0% found this document useful (0 votes)
64 views64 pages

PMOB 1,2,3 Units Notes Kusuma Final

Uploaded by

wedevelopers107
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
0% found this document useful (0 votes)
64 views64 pages

PMOB 1,2,3 Units Notes Kusuma Final

Uploaded by

wedevelopers107
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 64

ii UNIT - I

INTRODUCTION TO MANAGEMENT

INTRODUCTION

In the present context, managing has become one of the most important areas of human
activity because of increasing role of large and complex organisations in the society. Because
of their increasing role, the organisations have attracted the attention of both practitioners and
academicians to find out the solutions for business problems.

Concept

Defining the term management precisely is not so simple because the term management is
used in a variety of ways. Being a new discipline, it has drawn concepts and principles from a
number of disciplines such as economics, sociology, psychology, anthropology, statistics and
so on.

Each group of contributors has treated management differently. For example, economists have
treated management as a factor of production; sociologists have treated it as a class or group of
persons; practitioners have treated it as a process comprising different activities.

DEFINITION :

“Management is the art of getting things done through and with people in formally organized
groups” --- Koontz

“Management is the art of knowing what you want to do and then seeing that it is done in the
best and cheapest way” – F.W. Taylor

“Management is the art of securing maximum results with minimum effort so as to secure
maximum prosperity and happiness for both employer and employee and give the public the
best possible service” --- John Mee.
“Management is the accomplishment of results through the efforts of other people”-
-Lawrence

“Management is simply the process of decision making and control over the action of human
beings for the expressed purpose of attaining pre-determined goals” – Stanley V.

“Management is a process involving planning, organizing, staffing, directing and controlling


human efforts to achieve stated objectives in an organization.”

FEATURES/ NATURE/ CHARACTERISTICS OF MANAGEMENT :

1) Multidisciplinary: Management has been developed as a separate discipline, but it


draws knowledge and concepts from various disciplines like psychology, sociology,
anthropology, economics, statistics, operations research etc.,. Management integrates
the idea and concepts taken from these disciplines and presents newer concepts which
can be put into practice for managing the organisations
2) Dynamic nature of Principles: Principle is a fundamental truth which establishes
cause and effect relationships of a function. Based on integration and supported by
practical evidences, management has framed certain principles. However, these
principles are flexible in nature and change with the changes in the environment in
which an organization exists.
3) Relative, Not absolute Principles: Management principles are relative, not absolute,
and they should be applied according to the need of the organization. Each
organization may be different from others. The difference may exist because of time,
place, socio-cultural factors, etc.,.
4) Management: Science or Art: There is a controversy whether management is science
or art.
An art is personal skill of business affairs. Art is characterized by practical knowledge,
personal creativity and skill. The more one practices an art, the more professional one
becomes. Management can be considered as an art because it satisfies all these
criterion of an art.
A science is a systematized body of knowledge of facts. It can establish cause-
and-effect relationships among various factors. It involves basic principles, which are
capable of universal application. Management can be considered as science because it
satisfies all these criterion of a science.
5) Management as profession: Management has been regarded as a profession by many
while many have suggested that it has not achieved the status of a profession.
Profession refers to a vocation or a branch of advanced learning such as engineering or
medicine.
6) Universality of management: Management is a universal phenomenon. However,
management principles are not universally applicable but are to be modified according
to the needs of the situation.

IMPORTANCE OF MANAGEMENT :

Management has been important to the daily lives of people and to the organisations. The
importance of management may be traces with the following.

1) Effective utilisation of Resources: Management tries to make effective utilisation of


various resources. The resources are scarce in nature and to meet the demand of the
society, their contribution should be more for the general interests of the society.
Management not only decides in which particular alternative a particular resource
should be used, but also takes actions to utilize it in that particular alternative in the
best way.
2) Development of Resources: Management develops various resources. This is true
with human as well as non-human factors. Most of the researchers for resource
development are carried on in an organized way and management is involved in these
organized activities.
3) It ensures continuity in the organization: Continuity is very important in the
organisations. Where there are no proper guidelines for decision making continuity
cannot be guaranteed. It is quite natural that new people join while some others retire
or leave the organization. It is only management that keeps the organization
continuing.
4) Integrating various interest groups: In the organized efforts, there are various
interest groups and they put pressure over other groups for maximum share in the
combined output. For example, in case of a business organization, there are various
pressure groups such as shareholders, employees, govt. etc. these interest groups have
pressure on an organization. Management has to balance these pressures from various
interest groups.
5) Stability in the society: Management provides stability in the society by changing and
modifying the resources in accordance with the changing environment of the society.
In the modern age, more emphasis is on new inventions for the betterment of human
beings. These inventions make old systems and factors mostly obsolete and inefficient.
Management provides integration between traditions and new inventions, and
safeguards society from the unfavorable impact of these inventions so that continuity in
social process is maintained.

FUNCTIONS OF MANAGEMENT :
To achieve the organisational objectives managers at all levels of organization should perform
different functions. A function is a group of similar activities.
The list of management functions varies from author to author with the number of functions
varying from three to eight.

Writers Management Functions


Henry Fayol Planning,Organizing,Commanding,Coordinating,
LutherGullick Controlling
R. Davis POSDCORD-Planning,Organising,Staffing,Directing,
E.F.L.Breech Coordinating, Reporting, Directing
Koontz Planning,Organising,Controlling

Planning,Organising,Motivating,Coordinating, Controlling

Planning,Organising,Staffing,Leading, Controlling
Different authors presented different variations. By combining some of the functions,
these are broadly grouped into Planning, Organising, Staffing, Directing, and Controlling.

1) Planning: Planning is the conscious determination of future course of action. This


involves why an action, what action, how to take action, and when to take action. Thus,
planning includes determination of specific objectives, determining projects and
programs, setting policies and strategies, setting rules and procedures and preparing
budgets.

2) Organising: Organising is the process of dividing work into convenient tasks or duties,
grouping of such duties in the form of positions, grouping of various positions into
departments and sections, assigning duties to individual positions, and delegating
authority to each positions so that the work is carried out as planned. It is viewed as a
bridge connecting the conceptual idea developed in creating and planning to the
specific means for accomplishment these ideas.

3) Staffing: Staffing involves manning the various positions created by the organizing
process. It includes preparing inventory of personal available and identifying the
sources of people, selecting people, training and developing them, fixing financial
compensation, appraising them periodically etc.

4) Directing: when people are available in the organization, they must know what they
are expected to do in the organization. Superior managers fulfill this requirement by
communicating to subordinates about their expected behavior. Once subordinates are
oriented, the superiors have continuous responsibility of guiding and leading them for
better work performance and motivating them to
work with zeal and enthusiasm. Thus, directing includes communicating, motivating and
leading.

5) Controlling: Controlling involves identification of actual results, comparison of actual


results with expected results as set by planning process, identification of deviations
between the two, if any, and taking of corrective action so that actual results match
with expected results.
EVOLUTION OF MANAGEMENT THOUGHT :

14

TAYLOR & SCIENTIFIC MANAGEMENT :

The concept of scientific management was introduced by Frederick Winslow Taylor


in USA in the beginning of 20th century.

“Scientific management is concerned with knowing exactly what you want to do and then see
in that they do it in the best and cheapest way”

Since Taylor has put the emphasis on solving managerial problems in a scientific way, often,
he is called as father of scientific management and his contributions as the principles of
scientific management. Taylor carried experiments about how to increase the efficiency of
people. On the basis of experiments, he published many papers and books and all his
contributions were compiled in his book “scientific management”. His contributions are
divided into two parts.
 Elements and tools of scientific management
 Principles of scientific management

FEATURES/ELEMENTS AND TOOLS OF SCIENTIFIC MANAGEMENT :

1) Separation of planning & doing: Taylor emphasized the separation of planning


aspect from actual doing of the work. In other words planning should be left to the
supervisor and the worker should concentrate only operational work.
2) Functional foremanship: Taylor introduced the concept of functional foremanship
based on specialization of functions. In this system, eight persons are involved to direct
the activities of workers. Out of these four persons are concerned with planning viz.,
route clerk, instruction card clerk, time and cost clerk and disciplinarian. The
remaining four persons are concerned with doing aspect of the job, viz., speed boss,
inspector, gang boss and maintenance foreman. It is against to the principle of unity of
command.

1) Job Analysis: It is useful to find out the one best way of doing the things. The best
way of doing a job is one which requires the least movements, consequently less time
and cost. The best way of doing the thing can be determined by taking up time –
motion - fatigue studies.
 Time study involves the determination of time a movement takes to complete.
 Motion study involves the study of movements in parts which are involved in
doing a job and thereby eliminating the wasteful movements.
 Fatigue study shows the amount and frequency of rest required in completing
the work.
Thus, job analysis identifies the fair amount of a day’s work requiring certain
movements and rest periods to complete it.
2) Standardization: As far as possible, standardization should be maintained in respect
of instruments and tools, period of work, amount of work, working conditions, cost of
production etc.,. These things should be fixed in advance on the basis of job analysis
and various elements of costs that in performing a work.
3) Scientific selection and training of workers: Taylor has suggested that workers
should be selected on scientific basis taking into account their education, work
experience, aptitude, physical strength, etc., A worker should be given work for which
he is physically and technically most suitable. Apart from selection, proper training
should be provided to workers to make them more effective and efficient.
4) Financial Incentives: Financial incentives can motivate workers to put intheir
maximum efforts. If provisions exist to earn higher wages by putting in extra effort,
workers will be motivated to earn more. Taylor himself applied the concept of
differential piece rate system which was highly motivating. According to this scheme,
a worker who completes the normal work gets wages at higher rate per piece and one
who does not complete gets at lower rate.
5) Economy: while applying scientific management, not only scientific and technical
aspects should be considered but adequate consideration should be given to economy
and profit. The economy and profit can be achieved by making the resources more
productive as well as by eliminating the wastages.

PRINCIPLES OF SCIENTIFIC MANAGEMENT :

Taylor has given certain basic principles of scientific management.

1) Replacing rule of thumb with science: According to Taylor, exactness of various


aspects of work like day’s fair work, standardization in work, differential piece rate for
payment, etc.., is the basic core of scientific management, it is essential that all these
are measured precisely and should not be based on mere estimates.
2) Harmony in group action: Taylor has pointed out that attempts should be made to
obtain harmony in group action rather than discord. Group harmony suggests that there
should be mutual give and take situation and proper understanding so that group as a
whole contributes to the maximum.
3) Co-operation: Scientific management involves achieving cooperation rather than
chaotic individualism. It is based on mutual confidence, co-operation and goodwill.
Co-operation between management and workers can be developed through mutual
understanding and a change in thinking.
4) Maximum output: scientific management involves continuous increase in production
and productivity instead of restricted production either by management or by worker.
Taylor heated inefficiency and deliberate curtailment of production.
In his opinion, “there is no worse crime to my mind than that of deliberately restricting
output”
5) Development of workers: all workers should be developed to the fullest extent
possible for their own and for the company’s highest prosperity. Training should be
provided to the workers to keep them fully fit according to the requirement of new
methods of working which may be different from non- scientific methods.

FAYOL’S ADMINISTRATIVE MANAGEMENT :

Henry Fayol is a French Industrialist and the father of modern operational management
theory. Fayol recognized the following organizational activities.

Organizational Activities: Fayol divided the activities of organization into six groups---
 Technical (related to production)
 Commercial ( buying, selling and exchange)
 Financial (search for capital and its optimum use)
 Security (protection of property and person)
 Accounting
 Managerial (planning, organizing, commanding, coordinating and controlling)
Among the above activities Fayol considered managerial activities are the most important for
the success of business and he concentrated more on that. His contributions are divided the
following categories.
 Qualities of a manager
 General principles of management
 Elements of management

Managerial Qualities and Training: According to Fayol the following are the list of qualities
required in a manager.
 Physical (Health, Vigor and Health)
 Mental (Ability to understandand learn, judgment, mental vigor and capability)
 Moral (energy, firmness, initiative, loyalty, tact etc.,)
 Educational
 Technical (peculiar to the function being performed)
 Experience

GENERAL PRINCIPLES OF MANAGEMENT:

Fayol has given 14 principles of management. He has made distinction between management
principles and management elements. While management principles is a fundamental truth and
establishes cause effect relationship, elements of management denotes the function performed
by a manager.

While giving the management principles, Fayol has emphasized two things.
1. The list of management principles is not exhaustive but suggestive and has discussed
only those principles which he followed on most occasions.
2. Principles of management are not rigid but flexible

PRINCIPLES :

1. Division of work: It is helpful to take the advantage of specialization. Here, the work is
divided among the members of the group based on the employees skills and talents. It can
be applied at all levels of the organization.
2. Authority and Responsibility: Fayol finds authority as a continuation of official and
personal factors. Official authority is derived from the manager’s position and personal
authority is derived from personal qualities such as intelligence, experience, moral worth,
past services, etc., Responsibility arises out of assignment of activity. In order to discharge
the responsibility properly, there should be parity between authority and responsibility.
3. Discipline: All the personal serving in an organization should be disciplined. Discipline is
obedience, application, behavior and outward mark of respect shown by employees.
4. Unity of Command: Unity of command means that a person should get orders from only
one superior. Fayol has considered unity of command as an important aspect in managing
an organization. He says that “should it be violated, authority is undermined, discipline is
in jeopardy, order disturbed, and stability threatened.”
5. Unity of Direction: According to this principle, each group of activities with the same
objective must have one head and one plan. It is concerned with functioning of the
organization I respect of grouping of activities or planning. Unity of direction provides
better coordination among various activities to be undertaken by an organization.
6. Subordination of individual interest to general interest: Individual interest must be
subordinate to general interest when there is conflict between the two. However factors
like ambition, laziness, weakness, etc., tend to reduce the importance of general interest.
Therefore, superiors should set an example in fairness and goodness.
7. Remuneration to Personnel: Remuneration to employees should be fair and provide
maximum possible satisfaction to employees and employers. Fayol did not favor profit
sharing plan for workers but advocated it for managers. He was also in favor of non-
financial benefits.
8. Centralization: Everything which goes to increase the importance of subordinate’s role is
decentralization; everything which goes to reduce it is centralization. The degree of
centralization or decentralization is determined bythe needs of the company.

9. Scalar Chain: There should be a scalar chain of authority and of communication ranging
from the highest to the lowest. It suggests that each communication going up or coming
down must flow through each position in the line of authority. It can be short-circuited
only in special circumstances. For this purpose, Fayol has suggested ‘gang plank’

10. Order: This is a principle relating to the arrangement of things and people. In material
order, there should be a place for everything and everything should be in its place.
Similarly, in social order, there should be the right man in the right place.

11. Equity: Equity is the combination of justice and kindness. Equity in treatment and
behavior is liked by everyone and it brings loyalty in the organization. The application of
equity requires good sense, experience and good nature.

12. Stability of tenure: No employee should be removed within short time. There should be
reasonable security of jobs. Stability of tenure is essential to get an employee accustomed
to new work and succeeding in doing it well

13. Initiative: Within the limits of authority and discipline, managers should encourage their
employees for taking initiative. Initiative is concerned with thinking out and execution of a
plan. Initiative increases zeal and energy on the part of human beings.

14. Esprit de corps: It is the principle of ‘union is strength’ and extension of unity of
command for establishing team work. The manager should encourage esprit de corps
among his employees.

SOCIAL RESPONSIBILITIES OF MANAGEMENT :

A sense of responsibility to society and everything that accompanies it is social responsibility. In other
words, “social responsibility” means that management is responsible not only to its shareholders but to
the entire community. In general, social responsibility is a decisive feature of capitalism. Individuals
and customers trust that companies “do the right thing” and lead the world to a better place.

SOCIAL RESPONSIBILITIES OF MANAGERS


Managers’ social responsibility is their obligation and commitment to safeguard and improve society’s
welfare while also protecting their interests. For the following reasons, managers have social
responsibility:
 Organizational Resources: A company’s resources include people, money, competencies, and
functional expertise. When an organization possesses these resources, it can better work for societal
objectives.
 Precautionary step: If a company waits too long to address social difficulties, it will end up
putting out social fires, leaving no time to achieve its purpose of creating goods and services. It is more
cost-effective to address social concerns before they evolve into disasters that consume a significant
amount of management time.
 Moral Obligation: It has been determined that accepting managers’ social duty is a morally
appropriate viewpoint. It is the organization’s moral responsibility to assist in resolving or eliminating
societal problems.
 Efficient and Effective Personnel: Recruiting employees has become easier for socially
responsible organizations. Employees are drawn to organizations that are more socially responsible.
Tobacco companies, for example, may have a difficult time finding individuals with excellent skills
and abilities.
 Better Organizational Environment: Organizations most sensitive to improving the quality of
life of society will benefit from a better society for doing business. It makes it easier to hire employees
and improves the quality of their employees. Employee volatility and absenteeism are minimized. As a
result of all social changes, crime rates are lower, which means less money is spent on taxes and land
safety. As a result, a better society will create a better world.

SOCIAL AND ETHICAL RESPONSIBILITIES OF MANAGEMENT


Organizations need to be involved in the external environment to be truly productive. The general or
macro-environment and the specific task environment are two types of external environments.
Corporate efforts to improve society while enjoying profits are known as social responsibility.
Shareholders, employees, customers, creditors, suppliers, society and government are the top six
stakeholders for which a company is responsible. The ability of a company to implement and engage in
policies that benefit both society and the company is known as the social response.
Contribution, quality of work, diversity policies, financing, direct business investment, volunteering,
recycling, customer care and pollution control are all evaluated when measuring social response. Social
audits were created in response to the need to monitor social reactions. There are two types of social
audits: government-mandated and voluntary audits. Social audits are not required by law, but many
companies include social information in their annual reports. This shows that prominent companies are
becoming more and more concerned about their social responsibility. The code of ethics of the
managers of an organization determines their ethical behaviour. In the long run, moral management is
beneficial to the organization.

IMPORTANCE OF SOCIAL RESPONSIBILITY OF MANAGEMENT


 Employee morale can be improved by social responsibility programmes, which leads to
increased productivity, which in turn affects the company’s profitability.
 Businesses that embrace social responsibility activities can improve customer retention and
loyalty.
 Employees with a sense of social responsibility can use the corporate resources at their disposal
to do good.
 Being a socially responsible business can help to improve a company’s image and brand.
 Employee morale can be improved by social responsibility programmes, which leads to
increased productivity, which affects the company’s profitability.
 Companies that employ social responsibility activities can improve customer retention and
loyalty.
 Socially responsible companies have the opportunity to differentiate themselves from their
competitors as they build profitable brand awareness.

General
Local Public Environmen
Community t

Government
Social Shareholder
or it’s
Responsibilities s or
Administrati
of Management Investors
ve Bodies

Consumers
or Employees
Customers or Workers

PLANNING :
Definition: Planning is the fundamental management function, which involves deciding beforehand,
what is to be done, when is it to be done, how it is to be done and who is going to do it. It is
an intellectual process which lays down an organisation’s objectives and develops various courses of
action, by which the organisation can achieve those objectives. It chalks out exactly, how to attain a
specific goal. Planning is nothing but thinking before the action takes place. It helps us to take
a peep into the future and decide in advance the way to deal with the situations, which we are going to
encounter in future. It involves logical thinking and rational decision making.

CHARACTERISTICS OF PLANNING :
1. Managerial function: Planning is a first and foremost managerial function provides the base
for other functions of the management, i.e. organising, staffing, directing and controlling, as they are
performed within the periphery of the plans made.
2. Goal oriented: It focuses on defining the goals of the organisation, identifying alternative
courses of action and deciding the appropriate action plan, which is to be undertaken for reaching the
goals.
3. Pervasive: It is pervasive in the sense that it is present in all the segments and is required at all
the levels of the organisation. Although the scope of planning varies at different levels and
departments.
4. Continuous Process: Plans are made for a specific term, say for a month, quarter, year and so
on. Once that period is over, new plans are drawn, considering the organisation’s present and future
requirements and conditions. Therefore, it is an ongoing process, as the plans are framed, executed and
followed by another plan.
5. Intellectual Process: It is a mental exercise at it involves the application of mind, to think,
forecast, imagine intelligently and innovate etc.
6. Futuristic: In the process of planning we take a sneak peek of the future. It encompasses
looking into the future, to analyse and predict it so that the organisation can face future challenges
effectively.
7. Decision making: Decisions are made regarding the choice of alternative courses of action that
can be undertaken to reach the goal. The alternative chosen should be best among all, with the least
number of the negative and highest number of positive outcomes.
Planning is concerned with setting objectives, targets, and formulating plan to accomplish them.
The activity helps managers analyse the present condition to identify the ways of attaining the
desired position in future. It is both, the need of the organisation and the responsibility of managers.
IMPORTANCE OF PLANNING :
 It helps managers to improve future performance, by establishing objectives and selecting a
course of action, for the benefit of the organisation.
 It minimises risk and uncertainty, by looking ahead into the future.
 It facilitates the coordination of activities. Thus, reduces overlapping among activities and
eliminates unproductive work.
 It states in advance, what should be done in future, so it provides direction for action.
 It uncovers and identifies future opportunities and threats.
 It sets out standards for controlling. It compares actual performance with the standard
performance and efforts are made to correct the same.
Planning is present in all types of organisations, households, sectors, economies, etc. We need to plan
because the future is highly uncertain and no one can predict the future with 100% accuracy, as the
conditions can change anytime. Hence, planning is the basic requirement of any organization for the
survival, growth and success
STEPS INVOLVED IN PLANNING :

By planning process, an organisation not only gets the insights of the future, but it also helps the
organisation to shape its future. Effective planning involves simplicity of the plan, i.e. the plan should
be clearly stated and easy to understand because if the plan is too much complicated it will create chaos
among the members of the organisation. Further, the plan should fulfil all the requirements of the
organisation.

4 TYPES OF PLANNING IN MANAGEMENT :


Now that you got a gist of its importance, here are the 4 types of planning in management.
1) Operational Planning
It is the kind of planning required for day-to-day activities. Organisations use such kind of planning
with extreme detail to clearly identifying the who, what, when, where and why of all parties involved.
And, there are some variations within it. Operational planning can be of two types – either single-use
plans or ongoing plans.
Single Use Plans
As the name suggests, single-use plans can be used only until the objective is achieved, after which
they are of no purpose.
Example of single-use plan
You can think of single-use plan in the context of a marketing campaign. There is one specific goal,
and once it is achieved, the marketing department may start with a different plan for another purpose.
Ongoing Plans
Ongoing plans are repetitive in nature and can be modified for evolving purposes in the future. They
are also characterised by short-term plans.
Example of an ongoing plan
An easy example of an ongoing plan is perhaps the planning that goes into the recruitment of
employees in an organisation. The HR department’s planning here is repetitive and short term. Once
the objective is achieved, the same process is followed in the future with little or no modifications.
Related: Top recruitment courses
2) Contingency Planning
Also known as ‘special planning’, it is used for situations when changes cannot be foreseen. It is that
‘what if’ scenario that a business manager needs to consider so that the company does not face losses.
That ‘what if’ scenario can be loss of data in a data security firm, failed product in the market, etc.
Probably the recent damaging ‘what if’ scenario for many businesses was the pandemic. It was
unprecedented. Many organisations that did not have a solid contingency plan had to lay off their
employees, and most small businesses had to shut shop completely. The ones who did, shifted their
focus to growth prospects in the cloud or digital technologies.
3) Strategic Planning
Strategic planning is used in light of achieving big goals in the long term. It is more of a high-level
planning done by the top-level managers in the organisation. Such a kind of planning in management is
used for starting a business. A strategic plan includes the vision and mission of the company. It also
includes defining timelines, establishing KPIs (key performance indicators) and tracking their
progress.
Related: Free business strategy courses
Its use is also seen when there is a sudden change in the market trend, and the business has to adapt to
it within a specific timeline.
4) Tactical Planning
Tactical planning refers to task prioritisation for achieving short term goals. This is one of the crucial
types of planning in management that helps achieve those goals as prescribed in a strategic plan. In an
organisation, tactical planning is approached by mid-level management. The goals to be achieved are
set for one or two departments and then moving on to the next in a tactical plan.

TYPES OF PLANS :
1. Standing Plans
1. Objectives
2. Strategies
3. Policies
4. Procedures
5. Rules
2. Single-use Plans
1. Programmes
2. Budgets

DECISION MAKING :

In simple terms, decision making is the process of making choices by recognizing the problem,
gathering information about feasible solutions, and finalizing the best alternative. This process is
carried out through an intuitive or logical process, or a combination of two. Intuition is all about using
your gut feeling to take a stand on the possible course of action. In contrast, a logical process uses facts
and figures to make scientifically sound decisions. Intuition is an acceptable way of decision-making;
nevertheless, it is often more suited when the decision is easy, personal, or needs to be made quickly.
More complex judgments typically need a more formal, systematic approach that incorporates both
intuition and logical reasoning. It is critical to avoid rash reactions or intuitions in such scenarios,
majorly in business decisions. You live in an era of digitalization where new information is generated
every second at a rapidly increasing rate. And it circulates all around the globe, 24 by 7. This means the
amount of historical records you have in databases spread across the globe is huge. And not making use
of it seems totally delinquent. That is why organizations are increasingly relying on business and data
analytics to guide their decision-making.
CHARACTERISTICS OF DECISION MAKING :
Decision-making is a skill that comes from training and experience. Here are a few characteristics of
decision-making.
 Rational-thinking
Rational thinking involves fixing goals and objectives, systematically analyzing options, and choosing
the right path using logic and evidence. However, this also involves considering emotions apart from
cold logic.
 Process
Every efficient task needs a robust process to make it consistently successful. Decision-making is also
familiar with this fact. It also must have a process that starts at a stage, has specific steps, and has an
end. And this process must consider conscious, unconscious, and emotional factors.
 Selective
A management decision is highly selective, and you can only use the trial and error method if that costs
you money. You must ensure that each selection has clear evidence of a positive impact on the
organization.
 Purposive
The management decision has a purpose. For example, you decide to improve the state of the
organization; it could be improving profits or employee lifestyles. This characteristic comes into play
very early in the decision-making process as objectives.
 Positive
While making a management decision, you aim for positive outcomes. This characteristic differs from
a scientific decision; you don’t need a positive result. However, any negative impact due to
management decisions will cost the company capital and reputation.
 Commitment
Commitment is necessary for any success; however, managers need to have a strong commitment
because of the number of opposition they will face and the responsibility they shoulder. To successfully
make management decisions, you need to commit to defending them and seeing through them.
 Evaluation
Management decision-making involves lots of evaluation; you must see all the angles. In addition, you
must have several backup plans when your first one fails, requiring meticulous evidence evaluation
while making a decision.
DECISION MAKING PROCESS :
The step-by-step decision-making process can lead to more deliberate and effective judgments.
1. Identify Your Goals
The first step in mastering the art of decision-making is to clarify your objectives. When it comes to
making a professional decision, you should have a rough idea about which direction you want to
follow. Once you've narrowed down your objectives, you'll be able to make more informed judgments.
Try to define the nature of judgement you want to make.
2. Make Use of the Elimination Process
Along with what you want to achieve with your judgment, evaluating what you don’t is also critical.
Making smart judgments might be difficult if you're still trying to determine what you want to do.
However, if you know what you want to avoid, the process of elimination might make certain decisions
easier.
3. Use SWOT Analysis Method
SWOT is an acronym that stands for Strengths, Weaknesses, Opportunities, and Threats. The SWOT
analysis is an excellent decision-making tool since it allows you to determine the pros and cons of a
certain decision readily. All you have to do is draw a rectangular shape, divide it into four parts and
label each section of the table with SWOT parameters. The image given below portrays the sample
SWOT metrics.
In the next step, you will fill all the positives and negatives of your initiative. Focus more on what
connects strengths and opportunities when you complete your selection. Anything that is continually
linking threats and vulnerabilities should preferably be avoided.
4. Simulate Feasible Outcomes
While simulating probable outcomes isn't a reliable approach to predicting what will happen after you
make a decision, there are certain ways to simulate what is more likely to happen because of your
decision. If you’re familiar with project management concepts, some of your learnings can be applied
here to visualize the outcome of your decision. Scientific methodologies such as problem trees, SCQA
(situation, complexity, question, answer), and MECE (mutually exclusive, collectively exhaustive) can
also help you add a touch of science to your decision making.
5. Choose Best Alternative
After you've analyzed all of your options and created a solid visual picture of the repercussions of each,
you're ready to choose the one that appears to be the greatest fit for you. If you cannot decide the
course of action, ask for help from your colleagues, leadership team, and friends.
ORGANIZATION :

Organisation refers to a collection of people who are working towards a common goal and objective. In
other words, it can be said that organisation is a place where people assemble together and perform
different sets of duties and responsibilities towards fulfilling the organisational goals.
Louis Allen, “Organization is the process of identifying and grouping work to be performed,
defining and delegating responsibility and authority and establishing relationships for the
purpose of enabling people to work most effectively together in accomplishing objectives.”

PRINCIPLES OF ORGANISATION :
1. Principle of Objective
2. Principle of Specialisation
3. Principles of Co-ordination
5. Principle of Definition
6. Span of Control
7. Principle of Balance
8. Principle of Continuity
9. Principle of Uniformity
10. Principle of Unity of Command
11. Principle of Exception
12. Principle of Simplicity
13. Principle of Efficiency
14. Scalar Principle

TYPES OF ORGANISATIONAL STRUCTURES :

There are two broad categories of organisation, which are:


1. Formal Organisation
2. Informal Organisation
Formal Organisation: Formal organisation is that type of organisation structure where the authority
and responsibility are clearly defined. The organisation structure has a defined delegation of authority
and roles and responsibilities for the members.
The formal organisation has predefined policies, rules, schedules, procedures and programs. The
decision making activity in a formal organisation is mostly based on predefined policies.Formal
organisation structure is created by the management with the objective of attaining the organisational
goals.
There are several types of formal organisation based on their structure, which are discussed as follows:
1. Line Organisation
2. Line and Staff Organisation
3. Functional Organisation
4. Project Organisation
5. Matrix Organisation

LINE ORGANISATION:
Line organisation is the simplest organisation structure and it also happens to be the oldest organisation
structure. It is also known as Scalar or military or departmental type of organisation.
In this type of organisational structure, the authority is well defined and it flows vertically from the top
to the hierarchy level to the managerial level and subordinates at the bottom and continues further to
the workers till the end. There is a clear division of accountability, authority and responsibility in the
line organizational structure.
Advantages of Line organization :
1. Simple structure and easy to run
2. Instructions and hierarchy clearly defined
3. Rapid decision making
4. Responsibility fixed at each level of the organisation.
Disadvantages of Line organization :
1. It is rigid in nature
2. It has a tendency to become dictatorial.
3. Each department will be busy with their work instead of focusing on the overall development of the
organisation.

LINE AND STAFF ORGANISATION:


Line and staff organisation is an improved version of the line organisation. In line and staff
organisation, the functional specialists are added in line. The staff is for assisting the line members in
achieving the target effectively.

Advantages of Line and Staff organisation


1. Easy decision making as work is divided.
2. Greater coordination between line and staff workers.
3. Provides workers the opportunity for growth.
Disadvantages of Line and Staff Organisation
1. Conflict may arise between line and staff members due to the improper distribution of authority.
2. Staff members provide suggestions to the line members and decision is taken by line members, it
makes the staff members feel ignored.

FUNCTIONAL ORGANISATION:
Functional organisation structure is the type of organisation where the task of managing and directing
the employees is arranged as per the function they specialise. In a functional organisation, there are
three types of members, line members, staff members and functional members.

Advantages of Functional organisation


1. Manager has to perform a limited number of tasks which improves the accuracy of the work.
2. Improvement in product quality due to involvement of specialists.
Disadvantages of Functional organisation
1. It is difficult to achieve coordination among workers as there is no one to manage them directly.
2. Conflicts may arise due to the members having equal positions.

PROJECT ORGANISATION:
A project organisation is a temporary form of organisation structure that is formed to manage projects
for a specific period of time. This form of organisation has specialists from different departments who
are brought together for developing a new product.
Advantages of Project organisation
1. The presence of many specialists from different departments increases the coordination among the
members.
2. Each individual has a different set of responsibilities which improves control of the process.
Disadvantages of Project Organization
1. There can be a delay in completion of the project.
2. Project managers may find it difficult to judge the performance of different specialists.

MATRIX ORGANISATION:
Matrix organisation is the latest form of organisation that is a combination of functional and project
organisation. In such organisations there are two lines of authority, the functional part of the
organisation and project management part of the organisation and they have vertical and horizontal
flow of authority, respectively.

Advantages of Matrix Organisation


1. Since the matrix organisation is a combination of functional and project management teams, there is
an improved coordination between the vertical and horizontal functions.
2. Employees are motivated as everyone will be working towards one project.
Disadvantages of Matrix Organisation
1. Due to the presence of vertical and horizontal communication, there will be increased cost and
paperwork.
2.Having multiple supervisors for the workers leads to confusion and difficulty in control.

COMMITTEE ORGANIZATION :
A committee organization represents a group of people with various kinds of knowledge, which is
formally constituted to solve specific problems of the organization. A committee helps to gather
collective ideas and information, and properly analyze them which helps to make strong managerial
decisions and solve difficult problems. During the course of the operation committee organizational
structure, various problems may arise in the organization, to solve such problems, the management
constitutes committees by gathering the members from the concerned fields. And, in accordance with
the provided information and suggestions from the committee members, the management takes
decisions and solves problems. This helps to minimize the workload of top-level management.

EXECUTIVE COUNCIL VICE CHANCELLOR ACADEMIC SENATE

FINANCE COMMITTEE RECTOR BOARD OF STUDIES

REGISTRAR

SELECTION PURCHASES CONVOCATION


COMMITTEE COMMITTEE COMMITTEE
Advantages of Committee Organizational Structure
1. Quality of Decision
Quality of decision is one of the major advantages of committee organization. Here, members
have knowledge from various fields, and experiences are gathered. Through gathering collective ideas
and analyzing them they come to the right decision for solving the complex problems.
2. Setting Objectives, Plans, and Policies
Every organization is formed with definite objectives, to achieve them, and it is necessary to
formulate plans and policies. Committee provides the framework for setting organizational objectives.
It also provides suggestions and information for making plans and policies to achieve defined
objectives.
3. Participative Management
Committee organization ensures the participation of competent members in management. Here, all the
members have the right to put their ideas and views into the decision-making process. The democratic
process is taken into consideration in the decision-making.
4. Reduce Bias and Conflicts
The committee facilitates the development of relations among members and their relation with the line
management. They help in maintaining close communication and transformation of information among
authorities. Thus, there is less probability of bias or decision-making mistakes. In a similar way, the
development of mutual relationships helps to resolve conflicts among members.
5. Dealing with Complex Problems
Committee organization facilitates dealing with complex and difficult types of problems. In some
situations, during operation, many complex or critical problems may arise in an organization. It is more
difficult to solve such problems by line authority and even by the top management. In such cases,
committees are formed by pooling experts from the concerned field so that it becomes easy to resolve
such problems in a systematic manner.
6. Commitment to Implement
A committee is formed to resolve complex and difficult problems. Members of the committee are
experienced experts in their own fields. Besides, expert representatives from top-level management are
also involved in committees. They come to a conclusion after a detailed discussion and evaluation of
the impact of alternative decisions.
7. Pooling Authorities
In the process of investigation and research, some authority of the top management is also shared
among the committee members. The committee embers can perform their work independently by
remaining within the defined area.

All the members have equal authority in the committee. Thus, executive levels come to a conclusion
with the help and mutual consent of all the committee members.

Disadvantages of Committee Organizational Structure


1. Creating Conflict

Conflict is common in committees because of more heads. In some situations, committee organization
creates confusion or conflicts in the decision-making process. Ideas or views of a member may be in
conflict with the views of other members.

2. Delay in Decision
The committee members take more time to discuss the various factors of a problem. The valuable time
the committee members spent on the discussion. The delay in the decision may result in an extra
financial burden to the management.

3. Probability of Diversion
In some cases, committee discussion may be diverted to other subject matter. In such a situation,
committee members can not come to a conclusion within the given time frame. They have to meet
many times to come to a suitable outcome.

4. Tendency of Shifting
It is common to shift the tendency of decisions to committees. When the executives feel difficult to
take a decision on important problems, they often shift it to the committee. This attitude of line
authorities minimizes their initiative and creativity, which provides a negative impact on organizational
performance.

5. Lack of Secrecy
Maintaining secrecy of internal matters is difficult in committee organization. All the members of the
committee discuss the problems in detail and in the process they get knowledge about internal matters
of the organization. Thus, there is more probability of leakage of internal plans and strategies of the
organization.

6. Distribution of Responsibility
In committee organizations, most of the members are concerned about the decision-making process. In
some situations, the committee may take the wrong decision and in such a case no members
individually take responsibility for the wrong decision on behalf of all the members. Everyone wants to
shift the responsibility to other members of the committee.

7. Splits Accountability
In a committee organization, nobody is held accountable for a decision made by a committee. A
committee’s decision is known as nobody’s decision just because it is everybody’s decision. Problems
in the organization may arise when any mistake is made in the decision-making process. And, nobody
wants to take full responsibility for the mistake on behalf of all members of the committee.

TEAM ORGANISATIONAL STRUCTURE :


A team organizational structure is a structure in which different work teams are created to achieve
common organizational goals. This structure emphasizes the creation of work teams instead of
departments.
The concept of team structure breaks down departmental barriers and decentralizes the decision-
making authority to the level of the work teams. The teams are created at the operating levels to
improve productivity and enhance employee performance.
Team-based organizational structure is one of the modern organizational structures that has greater
flexibility and effectively aligns with modern business settings. It is not like traditional structures
which were less flexible and more permanent.
In this team structure, the top manager formulates plans, and team members decide how to accomplish
them. They are given the necessary authority to make decisions at team levels. This enables
managers to give more focus on other strategic activities however the manager should review or
supervise the performance of different work teams.
VIRTUAL ORGANISATION STRUCTURE :
A virtual organization is an alliance of separate individuals, business units or companies, all with
different core competencies, working together to bring a project to market faster. These projects are
usually initiated to serve a particular market opportunity.
CELLULAR ORGANIZATIONAL STRUCTURE :
Cellular organizational structure (also known as a cellular organization, cellular system, nodal
organization, nodal structure, et cetera) is set up in such a way that it mimics how natural
systems within biology work, with individual 'cells' or 'nodes' working somewhat independently to
establish goals and tasks, administer those things, and troubleshoot difficulties." These cells exist in a
broader network in which they frequently communicate with each other, exchanging information, in a
more or less even organizational playing field. Numerous examples have existed both
in economic terms as well as for groups working towards other pursuits.

BOUNDARYLESS ORGANIZATION :
A Boundaryless Organization is a contemporary approach in organizational design. In a
boundaryless organization, the boundaries that divide employees such as hierarchy, job function, and
geography as well as those that distance companies from suppliers and customers are broken down. A
boundaryless organization seeks to remove vertical, horizontal, and external barriers so that
employees, managers, customers, and suppliers can work together, share ideas, and identify the best
ideas for the organization. Boundaryless organizations share many of the characteristics of flat
organizations. Some believe that the boundaryless organization is the perfect organizational
structure for the 21st century.[1]
The concept was pioneered by well-known management thinker and former General Electric chairman
Jack Welch, who wanted to break down existing barriers between different parts. While traditional
organizational structures have defined vertical and horizontal borders and hierarchies, boundaryless
organisations are defined specifically by a lack of structures and an approach to business that is based
on the free flow of information and ideas to drive innovation, efficiency and growth in a world that’s
constantly changing. Adaptability and flexibility are important criteria of boundaryless organisations.
Boundaryless organizations will often make use of the latest technology and tools to facilitate the
breaking down of traditional borders, such as virtual collaboration and flexible working. With regard to
employees, they may have more responsibility for their own projects and targets and be more able to
achieve results in a way that’s appropriate for the project at hand. Because many boundaryless
organizations are dispersed across geographic borders, employees may be from different cultures and
countries but must work together. Because of this, boundaryless organizations require a strong set of
core values and a strong vision.
INVERTED PYRAMID :
A reverse hierarchy (or inverted pyramid) is a conceptual organizational structure that attempts to
"invert" or otherwise "reverse" the classical pyramid of hierarchical organizations.
In the proposed structure, key decisions are made by the employees in direct contact with customers,
while progressively senior management positions provide support and help to the customer-facing
employees.
The term "invert the pyramid" is attributed to Jan Carlzon, who transformed SAS airlines by giving
front line employees authority to make decisions on the spot. [2] The creation of the reverse hierarchy
has been attributed to the Nordstrom retail organization.[1] Other notable adopters of this structure
include the United Parcel Service and Canadian Imperial Bank of Commerce.

FLAT ORGANIZATIONS :
Which have relatively few or even one level of management. Flat is also known as wider span of
control
TALL ORGANIZATIONS :
Tall organizations have many levels of management. Tall organization involves narrow span of
management.

LEAN ORGANIZATIONAL STRUCTURE :


A lean organizational structure refers to a structure that creates maximum value for the customer
while using fewer resources. An organization with such a structure encourages its employees to focus
on value streams and find ways to eliminate waste than an organization with a traditional structure. An
organization with a lean organizational structure also allows its employees flexibility, while a
traditional structure makes its members focus more on their respective jobs. Hence a traditional
structure has more job classifications compared to a lean structure. Accordingly, employees in a
traditional structure do not interact more with people from other departments, as in the case of a lean
organization.
Importance of Value Stream
All members in an organization with a lean structure focus on the value stream used to deliver goods
and services to customers. Value stream refers to the series of activities required in designing,
producing, and providing goods and services from a customer's perspective. It should be viewed as the
value derived from a company's goods and services as seen by a customer. When employees in a lean
organization focus on how they can put effort into impacting the value stream, they develop ways to
improve processes and avoid waste.
UNIT -2
Motivation and leadership

MASLOW’S NEED HIERARCHY:


The behaviour of an individual at a particular movement is usually determined by his strongest need.
Psychologists claim that needs have a certain priority, as the more basic needs are satisfied, an
individual seeks to satisfy the higher needs. If his basic needs are not met, efforts to satisfy the higher
needs should be postponed.
Abraham Maslow, a famous social scientist, has given a framework that helps to explain the strength of
certain needs. According to him, there is hierarchy for need, which is presented in the following way.
Maslow’s Need Hierarchy
 Physiological needs
 Safety/Security needs
 Social needs
 Self-actualization needs
 Esteem needs

Physiological needs: The Physiological needs are at the top of hierarchy because they tend to have the
highest strength until they are reasonably satisfied. Until these needs are satisfied to the degree needed
for the efficient operation of the body, the majority of a person’s activities will probably at this level,
and the other level will provide him with little motivation.
A famous saying ‘man can live on bread alone if there is no bread’ suggests that man first try to acquire
necessities for their survival.
Safety/Security Needs: Once physiological needs are satisfied to a reasonable level, the next level in
the hierarchy is safety. Safety means being free of physical danger or self- preservation. In the
industrial society, employee can be motivated through either positive action like pension plan,
insurance plan etc... Or negative actions like laid off or demotions.
Social needs: After the first two needs are satisfied, social needs become important in the need
hierarchy. Since man is a social being, he has a need to belong and to be accepted by various groups. In
the organization, workers form informal group environment to support unfulfilled social needs such as
affiliation.
Esteem needs: These needs are concerned with self respect, self confidence, a feeling of personal
worth, feeling of being unique and recognition. Satisfaction of these needs produces feelings of self
confidence, prestige, power and control. These needs are satisfied through adaptive behavior, matured
behavior or with irresponsible actions.
Self-actualization needs: It is the need to maximize ones potential, whatever it may be. It is related
with the development of intrinsic capabilities which lead people to seek situations that can utilize their
potential. This includes competence which implies control over environmental factors both physical
and social and achievement.
Conclusion: Maslow suggests that the various levels are interdependent and overlapping, each higher
level need emerging before the lower level need has been completely satisfied. Since one need does not
disappear when another emerges, all needs tend to be partially satisfied in each area.

HERZBERG’S MOTIVATION–HYGIENE THEORY:

Frederick Hertzberg conducted a structured interview programme to analyse the experience and
feelings of 200 engineers and accountants in nine different companies in Pittsburg area, U.S.A during
the structured interview, they were asked to describe a few previous job experiences in which they felt
‘exceptionally good’ or exceptionally bad about jobs.
In his analysis, he found that there are some job conditions which operate primarily to dissatisfy
employees when the conditions are absent, however their presence does not motivate them in a strong
way. Another set of job conditions operates primarily to build strong motivation and high job
satisfaction, but their absence rarely proves strongly dissatisfying.
The first set of job conditions has been referred to as maintenance or hygiene factors and second set of
job conditions as motivational factors.
Hygiene Factors:
According to Hertzberg, there are 10 maintenance factors. These are company policy and
administration, technical supervision, salary, job security, personal life, status, working conditions,
interpersonal relationship with superiors, interpersonal relationship with peers and interpersonal
relationship with subordinates.
These maintenance factors are necessary to maintain at a reasonable level of satisfaction in employees.
Any increase beyond this level will not produce any satisfaction to the employees: however, any cut
below this level will dissatisfy them.

Motivational Factors:
These factors are capable of having a positive effect on job satisfaction often resulting in an increase in
ones total output. Hertzberg includes six factors that motivate employees. These are achievement,
recognition, advancement; work itself, possibility of growth and responsibility.
Most of the above factors are related with job contents. An increase in these factors will satisfy the
employees: however, any decrease in these factors will not affect their level of satisfaction. Since, these
increased level of satisfaction in the employees, can be used in motivating them for higher output.

MC GREGOR’S THEORY X AND THEORY Y

The idea that a manager’s attitude has an impact on employee motivation was originally proposed
by Douglas McGregor, a management professor at the Massachusetts Institute of Technology during
the 1950s and 1960s. In his 1960 book, The Human Side of Enterprise, McGregor proposed two
theories by which managers perceive and address employee motivation. He referred to these opposing
motivational methods as Theory X and Theory Y management. Each assumes that the manager’s role is
to organize resources, including people, to best benefit the company. However, beyond this
commonality, the attitudes and assumptions they embody are quite different.
Theory X
According to McGregor, Theory X management assumes the following:
 Work is inherently distasteful to most people, and they will attempt to avoid work whenever
possible.
 Most people are not ambitious, have little desire for responsibility, and prefer to be directed.
 Most people have little aptitude for creativity in solving organizational problems.
 Motivation occurs only at the physiological and security levels of Maslow’s hierarchy of needs.
 Most people are self-centered. As a result, they must be closely controlled and often coerced to
achieve organizational objectives.
 Most people resist change.
 Most people are gullible and unintelligent.
Essentially, Theory X assumes that the primary source of employee motivation is monetary, with
security as a strong second. Under Theory X, one can take a hard or soft approach to getting results.
The hard approach to motivation relies on coercion, implicit threats, micromanagement, and tight
controls— essentially an environment of command and control. The soft approach, however, is to be
permissive and seek harmony in the hopes that, in return, employees will cooperate when asked.
However, neither of these extremes is optimal. The hard approach results in hostility, purposely low
output, and extreme union demands. The soft approach results in a growing desire for greater reward in
exchange for diminished work output.
It might seem that the optimal approach to human resource management would lie somewhere between
these extremes. However, McGregor asserts that neither approach is appropriate, since the basic
assumptions of Theory X are incorrect.
Drawing on Maslow’s hierarchy of needs, McGregor argues that a need, once satisfied, no longer
motivates. The company uses monetary rewards and benefits to satisfy employees’ lower-level needs.
Once those needs have been satisfied, the motivation disappears. Theory X management hinders the
satisfaction of higher-level needs because it doesn’t acknowledge that those needs are relevant in the
workplace. As a result, the only way that employees can attempt to meet higher-level needs at work is
to seek more compensation, so, predictably, they focus on monetary rewards. While money may not be
the most effective way to self-fulfillment, it may be the only way available. People will use work to
satisfy their lower needs and seek to satisfy their higher needs during their leisure time. However,
employees can be most productive when their work goals align with their higher-level needs.
McGregor makes the point that a command-and-control environment is not effective because it relies
on lower needs for motivation, but in modern society those needs are mostly satisfied and thus are no
longer motivating. In this situation, one would expect employees to dislike their work, avoid
responsibility, have no interest in organizational goals, resist change, etc.—creating, in effect, a self-
fulfilling prophecy. To McGregor, a steady supply of motivation seemed more likely to occur
under Theory Y management.
Theory Y
The higher-level needs of esteem and self-actualization are ongoing needs that, for most people, are
never completely satisfied. As such, it is these higher-level needs through which employees can best be
motivated.
In strong contrast to Theory X, Theory Y management makes the following assumptions:
 Work can be as natural as play if the conditions are favorable.
 People will be self-directed and creative to meet their work and organizational objectives if they
are committed to them.
 People will be committed to their quality and productivity objectives if rewards are in place that
addresses higher needs such as self-fulfillment.
 The capacity for creativity spreads throughout organizations.
 Most people can handle responsibility because creativity and ingenuity are common in the
population.
 Under these conditions, people will seek responsibility.
Under these assumptions, there is an opportunity to align personal goals with organizational goals by
using the employee’s own need for fulfillment as the motivator. McGregor stressed that Theory Y
management does not imply a soft approach.
McGregor recognized that some people may not have reached the level of maturity assumed by Theory
Y and may initially need tighter controls that can be relaxed as the employee develops.
If Theory Y holds true, an organization can apply the following principles of scientific management to
improve employee motivation:
 Decentralization and delegation: If firms decentralize control and reduce the number of levels
of management, managers will have more subordinates and consequently need to delegate some
responsibility and decision making to them.
 Job enlargement: Broadening the scope of an employee’s job adds variety and opportunities to
satisfy ego needs.
 Participative management: Consulting employees in the decision-making process taps their
creative capacity and provides them with some control over their work environment.
 Performance appraisals: Having the employee set objectives and participate in the process of
self-evaluation increases engagement and dedication.
If properly implemented, such an environment can increase and continually fuel motivation as
employees work to satisfy their higher-level personal needs through their jobs.

ALDERFER’S ERG THEORY OF MOTIVATION


Clayton Alderfer developed Maslow’s Hierarchy of Needs into a three factor model of motivation
know as the ERG model. In this model the letter E, R, & G each stand for a different human need:
existence, relatedness and growth. The ERG model is a content theory of motivation.
Relatedness includes personal and family relationships.
Alderfer’s model says that all humans are motivated by these three needs. The most concrete and
motivating of Alderfer’s three needs is existence, which really relates to physical and psychological
survival. The next level is the need for relatedness, a sense of community and a good relationship with
yourself. The least concrete, but still important, of Alderfer’s needs in the ERG model is growth, which
really relates to self-development, fulfillment and the sense of achieving your potential.
How the model works
Alderfer’s ERG Theory of Motivation states that individuals can be motivated by multiple levels of
need at the same time, and that the level which is most important to them can change over time. In
other words, an individual’s priorities and motivations may be fluid and can move between the
existence, relatedness and growth levels of need over time. They can move upwards, and they can
move downwards.

Comparing Alderfer and Maslow

In Maslow’s Hierarchy of Needs, individuals need to have satisfied one level of needs before moving
on to the next one. For example, they need to have satisfied their safety needs before being motivated
by social belonging. Alderfer disagreed. In his model, individuals do not need to have satisfied their
existence needs before being motivated by their relatedness need.
In fact, Alderfer went further and said that different individuals potentially prioritize the needs in
different orders based on their life views. A standard example of this could be the starving actor who’s
motivated by growth through their art, potentially at the expense of their existence (i.e. they can’t pay
their rent but are pursuing their passion).
Alderfer also noted that how individuals perceive their progression in relation to each of the levels of
need is important. If an individual feels they are making great progress at relatedness, they may be
increasingly motivated by growth even though their relatedness need has not been fully satisfied.
Similarly, if an individual feels frustrated with the progress they are making in relation to growth, they
may abandon it and redouble their motivation in relation to relatedness.
The ERG model in the world of work
Perhaps our needs are more balanced than Maslow thought.
In Maslow’s model, individuals remain at a fixed level of need until they have satisfied it. This would
mean that individuals at work should work towards satisfying their current stage of need, and that
leaders and managers should focus on helping the members of their teams achieve one specific level of
needs at a time.
Alderfer’s ERG Theory of Motivation, though, upends this thinking. Under Alderfer’s model
individuals can be motivated by different levels at the same time, and have their motivational priorities
change in relation to their sense of progress. Given this, individuals should not focus on one level of
need at a time. Instead, they may wish to balance their motivations across levels. Similarly, leaders
should not focus on helping the members of their team satisfy one level of need at a time. Instead, they
should be aware of the blend of needs that humans can have and help their team members progress in
relation to a blend of needs, which will change over time.

LEADERSHIP

Definition/ Concept
• According to Livingston – ‘Leadership is the ability to awaken the desire to
follow a common objective’.
• According to C.I. Bernard – ‘Leadership is the quality of behaviour of the
individuals whereby they guide people or their activities in organised efforts’.
• According to Bernard Keys and Thomas – ‘Leadership is the process of
influencing and supporting others to work enthusiastically towards achieving
objectives’.
• Leadership is essentially a continuous process of influencing behaviour. It may be
considered in context of mutual relations between a leader and his followers. The
leader tries to influence the behaviour of individuals or group of individuals
around him to achieve desired goals.
• Keith Davis, “Leadership is the process of encouraging and helping others to
work enthusiastically towards their objectives. Leadership must extract
cooperation and willingness of the individuals and groups to attain the
organisational objectives.”
• Leadership is the lifting of a man's vision to higher sights, the raising of a man's
performance to a higher standard, the building of a man's personality beyond its
normal limitations- Peter.F.Drucker

LEADERSHIP STYLES :

leadership style helps you provide adequate guidance and feedback to employees, and better understand
your thoughts, how you make decisions and strategies you can consider implementing when making
business decisions. It can also help you understand how your direct reports see you and why they may
give you specific feedback. For example, if employees feel stifled at work and don’t have many
opportunities to speak their minds, they may be telling you that you’re an autocratic leader who can
benefit from changing their style. Knowing your leadership styles may help you improve with limited
feedback. Each leadership style has its pitfalls, allowing you to proactively address areas of
improvement. This is critical because some employees might hesitate to speak up, even in an
anonymous survey. Ready to find out your leadership styles? Check out the most common styles
below.
Different styles of leadership can lead to very different team cultures and experiences. How would you
describe your leadership style? Leadership styles in management can vary based on industry, local
customs, and personality.
In mentoring relationships, it is important for both the mentor and mentee to practice their leadership
skills. In fact, 71% of mentors on MicroMentor say that mentoring has helped them improve their
leadership skills.
There are many different styles of leadership, but we will focus on 7 of the most common here.
1. Transactional leadership
2. Transformational leadership
3. Servant leadership
4. Democratic leadership
5. Autocratic leadership
6. Bureaucratic leadership
7. Laissez-Faire leadership
8. Strategic Leadership
9. Coach-Style leadership
10. Charismatic Leadership
While there may not be one “best choice”, different styles of leadership may work best in specific
situations.
Transactional leadership :
This leadership style helps to establish roles and responsibilities by using incentivization to motivate
employees. For example, a transactional leader might motivate their team with a scheduled bonus for
generating a certain number of leads in a quarter. Transactional leadership can be effective, but can also
encourage employees to do the bare minimum to meet goals and nothing more. It is much more
effective to use this leadership style in conjunction with transformational leadership.

Transformational leadership:
Transformational leadership is a popular style among growth-oriented companies as it encourages
employees to see what they are capable of. This type of leader will constantly push their team outside
of their comfort zones. For example, a transformational leader might provide their employees with a
list of goals with deadlines. While they may seem straightforward at first, the manager might start
adding more challenging goals or pick up the pace of deadlines. Without the right coaching to guide
team members, this style of leadership risks leaving team members with different learning curves
behind. However, it can also motivate and build confidence among employees.

Servant leadership :
The servant leadership style can be a very effective model for empowering teams and boosting morale.
Servant style leadership means prioritizing the needs of your team above all else. A leader or manager
using this style of leadership will focus their energy on elevating and developing their teams. An
example of this style could be a manager investing their time in a project to helping a team member
develop a specific skillset, regardless of how much this slows down the process and takes up their own
time. While it can be challenging for many of us, the servant leadership style has long term benefits for
teams and creates a culture of trust among team members

Democratic leadership :
Democratic leadership is an extremely effective leadership style because it empowers team members at
all levels to feel empowered within the organization. In this leadership style, the leader makes decisions
taking into account the input of all team members, regardless of their seniority or expertise. An
example of democratic leadership in action is a meeting in which a leader might provide the team with
a few decision-related options. After an open discussion about the options, the leader would take into
account the team members’ thoughts and feedback or open the decision up to a vote.

Autocratic leadership :
This leadership style is one of the least effective ways of practicing leadership. In this style, the leader
makes decisions without taking input from any stakeholders. Team members are expected to adhere to
the decision however the leader sees fit. An example of autocratic leadership could be when a team
manager decides to take on a new project without consulting anyone on the team about capacity,
strategic relevance, or practicality. Autocratic leadership disempowers team members and results in
decisions lacking the necessary input from stakeholders to be successful.

Bureaucratic leadership :
Another ineffective leadership style is the bureaucratic leadership style. Unlike autocratic leadership,
this style might consider the input of team members. However, if that input conflicts with existing
policy the leader will likely reject it. This style of leadership is commonly found in larger and older
organizations who have successful processes already in place. Bureaucratic leadership is quick to shut
down innovation and discourages new ways of thinking and achieving ambitious goals.

Laissez-Faire leadership :
laissez-Faire leadership style is often found in younger start-ups. In this leadership style, leaders put
nearly all the decision making power in the hands of their employees. For example, a leader might not
set official policies around project deadlines or working hours for their employees. While this style of
leadership can empower employees to set their own goals and work in a way that works best for them,
it can also limit professional development and overlook strategic growth opportunities.

Strategic Leadership :
We all know that a good strategy can be the key to success. Therefore, strategic leaders are always at the
intersection point of company work and growth opportunities. You maintain the upper-level management but
ensure that everyone else is not negatively affected by it. They ensure that working conditions are best for
everyone.

Coach-Style Leadership :
You should identify and nurture the strengths of each of the members. This results in better teamwork and
better strategy building. Also, you can find subtle hints of democratic and strategic leadership in this type of
leadership. The leader creates a team where all the team members contribute as per their expertise and skills.
Moreover, teams have better communication and cooperation spirit to get things done in order.

Charismatic Leadership :
You might find it similar to transformational leadership but different. Motivating and inspiring your team
remains the primary goal of you as the leader. However, there is no transformation in this process. As a leader,
you are determined that you are always right even if people tell you about the wrongs. This can lead to certain
risks and damage to the team or organization at times.

LEADERSHIP THEORIES

Leadership theories are the explanations of how and why certain people become leaders. They focus on
the traits and behaviors that people can adopt to increase their leadership capabilities. Some of the top
traits that leaders say are vital to good leadership include:
 Strong ethics and high moral standards
 Great self-organizational skills
 Efficient learner
 Nurtures growth in employees
 Fosters connection and belonging

Major leadership theories.


While there are dozens of leadership theories and psychology, there are a few that are more well-
known. Understanding psychological and social impacts of effective leadership will help you determine
the kind of leader you want to be.

Behavioral theory :
The behavioral leadership theory focuses on how leaders behave, and assumes that these traits can be
copied by other leaders. Sometimes called the style theory, it suggests that leaders aren’t born
successful, but can be created based on learnable behavior. Behavioral theories of leadership focus
heavily on the actions of a leader—this theory suggests that the best predictor of leadership success is
viewing how a leader acts. Action rather than qualities are the focal points of behavioral learning
theory. Patterns of behavior are observed and categorized as “styles of leadership” in this theory. Some
of the styles of leadership include task-oriented leaders, people-oriented leaders, country club leaders,
status-quo leaders, dictatorial leaders, and more. At the end of the day, the actions and actual behaviors
of a leader are what defines success in this theory.
The behavioral theory has many advantages, primarily that leaders can learn and decide what actions
they want to implement to become the kind of leader they want to be. It allows leaders to be flexible
and adapt based on their circumstances. Another great benefit of this leadership style is that it suggests
anyone is capable of becoming a leader. Some disadvantages of the behavioral theory are that while it
allows flexibility, it doesn’t directly suggest how to behave in certain circumstances. There are dozens
of leadership styles that stem from the behavioral theory, but there isn’t a right one for every
circumstance.
A great example of the behavioral theory is looking at a task-oriented leader vs. a people-oriented
leader. If there’s a problem with a team, a task-oriented leader will look at the process to see if
something needs to be adjusted with the workflow. A people-oriented leader will look at the individuals
and go right to them, asking what the issue is. Whatever behaviors you choose, the behavioral
leadership theory helps leaders focus on their actions and utilize their decisions to be a great leader.

Contingency theory :
The contingency leadership theory, sometimes called situational theory, focuses on the context of a
leader. These theories look at the situational effects of the success or failure of a leader. A leader’s
effectiveness is directly determined by the situational context. While a leader’s personality is a small
factor in their success, the most important factor is the context and situation of the leader. This theory
takes the specific leadership styles and suggests that good leaders can adjust their leadership style
situationally. It also suggests that it may be best to find the right kind of leader for a specific situation.
Types of contingency theories include the Hershey and Blanchard’s Situational Theory, the Evans and
House Path-Goal Theory, and Fiedler’s Contingency Theory.
The contingency theory has great advantages, including that leaders are able to be effective no matter
their situational context. However, this theory does have criticism suggesting that there isn’t enough
detail that goes into the context of any situation. Contingency theory focuses on the importance of a
situation, but may not focus enough on the psychology of the employees or the company itself. It also
may not focus enough on how leadership styles can change over time.
There are internal and external factors that impact a leader and their situation. The type of company,
the size of the team, and the innate leadership style of an individual are internal factors. External
factors may include the customer feelings and the marketplace. All of these situations play a factor into
the contingency theory.

Trait Theory / Great Man Theory.


The great man theory of leadership, sometimes called the trait theory, suggests that good leaders are
born. They have innate traits and skills that make them great, and these are things that can’t be taught
or learned. The trait theory suggests that leaders deserve to be in their position because of their special
traits.
There is a great amount of criticism for the trait theory, mainly that leaders are either born or not, that
there isn’t work or effort that is needed to be put in so you can become a leader. This suggests that
social or psychological leaders are predetermined and that leaders are unable to come from the
shadows—they are either chosen or not. There is also criticism that most of the traits associated with
this theory are inherently masculine, and don't match the real psychology of good leaders.
People cite Abraham Lincoln, Alexander the Great, Queen Elizabeth I, and many others as their
examples of the great man theory. These social giants utilized their skills to lead nations. High levels of
ambition and determination are usually seen in leaders that appear to bring this theory to life. Today,
leaders that climb to the top may view their traits and abilities as part of the “great man” theory. So it
may appear that leaders get to their position based on their inherit gifts.

Management theory.
The management theory is sometimes called transactional leadership, and focuses on supervision,
organization, and group performance. Transactional leadership is a system of rewards and punishments,
and transactional leadership is regularly used in business. When employees do something successful,
managers reward them. When they fail, they may get punished. Transactional rewards and punishments
are given based on the idea that people really only do things for the reward. Their psychology doesn't
allow human beings to do things out of goodness, but rather out of the promise of a reward.

The management leadership style can be extremely effective. Positive reinforcement is known for
working wonders with employees, encouraging and motivating them to succeed. But there is lots of
criticism around leadership that is strictly transactional as well. Consequences and punishments can
decrease morale in an organization, negatively impacting employees. It can also be seen as a lazy
leadership style—rewards and punishments are a relatively simple way to lead employees.
A common example of this management style is a leader that offers a cash bonus for employees who
meet a goal. Or a leader who makes employees do extra paperwork if they miss a deadline.

Participative theory.
Participative leadership isn’t as common in the corporate world. Sometimes called democratic
leadership, this leadership theory suggests that employees be directly involved in decision making in
their organization. The leader simply facilitates a conversation and then takes all the suggestions, and
comes up with the best possible action. In this theory, everyone is very involved with decisions for the
team and organization, with the leader simply helping direct the charge.
There are many advantages to this theory. Employees feel more engaged and motivated when they are
directly involved in decisions and outcomes for their company. This theory is not without criticism
however—some suggest that this type of style makes leaders appear weak or unnecessary. It is also a
criticism that leaders in this theory don’t actually get the best outcomes, because they are too engaged
in what people want more than what the company needs.
Bill Gates is a well known example of participative theory. While this theory is still hotly debated,
there are many examples of companies that work to incorporate employees more in the decision
making process. In this theory, a leader may have a meeting to ask employees how to solve a particular
problem. They encourage employees to be open and honest about their thoughts. They take all the
suggestions, and meet with other leaders to discuss them. Leaders then make a decision based on the
input from employees and their own decision making. Employees tend to appreciate this style, though
it can be less effective overall.

Power theory. This theory looks at the way a leader utilizes their power and influence to get things
accomplished. French and Raven's Five Forms of Power is a commonly known power theory of
leadership. It looks at positional power and personal power and how they impact leaders choices and
outcomes.
This theory may appear to be highly effective—leaders with great power may seem highly efficient and
get things done quickly. However, most employees don’t appreciate power leadership. They want a
leader who doesn’t wield power over them, but works with them and encourages them. Thus the
greatest criticism of this theory is that it doesn’t reach the end goal of inspiring and encouraging
employees, but rather makes them feel dominated.
The power theory can be seen in organizations where hierarchy and promotion is key to success.
Employees in power theory companies see that their only way to influence change or impact the
company is to gain power of their own. This can result in low morale, political, and cliquey climates in
the office.

Relationship theory.
The relationship theory of leadership focuses on leaders who are mainly concerned about their
interactions with others. They are often mentors for employees, scheduling time to talk to them and
working to meet their needs. These kinds of leaders are focused on making work enjoyable for as many
people as possible, and they want to foster a positive work environment. Studies show that this kind of
leadership behavior can be the most effective for many employees. Relationship-oriented managers
often get better results from their employees.
There are many advantages to this kind of leadership. Employees feel confident in their leader and
want to follow them. They are also inspired to be good leaders to others. Mentorship provides great
opportunities to foster growth in employees, and encourages them to stay at the organization for a
longer period of time. There are some critics for this kind of leadership however, including thoughts
that relationship driven leaders may be unwilling to view employees who are causing problems at face
value, they can let relationships get in the way of work, and they can be guided to favor people over
productivity. However, most experts agree that relationship driven leaders are actually more effective
at the end of the day.
An example of relationship theory would be a manager who takes a newer employee under her wing.
She works to help this employee understand how they fit within the organization, encourage them to be
open about questions and problems, and create a positive working relationship. This employee then is
encouraged to work hard, point out issues, and help solve problems for the company.
UNIT – 3
ORGANIZATIONAL BEHAVIOR

MEANING & DEFINITION :

Organizational Behavior is concerned with the understanding, prediction and control of human
behavior in organizations. It focuses on the individuals, the groups and the organization and also
on their interaction relationships. It is the study and application of knowledge about how people
act with organizations. It is a human tool for human benefit. It applies broadly to the behavior of
people in all types of organizations. Wherever organizations are, there is a need to understand
organizational behavior.
According to Fred Luthans, “Organizational behavior is directly concerned with the
understanding, production and control of human behavior in organizations.”

NATURE :

The nature/ characteristics of OB are as given below:


1. OB is a part of general management and not the whole of management. It represents
behavioral approach to management.
2. OB contains a body of theory, research and application associated with a growing concern for
people at the work place. It helps in understanding human behavior in work organizations.
3. OB is a human tool for human benefit. It helps in predicting the behavior of individuals.
4. OB is inter-disciplinary field of study. It tries to synthesize knowledge drawn from various
behavioral and social sciences such as Psychology, Sociology, Anthropology, Political-science,
Economics, etc. In fact, OB is an applied behavioral sciences.
5. OB involves three levels of analysis of behavior-individual behavior, group behavior and
behavior of the organization itself.
6. OB is an action-oriented and goal-directed discipline. It provides a rational thinking about
people and their behavior
7. OB is both a science and an art. The systematic knowledge about human behavior is a science.
The application of behavioral knowledge and skills clearly leans towards being an art.
8. OB seeks to fulfil both employees’ needs and organizational objectives.
SCOPE OF OB

“OB is a field of study that investigates the impact, that individuals, groups, and structure have
on behavior within organizations, for the purpose of applying such knowledge towards
improving an organization’s effectiveness”.
The scope of OB involves three levels of behavior in organizations: individuals, groups and
structure.
1. Individual Behavior
(i) Personality
(ii) Perception
(iii) Values and Attitudes
(iv) Learning
(v) Motivation
2. Group Behavior
(i) Work groups and group dynamics
(ii) Dynamics of conflict
(iii) Communication
(iv) Leadership
(v) Morale
3. Organization: Structure, Process and Application
(i) Organizational Climate
(ii) Organizational Culture
(iii) Organizational Change
(iv) Organizational Effectiveness
(v) Organizational Development
IMPORTANCE OF ORGANIZATION BEHAVIOR/ WHY TO STUDY OB :

1. It builds better relationship by achieving, people, organizational, and social objectives.


2. It covers a wide array of human resource like Behavior, training and development, change
management, leadership, teams etc.
3. It brings coordination which is the essence of management.
4. It improves goodwill of the organization.
5. It helps to achieve objectives quickly.
6. It makes optimum utilization of resources.
7. It facilitates motivation.
8. It leads to higher efficiency.
9. It improves relations in the organization.
10. It is multidisciplinary in the sense that applies different techniques, methods, and theories to
evaluate the performances.

ORGANIZATIONAL BEHAVIOUR: CONCEPT AND SIGNIFICANCE :

“Organizational behavior is directly concerned with the understanding, prediction, and


control of human behavior in organizations.” Fred Luthans.
“Organizational behavior studies the impact that individuals, groups and structure have on
behavior within organization for the purpose applying such knowledge towards improving
Organizational effectiveness.” Stephen P. Robbins.
Keith Davis said that, “Organizational Behavior is the study and application of knowledge about
how people act within organization.”
Raman J. Aldag states, “Organizational Behavior is a branch of the Social Sciences that seeks
to build theories that can be applied to predicting, understanding and controlling behavior in
work organizations”. “Organizational Behavior is a subset of management activities concerned
with understanding, predicting and influencing individual behavior in Organizational setting.”
Callahan, Fleenor and Kudson.
Organizational behavior is basically a study of human behavior in both, group as well as
an individual in an organization. As we know that certain types of behavior of a person is linked
to certain types of roles and responsibilities. So, generalizations were made based on their
behaviors that help us predict what people do and should do so.And the accurateness of these
generalizations is depending upon the accurate observations. An accurate generalization helps in
taking strategic decisions in managing and controlling workforce in an organization. While
observing and understanding the behavior, one should follow a systematic approach because a
structured approach to conduct study may boost the explanatory and predictive capacities of a
person.

Significance of Organizational Behavior

(OB) is a study involving the analysis of an organization's persons, community and


structure or actions, and this analysis has significant significance in an organization's successful
working. It is a kind of study pertaining to “what people do within an organization” and “how
their behavior affects the performance of an organization”. Organizational conduct relates
primarily to job-related concerns such as jobs, work, leaves, turnover, efficiency, human
resources, and management. Organizational behavior study provides a comprehensive set of
concepts and theories dealing with commonly accepted 'facts' about a person's behavior and
organizations acquired over the years, e.g. "You can teach new tricks to an old dog", “Two heads
are better than one." Study of “organization behavior does offer challenges and opportunities for
managers since it focuses on ways and means to improve productivity, minimize absenteeism,
increase employee job satisfaction, etc”. A Study of Organization Behavior provides a basis for
managers to develop and create an ethical culture and climate of work. Also, good prediction of
human and Organizational behavior is helpful.

RELATIONSHIP TO OTHER FIELDS

Organizational behavior is a multidisciplinary subject because it has borrowed concepts and


theories from other fields like Psychology, Sociology, Political science, Anthropology,
Economics, Technology, Environmental science, and science. Organizational behavior is
basically an applied behavioral science.
Psychology:
The term 'psychology' originates from the Greek language 'Psyche' meaning 'soul' or 'heart' and
Organizational behavior is a scientific field that explores human behavior mainly concerned
with the psychology of the individuals. Industrial psychology can be defined as “Industrial
Psychology is a scientific study of employees, workplaces, organizations and Organizational
behavior. Industrial psychology is also known as work psychology. Organizational psychology
helps in improving the workplaces, satisfaction and motivation levels of the employees, and
helping the overall productivity of the organization.”

Sociology:
According to Dictionary of the social sciences, sociology is “the study of society, patterns of
social relationships, social interaction, and culture that surrounds everyday life.” From the
definition it is very much clear that sociology also has a major impact on the study of
Organizational behavior. Max Weber defines sociology as, “a science which attempts the
interpretive understanding of social action in order thereby to arrive at a causal explanation of its
course and effects.”

Anthropology:
It is “the science of humanity, which studies human beings in aspects ranging from the biology
and evolutionary history of Homosapiens to the features of society and culture that decisively
distinguish humans from other animal species.”
Therefore, Anthropology deals with the relationships between people and their environment
and anthropology contributes to understanding the cultural impact on Organizational
behaviour, the impact of value structures, expectations, emotions, unity and interaction.
Also, University of Florida defines, “Anthropology is the study of humankind. Of all the
disciplines that examine aspects of human existence and accomplishments, only Anthropology
explores the entire panorama of the human experience from human origins to contemporary
forms of culture and social life.” Eric Wolf said, “’Anthropology’ is less a subject matter than a
bond between subject matters. It is part history, part literature; in part natural science, part
social science; it strives to study men both from within and without; it represents both a manner
of looking at men and vision of men – the most scientific of the humanities, the most humanist
of sciences.”

PoliticalScience
Political science has some fascinating implications in researching Organizational behavior as it
helps in understanding how and why people gain control, political actions, decision-making,
conflict, interest group activity and creation of coalitions. And the same is also true of major
areas of Organizational behaviour.
It has been stated many times that political parties and government are actively active in many
of the activities of the ORGANIZATION.

Economics
Lionel Robbins stated the term economics as,“the science which studies human behavior as a
relationship between ends and scares means which have alternative uses”. Economics tackles
the problem of fear resources and limitless uses or restricted resources and infinite desires. In
addition to this, it studies the growth, distribution, and consumption of goods and services. And
studying different economic subfields helps to illustrate the Organizational actions in a very
useful way, such as understanding the dynamics of the labor market, efficiency, human
resource planning and forecasting, and cost benefit analysis.

Science:
Scientific approaches are the foundation of organization's actions. Organizational behavior is
based on the systematized analysis of data, actions, their relationships and predictions. New
research methods help to learn modern analytical tools and techniques and to apply them.

Technology:
Technological progress often impacts employee behaviour. Because we live in an era of
information technology in which technology plays a very important role, to understand the
Organizational actions, the study of technological development becomes important because
people are affected by technological growth. Technology influences consumer behaviour,
manufacturing practices, and storage and distribution activities. To match the pace people
need to be educated and/or technically qualified about technological development.

Engineering:
Engineering too plays significant role in the study of Organizational behavior. Certain topics
are very common in both engineering as well as Organizational behavior.

Medicine:
Medicine has a link to researching human behavior in the workplace, as stress has become a
very common issue in organizations as well as in people employed in organizations. To
control the causes and consequences of stress, since it is important for the well-being of both
the individual and the organizations. Medicine helps with treating emotional disorders as well
as emotional related problems.
Finally, it can be inferred that the Organizational conduct is given a multidisciplinary focus.
MODELS OF ORGANISATIONAL BEHAVIOUR

Every organization develops a particular type of culture or value system or a model according
to which people of an organization are supposed to behave. And the system is developed by
taking into account the assumptions of the management regarding people, mission and
management vision. The assumptions on which an organization's culture is based vary greatly
from one organization to another, and so do the ORGANIZATIONAL BEHAVIOUR
MODELS.
In the starting of civilized human society, there were two forms of strategies for the people in
action, one says "trust anyone unless there is proof to the contrary" and an additional says
"trust no one unless there is evidence to the contrary." Obviously, in such organizations the
interactions between people take place differently according to these two approaches.
"McGregor" specified "theories X and Y and each theory makes assumptions which are quite
contrary to each other"; Argyris specified "theconcept of immaturity and maturity of people
which also provides two opposite views about the people". Ergo, Models of Organizational
behavior built on the basis of different decisions or assumptions represent Beat variations. O
B models that are in practice, however, show some sort of continuum between these two
opposite poles, although they tend to lean towards a specific pole. "Davis" has described four
OB models which are as follows:
1. Autocratic
2. Custodial
3. Supportive
4. Collegial.

AutocraticModel
In the autocratic model there is managerial orientation toward power. Managers see power as
the only way to get the job done, and employees are forced to obey orders which lead to high
boss dependence.The Organizational mechanism is largely formalized; power is delegated by
the right of command to the individuals to whom it refers. The model is largely based on the
“Theory of X assumptions of Mc Gregor where the human beings are taken inherently
distasteful to work and try to avoid responsibility”. In this model employees are closely and
strictly supervised inorder to attain desired performance. Employees are supposed to obey the
order of the managers and there is no place for employee's suggestion in this model which
sometimes results in minimal performance.
Custodial Model
Under this model, the key goal relating to management is to use money or resources to
support workers. Employee works towards security attainment and in return organization uses
the organization's economic resources to benefit the organization's employees which lead to
high employee dependence on organization.
Employee Organizational reliance reduces personal dependence on boss. Employees in this
model feel satisfied when working and their performance level is a little higher than the
autocratic Organizational model but overall performance is not that good.
This model Is similar to the more satisfying and dissatisfying Herzberg theory.
Employees get sufficient respect and Organizational protection according to this model, they
feel satisfied but they are not given any kind of authority to determine what benefits or
incentives they will receive. This model is quite common in many Indian business
Organizations.
Supportive Model
In this supportive model mangers are very supportive towards employees. Here Managerial
leadership is the key criterion of Organizational behavior, rather than using money or
influence or authority. The main goal is to assist employees in achieving results with the aid
of employee involvement and participation in managerial decision making process.
The model is based on "Likert's supporting partnership values, which is the fundamental
component of his program 4(participatory)." "Likert" notes that full manager-employee
interactions will occur. The job of the manager is to support and inspire the subordinates to
carry out their mission, rather than closely supervise them. In this model, employee output is
much higher than the autocratic and custodial model, because employees have a sense of
belonging due to managers' positive attitude towards them.
Collegial Model
This model is an extension of the positive model. Within this model all employees work for a
common target. Collegial meaning implies a community of shared-intentioned individuals.
Therefore, the collegial model, suggests the concept of a partnership in which a high degree
of understanding is established between the two in order to accomplish common objectives.
This model requires less guidance and control from the side of management. And the
organization's environment is so favorable that Regulation is essentially carried out by team
members by self-discipline. Collegial model is more useful where there is flexibility in
behaviour, an intellectual environment and considerable freedom of employment.

These OB models are based on the individual characteristics and how they could perform
better. One model cannot be adapted in all situations and at all stages and managers cannot
assume that a particular model is best suited for all purposes and all situations.

You might also like