the work place to avoid
disturbances.
Gestalt approach to team building
This approach focuses more on the individual than the group. It is based on a form of
psychotherapy called Gestalt therapy, developed by Frederick S. Perls. Gestalt
therapy is based on the belief that persons function as whole, total organisms and not
as fragmented beings. Therefore, it is essential for people to be aware of their ‘selves’
and accept themselves as whole which covers positive as well as negative aspects of
their personality. When people are compelled to live up to the expectations of others
and they are not allowed to express themselves, they become frustrated. According to
Robert Harman, the goals of Gestalt therapy are awareness, integration, maturation,
authenticity, self-regulation and behavior change2. Gestalt approach emphasizes that
an individual should know about oneself (awareness), accept responsibility for his
actions (authenticity), and regulate any dysfunctional behavior that minimizes his
awareness, authenticity and such other desirable characteristics.

2 Robert L. Harman, “Goals of Gestalt Therapy,” Professional Psychology, May 1974, 178-
184.
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The Gestalt approach increases self awareness and authenticity of an individual and
makes him stronger. Stanley Herman, a popular management and OD consultant, used
Gestalt approach extensively in organizations to improve leader-subordinate relations
and team building. Through this approach, he helped individuals to not only cope with
the organization’s environment but also made them realize their potential to influence
the environment in a way that helped them achieve their goals.
The Gestalt approach proposes that people should be able to accept both positive as
well as negative elements in their personality. They should not repress their negative
feelings or discontinue transactions with others. Negative feelings can be resolved
only through confrontation and not by repression. Gestalt approach includes exercises
which encourage individuals to express themselves fully and sustain transactions for
longer time. But to accomplish this, Gestalt practitioners attempt to explore the
psychological depths of an individual. This acts as a major deterrent to participants
who may not like themselves to be explored so deeply by others. So, the seriousness
and complexity of the approach also requires that such a therapy be practiced only by
a trained practitioner and not just by any manager or consultant.
Some other techniques and exercises used in team-building are:
Role analysis technique
This technique is adopted to clarify the duties and responsibilities of team members
and improve team performance. Sometimes individuals play multiple roles such as
superior, subordinate, colleague, expert, administrator, etc. Each role demands a
certain type of behavior. When a person assumes a new role, he does not know about
the behaviors expected of him by others. This results in role ambiguity.
Ishwar Dayal and John Thomas (researchers in OD) designed a technique called the
Role Analysis Technique (RAT) to help new teams define the roles of their members,
and established teams to resolve problems of role ambiguity and confusion. This
technique assumes that cooperation and coordination among the team members can be
enhanced by defining and clarifying their roles. In RAT, the role being defined is
known as the focal role. RAT consists of these steps:
Step One: The incumbent of focal role attempts to analyze his role. He describes his
formal duties and responsibilities in his role, the significance of the role to the
organization and its place in achieving goals of the organization. The other members
of the team give their suggestions to the duties and behaviors described by the focal
role incumbent. The discussion continues among team members till they arrive at a
consensus on the role definition
Step Two: The focal role incumbent describes the behavior that he expects from other
members of the team so that he can perform his well. The other members may seek
clarifications or make some suggestions to modify the behavior expectations by focal
role incumbent.
Step Three: All the team members express the behavior they expect from the focal
role incumbent. The focal role incumbent may make some suggestions and
subsequently, the entire team discusses and finalizes the expectations of focal role.
The focal role incumbent prepares a written description of his role, including the
results of the above steps. It is known as the role profile. According to Dayal and
Thomas, the role profile consists of discretionary activities of the role, obligatory
duties towards other roles and the expectations of focal role from other roles in the
team or organization.
As all the team members participate in discussions, define the roles collaboratively
and communicate their expectations to each other, there is an assurance that everyone
understands his/her role clearly and is committed to perform the duties and
responsibilities expected of him.

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Role negotiation technique


As cited earlier, there are many factors that cause individual and organizational
resistance to change. In the case of a team, some members out of fear of losing their
power and influence may be unwilling to change. This weakens the team, resulting in
conflict among members and decline in its performance. The Role Negotiation
Technique (RNT), a technique designed by Roger Harrison (OD theorist), can be used
to deal with such situations. The technique is based on the assumption that people
prefer to resolve a conflict even if it means making some compromises from their
side, rather than leaving the conflict unresolved. By using the RNT, the consultant
negotiates between conflicting parties and reaches a settlement where each party
agrees to make specific changes in its behavior in return for changes in the behavior of
the other party.
RNT consist of the following steps:
Contract setting: In this step, the consultant lays down some ground rules for
negotiations between members of the teams in conflict. Some of the rules may be:
During negotiations, one should not comment on personal beliefs and feelings of other
members but should focus only on work behaviors; one should keep one’s priorities
straight, and be sure whether one wants the other person to be more supportive, less
interfering or remain unchanged; each expectation should be submitted in written
form; one should not expect change from others without making a similar concession
from one’s own side, etc.
Issue diagnosis: In this step, the parties are given issue diagnosis forms. In the forms,
each party writes what type of change in work behavior he expects from others and in
what way will the change affect his own performance. The content of all the issue
diagnosis forms is shared among all the members. The content may also be displayed
to bring to the notice of all members.
Influence trade or negotiation period: In this stage the conflicting parties discuss the
most important changes they require from each other. They highlight the changes they
are willing to bring in their behavior and the changes they expect from the other
person in return. The number of behavioral changes expected from each other may
decline during the process of negotiation. Once all the parties are satisfied with the
contents of the agreement, the process of negotiation comes to an end. All the
agreements are written and the agreement copies are distributed among the members.
Generally, the role negotiation technique takes two days to complete. After a month, a
follow-up meeting is conducted. The meeting reviews whether the plans in the
agreements have been executed and also evaluates the impact of the agreement on
team efficiency.
Thus, RNT is highly effective in situations where power and influence related issues
jeopardize interpersonal relationships and behavior of employees in the organization.
Force-field analysis
Force-field analysis is one of the oldest and most widely used interventions for
understanding problematic situations and planning corrective actions This technique is
based on the assumption that there are two forces, namely driving forces (or forces for
change) and restraining forces (or forces resisting change) that play a role in attaining
a desired state of equilibrium in an organization. An example of force-field analysis is
given in the Figure 16.4. The figure explains the driving and restraining forces acting
upon a change program, which ultimately results in the desired state of equilibrium.
The state of equilibrium is the desired outcome of the change program.
This technique was developed by Kurt Lewin. According to him, social forces and
events have major affect on organizational phenomena such as productivity, morale of

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Organizational Behavior

a team, and the degree of prejudice in a community. These organizational phenomena


stabilize at the point of equilibrium. The point of equilibrium can be brought by
bringing about certain changes in the driving and restraining forces that govern the
equilibrium. The force-field analysis includes the following steps:

Figure 16.4: Example of Force Field Analysis

Forces for Equilibrium Forces resisting


Change Change

 Added Organizational  Fear of change


capability initiative.  Resistance to
 Perform work Implement a new new training
quicker software program  Old habits
 Maintain organization wide  No benefits of
technological + - change
edge identified
 Network
everyone on
the same
system

Source: Joseph. W. Weiss, Organizational Behavior and Change, 2nd edition


(Singapore: Thomson Asia Pvt. Ltd, 2000) p 416.

Step 1 – The first step involves identifying and defining the current problem
situation. The current situation and all its components are described comprehensively
as it is important to know precisely what the current condition is and why it needs to
be changed.
Step 2 – The desired condition is described completely and accurately with all the
minute details of the primary goal of the change program and the desired state of
things in the future.
Step 3 – The driving forces and restraining forces operating in the current state of
things are identified. The analysis of these forces helps management identify the
causes of the problems and find ways to correct the problems.
Step 4 – The strong and weak forces within the driving and restraining forces are
identified. The forces that are under the control of management and can be influenced
easily are identified and examined in detail for further action
Step 5 – An appropriate strategy is chosen to move from the current condition to the
desired condition is chalked out. The desired condition can be achieved either by
adding more driving forces or removing the number of restraining forces. But, if more
driving forces are added, without taking the consequences into consideration, it may
lead to resistance from within the system. Therefore, the best way is to add driving
forces and remove more of restraining forces. An action plan is developed to
introduce the opposing forces into the system and obtain new equilibrium.
Step 6 – Action plans are implemented and the activities of the team members are
closely monitored to ensure the stability of equilibrium.
Step 7 – The actions that are needed to sustain the new equilibrium/desired state are
planned and implemented.
Intergroup Team-building Interventions
This group of OD interventions focuses on improving intergroup relations, i.e
between work teams. These activities are aimed at increasing the easy flow of

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communication and interaction between work teams and reducing dysfunctional


competition. They also emphasize the importance of the interdependence of
organizational activities. Intergroup problems are usually a result of organizational
reward structures which place emphasis on unit goal attainment rather than total
organization goal attainment.
In an organization, different work groups compete with each other for resources and
strive to outperform each other. Though competition among groups is desirable to a
certain extent, cut-throat competition strains relationships and harms overall
organizational interests. A technique developed by Blake, Shepard and Mouton is
used to facilitate communication and interaction between work groups, promote co-
operation and co-ordination between them and reduce dysfunctional competition in
the organization. The technique involves the following steps.
I. In the first step the consultant or OD practitioner meets with the leaders of the
two groups to find out whether they are genuinely interested in improving mutual
relations. Sometimes, consent is taken from all the members of both the teams
before proceeding. If they respond positively, they go to the next step.
II. The consultant asks the two groups (say A and B) to meet in separate rooms and
prepare two lists each. In the first list (list I), the group members are expected to
write about their attitudes and perceptions towards the other group. They also
have to write the behavior of the other group that hinders their working. In the
second list (list II), the group tries to anticipate what the other group would write
in its first list.
III. In this step, the two groups are permitted only to exchange information written in
the first and the second lists. They can clarify certain unclear items mentioned in
the lists but are not allowed to discuss them in detail.
IV. The groups return to their respective meeting places to perform two tasks. Task I:
The group members discuss the information on the list prepared by the other
group. From the information, they get the idea that often it is the lack of
communication that is the underlying cause for conflict between the two groups.
They also realize that most of the differences between the two groups did not
actually exist and some of them were resolved because of the information shared
through the lists. Task II: Setting aside the problems that were resolved in Task I,
the members of each group prepare a list of the priority issues that are left
unresolved between the two groups. This list is usually found to be smaller than
the original list.
V. The two groups form a single list of unresolved problems and issues and work
jointly to determine the order of priority to be given to the listed items. An action
plan, to resolve problems is also chalked out. The activities and responsibilities to
be taken by various members of the two groups to improve inter-group relations
are also determined in the meeting.
VI. A follow-up meeting attended by all members of two groups or their leaders, is
usually conducted, to discuss the progress made in the implementation of the
action plan and to evaluate the efforts of the two groups. They may also discuss
the measures to be taken to further promote intergroup co-operation.
A slightly modified version of this OD intervention is given by J.K. Fordyce and R.
Weil. In this technique, the groups prepare three lists. The first list contains what a
group likes about the other group, second list has what it dislikes about the other
group and third list is about the prediction of what the other group will write in its
lists.
The two groups come together to list the items in their lists. No discussion is allowed
at this stage and questions are restricted to issues of clarification. Here, also, both the
groups prepare one list containing major problems and unresolved issues. These issues
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Organizational Behavior

are ranked according to their importance. Subgroups comprising members of each


group, are created and are assigned the task of working on each item. All the
subgroups report back to the whole group.
The main advantage of this technique is that the groups do not go back to separate
places to discuss the lists. The groups are divided into subgroups (containing members
from each group) which discuss the issues and report to the main group. This helps in
increasing interaction between the two groups and improving relations between them.
The above mentioned techniques reduce friction between groups, help them resolve
conflicts amicably and enhance mutual co-operation and coordination.

PREREQUISITES OF ORGANIZATION DEVELOPMENT

The following conditions must be satisfied in an organization to facilitate OD


initiatives:

Top Management Commitment


Support from the top management is an essential prerequisite for the success of any
OD effort. It is essential that senior managers encourage employees to think creatively
and use innovative methods to solve their work-related problems. They must be able
to show tolerance towards ambiguous results and possible errors that may occur
during the course of the OD program implementation, and enthusiasm to devote the
time and resources needed for the program.
Organizations must also train their top management so that they are well equipped to
support to employees as they participate in OD programs.

Influential Managers
There should be some influential managers within the organization who can assist the
external consultant and act as internal change agents. They must facilitate the
implementation of innovative methods of work and speed up the pace of OD program.
The presence of an experienced external change agent is a prerequisite for the success
of OD program. The change agent should train the employees to acquire problem-
solving skills so that they can solve the problem themselves if it occurs in future.
Success in Initial Efforts
The change agents should start the OD program with relatively simple and
comfortable programs that are easy for the employees to adopt. Once they succeed at
initial attempt, employees feel motivated to take up more complicated tasks of OD
program, subsequently.
Establishing Reward Systems
Rewards motivate people to work harder. Ample rewards should be given to
employees who make efforts to change the system, or facilitate the change in the
system, or bring about a positive change in their work and behavior.
Constant Learning
Constant renewal is an essential prerequisite for the success of OD efforts.
Employees and managers should be motivated to learn and change continuously
according to the changing needs. The performance of the organization should be
evaluated at regular intervals so that necessary changes or amendments can be made
keeping with the developments.

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Organization Development and Change

STEPS IN ORGANIZATIONAL DEVELOPMENT


Organization development is generally carried out in four phases:- (i) Diagnosing the
problems of the organization, (ii) developing plans for change, (iii) implementing
change plans in the organization, (iv) follow-up and evaluation. These phases may or
may not be followed in the given sequence (Refer Exhibit 16.3). Organizational
theorists and practitioners described these phases in different ways. Let’s examine
some of them:

Abad’s Model
According to Ahmad Abad, an OD program can be divided into six steps – (i)
Motivation for change, data-collection, (ii) problem-identification and diagnosis,
planning strategy for change, (iii) intervening in the system, (iv) reinforcement and
follow-up, and (v) monitoring and evaluation.
i. Motivation for change: Motivation for change can come from various quarters. The
changes in external and internal environment of an organization compel top
management to take initiatives for change. Sometimes, a new incumbent in top
management position may also initiate change in the organization in an effort to
improve the organizational performance. The industrial relations manager of the
organization may initiate change to improve union-management relations. Or an
external consultant hired for resolving certain problems in the organization may
initiate change.
ii. Data collection, diagnosis and problem-solving: This step involves collecting
organizational data and individual opinions from all the employees through interviews
and questionnaires and conducting meetings to discuss the data, identify problems and
find possible solutions collectively. The top management is involved right from the
inception of change program i.e, motivational step, till the last step, i.e, evaluation.
iii. Planning strategy for change: Based on the diagnosis made in the previous step,
an action plan is developed keeping all the goals in view. The intervention that needs
to be adopted for achieving the goals is also determined. All the activities that have to
be undertaken as part of the intervention, the sequence in which they have to be
carried out, and the tasks to be taken up by each employee are decided. The
management checks the entire plan to ensure that it is prepared in accordance with the
problems that are diagnosed, all the constraints are duly considered and that its
implementation is feasible.

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Organizational Behavior

Exhibit 16.3
Implementation of OD Techniques in Organizations
OD techniques or interventions have worked successfully in well-known organizations such as Ford
and Boeing. The following is an example of a company in which OD interventions has been carried
out.
An experienced external consultant in OD interventions management is hired by the company. Then
a planning team, consisting of representatives from management, internal consultants (some senior
executives) and external consultants, is formed.
A design team with members from all levels of the organization, is constituted by the planning
team. The design team plans a meeting to be attended by all members of the organization. They
clearly specify the purpose, the desired outcomes, and the learning techniques to be used in the
meeting, in minute detail in the form of worksheets. The design team then appoints a logistics team
to work out the final details of the change program.
The actual meeting is finally held after the completion of preparation for the meeting by technical
team, the preparations may take one complete calendar year. It is a three-day meeting with an active
participation of all the members of the organization. The manufacturing plant is shut down for all
these days to facilitate the meeting or the change program to take place.
During the meeting
All the participants sit in the same hall in groups of 5-10. The groups are formed in such a way that
that no two members in a group belong to the same function or same level of management. For
example, a group may be made up of a general manager, a production engineer, a sales executive
and an accountant.
First day of the meeting
Each member of the group learns about the activities, work load, problems, constraints, etc in the
department of other group. There is an exchange of information within the group as well as between
the groups.
Second day of the meeting
The design team presents a vision statement. The groups exchange their views on statement and
attempt to refine it.
The participants conduct a SWOT analysis for themselves and the organization. They also identify
the problems that prevent change and impede the progress of the organization.
The groups are then reshuffled to form groups, according to function. Each group informs the other
group what it likes and dislikes about it, and the kind of cooperation it expects from that group to
help it carry out its own tasks efficiently.
Third day of the meeting
Strategies are formulated to address the problems identified on the previous day of the meeting.
Feedback from the participants is obtained before taking a final decision on the implementation
strategy. Each individual and group makes some commitments to execute the strategies. The
participants also involve in developing action plans to achieve the organizational objectives.
The above described OD intervention program can be implemented with some modification to suit
structure and processes in any organization pertaining to any industry.
Adapted from Robert H. Rouda & Mitchell E. Kusy, Jr., “Managing change with large-scale, real-
time interventions,” Tappi Journal, 1995.

iv. Intervening in the system: This step involves the actual implementation of the
action plan developed in the previous step and the application of OD technology to
resolve organizational problems. Various OD techniques or interventions like T-group
training, process consultation, role negotiation, etc are used to improve organizational
processes. Also, employees are trained to participate in the change process. OD
techniques like confrontation and consultation are also used to solve various
problems.

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Organization Development and Change

v. Reinforcement and follow-up: Constant reinforcement of change and new behaviors


are essential to ensure that the organization or the employees do not regress to their
old ways. Reinforcement may be in the form of rewards for departments which have
achieved the desired change, or education and training programs for employees.
Review meetings are also held frequently to review and monitor change efforts and to
take necessary measures to speed up the change process.
vi. Monitoring and evaluation: Along with the implementation of the OD program,
mechanisms to measure the effectiveness of the program are also adopted. The
management conducts open sessions where employees can freely express their views
on the change program. Here, the management can take the help of professional OD
practitioners in evaluating the change. Evaluation is done by comparing the
organizational unit where OD program is implemented with a unit where it is not
implemented and the behavior of employees in pre-implementation phase is compared
with their behavior in post-implementation phase. The outcome of the evaluation is
used to identify and remove inefficiencies and improve the effectiveness of the
program.

Lawrence and Lorsch’s Approach


According to Lawrence and Lorsch's approach, an OD program can be implemented
in four steps – diagnosis, planning action, implementing action and evaluation. It
suggests that an OD program is of an iterative nature in which the first step starts
immediately after the fourth step ends.

Lippitt’s Approach
According to Lippitt’s approach proposed by G.L. Lippitt, OD program has three
steps – crisis, process of interfacing and appropriate response.

Blake and Mouton’s Approach


According to R.R. Blake and J.S. Mouton, the OD program has six phases. The
activities performed by managers in each phase are given below:
i. Understanding theories related to organizational behavior, especially the
managerial grid theory.
ii. Understanding the actual behavior of the team in the context of the managerial
grid to improve team processes.
iii. Repeating the above activities for all the organizational units that are
interdependent and require high level of cooperation and coordination between
their employees and activities for efficient functioning.
iv. Involving the top management in the identification of a strategic corporate model
that can optimize the profitability of the organization.
v. Developing steps for bringing about changes in the organization in an effort to
transform it into the ideal model.
vi. Comparing the condition of the organization in phase (i) with that in phase (v)
within the parameters of organizational stability, formulation of goals and
objectives and their accomplishment. The goals and objectives of the
organization can also be reassessed to match the new (ideal) model of the
organization.

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Organizational Behavior

Warner Burke’s Approach


Warner Burke’s approach to OD program has the following seven phases:
Entry: In this phase, the management of an organization (client) approaches external
consultant. The consultant tries to explore the reasons that compelled the client to seek
external help, the nature of the problem and whether it is feasible to conduct an OD
program for that particular problem .
Contracting: In this phase, the client and consultant discuss the intensity of the
problem being faced by the former. Both the parties communicate their expectations
to each other. The client may expect the consultant to identify and resolve the
problems in the organization. They may discuss the amount of time and effort that
each party needs to spend to help the organization achieve its goals. This stage ends
when an agreement is reached between both the parties.
Diagnosis: In this phase, the consultant establishes contact with the employees of the
organization. He takes their interview to obtain a general view, observes the
workplace and its processes, distributes questionnaires to get employees’ indepth view
and studies the records to understand work rules of the organization. He analyzes the
information collected from these sources and attempts to diagnose the organization’s
problems and their causes.
Feedback: In this phase, the consultant presents to the employees of client
organization, the information analyzed from the raw data. The employees may
confirm the accuracy of data, supply further details for better understanding of the
organizational situation and identify the problems and opportunities.
Planning change: Under the guidance of the consultant, the members of the client
organization, determine the action to be taken based on the information given to them.
In this stage, the various alternatives available are closely studied. They also develop
plans for implementing the action.
Intervention: The plans developed in previous steps to resolve the problems or exploit
the opportunities are implemented in the organization. Various OD techniques may be
used to train employees and build teams, to efficiently carry out the program.
Evaluation: The OD program is evaluated to measure its impact on employees,
organizational processes, and overall function of the organization.
Beckhard’s Approach
R Beckard’s approach to OD is known as Beckard’s approach. According to this
approach, OD program can be implemented in five steps – diagnosis, strategy
planning, education, consulting and training and evaluation.
Diagnosis: This phase involves taking a comprehensive view of the organization and
identifying whether there is any need for change.
Strategy planning: If the above step confirms the need for change, the management
chalks out an action plan for change. It also formulates a strategy for the
implementation of change. The strategy includes the activities to be undertaken by the
management in bringing the change, the sequence in which change is to be introduced
in the various units/departments of the organization and the resources to be allocated
for the change program.
Education: The managers attend lectures given by OD experts, participate in seminars
and other training programs to equip themselves with skills that would enable them to
cope with change and improve the efficient working of the organizations.

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Organization Development and Change

Consulting and Training: The management approaches an external consultant to


discuss the ways to improve the existing organizational practices or the introduction
of new practices.
Evaluation: The change program is constantly assessed to know its impact on the
organization.
SUMMARY
Change, in general, indicates any act of making something different. The factors that
necessitate change in organizations are broadly categorized into people, technology,
information processing and communication, and competition. Some changes in the
organization occur suddenly without the conscious efforts of the people. These are
called unplanned changes. On the other hand, some changes are initiated by the
management to accomplish certain goals and objectives. These are called planned
changes. More often, change is met with resistance. The resistance can be implicit (or
covert) or explicit (or overt). Resistance to change can be classified into individual
resistance and organizational resistance. Individuals resist change because they
consider it as a threat to their habits, security and economic conditions. Organizational
resistance occurs mainly because of structural inertia, group inertia, fear of losing
power, expertise or control over resources. To overcome resistance to change,
management can educate employees, involve employees in change decisions, go for
negotiation, manipulation, co-optation and coercion. The approaches to managing
planned change include Lewin’s three step model and Action research. The three step
model suggests that organizations can bring permanent changes in employee behavior
by making them unlearn old behaviors and work procedures. Action research is a
scientific approach towards managing planned change that involves systematically
collecting data and taking action based on the analysis of data analyzed.
Organization Development (OD) is a unique organizational improvement strategy.
The sets of structured/planned activities adopted by groups or individuals in an
organization as a part of the organization development program, are known as OD
techniques or OD interventions. While change programs may involve either external
or internal consultants, OD interventions mostly involve external consultants. Some
OD interventions include sensitivity training, survey feedback, process consultation,
team interventions and intergroup interventions. OD programs consists of four
phases:- (i) Diagnosing the problems of the organization, (ii) Developing plans for
change, (iii) Implementing change plans in the organization, (iv) Follow-up and
evaluation. Different OD practitioners have different approaches towards the
implementation of OD program. Some of the approaches discussed in this chapter are
Blake and Mouton’s approach, Abad’s model, Warner Burke’s approach and
Beckhard’s approach.

353
Chapter 17

Quality of Work Life –


Emerging Trends
In this chapter we will discuss:
 Need for Innovative Approaches
 The Concept of Quality of Work Life (QWL)
 Benefits and Potential Difficulties of QWL
 Strategies for Improving QWL
 Self Managed Teams: An Approach to QWL
Quality of Work Life – Emerging Trends

The scientific approach towards management and organization resulted in a rigid


structural hierarchy, exhaustive specialization of jobs, deployment of unskilled labor
and an unfavorable work environment. This led to high employee turnover, decline in
productivity, absenteeism and consequently, a group of demotivated employees.
Modern managers have realized the need to develop a work climate that motivates the
employees to perform better in order to enhance the productivity of their organizations.
This realization gave birth to a concept called “Quality of Work Life” (QWL).
QWL deals with the impact of work and the work environment on employees and
organizational productivity. It focuses on improving the conditions of work to create a
supportive and healthy work environment.
In this chapter, we will examine innovative approaches towards improving
organizational structures and the growing relevance of the concept of QWL. We will
discuss the objectives and benefits of implementing QWL and also take a look at the
difficulties encountered in the implementation process. This chapter also touches on
modern approaches to QWL.

NEED FOR INNOVATIVE APPROACHES

The early 1990s saw the emergence of a considerable number of Behavioral Science
interventions in the management of organizations. Interventions such as QWL, job
enrichment, job rotation and job redesign aimed at improving the health and overall
effectiveness of organizations through a series of planned changes. The need to change
and the need to discover innovative approaches to designing and managing
organizations was triggered by a number of factors. These factors are discussed below.

Need to Improve the Work Environment


In the early 90s, many people began to feel that organizations failed to provide a
stimulating work environment for their workers. In order to study the impact of the
work environment on organizational performance, a survey of important organizations
in the European Union was conducted by The European Foundation for the
Improvement of Living and Working Conditions (European body set up in 1975 to
contribute to the planning and establishment of better living and working conditions).
The survey revealed that most organizations had unhygienic work places and many
physical constraints (space, ventilation, lighting, etc.). In addition, social interaction
was non-existent in these organizations. This work environment had a negative impact
on employees, both physically and psychologically. This physical and mental stress
experienced by the employees affected the profitability of organizations. The decline in
profits made organizations feel the need to change their approach to organizing and
managing.

Opportunities and Threats in the Wake of Globalization


Over the last decade, many developing countries (including India) liberalized their
economies. Liberalization brought about deregulation of markets and provided
domestic companies with the impetus to produce goods and services of international
quality, on par with those manufactured by multinational organizations. This boosted
the economies of developing countries. However, the deregulation of markets also
threatened the domestic industries which had, till then been protected by the
government. Companies in such industries feared that they would be wiped out of the
market. Even the highly competitive North American companies feared that they
would not survive the stiff competition offered by the Japanese and Korean companies.
Consequently, these companies felt the need to improve the quality and reduce the
costs of their products to achieve the levels of the Japanese and Korean companies.

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Organizational Behavior

They also realized that they can improve the quality and productivity levels of the
organizations by improving not only the production technologies but by discovering
new approaches to organizing and managing business as well.

Diminishing Rates of Growth in Productivity


Although the productivity of organizations in a few developing countries was on the
rise, the productivity rates, even in countries like Japan and Korea, were not as high as
was during the previous years. The deteriorating productivity levels exposed the ill-
health and the ineffectiveness of the organizations. This increasing inefficiency of
organizations began to have a negative impact on the motivation and satisfaction levels
of the employees. This became a major cause of concern for the management. A probe
into modern approaches to management and organization became inevitable to increase
productivity, and enhance the profitability of organizations.

Need to Keep Pace with the Technological Changes


Advances in technology led to the introduction of newer and easier ways of
accomplishing complex, monotonous and repetitive tasks in organizations. Technology
plays a vital role in raising the productivity and quality of work of employees. In many
organizations, the replacement of humans with complex micro-computers, has led to a
reduction in operational costs and an increase in productivity. It is therefore necessary
for organizations to not only participate in this technological revolution but also to
constantly keep pace with rapid changes in technology. Organizations have to discover
modern approaches to organizing in order to effectively implement new technologies
and enhance and sustain productivity and profitability.

Revolutionary Change in the Profile of the Workforce


Nowadays the labor force in modern organizations is much more educated, informed,
affluent, independent and refined than it was a few decades ago. An increasing number
of women are being employed in areas that were previously male-dominated. The
invasion of technological revolution led to large-scale unemployment in most
developing countries. This lowered the motivational levels of employees, leading to
lower rates of productivity. The above developments in the labor market have forced
organizations to innovate better ways of managing.

THE CONCEPT OF QUALITY OF WORK LIFE (QWL)


A more worker-oriented approach to organizing than that proposed by the Scientific
theory of Management by F W Taylor, was the concept of “Quality of Work Life”
(QWL). The activities of QWL were spurred off by a series of attitudinal surveys
conducted at the University of Michigan between 1969 and 1973. These surveys
sought to find ways to improve the quality of life of individuals at the work place. The
objective of these surveys was to draw the attention of managements of organizations
to the quality of employment.
The term “QWL”, coined by Louis Davis, gained wider acceptance after the Arden
House Meet in New York in 1972. The meet also paved way for the establishment of
the International Center of QWL.
QWL may be defined as the extent to which the environment at the work place
stimulates or hinders the productivity of the employees. It can also be defined as “the
quality of relationship between employees and the total working environment.”1

1
Davis, L.E., ‘Learning from the design of New Organizations,’ in H F Kolondy and
H Van Beinum (eds.), The Quality of Working Life and the 1980s (New York:
Praeger, 1983) 80.
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Quality of Work Life – Emerging Trends

QWL programs aim at developing work conditions that satisfy employee needs. The
satisfaction of employees can be determined by the degree to which an employee is
“engaged.” The term “engaged” refers to the emotional and intellectual involvement of
the employees. And the key drivers for this “engagement” are the work design, the
opportunities offered by the job and the recognition received on completion of the job.
QWL activities focus on these key drivers for employee engagement. Therefore QWL
activities must cater to the follow physical and emotional needs of employees.

Provision of a Safe and Healthy Environment


Organizations must provide its employees with a safe and hygienic work place that not
only safeguards their health but also stimulates and encourages them to perform well.
They should provide a workplace that stimulates and encourages employees to perform
well. Organizations should also strive to ensure that employees are not exposed to
undue job stress. They can achieve this by developing a structure and hierarchy that
does not pose a threat to the employees’ sense of security. A QWL activity, initiated by
the organization, should therefore cater to the physical needs of employees.

Establishment of Effective Supervision and Management


The onus of creating a work environment that attracts, keeps and motivates the
workforce lies entirely on the managers and supervisors. The managers and supervisors
should make their subordinates feel important and satisfied. They must make them feel
proud about their job and their organization and must encourage them to explore their
finer skills at work, thus raising their productivity. Supervisors and managers should
communicate honestly and explicitly to subordinates, their expectations of behavior at
the workplace. They must also serve as role models for their subordinates. Managers
and supervisors should therefore be properly selected, trained and held accountable for
all relevant management results, as it is they who have the biggest impact on the
morale and motivation of the employees. QWL activities must, therefore establish an
effective supervision and management system.

Adequate and Fair Compensation


Organizations must aim at providing employees adequate and fair compensation. The
compensation should not only be competitive but also motivate and retain them in the
organization. QWL activities must therefore seek to develop a variable pay system that
adequately recognizes good performance and encourages the employees to raise their
productivity levels.

Development of Work Skills


A positive work environment develops the skills and capacities of the workforce. QWL
activities introduced by the organization, must create learning opportunities for
employees, thereby facilitating the all round development of the human capital of
organizations.

Creation of a Positive Attitude towards Work and the Organization


A positive attitude at work would motivate the employees to constantly raise their
productivity levels, thereby enhancing their job satisfaction. Therefore, QWL activities
should strive to inculcate a positive attitude in employees towards their work and the
organization.

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Organizational Behavior

Effective Management of Change and Transition


Effective management of change and transition in various aspects of management like
technology, and organizational structure is one of the important areas of concern for
organizations. QWL activities must therefore prepare the organizations and the
employees to adapt to change, thereby facilitating transition of the organization from
one stage of development to another.

Exhibit 17.1
Quality of Work Life at GE Plastics
GE Plastics, a division of GE, is well known for its innovations in resins and many other materials.
GE Plastics assures complete support to all its employees on both professional and personal fronts.
Apart from creating a friendly and stimulating work environment, GE Plastics also extends support to
its employees in their domestic lives. It offers comprehensive services to its employees in the
following areas:
 Parenting Assistance – The company assures complete assistance in childcare or adoption
processes. It extends financial support for the education of children and also provides parents
with confidential and expert counseling in raising children and balancing work and family.
 Educational Counseling – Provides career guidance to children of employees from kindergarten
to graduation. Assists in exploring the various sources of financial aid.
 Elder Care Assistance – The company helps employees find resources for home safety and
making living arrangements for dependents. It even helps employees develop their own
retirement plans.
 Financial Assistance – Provides resources and information in areas like budgeting, saving,
investment plans, buying a home etc.
 Legal Advice – Assists in providing legal resources for sorting out problems regarding family
law, immigration, tenant’s rights etc.
 Work Advice – Supports employees with expert advice on issues like handling stress, managing
relationships and dealing with change.
 Managing Health – Provides employees and their families with adequate medical assistance like
hospital care, health screenings, vision care, mental health and abuse treatment.
 Health Care – Provides workers access to quality, comprehensive medical coverage through a
network of health care providers.
 Other Services – Provides its employees with services like dental care and disability plan. The
disability plan provides employees with short and long term income replacement in case illness
or injury prevents them from working. It also supports insurance plans, pension plans, holiday
plans and even job-loss plans.
Such a caring and motivating work environment has helped GE Plastics increase not only employee
satisfaction levels but also productivity levels.

Adapted from “Life at GE Plastics,” GE Plastics, 10 Aug. 2003, <www.geplastics.com>

Therefore, from the management’s point of view, QWL programs increase the
participation of workers in the decision making process and improve the productivity
of the organizations through the all round development of employees. From the point
of view of employees, QWL activities provide them with a more worker-friendly work
environment. QWL activities also provide opportunities for employees to upgrade their
skills, thus contributing to their professional advancement. Such programs also help in
recognizing, encouraging and rewarding employees’ personal skills and abilities. The
workers also view QWL activities as tools for achieving their personal goals (Refer to
Exhibit 17.1 and 17.2)

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Quality of Work Life – Emerging Trends

Exhibit 17.2
QWL Initiatives at Texas Instruments
Texas Instruments Incorporated (TI) is a world leader in digital signal processing, analog technologies
and semiconductor engines. TI has always been an employee-friendly company. It has worked hard to
implement QWL programs that help its people balance work and personal life outside the office. It
has always encouraged its employees to achieve their professional and personal goals. These QWL
efforts have improved employee morale and, consequently reduced employee turnover and increased
productivity and profitability.
TI’s successful QWL initiatives have contributed greatly to its profitability. Some of the QWL
initiatives implemented at TI are described below.
 Flexible Work Arrangements – TI offers a variety of flexi-time options for its employees,
ranging from part time work to job sharing. These options allow employees to select the most
convenient time and place of work. Compressed work weeks and work from home are common
at TI. Flexible work arrangements provide employees with sufficient time for their personal tasks,
thereby improving the quality of their work.
 LifeWorks – This is an information center which provides information on educational institutions
for employees. Programs relating to parenting, educational planning, and work-life balance are
also available through this center.
 ABC – In 1995, TI along with 21 other US companies joined the American Business
Collaboration for Quality Dependent Care (ABC). Through ABC, these companies sought to
improve the availability and quality of dependent care resources (resource centers for taking care
of children and senior citizens) in their local communities. These companies work together to
conduct training sessions for child care providers, emergency and back-up child care programs
and elder care programs.
 Parents Network – The Parents Network facilitates the exchange of information among
employees with young children. It enables them to exchange information and experiences of
parenting.
 New Mothers Room – TI provides a room for nursing mothers with all the necessary facilities for
promoting infant health through breast feeding, thus proving to be a mother-friendly work place.
 Summer Time Kids Camp – TI holds a summer camp for its employees’ children at its fitness
facility. The 10-week program is run by Bright Horizons Family Solutions, a reputed corporate
childcare company.
 Seminars – A variety of seminars and workshops are conducted by TI to help employees
understand various work/life issues. Some of the topics discussed are parenting, elder care,
education, stress management and financial planning.
 Health Excellence – TI offers programs and services that help employees maintain a healthy
lifestyle.
 Adoption Benefits – TI offers an adoption benefit plan which enables its employees to bear the
expenses of child adoption, by offering reimbursements up to $4000.
Apart from these benefits, TI also extends other benefits like education assistance, life insurance
options, confidential counseling for employees and recreation outlets to ensure complete employee
satisfaction. These QWL initiatives have made TI a great place to work in.

Adapted from “Corporate Citizenship,” Texas Instruments, 10 Aug. 2003, <www.texasInstruments


.com>

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BENEFITS AND POTENTIAL DIFFICULTIES OF QWL

Implementation of QWL initiatives not only brings various benefits to organizations


and their workers but is also accompanied by certain difficulties and risks. In this
section we discuss the various benefits and potential difficulties of QWL.

Benefits of QWL
An effective QWL initiative leads to the creation of a healthy, satisfied and productive
workforce, which brings about the development of efficient, adaptive and profitable
organizations. QWL activities, that provide a safe and healthy environment, develop a
positive attitude in employees towards their jobs and their organizations. Effective
QWL activities also provide employees opportunities for learning and professional
growth. They enhance employee-participation in the process of organizational
decision-making and foster better communication between labor and management,
which in turn, smoothens labor-management relations. QWL activities ensure fair
compensation and security for workers, thus motivating them to perform better, work
regularly and be loyal to their organizations. QWL activities encourage interaction
between the individual and the organization to satisfy each other’s needs and
expectations. By doing so, QWL activities build mutual trust among the members of
the organization.
There are many companies which have been benefited by implementing QWL
initiatives. Johnson & Johnson, which implemented QWL initiatives as benefited in
numerous ways. To improve the quality of work life, J&J offered a Health and
Wellness Program (HWP) to its employees in the US. The HWP offered not only
assistance to its employees (which helped them maintain a balance between their
personal and professional lives) and benefits packages, but also several family-friendly
policies and excellent professional development opportunities. This initiative saved
J&J $8.5 million per annum in the form of reduced employee medical claims and
administrative savings. Moreover, within two years of implementing HWP, J&J
witnessed a 15% decline in the rate of absenteeism.

Potential Difficulties of QWL


Although all QWL initiatives aim at improving organizational processes, the
implementation of such initiatives poses some difficulties. Problems arise when QWL
initiatives are collaboratively launched by the management and the union. In such a
case, management feels that a collaborative venture initiated by the union might result
in loss of managerial control over the union. If such a venture is initiated by the
management, the union fears that it might be overpowered by the management. Such
perceptions may have a negative effect on the relationship between the two parties.
The above difficulties can be minimized if there is mutual trust between the two parties
and management and the union accept some general norms regarding the
implementation of QWL initiatives. These initiatives can also be successful if there is
open acknowledgment of the benefits each party would enjoy. The establishment of a
charter for QWL specifying the ground rules, responsibilities and authorities of both,
the management and the union would also help sustain a harmonious relationship
between the two parties.

STRATEGIES FOR IMPROVING QWL


QWL is the shared responsibility of the management and the union. Both parties must
participate equally in the implementation of QWL initiatives. J.Richard Hackman and
J.L.Suttle have recommended six strategies to improve QWL in organizations.

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Effective Career Guidance


Managers and supervisors must provide career guidance to their subordinates right
from the initial stages to the mid and later stages of career planning. The management
should develop career paths for employees, counsel workers, provide them with
adequate information regarding their career, train them, and periodically assess their
skills. This exercise would help sustain the productivity of employees and also help
them prepare for any change in the work environment or organizational setting. Career
guidance can be made more effective if such career development activities are taken up
in coordination with other activities carried out by the Human Resource Management
department.

Reward Systems
An effective reward system will lead to the creation of a skilled, committed, competent
and motivated workforce which in turn will bring about an increase in the productivity
and profitability of the organization. The reward system may be financial or non-
financial in nature. Financial rewards include an increase in salary or special
performance bonus. These rewards should be commensurate with the performance and
contribution of the individual towards the productivity of the organization. Non-
financial rewards include enhanced responsibility, opportunities for growth and
development along the career ladder, etc. The success of any reward system depends
on the degree of involvement of the participants and their perception of its value and
fairness. Organizational reward systems are therefore very complex in nature and need
to be designed carefully. Improved communication systems go a long way in
contributing to the success of any reward system.

Role of Supervision and Management


An organization’s existing managerial practices have an immense impact on the
implementation of QWL initiatives. The supervisors and managers play an important
role in determining the success of QWL programs as they act as facilitators between
the management and the union. They influence the productivity of the workers and the
success of QWL initiatives by the way they treat their subordinates and motivate them
to enhance the quality of work. They also affect the output of employees through their
influence on the design of jobs, the development of the reward system and the
development of teamwork. The supervisor also influences the participation of the
employees in crucial decision making activities.

Job Design
Job design has a tremendous impact on the motivation, satisfaction and productivity of
employees. It must therefore ensure that the optimal quantity of work is carried out by
employees, that responsibilities are supported by adequate powers and that the work
satisfies the workers and enables them to move up the career ladder. However, there
exists no specific job design strategy to improve the quality of work life. The
management should therefore encourage the involvement of workers in designing jobs.

Design and Maintaining Group and Inter-group Relationships


The management of an organization is responsible for designing and maintaining inter-
group relationships. Groups may be formed by virtue of the tasks they perform or the
hierarchy existing in organizational structures. They may even be based on the social
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Organizational Behavior

and personal characteristics of the workers. To improve the quality of work life,
management should pay attention to the dynamics of intra-group and inter-group
relationships. A variety of behavioral science interventions (like inter-group meetings
etc.) may be used to minimize the unfavorable effects of inter-group conflicts, thereby
improving the quality of work life. These interventions tend to increase communication
and interaction between work-related groups and decrease the amount of dysfunctional
competition.

SELF MANAGED TEAMS : AN APPROACH TO QWL

A Self Managed Team (SMT) refers to a group of employees formed to accomplish a


common objective. A SMT is directed by a team leader. The members of the team are
granted decision making authority to accomplish the objectives of the team. They
participate in activities like designing the work methods, making hiring decisions and
sometimes even establishing the rates of pay.
Also called ‘autonomous work groups’ or ‘socio-technical teams’, Self Managed Team
aim at achieving a balance between the human and technical systems of an
organization. The team manages itself without any formal supervision. It is largely
guided by its team leader, who defines the end objectives of the group and facilitates
the success of the team. The team leader not only provides the necessary guidance to
his team, but also helps it obtain the required resources for the accomplishment of the
objectives. He is also responsible for encouraging the group to enhance its problem
solving and self-evaluation skills. He thus plays the role of a facilitator among the
members of the team. By doing so, he helps the organization make the transition from
a traditional hierarchical structure to a structure in which teams manage themselves.
Considerable time is spent on team meetings to facilitate the all round development of
the team members. This creates a shared sense of responsibility and accomplishment
among all the members of the team, and motivates them to perform better. Exhibit 17.3
discusses the transition of an organization into an effective SMT and the difficulties
faced by managers and supervisors during the transition phase.

Exhibit 17.3
The Managerial Transition to Self Managed Teams
The establishment of a Self Managed Team (SMT) is not possible without the participation of the top
management. The success of an SMT is largely determined by the extent to which the supervisors
and the managers are trained for their new role as facilitators.
The transition from a traditional hierarchical organizational structure to a modern, flat, self-managing
team structure necessitates significant adjustments on the part of managers. The adjustment is not
easy as managers feel that a flat structure may reduce their power or status in the organization.
According to a study, during the transformation of a company into an SMT, managers revealed the
following behavior:
 Initial suspicion, uncertainty and resistance – The feeling of suspicion over the transition
stemmed from the apprehension that their past personal performance failures would be brought to
the attention of senior management. They also resisted the change because they did not want the
credit for the change to go to the external consultant (the consultant plays an important role in the
implementation of the change process). Moreover, they were not convinced about the success of
the initiative.

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Quality of Work Life – Emerging Trends

 Playing the role of a facilitator – Playing the role of a facilitator was not an easy task for the
managers as they had to deal with issues relating to communication within the team while
maintaining their image as team leaders. The supervisor also had the responsibility of resolving
new behavioral conflicts among the members of the team. New behavioral conflicts developed
because of the fact that all employees were given equal rights and responsibilities. The managers
felt that the team was not competent to manage itself. They also had to face the challenge of
acting as mere facilitators, instead of supervisors.
 Development of new modes of behavior – The managers faced a tough time developing a new
system of behavioral practices and modes of conversation required in their new role as
facilitators of self managed teams.
The organization finally transformed itself into a Self Managed Team due to a QWL initiative which
had the complete support of top management. This, in turn, laid the foundation for a new and
successful work system.

Adapted from "Preparing for organizational change to employee self management – The managerial
transition,"10th August 2003,Organizational Dynamics.

SUMMARY

Job discontent and declining productivity rates of employees working in organizations


that followed traditional managerial practices, paved the way for the emergence of
QWL initiatives to boost the motivation levels of employees and improve the health of
organizations. QWL is an important intervention which focuses on establishing a
workplace that encourages workers to perform well, thereby sustaining the productivity
and profitability of organizations. Effective QWL activities lead to the development of
a healthy, satisfied and productive workforce and creation of an efficient, adaptive and
profitable organization. However, QWL activities that have not been properly
implemented may destroy the harmonious relationship between the management and
the union. It is therefore essential to understand that QWL programs are the joint
responsibility of the management and the union. The concept of Self-Managed Teams
is a modern approach towards QWL. A SMT can be defined as a cohesive group
striving to achieve a common goal under the guidance of a team leader. The members
of a SMT are given appropriate responsibilities and sufficient powers to accomplish
their duties and achieve the team’s objective.

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