Organisational Behaviour

Organisational Behaviour
Board of Studies
Prof. H. N. Verma Prof. M. K. Ghadoliya

Vice- Chancellor Director,
Jaipur National University, Jaipur School of Distance Education and Learning
Jaipur National University, Jaipur
Dr. Rajendra Takale
Prof. and Head Academics
SBPIM, Pune
___________________________________________________________________________________________
Subject Expert Panel
Dr. Daniel J. Penkar Vijayalakshmi R.H

Director, SBS, Sinhgad Subject Matter Expert
Pune
___________________________________________________________________________________________
Content Review Panel
Shreya Saraf
Subject Matter Expert
___________________________________________________________________________________________
Copyright ©
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First Edition 2013
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Index
I. Content..................................................................... II
II. List of Figures...................................................... VII
III. List of Tables.................................................... VIII
IV. Abbreviations........................................................IX
V. Case Study.............................................................. 97
VI. Bibliography....................................................... 100
VII. Self Assessment Answers................................. 103
Book at a Glance
I
Contents
Chapter I........................................................................................................................................................ 1
Organisational Behaviour............................................................................................................................ 1
Aim................................................................................................................................................................. 1
Objectives....................................................................................................................................................... 1
Learning outcome........................................................................................................................................... 1
1.1 Introduction............................................................................................................................................... 2
1.1.1 Classifications of Organisations............................................................................................... 2
1.1.2 Factors Influencing an Organisation......................................................................................... 2
1.2 Organisational Behaviour......................................................................................................................... 2
1.2.1 Fundamental Concepts in Organisational Behaviour............................................................... 3
1.3 Importance of Organisational Behaviour for Managers........................................................................... 3
1.4 Behaviour Model for Organisational Efficiency....................................................................................... 4
1.5 Organisational Components that Need to be Managed People................................................................. 4
1.6 Contemporary Organisational Behaviour................................................................................................. 6
1.6.1 Characteristics of the Field....................................................................................................... 6
1.6.2 An Interdisciplinary Focus........................................................................................................ 6
1.6.3 A Descriptive Nature................................................................................................................. 7
1.7 Contextual Perspectives on Organisational Behaviour............................................................................. 7
1.7.1 Systems and Contingency Perspectives.................................................................................... 7
1.7.2 The Systems Perspective ......................................................................................................... 7
1.7.3 The Contingency Perspective .................................................................................................. 8
1.8 Interactionalism......................................................................................................................................... 8
Summary........................................................................................................................................................ 9
References...................................................................................................................................................... 9
Recommended Reading................................................................................................................................ 9
Self Assessment............................................................................................................................................ 10
Chapter II.................................................................................................................................................... 12
Approaches and Models of Organisational Behaviour............................................................................ 12
Aim............................................................................................................................................................... 12
Objectives..................................................................................................................................................... 12
Learning outcome......................................................................................................................................... 12
2.1 Introduction............................................................................................................................................. 13
2.2 Some of the Important Approaches......................................................................................................... 13
2.2.1The Inter-Disciplinary Approach............................................................................................. 13
2.2.2 The Human Resources Approach........................................................................................... 13
2.2.3 The Systems Approach........................................................................................................... 13
2.2.4 The Contingency Approach.................................................................................................... 13
2.3 Models of Organisational Behaviour...................................................................................................... 13
2.3.1 Two Sources of Model of Organisational Behaviour.............................................................. 15
2.3.2 Goals....................................................................................................................................... 15
2.4 Managerial Functions.............................................................................................................................. 15
2.5 Inter-Relationship between Personal Life and Work Life....................................................................... 15
2.5.1 Managerial Roles.................................................................................................................... 15
2.5.2 Managing for Effectiveness.................................................................................................... 16
2.6 Group and Team-Level Outcomes.......................................................................................................... 17
2.7 Organisation-Level Outcomes................................................................................................................ 17
Summary...................................................................................................................................................... 18
References.................................................................................................................................................... 18
Recommended Reading.............................................................................................................................. 18
Self Assessment............................................................................................................................................ 19
II
Chapter III................................................................................................................................................... 21
Organisational Design and Culture........................................................................................................... 21
Aim............................................................................................................................................................... 21
Objectives..................................................................................................................................................... 21
3.1 Introduction............................................................................................................................................. 22
3.2 Organisational Design............................................................................................................................. 23
3.2.1 Dimensions of Organisational Design.................................................................................... 23
3.2.2 Determinants of Organisational Design.................................................................................. 23
3.2.3 Elements of Organisational Design........................................................................................ 23
3.3 Centralisation v/s Decentralisation......................................................................................................... 24
3.3.1 Factors Influencing Organisational Redesign......................................................................... 24
3.4 Organisational Structure......................................................................................................................... 24
3.4.1 Structural Dimensions of Organisations................................................................................. 24
3.4.2 Types of Organisational Structure........................................................................................... 25
3.5 Organisational Culture............................................................................................................................ 27
3.5.1 Definitions.............................................................................................................................. 27
3.5.2 Indicators of Organisational Culture....................................................................................... 27
3.5.3 Projection of Organisational Culture...................................................................................... 28
3.5.4 Characteristics of Organisational Culture............................................................................... 28
3.5.5 Factors Affecting Organisational Culture............................................................................... 28
3.5.6 Assessing Organisational Culture........................................................................................... 29
3.5.7 Changing Organisational Culture........................................................................................... 29
3.6 Organisational Design: Combining the Structural Elements of Organisations....................................... 29
3.7 Strategic Alliances: A Continuum of Inter-organisational Relationships............................................... 30
Summary...................................................................................................................................................... 32
References.................................................................................................................................................... 32
Self Assessment............................................................................................................................................ 33
Chapter IV................................................................................................................................................... 35
Perceptions, Values and Attitudes............................................................................................................. 35
Aim............................................................................................................................................................... 35
Objectives..................................................................................................................................................... 35
4.1 Introduction............................................................................................................................................. 36
4.1.1 Process of Perception.............................................................................................................. 37
4.1.2 Factors Affecting Perception.................................................................................................. 37
4.1.3 Developing Perceptual Skills: Suggestions for developing perceptual skills......................... 38
4.1.4 Rules of Perception and Personality....................................................................................... 39
4.2 Value....................................................................................................................................................... 39
4.2.1 Sources of Values.................................................................................................................... 39
4.2.2 Manifestations of Values......................................................................................................... 39
4.2.3 Types of Values....................................................................................................................... 40
4.2.4 Classifications of Values......................................................................................................... 41
4.3 Attitude.................................................................................................................................................... 41
4.3.1 Theories of Attitude................................................................................................................ 41
4.3.2 Components of Attitude.......................................................................................................... 42
4.3.3 Significance of Attitude.......................................................................................................... 42
Summary...................................................................................................................................................... 44
References.................................................................................................................................................... 44
Self Assessment............................................................................................................................................ 45
III
Chapter V..................................................................................................................................................... 47
Personality, Morale and Motivation.......................................................................................................... 47
Aim............................................................................................................................................................... 47
Objectives..................................................................................................................................................... 47
5.1 Introduction............................................................................................................................................. 48
5.2 Determinants of Personality.................................................................................................................... 48
5.2.1 Personality Traits (Cattell’s Traits Test).................................................................................. 49
5.2.2 Types of Personality................................................................................................................ 50
5.2.3 Personality and Organisational Behaviour............................................................................. 50
5.3 Morale and Motivation........................................................................................................................... 51
5.4 Motivation............................................................................................................................................... 51
5.4.1 Mechanism of Motivation....................................................................................................... 52
5.4.2 Motivation and Frustration..................................................................................................... 52
5.4.3 Basic Theories of Motivation................................................................................................. 52
5.4.3.1 Abraham Maslow’s Theory...................................................................................... 53
5.4.3.2 Fredrick Herzberg’s Two Factor Theory.................................................................. 53
5.4.3.3 David McClelland’s Theory..................................................................................... 55
5.4.3.4 Douglas McGregor’s Theory................................................................................... 55
5.5 Co-operation: Providing Mutual Assistance........................................................................................... 56
5.6 Co-operation within Organisations......................................................................................................... 56
5.6.1 The Reciprocity Principle....................................................................................................... 56
5.6.2 Trust: Believing in Others....................................................................................................... 56
5.6.3 Personal Orientation............................................................................................................... 57
5.7 Organisational Reward Systems............................................................................................................. 57
5.8 Co-operation between Organisations...................................................................................................... 57
Summary...................................................................................................................................................... 58
References.................................................................................................................................................... 58
Self Assessment............................................................................................................................................ 59
Chapter VI................................................................................................................................................... 61
Group Dynamics and Conflict Management............................................................................................ 61
Aim............................................................................................................................................................... 61
Objectives..................................................................................................................................................... 61
6.1 Interpersonal Relationships..................................................................................................................... 62
6.1.1 Approaches to Inter-Personal Relationships........................................................................... 62
6.1.2 Factors Influencing Inter-Personal Relationships................................................................... 62
6.2 Group...................................................................................................................................................... 63
6.2.1 Reasons for Joining a Group, Characteristics of a Group, Functions of Groups.................... 63
6.2.2 Advantages and Disadvantages of Groups.............................................................................. 63
6.2.3 Stages of Group Development................................................................................................ 64
6.3 Group Dynamics..................................................................................................................................... 64
6.3.1 Factors of Group Dynamics.................................................................................................... 64
6.4 Conflict Management.............................................................................................................................. 64
6.4.1 Sources of Conflict, Factors Involved in Conflict, Types of Conflicts................................... 65
6.4.2 Two Views of Conflict............................................................................................................ 65
6.4.3 Functional Conflict (wanted/constructive)............................................................................. 65
6.4.4 Dysfunctional Conflict (unwanted/destructive)...................................................................... 66
6.4.5 Conflict Management............................................................................................................. 66
6.4.6 Resolving Conflicts................................................................................................................. 66
6.4.7 Conflict Resolving Outcomes................................................................................................. 67
IV
6.5 Group Development over Time: The Five-Stage Model........................................................................ 68
6.6 Social Loafing: “Free Riding” When Working with Others................................................................... 68
Summary...................................................................................................................................................... 69
References.................................................................................................................................................... 69
Self Assessment............................................................................................................................................ 70
Chapter VII ................................................................................................................................................ 72

Leadership................................................................................................................................................... 72
Aim............................................................................................................................................................... 72
Objectives..................................................................................................................................................... 72
7.1 Leadership............................................................................................................................................... 73
7.1.1 Leadership in Business Organisations.................................................................................... 73
7.1.2 Evolution of Leadership.......................................................................................................... 73
7.2 Theories of Leadership........................................................................................................................... 74
7.2.1 Traits Theory (Ordway Tead and Chester Bernard)................................................................ 74
7.2.2 Behavioural Theories.............................................................................................................. 74
7.2.3 Rensis Likert’s 4- system Approach....................................................................................... 76
7.2.4 The Situational Theory........................................................................................................... 77
7.2.5 Contingency Theories............................................................................................................. 77
7.3 Styles of Leadership................................................................................................................................ 77
7.3.1 Autocratic Leadership............................................................................................................. 78
7.3.2 Democratic Leadership........................................................................................................... 78
7.3.3 Laissez- Faire Leadership....................................................................................................... 79
7.4 Functions of Leaderships........................................................................................................................ 79
7.5 Team Building......................................................................................................................................... 80
7.5.1 Team Building......................................................................................................................... 80
7.5.2 The Process of Team Building following steps are the part of team building........................ 80
7.5.3 Characteristics, Values and Suggestions for Effective Team.................................................. 81
7.6 Path-Goal Theory: Leaders as Guides to Valued Goals.......................................................................... 81
7.7 Charismatic Leaders: That “Something Special”................................................................................... 82
Summary...................................................................................................................................................... 83
References.................................................................................................................................................... 83
Self Assessment............................................................................................................................................ 84
Chapter VIII................................................................................................................................................ 86
Stress Management..................................................................................................................................... 86
Aim............................................................................................................................................................... 86
Objectives..................................................................................................................................................... 86
8.1 Introduction............................................................................................................................................. 87
8.2 Manifestations of Stress.......................................................................................................................... 87
8.2.1 Positive Manifestations........................................................................................................... 87
8.2.2 Negative Manifestations......................................................................................................... 87
8.3 Causes of Stress...................................................................................................................................... 87
8.3.1 External Demands / Expectations........................................................................................... 87
8.3.2 Personal Capacities................................................................................................................. 88
8.4 Sources of Stress..................................................................................................................................... 88
8.5 Consequences of Stress........................................................................................................................... 89
8.5.1 Physiological Consequences................................................................................................... 89
8.6 Stress Management................................................................................................................................. 90
8.6.1 Process of Stress Management............................................................................................... 91
8.6.2 Strategies for Coping with Stress............................................................................................ 91
V
8.7 Innovation Management......................................................................................................................... 92
Summary...................................................................................................................................................... 94
References.................................................................................................................................................... 94
Self Assessment............................................................................................................................................ 95
VI
List of Figures
Fig. 1.1 Universal versus contingency approaches......................................................................................... 8
Fig. 1.2 The interactionist perspective on behaviour in organisations............................................................ 8
Fig. 2.1 Elements of organisational behaviour............................................................................................. 16
Fig. 3.1 Line organisational structure........................................................................................................... 25
Fig. 3.2 Functional organisational structure................................................................................................. 26
Fig. 3.3 Line and staff organisational structure............................................................................................ 26
Fig. 3.4 Matrix Organisational structure....................................................................................................... 27
Fig. 3.5 Continuum of inter-organisational relationships............................................................................. 30
Fig. 4.1 Diagrammatic representation of perception.................................................................................... 36
Fig. 4.2 Sources of values............................................................................................................................. 39
Fig. 4.3 Types of values................................................................................................................................ 40
Fig. 4.4 Components of Attitude................................................................................................................... 42
Fig. 5.1 Determinants of personality- biological factors.............................................................................. 48
Fig. 5.2 Determinants of personality-family factors..................................................................................... 49
Fig. 5.3 Indicators, determinants and suggestions for morale...................................................................... 51
Fig. 5.4 Mechanism of motivation................................................................................................................ 52
Fig. 5.5 Maslow’s hierarchy of needs........................................................................................................... 53
Fig. 5.6 David McClelland’s theory.............................................................................................................. 55
Fig. 6.1 Factors influencing inter-personal relationships.............................................................................. 62
Fig. 6.2 Reasons for joining a group, characteristics of a group, functions of groups................................. 63
Fig. 6.3 Stages of group development.......................................................................................................... 64
Fig. 6.4 Sources of conflict, factors involved in conflict, types of conflicts................................................ 65
Fig. 6.5 Johari window................................................................................................................................. 67
Fig. 7.1 Leadership evolution....................................................................................................................... 73
Fig. 7.2 Features, strengths, weaknesses of Trait’s theory............................................................................ 74
Fig. 7.3 Two dimensional model................................................................................................................... 75
Fig. 7.4 Rensis Likert’s 4-systems approach................................................................................................ 76
Fig. 7.5 Situational theory............................................................................................................................. 77
Fig. 7.6 Contingency theories....................................................................................................................... 77
Fig. 7.7 Sub classifications, merits, demerits of autocratic leadership......................................................... 78
Fig. 7.8 Functions of leaderships.................................................................................................................. 79
Fig. 7.9 Objectives, pre-requisites for team building.................................................................................... 80
Fig. 7.10 Process of team building................................................................................................................ 80
Fig. 7.11 Characteristics, values and suggestions for effective team............................................................ 81
Fig. 8.1 Sources of stress.............................................................................................................................. 88
Fig. 8.2 Physiological consequences of stress.............................................................................................. 89
Fig. 8.3 Psychological consequences of stress.............................................................................................. 90
Fig. 8.4 Process of stress management......................................................................................................... 91
Fig. 8.5 Individual strategies......................................................................................................................... 91
Fig. 8.6 Organisational strategies.................................................................................................................. 92
VII
List of Tables
Table 2.1 Tabular representation of models.................................................................................................. 14
Table 3.1 Centralisation v/s Decentralisation............................................................................................... 24
Table 4.1 Internal factors.............................................................................................................................. 38
Table 4.2 External factors............................................................................................................................. 38
Table 4.3 Theories of attitude....................................................................................................................... 41
Table 5.1 Two types of personalities, Type A and Type B............................................................................ 50
Table 5.2 Motivating factors and maintenance factors................................................................................. 54
Table 5.3 Differences between Maslow’s and Herzberg’s theory . .............................................................. 54
Table 5.4 Theory X and Y............................................................................................................................. 56
Table 6.1 Advantages and disadvantages of groups...................................................................................... 63
Table 6.2 Views on conflict........................................................................................................................... 65
Table 7.1 Merits and demerits of democratic leadership.............................................................................. 78
Table 7.2 Merits and demerits of Laissez- Faire Leadership........................................................................ 79
VIII
Abbreviations
CEO - Chief Executive Officer
MRI - Magnetic Resonance Imaging
OCB - Organisational Citizenship Behavior
nAch - Need for Achievement
nAff - Need for Affiliation
nPow - Need for Power
IX
Chapter I
Aim
The aim of this chapter is to:
• define the concept of organisation
• introduce the basics of organisational behaviour
• explain the importance of organisational behaviour
Objectives
The objectives of this chapter are to:
• classify organisation
• describe the factors influencing an organisation
• explain the fundamental concepts of organisational behaviour
Learning outcome
At the end of this chapter, you will be able to:
• define organisational behaviour
• identify the concepts of organisational behaviour
• understand the importance of organisational culture
1
1.1 Introduction
An organisation is a man made system. A large group of people traveling in a bus, or watching a movie do not form
an organisation. An organisation requires people with purpose, goals and objectives. An organisation is a group
of people working together to achieve the common organisational goal (viz., production of goods or service) with
the help of people, machines and materials. Examples of an organisation are family, university, bank, Municipal
Corporation, government, army, etc.
1.1.1 Classifications of Organisations

• Industrial sector v/s Agricultural sector
• Public Sector v/s Private Sector
• Joint Sector v/s Co-operative Sector
• Capital intensive
• Labour intensive
• Public limited
• Private limited
• Manufacturing sector
• Service Sector
• Large Scale
• Small-Scale etc
1.1.2 Factors Influencing an Organisation

• People
• Size
• Technology
• Environment
• Management
1.2 Organisational Behaviour

Study shows that an individual spends maximum time of his life in the organisation than the time he spends on
other activities.
The subject of organisational behaviour deals with that part of life, which is spent working. It is also called ‘on-the-
job’ life. Interestingly our ‘off-the-job’ life is inter related and inter dependent on “on-the-job’ life and vice-versa.
Definitions
• Keith Davis: A study of human behaviour at work.
• Fred Luthans: An understanding, prediction and control of human behaviour in the organisation.
• Stephen Robbins: A study that investigates the impact, individuals, groups and structures h a v e on human
behaviour within the organisation.
• S. K. Kapur: As a systematic study of actions and reactions of people working in an organisation in order to
improve the overall organisational performance.
• Talya Bauer: As the systematic study and application of knowledge about how individuals and groups act
within the organisations where they work.
2
1.2.1 Fundamental Concepts in Organisational Behaviour
As per definitions, study of human behaviour is a very important part of organisational behaviour. It is essential
for modern managers to understand and predict human psychology in terms of behaviour. Thus, it is essential to
understand the organisational culture, which is formed by the organisational behaviour of the people over a long
period of time.
When new employees enter organisations, their stable or transient characteristics affect how they behave and
perform. Therefore, it is important to understand individual characteristics that matter for employee behaviours at
work. Important concepts of organisational behaviour are as follows:
Every individual is different
Every person is unique. Therefore, each person should be treated separately while managing people. A uniform
management style will not be applicable to all employees.
Every individual is a complete person

Each individual has his/her own likes-dislikes, opinions, views, attitude, knowledge, etc. Since the employee spends
more time in the organisations they work, they are expected to be happy on-the –job as well as off-the–job.
Human behaviour has cause-effect relationship

It is necessary for managers to understand the beliefs and faiths of the people and also the cause-effect relationship
behind the behaviour, if they want to be effective managers.
Every individual has self – esteem

People are different from machines and materials. They have self-respect and prestige. They expect their due respect
in day-today activities.
An organisation is a social system

The organisational behaviour of people depends upon their social status, social roles and social groups. As a result,
within every formal organisation, there exists an informal organisation, which influences the formal organisation
to a large extent.
Mutual interests are inter-dependent

As organisation needs people, people too need the organisation to achieve their respective goals. There is
interdependence of interests. It is necessary that these are ‘complementary’ and not ‘contradictory’.
A total view of organisation

When all the above aspects of organisational behaviour are taken in to consideration we can have a total view of
the organisation. This helps the managers understand human behaviour in the organisation, which results in the
necessary co-ordination between organisation, management and employees.
1.3 Importance of Organisational Behaviour for Managers

In the modern world, organisations are becoming increasingly complex with rapidly changing technology. As a
result, organisations are demanding more from their employees. Employees are called ‘Human Resources’ because
they are not commodities. Managements have become aware that they have to treat their employees as human beings
and not as machines or materials. Therefore understanding the ‘Organisational Behaviour’ of their employees is
extremely important for the managers of tomorrow.
Although the importance of organisational behaviour may be clear, we should still take a few moments to emphasise
certain points. People are born and educated in organisations, acquire most of their material possessions from
organisations, and die as members of organisations.
Many of our activities are regulated by organisations called governments. And most adults spend the better part of
their lives working in organisations. Because organisations influence our lives so powerfully, we have every reason
to be concerned about how and why those organisations function. In our relationships with organisations, we may
adopt any one of several roles or identities.
3
1.4 Behaviour Model for Organisational Efficiency

Organisational behaviour is a study and application of managerial skills and knowledge to people in the organisation
to investigate individual and group behaviour. Various concepts and models in the field of organisational behaviour
attempt to identify, not only the human behaviour but also modify their attitude and promote skills so that they can
act more effectively. This is done scientifically; therefore, organisational behaviour field is a scientific discipline.
The knowledge and models are practically applied to workers, groups and organisational structure that provide tools
for improved behaviour and dynamics of relationship. The field of organisational behaviour also provides various
systems and models for international relationship that are applied to organisations.
Leaders must look for indicators (effects) of individual behaviour and of groups in any organisation. Indicators
have a root cause beneath. As a leader, it is that symptom, which must be evaluated, and cause of human behaviour
established so that if the behaviour is good, the manager can establish the norms of behaviour. If the behaviour is
not conducive to achieve the organisational objective then suitable alternative model can be applied to channelise
individual behaviour towards an appropriate organisational value system and thus individual behaviour modified.
An organisation has three basic elements namely, people, structure, and technology. An organisation must have
suitable organisational structure, with appropriate number of tier and reporting system properly explained. Principle
of unity of command, delegation of authority and responsibility, formulation of objectives and its allotment to
various groups is very important so that workers achieve a required level of job satisfaction. They must be trained
to handle sophisticated machines and equipment. It is the people, their value system, and faith in the leadership
that make an organisation. Leader must be able to describe, understand, predict and control individual behaviour
in the organisation.
Describe: Study of organisational behaviour is based on scientific methods, which have been applied on human
beings. It is a science, that analyses as to how people behave in different situations in the organisation. A manager
should be able describe the behaviour of each of the individuals under his command, identify attitude, and be able
to pinpoint his behaviour so that the situation in the organisation is under control.
Understand: Leaders must understand human behaviour as to why people behave in particular manner and try to
identify reasons so that corrective actions can be taken.
Predict: By frequent closer interaction, a leader is in a position to identify the nature of workers. Some are more
productive while the others are tardy and disruptive. In such situation, a leader should be able to handle each
individual differently so that his or her actions can be channelised to higher productivity.
Control: Managers in the organisations should train their subordinates continuously; aim being development of
skills, promotion of productivity and improvement of individual behaviour. It is a continuous process on the part
of manager. He must lay down control measures so that the energy of workers is diverted towards organisational
objectives. Communication should be used to ensure that the behaviour of individual is controlled. Environment
has a great impact on human behaviour.
Appropriate internal environment would help organisations to built favourable work environment that will help
individuals and groups within organisations to work effectively towards higher productivity.
1.5 Organisational Components that Need to be Managed People

People are the main component of any organisation that has to be managed. Every individual has a personal goal to
be achieved. Organisations must identify the need spectrum of individuals and take suitable steps for its fulfilment
to enable them to perform effectively so that they complete their allotted task in time. Relationship between the
workers, with subordinates and superiors should be established based on full understanding and complete faith based
on mutual trust so that it is easy to communicate and understand each other’s views. Work teams and Groups play
a vital role in the organisation. Individual may have to keep his personal interest aside if it conflicts with team or
group goals. It is the team goals, accomplishment of which contributes towards achieving organisational goals.
4
Structure
There are two types of organisations, formal and informal. Informal organisations do not have a specified structure.
Formal organisations are building based upon the objective set for it. Organisational structure in such organisation
is hierarchical in nature, with people at each level having their own objectives, which contributes towards fulfilment
of overall organisational objectives. In such organisations people at lower level report to higher level managers. The
tier system has the principle of unity of command inbuilt in it. The organisation structure may depend upon the size,
number of products/services produced, skill and experience of the employees, managerial staff and geographical
location of the organisation. An organisation may have several levels and pyramid like organisational structure or flat
structure. The efficiency of the organisation will depend upon the free flow of the information, efficient communication
system prevailing in the organisation, well-defined authority and responsibility supported by detailed policies, rules
and regulations. The organisation must have well laid out systems, which are understood by workers, supervisors and
managers. The leader must keep open mind while dealing with subordinates and exercise full control over various
systems, levels and ensure planned productivity and achieve high level of job satisfaction.
Technology
Managing technology is an important job of any management. It is an important element of any unit. Selection
of technology, procurement, installation, operation and maintenance is important and no compromise should be
made in procuring latest or advanced technology. Various systems and sub- systems should support technology that
exists in an organisation. Based on the technology, an organisation should formulate job structure and resultant
procurement of human resource so that they are complimentary to each other. Adequate attention is also being paid
to service industry. For example an appropriate drill, procedures are installed in hospital industry to ensure that the
patients’ record is maintained properly. On line operations of all systems relating to admission record, past treatment,
drugs, availability of beds, schedule of operations maintained so that the level of patients satisfaction is raised. In
minimum number of days, maximum numbers of patients should be treated. Various processes required to regulate
these functions form the important part of service industry.
Jobs
Job is an assignment assigned to an individual. It encompasses various tasks within it. For example, Personnel
manager wants to fill up twelve vacancies in production department within three months. Job will have various tasks
inbuilt in it like designing of job specification, selection of media, advertising vacancies, scheduling of selection
and recruiting process. Manager, therefore have to manage various tasks to accomplish a particular job. This may
form a part of managerial functions.
Processes
Management of processes and its inter-dependence is very crucial to high productivity and higher job satisfaction.
What is important for a manager is to ensure high morale of the work force. To ensure this, he must identify various
managerial dictums. Select appropriate subordinates to carry out a job based on aptitude, personality traits, mental
build up and attitude. He should also involve himself and lead subordinates by personal example. In defence services,
it is the quality of leadership that motivates troops to achieve near impossible task where everything appears to be
going wrong. Various role models assist leaders in identifying as to which process, method or approach would be
suitable to mould subordinates in suitable frame that may be required by any organisation. Nothing motivates workers
better if you give them their entitlements in full and train them to take up higher jobs. By doing so, manager must
develop and build an organisational culture that will bind employees to a common cultural bond. During day-to-day
functions, managers must be transparent and maintain a high degree of value system and display ethical behaviour.
There are no short cuts to this and will pay rich dividends in times to come.
External Environment
What we have so far discussed is various components of an organisation that should be managed properly.
External environment also plays an important role in managing the points discussed above. When we talk about
managing people in the organisation, what we have to study and manage is the influence of culture and its impact
on the individual. A manager should examine as to how he is going to cope up with the changes. Study of external
environment is very wide and encompasses economic, cultural, social, government rules and regulations, legal
aspects, political climate, demographics and its impact. If one scans the external environment that is prevailing
5
in Indian context, one will find that individuals are racing to catch up the upper class as it relates to standards of
living, material possession, higher education, attempt to copy western culture, food habits, dressing pattern and
the like. Beauty parlours, pubs and cyber cafes around each corner are an ample evidence of the impact of external
environment. This trend has an impact on what products or services are on priority in the society and indicates the
behaviour of an individual. If the above factors are evaluated appropriately, a manager will be able to examine and
predict human behaviour in the organisation. It is therefore important to evaluate market situation, competitors, and
availability of raw material, technology, availability of skilled, semi skilled and non-skilled personnel. In addition,
evaluate prevailing culture and how individuals are likely to respond to the call of the organisation. Some factors
like government rules, and political stability keep changing, the organisations must cater for such contingencies.
Manager must therefore keep in mind the internal and external factors and make the best amalgam and work to
achieve organisational effectiveness.
1.6 Contemporary Organisational Behaviour

Contemporary organisational behaviour has two fundamental characteristics that warrant special discussion. It also
generally accepts a set of concepts to define its domain.
1.6.1 Characteristics of the Field

Researchers and managers who use concepts and ideas from organisational behaviour must recognise that it has an
interdisciplinary focus and a descriptive nature; that is, it draws from a variety of fields and attempts to describe
behaviour (as opposed to prescribing how behaviour can be changed in consistent and predictable ways).
1.6.2 An Interdisciplinary Focus

In many ways, organisational behaviour synthesises several other fields of study. Psychology, especially organisational
psychology, is perhaps the greatest contributor to the field of organisational behaviour. Psychologists study human
behaviour, whereas organisational psychologists specifically address the behaviour of people in organisational
settings. Many of the concepts that interest psychologists, such as individual differences and motivation, are also
central to studying of organisational behaviour.
Sociology also has had a major impact on the field of organisational behaviour. Sociologists study social systems
such as families, occupational classes, and organisations. Because a major concern of organisational behaviour is
the study of organisation structures, the field clearly overlaps with areas of sociology that focus on the organisation
as a social system.
Anthropology is concerned with the interactions between people and their environments, especially their cultural
environment. Culture is major influence on the structure of organisations as well as on the behaviour of individual
people within organisations.
Political science also interests organisational behaviourists. We usually think of political science as the study of
political systems such as governments. But themes of interest to political scientists include how and why people
acquire power, political behaviour, decision making conflict, the behaviour of interest groups, and coalition formation.
These are also major areas of interest in organisational behaviour.
Economists study the production, distribution, and consumption of goods and services.
Organisational behaviourists share the economist’s interest of topics such as labour market dynamics, productivity,
human resource planning and forecasting, and cost-benefit analysis. Engineering has also influenced the field of
organisational behaviour. Industrial engineering in particular has long been concerned with work measurement,
productivity measurement, work flow analysis and design, job design, and labour relations. Obviously these areas
are also relevant to organisational behaviour.
6
Most recently, medicine has influenced organisational behaviour in connection with study of human behaviour at
work, specifically in the area of stress. Increasing research is showing that controlling the causes and consequences
of stress in and out of organisational settings is important for the well-being of the individual as well as that of the
organisation.
1.6.3 A Descriptive Nature

A primary goal of organisational behaviour is to describe relationships between two or more behavioural variables. The
theories and concepts of the field, for example, cannot predict with certainty that changing a specific set of workplace
variables will improve an individual employee’s performance by a certain amount. At best, theories can suggest that
certain general concepts or variables tend to be related to one another in particular settings. For instance, research
might indicate that in one organisation, employee satisfaction and individual perceptions of working conditions
correlate positively. Nevertheless, we may not know if better working conditions lead to more satisfaction, if more
satisfied people see their jobs differently from unsatisfied people, or if both satisfaction and perceptions of working
conditions are actually related through other variables. Also, the observed relationship between satisfaction and
perceptions of working conditions may be considerably stronger, weaker, or nonexistent in other settings.
Organisational behaviour is descriptive for several reasons: the immaturity of the field, the complexities inherent
in studying human behaviour, and the lack of valid, reliable, and accepted definitions and measures. Whether the
field will ever be able to make definitive predictions and prescriptions is still an open question. But the value of
studying organisational behaviour nonetheless is firmly established. Because behavioural processes pervade most
managerial functions and roles, and because the work of organisations is done primarily by people, the knowledge
and understanding gained from the field can help managers in significant ways.
1.7 Contextual Perspectives on Organisational Behaviour

Several contextual perspectives have increasingly influenced organisational behaviour: the systems approach and
contingency perspectives, the interactional view, and the popular-press perspectives. Many of the concepts and
theories we discuss in the chapters that follow reflect these perspectives; they represent basic points of view that
influence much of our contemporary thinking about behaviour in organisations.
1.7.1 Systems and Contingency Perspectives

The systems and contingency perspectives take related viewpoints on organisations and how they function. Each
is concerned with interrelationship among organisational elements and between organisational and environmental
elements.
1.7.2 The Systems Perspective

The systems perspective, or the theory of systems, was first developed in the physical sciences, but it has been
extended to other areas, such as management. A system is an interrelated set of elements that function as a whole.
An organisational system receives four kinds of inputs form its environment: material, human, financial, and
informational. The organisation then combines and transforms the inputs and returns them to the environment in
the form of products or services, profits or losses, employee behaviours, and additional information. Finally, the
system receives feedback from the environment regarding these outputs.
As an example, we can apply systems theory to an oil company. Material input includes pipelines, crude oil, and the
machinery used to refine petroleum. Financial input includes the money received from oil and gas sales, stockholder
investment, and so forth. Human input includes the effort put forth by oil field workers, refinery workers, office staff,
and other people employed by the company. Finally, the company receives information input from forecasts about
future oil supplies, geological surveys on potential drilling sites, sales projections, and similar analyses.
Through complex refining and other processes, these inputs are combined and transformed to create products such as
gasoline and motor oil. As outputs, these products are sold to the consuming public. Profits from operations are fed
back into the environment through taxes, investments, and dividends; losses, when they occur, hit the environment by
reducing stockholders’ incomes. In addition to having on-the-job contacts with customers and suppliers, employees
7
live in the community and participate in a variety of activities away from the workplace. In varying degrees, at least
some part of this behaviour is influenced by their experiences as workers. Finally, information about the company
and its operations is also released into the environment.
1.7.3 The Contingency Perspective

Another useful viewpoint for understanding behaviour in organisations comes from the contingency perspective. In
the early days of management studies, managers searched for universal answers to organisational questions. They
sought prescriptions that could be applied to any organisation under any conditions. For example, early leadership
researchers tried to discover forms of leadership behaviour that would always increase employee satisfaction and
effort. Eventually, however, researchers realised that the complexities of human behaviour and organisational settings
make universal conclusions virtually impossible. They discovered that in organisations, most situations and outcomes
are contingent; that is, the relationship between any two variables is likely to be influenced by other variables.
Universal Approach
Organizational The one best way of
problems or situations responding.
determine…
Contingency Approach
Organizational Elements of the situation, Contingent ways of
problems or situations which then suggest… responding.
must be evaluated in
terms of …
Fig. 1.1 Universal versus contingency approaches
1.8 Interactionalism
Interactionalism is a relatively new approach to understanding behaviour in organisational settings. First presented
in terms of interactional psychology, this view assumes that individual behaviour results from a continuous and
multidirectional interaction between the characteristics of a person and characteristics of a situation. More specifically,
interactionalism attempts to explain how people select, interpret, and change various situations. This interaction is
what determines the individual’s behaviour.
The interactional view implies that simple cause-and-effect descriptions of organisational phenomena are not enough.
For example, one set of research studies may suggest that job changes will lead to improved employee attitudes.
Another set of studies may propose that attitudes influence how people perceive their jobs in the first place. Both
positions are probably incomplete: employee attitudes may influence job perception, but these perceptions may in
turn influence future attitudes. Because interactionalism is a fairly recent contribution to the field, it is less prominent
in the chapters that follow than the systems and contingency theories. Nonetheless, the interactional view appears
to offer many promising ideas for future development in the field.
Individual
Behavior
Situation
Fig. 1.2 The interactionist perspective on behaviour in organisations
While some of the evidence provided by current research is open to a variety of different interpretations, they have
focused popular attention on many of the important issues and problems confronting business today. As a result,
managers of the 1990s better appreciate both their problems and their prospects in working toward more effective
organisational practices in the years to come.
8
Summary
• Organisational behaviour deals with that part of life, which is spent working. It is also called ‘on-the-job’
life.
• Employees are called ‘Human Resources’ because they are not commodities. Managements have become aware
that they have to treat their employees as human beings and not as machines or materials.
• The organisational behaviour of people depends upon their social status, social roles and social groups. As a
result, within every formal organisation, there exists an informal organisation, which influences the formal
organisation to a large extent.
• Despite the advancement in technology, the importance of people in an organisation cannot be undermined.
• Organisational behaviour is a study and application of managerial skills and knowledge to people in the
organisation to investigate individual and group behaviour.
• Study of organisational behaviour is based on scientific methods, which have been applied on human beings.
• Organisations must identify the need spectrum of individuals and take suitable steps for its fulfilment to enable
them to perform effectively so that they complete their allotted task in time.
• Contemporary organisational behaviour has two fundamental characteristics that warrant special discussion.
• The interactional view implies that simple cause-and-effect descriptions of organisational phenomena are not
enough.
References
• Bauer, Erdogan, T. & Berrin, 2010. Understanding Organisational Behaviour. In: Bauer, Talya and Erdogan,
Berrin. Organisational Behaviour.
• Hitt, M. A., Miller, C.C. & Collela, A., 2009. Organisational Behaviour, 2nd ed., John Wiley & Sons, Inc.
• Organisational Behaviour, [Online] Available at: <http://www.flatworldknowledge.com/pub/organisational-
behavior-v1.1/141353#web-141351> [Accessed 5 October 2010].
• Davis, Leadership and organisational behaviour, [Online] Available at: <http://www.nwlink.com/~donclark/
leader/leadob.html> [Accessed 14 August 2012].
• Lepelley, D., 2012, Organisational behaviour in business Part 1, [Video online] Available at: <http://www.
youtube.com/watch?v=SS8GSPdej-k> [Accessed 14 August 2012].
• Dr. Wicker, D., Organisational behaviour, [Video online] Available at: <http://www.youtube.com/
watch?v=0dAATdGxSGk> [Accessed 14 August 2012].
Recommended Reading
• Colquitt, LePine, J., Wesson, M., 2010. Organisational Behaviour: Improving Performance and Commitment
in the Workplace. 2nd ed., McGraw-Hill/Irwin.
• Schermerhorn, J.R., Dr. Hunt, J.G. & Dr. Osborn, R. N., 2010. Organisational Behaviour 11th ed., Wiley.
• Kreitner, R. & Kinicki, A., 2009. Organisational Behaviour, 9th ed., McGraw-Hill/Irwin.
9
Self Assessment
1. Which of the following statements is false?
a. An organisation requires people with purpose, goals and objectives
b. Organisations are not demanding more from their employees
c. Understanding the ‘Organisational Behaviour’ of their employees is extremely important
d. An organisation is a group of people working together to achieve the common organisational
goal
2. Match the following.

A As the systematic study and application of knowledge about how individuals and
1. Keith Davis
groups act within the organisations where they work.
B As a systematic study of actions and reactions of people working in an organisation
2. Fred Luthans
in order to improve the overall organisational performance.
3. Stephen C As a study that investigates the impact, individuals, groups and structure have on
Robbins human behaviour within the organisation
D As understanding, prediction and control of human behaviour in the
4. S.K.Kapur
organisation.
5. Talya Bauer E As a study of human behaviour at work.
a. 1-E,2-D,3-C,4-B,5-A
b. 1-B,2-A,3-D,4-C,5-E
c. 1-C,2-D,3-E,4-A,5-B
d. 1-C,2-D,3-A,4-B,5-E
3. Which of the following concepts result in the necessary co-ordination between organisation, management and
employees?
a. An organisation is a social system
b. A total view of organisation
c. Mutual interests are inter-dependent
d. All behaviour has cause-effect relationship
4. Management of _____________ and its inter-dependence is very crucial to high productivity and higher job
satisfaction.
a. Processes
b. Finance
c. Technology
d. Environment
5. Which of the following is a type of organisation?

a. Capital intensive
b. People intensive
c. Technology sector
d. Management sector
10
6. Which of the following is not an example of an organisation?
a. University
b. Book
c. Army
d. Movie theatre
7. Study of ______________ is a very important part of organisational behaviour.

a. human behaviour
b. human psychology
c. human strength
d. human physiology
8. Employees are called because they are not commodities.

a. Human resources
b. Human liabilities
c. Human Capital
d. Human asset
9. ______________ is concerned with the interactions between people and their environments.
a. Anthropology
b. Interactionalism
c. Contingency
d. Organisational behaviour
10. ___________ must have suitable organisational structure, with appropriate number of tier and reporting system
properly explained.
a. Manager
b. Organisation
c. Psychologists
d. System
11
Chapter II
Approaches and Models of Organisational Behaviour
Aim
• explain various approaches to organisational behaviour
• describe the models of organisational behaviour
• elucidate the importance of personal and work life relationship
Objectives
• enlist four approaches to organisational behaviour
• explain five different models of organisational behaviour
• elucidate the interdependence of personal-life and work-life
Learning outcome
• identify approaches to organisational behaviour
• enlist five different models of organisational behaviour
• understand the relationship between personal life and work-life
12
2.1 Introduction
Organisational behaviour of people can be studied from various angels. These angels are called the approaches to
organisational behaviour. Virtually all organisations have managers with titles like marketing manager, director
of public relations, vice president for human resources, and plant manager. But probably no organisation has a
position called organisational behaviour manager. The reason for this is simple: organisational behaviour is not an
organisational function or area. Instead, it is best described as a perspective or set of tools that all managers can use
to carry out their jobs more effectively.
By understanding organisational behaviour concepts, managers can better understand and appreciate the behaviour
of those around them. For example, most managers in an organisation are directly responsible for the work-related
behaviours of a set of other people—their immediate subordinates. Typical managerial activities in this area include
motivating employees to work harder, ensuring that their jobs are properly designed, resolving conflicts, evaluating
their performance, and helping them set goals to achieve rewards. The field of organisational behaviour abounds
with theory and research regarding each of these functions. Unless they happen to be CEOs, managers also report
to others in the organisation (even the CEO reports to the board of directors). In working with these individuals,
understanding basic issues associated with leadership, power and political behaviour, decision making, organisation
structure and design, and organisation culture can also be extremely beneficial.
Again, the field of organisational behaviour provides numerous valuable insights into these processes.
Managers can also use their knowledge from the field of organisational behaviour to better understand their own
behaviours and feelings. For example, understanding personal needs and motives, how to improve decision-making
capabilities, how to respond to and control stress, how to better communicate with others, and the way in which
career dynamics unfold can all be of enormous benefit to individual managers. Organisational behaviour once again
provides useful insights into these concepts and processes.
2.2 Some of the Important Approaches

Following are the important approaches of organisational behaviour
2.2.1The Inter-Disciplinary Approach

This approach states that in order to study the organisational behaviour, it is necessary to understand the interactions
and interdependence between the various aspects of human life.
2.2.2 The Human Resources Approach

This approach states that the management of an organisation should support training and development of employees,
since it yields better results. This leads to employee and organisation growth.
2.2.3 The Systems Approach

This approach looks upon the management as a ‘System’ with various sub-systems. The attention should be given
to overall effectiveness of the system rather than effectiveness of any sub-system in isolation.
2.2.4 The Contingency Approach

This approach states that each situation should be dealt uniquely, with special thinking and decision making. The
various approaches to the study of organisational behaviour have given rise to different models.
2.3 Models of Organisational Behaviour

Following are various models of organisational Behaviour
The autocratic model

This model assumes that authority of superiors and obedience is central to results. Obedience of subordinates is due
to two reasons: respect for knowledge and fear of punishment in case of disobedience.
13
The custodian model

This model assumes that organisational behaviour depends upon economic resources. Employees work for money
and job security. The management takes the role of guardian and custodian of their employees and their wealth.
The supportive model

This model assumes that management plays role of supportive leadership. Employees show an initiative and drive
for performance through their involvement and participation in the organisational activities. Employees need support,
status and recognition for their performance.
The collegial model

The model is based on the assumption that the main need of employees is self actualisation and they exhibit responsible
behaviour. The management must build teams and encourage participation in decision making.
The SOBC model

It is based on the philosophy that ‘human behaviour is caused and follows the cause-effect relationship’. SOBC
stands for Stimulus, Organism, Behaviour, Consequences.
• Stimulus: Is the cause

• Organism: Can be an individual or group.
• Behaviour: Is expressed in terms of action or response.
• Consequences: Are results.
Stimulus>Organism>Behaviour>Consequences
Parameter basis Autocratic Custodial Supportive Collegial
Managerial orientation Authority Money Support Teamwork
Employee orientation Obedience Job security Performance Responsibility

Dependence on Dependence on
Employee psychology Participation Self discipline
boss organisation
Self esteem&
Employee needs Survival Maintenance Self actualisation
recognition
Performance results Minimum Passive co-operation Efficient Effective
Level of morale Compliance Satisfaction Motivation Commitment
Table 2.1 Tabular representation of models
The philosophy (model) of organisational behaviour held by management consists and integrated set of assumptions
and beliefs about the way things are, the purpose for these activities, and the way they should be.
• These philosophies are sometimes explicit, and occasionally implicit, in the minds of manager.
• Five major organisational behaviour philosophies includes autocratic, custodial, supportive, collegial and
system.
14
2.3.1 Two Sources of Model of Organisational Behaviour
Fact premise are acquired through direct and indirect lifelong learning and are very useful in guiding our
behaviour.
• Value premise represent our views of the desirability of certain goals and activities.
• Value premises are variable beliefs we hold and are therefore under our control.
2.3.2 Goals
Goals are relatively concrete formulations of achievements the organisation is aiming for within set periods of time,
such as one to five years.
Goal setting is a complex process, for top management’s goals need to be merged with those of employees, who
bring their psychological, social, and economic needs with them to an organisation.
2.4 Managerial Functions

The four basic managerial functions in organisations are planning, organising, leading, and controlling. By applying
these functions to the various organisational resources human, financial, physical, and informational the organisation
achieves different levels of effectiveness and efficiency.
Planning: The managerial function of planning is the process of determining the organisation’s desired future position
and deciding how best to get there. The planning process at Sears, Roebuck, for example, includes scanning the
environment, deciding on appropriate goals, outlining strategies for achieving those goals, and developing tactics
to execute the strategies. Behavioural processes and characteristics pervade each of these activities. Perception, for
instance, plays a major role in environmental scanning, and creativity and motivation influence how managers set
goals, strategies, and tactics for their organisation.
Organising: The managerial function of organising is the process of designing jobs, grouping jobs into manageable
units, and establishing patterns of authority among jobs and groups of jobs. This process designs the basic structure,
or framework, of the organisation. For large organisations like Sears, the structure can be expensive and complicated.
As noted earlier, the processes and characteristics of the organisation itself are a major theme of organisational
behaviour.
Leading: Leading is the process of motivating members of the organisation to work together toward the organisation’s
goals. A manger must hire and train employees. Major components of leading include motivating employees, managing
group dynamics, and leadership per se, all of which are closely related to major areas of organisational behaviour.
Controlling: A final managerial function, controlling, is the process of monitoring and correcting the actions of
the organisation and its people to keep them headed toward their goals. A manger has to control costs, inventory,
and so on. Again, behavioural processes and characteristics play an important role in carrying out this function.
Performance evaluation and reward systems for example, are all aspects of controlling.
2.5 Inter-Relationship between Personal Life and Work Life

Research has revealed that organisational behaviour of an employee is a result of a constant interaction between
personal life and work life. Employee happy with the work-life tends to be happy with the personal-life. The reverse
may not be always true.
2.5.1 Managerial Roles

In an organisation, as in a play or a movie, a role is the part a person plays in a given situation.
Managers often play a number of different roles. Much of our knowledge about managerial roles comes from the
work of Henry Mintsberg. Mintzberg identified ten basic managerial roles clustered into three general categories.
15
Management’s
Philosophy • Values • Vision • Mission • Goals
Formal Social
Organisational Culture
Organisation Environment
Leadership • Communication • Group

Informal Dynamics
Organisation
Quality of Work Life (QWL)
Motivation
Outcomes
• Performance
• Employee satisfaction
• Personal growth and development
Fig. 2.1 Elements of organisational behaviour
Interpersonal roles
Mintzberg’s interpersonal roles are primarily social in nature; that is, they are roles in which the manger’s main task
is to relate to other people in certain ways. The manager sometimes many serve as a figurehead for the organisation.
Taking visitors to dinner and attending ribbon-cutting ceremonies are part of the figurehead role. In the role of
leader, the manager works to hire, train, and motivate employees. Finally, the liaison role consists of relating to
others outside the group or organisation. For example, a manger at Intel might be responsible for handling all price
negotiations with a major supplier of electronic circuit boards. Obviously, each of these interpersonal roles involves
behavioural processes.
Informational roles
Mintsberg’s three informational roles involve some aspects of information processing. The monitor actively seeks
information that might be of value to the organisation in general or to specific managers. The manager who transmits
this information to others is carrying out the role of disseminator. The spokesperson speaks for the organisation
to outsiders. For example, the manager chosen by Apple Computer to appear at a press conference announcing a
merger or other major deal, such as a recent decision to undertake a joint venture with Microsoft, would be serving
in this role. Again, behavioural processes are part of these roles because information is almost always exchanged
between people.
Decision-making roles
Finally, Mintsberg identified four decision-making roles. The entrepreneur voluntarily initiates change, such as
innovations or new strategies, in the organisation. The disturbance handler helps settle disputes between various
parties, such as other mangers and their subordinates. The resource allocator decides who will get what—how
resources in the organisation will be distributed among various individuals and groups. The negotiator represents
the organisation in reaching agreements with other organisations, such as contracts between management and labor
unions. Again, behavioural processes are clearly crucial in each of these decisional roles.
2.5.2 Managing for Effectiveness

A final set of issues we address in this chapter relates to the consequences of management. More specifically, what
are the outcomes of different types of and approaches to management? Three basic levels of outcomes determine
organisational effectiveness: individual-, group-, and organisation-level outcomes. Developing management skills
provides some additional perspectives on the importance of these outcomes.
16
Individual-level outcomes
Several different outcomes at the individual level are important to managers. Given the focus of the field of
organisational behaviour, it should not be surprising that most of these outcomes are directly or indirectly addressed
by various theories and models.
Individual behaviours
First, several individual behaviours result from a person’s participation in an organisation. One important behaviour
is productivity. Productivity, as defined in terms of an individual, is an indicator of an employee’s efficiency and
is measured in terms of the products or services (or both) created per unit of input. For example, if Bill makes 100
units of a product in a day and Sara makes only 90 units in a day, then, assuming that the units are of the same
quality and Bill and Sara make the same wages, Bill is more productive than Sara. Performance, another important
individual-level outcome variable, is a somewhat broader concept. It is made up of all work-related behaviours. For
example, even though Bill is highly productive, he may also refuse to work overtime, express negative opinions
about the organisation at every opportunity, and do nothing unless it falls precisely within the boundaries of his job.
Sara, on the other hand, may always be willing to work overtime, is a positive representative of the organisation,
and goes out of her way to make as many contributions to the organisation as possible. Bases on the full array of
behaviours, then, we might conclude that Sara actually is the better performer.
Individual attitudes
Another set of individual-level outcomes influenced by managers consists of individual attitudes. Levels of job
satisfaction or dissatisfaction, organisational commitment, and organisational involvement are all important in
organisational behaviour.
Stress
Stress is another important individual-level outcome variable. Given its costs, both personal and organisational, it
should not be surprising that stress is becoming an increasingly important topic for both researchers in organisational
behaviour and practicing managers.
2.6 Group and Team-Level Outcomes

Another set of outcomes exists at the group and team level. In general, some of these outcomes parallel the individual-
level outcomes just discussed. For example, if an organisation makes extensive use of work teams, team productivity
and performance are important outcome variables. On the other hand, even if all the people in a group or team have
the same or similar attitudes toward their jobs, the attitudes themselves are individual-level phenomena. Individuals,
not groups, have attitudes.
2.7 Organisation-Level Outcomes

Finally, a set of outcome variables exists at the organisation level. As before, some of these outcomes parallel those
at the individual and group levels, but others are unique. For example, we can measure and compare organisational
productivity. We can also develop organisation level indicators of absenteeism and turnover. But financial performance
is generally assessed only at the organisation level.
In terms of financial performance, organisations are commonly assessed on stock price, return on investment, growth
rates, and the like. They are also evaluated in terms of their ability to survive and the extent to which they satisfy
important constituents such as investors, government regulators, employees, and unions.
17
Summary
• Five major organisational behaviour philosophies includes autocratic, custodial, supportive, collegial and
system.
• The managerial function of planning is the process of determining the organisation’s desired future position
and deciding how best to get there.
• Stress is another important individual-level outcome variable. Given its costs, both personal and organisational,
it should not be surprising that stress is becoming an increasingly important topic for both researchers in
organisational behaviour and practicing managers.
• A manger has to control costs, inventory, and so on. Again, behavioural processes and characteristics play an
important role in carrying out this function.
• The interrelationship between personal life and work life cannot be overlooked. Hence it is extremely important
for mangers to understand various aspects of organisational behaviour in the light of various approaches and
models discussed in this chapter.
• Financial performance is generally assessed only at the organisation level. In terms of financial performance,
organisations are commonly assessed on stock price, return on investment, growth rates, and the like
References
• Zachary, W. B., Kuzuhara, L.W., William, B. & Loren, W., 2004. Organisational Behaviour: Integrated Models
and Applications, 1st ed., South-Western College Pub.
• Ivancevich, J., Konopaske, R. & Matteson, M., 2007. Organisational Behaviour and Management, 8th ed.,
McGraw-Hill/Irwin.
• Dr. Wicker, 2008, Organisational behaviour, [Video online] Available at: <http://www.youtube.com/
watch?v=Xkmt6yuze14> [Accessed 18 August 2012].
• Dr. Wicker, D., 2008, Organisational behaviour lecture 3, [Video online] Available at: <http://www.youtube.
com/watch?v=eKJ3lyUMCzc> [Accessed 18 August 2012].
• Chen, X., Organisational behaviour and human processes, [Online] Available at: <http://www.journals.elsevier.
com/organizational-behaviour-and-human-decision-processes/> [Accessed 18 August 2012].
• Sarab, Models of Organisational behaviour, [Online] Available at: <http://beepyoumba.com/BEEP/?p=28>
[Accessed 18 August 2012].
Recommended Reading
• George J. & Jones G., 2007. Understanding and Managing Organisational Behaviour, 5th ed., Prentice Hall.
• Slocum, J.W., 2010. Organisational Behaviour, 13th ed., South-Western College Pub
• Robbins, J., 2009. Organisational Behaviour, 13th ed., Pearson International.
18
Self Assessment
1 Autocratic A Support
2 Custodial B Authority
3 Supportive C Teamwork
4 Collegial D Money
5 SOBC E cause-effect
a. 1-A, 2-B, 3-C, 4-D, 5-E
b. 1-B, 2-D, 3-A, 4-C, 5-E
c. 1-D, 2-C, 3-A, 4-E, 5-B
d. 1-D, 2-C, 3-E, 4-A, 5-B
2. To study organisational behaviour, the inter-disciplinary approach emphasises the importance

of____________.
a. employee
b. authority
c. human-life
d. money
3. The Human Resources approach states that the management of an organisation should support ________
and________of employees.
a. training and development
b. training and decision making
c. compliance and development
d. training and authority
4. In systems approach the most important component is________________.

a. decision-making
b. compliance
c. training
d. system
5. The contingency approach states that each situation should be dealt with_______________.
a. authoritatively
b. uniquely
c. systematically
d. passively
6. ___________ is the process of motivating members of the organisation to work together toward the organisation’s
goals.
a. Controlling
b. Behaviour
c. Leading
d. Presentation
19

a. The field of organisational behaviour provides numerous valuable insights into these processes.
b. Managers can never use their knowledge from the field of organisational behaviour to better understanding
of their own behaviours and feelings.
c. A manager has to control costs, inventory, and so on.
d. Behavioural processes and characteristics play an important role in carrying out this function.

a. Value premise represent our views of the desirability of certain goals and activities.
b. Value premises are variable beliefs we hold and are therefore under our control.
c. Goals are relatively concrete formulations of achievements the organisation is aiming for within set periods
of time, such as one to five years.
d. Goal setting is a simple process, for top management’s goals need to be merged with those of employees,
who bring their psychological, social, and economic needs with them to an organisation.
9. The __________ speaks for the organisation to outsiders.\

a. owner
b. employee
c. spokesperson
d. human resource manager
10. The managerial function of _________ is the process of determining the organisation’s desired future position
and deciding how best to get there.
a. planning
b. execution
c. stress management
d. team work
20
Chapter III
Organisational Design and Culture
Aim
• explain the concept of organisational design
• elucidate the aspects of organisational design
• explicate the concept of organisational structure and organisational culture
Objectives
• explain the dimensions, determinants, and elements of organisational design
• enlist the factors influencing organisational redesign
• enlist the characteristics of organisational culture
Learning outcome
• describe various types of organisational design
• understand dimensions, determinants, and elements of organisational design
• identify the basis of assessing organisational culture
21
3.1 Introduction
Organisations develop from small to large units by moving through four stages of a life cycle: birth stage, youth
stage, middle stage, and maturity stage. This process of development is accompanied by corresponding changes in
the organisational design.
Birth stage: This is the stage when the organisation is created. At this initial stage, the organisation’s decision making
is highly centralised. The organisation is informal. There are usually few rules and regulations, no professional staff
and no internal system for planning.
Youth stage: During this stage, additional employees are employed as the sales for the company’s products and
services increase. Although authority is fairly centralised, a few trusted employees are involved in decision making
process. Some informal rules and procedures are involved. There are now a few professionals and administrative
personnel in the organisation. The division of labour begins to occur as the newly formed departments are assigned
tasks.
Middle stage: By the time the organisation reaches this stage, it has become somewhat successful and grown in size.
Its structure is similar to that of a formal bureaucracy with formalized departments, supporting staff departments
and many professional and clerical staffs. A large set of rules and procedures have been introduced. Authority has
been effectively decentralised. The division of labour has become extensive.
Maturity stage: During this stage the organisation becomes very large and mechanistic. A set of bureaucratic rules,
regulations and policies prevail. Decision making is centralised. The division of labour is highly refined. As a result
of the rigid virtual hierarchy, the organisation is on the brink of stagnation. At this stage, the organisation attempts
to become innovative and flexible. As such, it decentralises authority within the lateral structures such as liaison
personnel, task forces, and project teams. Thus, it is clear that an organisation’s structural characteristics undergo
different stages of organisation’s life cycle. To fully appreciate organisational culture we have to understand its
basic nature. With this in mind, we will now examine three key aspects of culture:
• Its basic characteristics,
• Whether there is generally only one or more than one culture within organisations, and
• The role that culture plays in organisational functioning.
Organisational culture: A definition and core characteristics

Although we have been talking about organisational culture in general terms, a specific definition is in order.
Accordingly, we define organisational culture as a cognitive framework consisting of attitudes, values, behavioural
norms, and expectations shared by organisation members. At the root of any organisation’s culture is a set of core
characteristics that are collectively valued by members of an organisation. Several such characteristics are especially
important. Organisations may be distinguished with respect to their basic values, such as the very fundamental ones
summarised here.
• Sensitivity to needs of customers and employees
• Freedom to initiate new ideas
• Willingness to tolerate taking risks
• Openness to communication options
First, organisations differ with respect to their sensitivity to the needs of customers and employees. For example,
several years ago, the culture at UPS was relatively rigid and inflexible with respect to customers’ needs. Today,
however, its new culture places a high value on customer service and satisfaction.
Second, organisations differ with respect to their interest in having employees generate new ideas. Walt Disney
Co. employees—or, “cast members,” as they are called—undergo lengthy orientation programs to ensure that they
know exactly what to say and how to behave toward guests. In contrast, people working at GE are encouraged to
be unique, and to bring fresh ideas to their work.
22
Third, companies also differ with respect to the value placed on taking risks.
The fourth value has to do with the openness of available communication options. In some companies, such as
DuPont, employees are expected to make decisions freely and to communicate with whoever is needed to get the
job done. At IBM, however, the tradition has been to work within the proper communication channels and to vest
power in the hands of only a few key individuals (although this appears to be changing).
3.2 Organisational Design

Organisational designing is very important in shaping the organisational behaviour and organisation culture. According
to Stephen Robbins, organisational design is a process of determining as to how tasks are divided, grouped and
coordinated for the successful achievement of the organisational goals.
It is extremely difficult to design and redesign the organisation structure, with an old organisation. However, modern
Organisations review the design once every 5 years to cope with changing situations.
3.2.1 Dimensions of Organisational Design

• The vertical dimension relating to the hierarchy of the managerial levels of superiors and subordinates
• The horizontal dimension relating to decentralisation, divisionalisation, departmentalisation, sectionalisation
3.2.2 Determinants of Organisational Design

Following are the determinants of organisational design
• Ownership (public, private, joint, co-operative)
• Size (small medium, large etc.)
• Technology (old, new, automation, modernisation)
• Strategy (goals, objectives, evaluation of alternatives)
• Environment (internal, external)
3.2.3 Elements of Organisational Design

Following are the elements of organisational design
Work specialisation
Division of labour based on work specialisation helps to improve the efficiency and effectiveness of the
organisation.
Departmentalisation
It is a process of dividing the various activities into different departments for proper administration of the
organisation.
Advantages of Departmentalisation:
• It permits utilisation of expertise of people
• It creates a feeling of autonomy and job satisfaction among employees
• It helps fixing the authority- responsibility relationship of the managers
• It facilitates performance appraisals by managers
• It helps the training, development and job rotations of managers
Chain of command
Organisational communication requires a chain of commands to flow downwards/upwards/ lateral. Organisational
behaviour becomes more complex in the absence of a proper chain of commands.
23
Span of control
It is the number of subordinates that can be efficiently managed by the superior for the optimum performance of
the work team.
3.3 Centralisation v/s Decentralisation

Following table shows the difference between the centralisation and decentralisation
Centralisation Decentralisation
It is a systematic and consistent reservation of It is a process of dividing organisational activities
authority and decision making at a central point in the into different autonomous divisions, physically and
organisation. functionally
Centralised authority and decision-making policy work

well for a small organisation. For a growing large scale
organisation activities should be decentralised to cope
with changing demands for efficiency.
Table 3.1 Centralisation v/s Decentralisation
3.3.1 Factors Influencing Organisational Redesign

There are certain aspects wherein an organisation has to change in:
• Knowledge requirements
• Technology and skill requirement
• Knowledge of human behaviour
• Emphasis from command control to consensus self control
Also an organisation has to change from:

• Centralised to decentralised structures
• Vertical and tall to horizontal and flat organisations
• Instability to mechanistic systems
• Generalisation to specialisation
• Product orientation to function orientation
• Mechanistic approach to humanistic approach
3.4 Organisational Structure

An organisation can be depicted by a line diagram, which is called as organisation chart. The organisation chart
shows the organisational structure. It shows various positions of the people, their status etc.
3.4.1 Structural Dimensions of Organisations

Think about how a simple house is constructed. It is composed of a wooden frame positioned atop a concrete slab
covered by a roof and siding materials. Within this basic structure are separate systems operating to provide electricity,
water, and telephone services. Similarly, the structure of the human body is composed of a skeleton surrounded by
various systems of organs, muscle, and tissue serving bodily functions such as respiration, digestion, and the like.
It is also possible to extend these analogies to the structure of organisations.
24
Hierarchy of authority
Organisation charts provide information about who reports to whom – what is known as hierarchy of authority.
Such diagrams reveal which particular lower-level employees are required to report to which particular individuals
immediately above them in the organisational hierarchy.
As we trace these reporting relationships, we work our way up the organisation’s hierarchy. In this case, the
organisation has six levels. Organisations may have many levels, in which case their structure is considered tall, or
only a few, in which case their structure is considered flat.
In recent years, a great deal has appeared in the news about organisations restructuring their work forces by flattening
them out. Although it has not been uncommon for large companies to lay off people in low-level jobs, in recent years,
middle managers and executives, who long felt secure in their positions, found they unemployed as their companies
“downsize,” “right size,” “de-layer,” or “retrench” by eliminating entire layers of organisational structure. Even the
U.S. Army has downsized by 30 percent in recent years. The underlying assumption behind these changes is that
fewer layers reduce waste and enable people to make better decisions (by moving them closer to the problems at
hand), thereby leading to greater profitability. Management experts claim that although some layers of hierarchy
are necessary, too many can be needlessly expensive. Moreover, as technology advances, fewer people are needed
to carry out traditional management roles.
3.4.2 Types of Organisational Structure

Each of the organisational structures is shown below with the help of diagrams.
• Line organisational structure
Board of Directors
General Manager
Purchase Manager Production Manager Sales Manager Financial Manager
Purchase Assistants Foreman Supervisor Superintendent
Workers Workers Workers Workers
Fig. 3.1 Line organisational structure
25
• Functional organisational structure
Top
Project Mgr.
Financial Business General Manuf’s Technical
Fig. 3.2 Functional organisational structure
• Line and staff organisational structure
Chief Executive Officer
Economist Legal Advisor
Marketing Manager Production Manager Finance Manager
Foreman Foreman Foreman
Worker Worker Worker
Fig. 3.3 Line and staff organisational structure
26
• Matrix organisational structure
Chief
Executive
Functional Functional Functional Manager of

Manager Manager Manager Project Managers
Project
Staff Staff Staff Managers
Project
Project
Fig. 3.4 Matrix Organisational structure
3.5 Organisational Culture

Organisational culture is an abstract concept that varies from one organisation to other. It helps in organisational
image building, goodwill and reputation.
3.5.1 Definitions
Edgar Schiene: As the sum total of the knowledge, beliefs, values, perceptions, attitudes, traditions, customs that
are shared by the groups and resulting into individual and group behaviour of the people working in the organisation
over a period of time.
Schneider and Snyder: As a process of manifestation of the perceptions, values and attitudes of the members of
the organisation.
3.5.2 Indicators of Organisational Culture

More bureaucratic culture: lack of knowledge
• Lack of skills
• Negative attitudes
• Resentful service
• Lack of compatibility
• Red tapism
• Bureaucracy
• Lack of discipline
• Lack of cleanliness
• Poor quality and quantity of organisational culture
27
Less bureaucratic culture: adequate knowledge

• Adequate skills
• Positive attitudes
• Cheerful service
• Accountability
• Responsibility
• Better discipline
• Better cleanliness
• Efficiency and effectiveness
• Better quality and quantity
3.5.3 Projection of Organisational Culture

According to Edgar Schiene, organisational culture is projected at three levels
• Level 1: Logo, trade mark, dress code, values, etc
• Level 2: Shared values and beliefs among employees
• Level 3: Common assumptions of the management about the employees
3.5.4 Characteristics of Organisational Culture

Following are the characteristics of organisational culture
• Pragmatic policies
• Strategic planning
• Decentralisation and delegation
• Individual autonomy
• Participation in decision making
• Risk tolerance
• Integration with the organisational goals
• Management support
• Innovation and creativity
• Self- esteem and identity
• Control systems
• Communication systems
• Conflict management
• Reward system
3.5.5 Factors Affecting Organisational Culture

Following are the factors affecting organisational culture
• Organisational context
• Organisational structure
• Organisational processes
• Physical environment
• Values, norms, systems
28
3.5.6 Assessing Organisational Culture
According to Rensis Likert, organisational culture can be accessed on the basis of the following 7-point scale.
• Leadership style
• Morale and motivation
• Organisational communication
• Interaction- influence process
• Decision making
• Goal setting
• Control
3.5.7 Changing Organisational Culture

Some factors that can bring about a change in organisational culture:
• Treat employees as individuals
• Respect individual identity and self-esteem
• Improve organisational communication
• Give training and development inputs at all levels
• Review systems and procedures
• Improve leadership and team building
• Give rewards and incentives in due recognition and appreciation
• Delegate to improve autonomy
• Change from autocratic to participative style of management
• Develop a positive attitude towards the organisational goals
3.6 Organisational Design: Combining the Structural Elements of Organisations

We began this chapter by likening the structure of an organisation to the structure of a house. Now we are prepared
to extend that analogy for purposes of introducing the concept of organisational design. Just as a house is designed in
a particular fashion by combining its structural elements in various ways, so too can an organisation be designed by
combining its basic elements in certain ways. Accordingly, organisational design refers to the process of coordinating
the structural elements of organisations in the most appropriate manner.
Classical and neoclassical approaches: The quest for the one best design
It is not difficult to realize that for organisations to function effectively, their designs must not be static, but
dynamic—changing in response to various conditions (e.g., governmental regulations, competition, and so on.). As
obvious as this may be to us today, the earliest theorists interested in organisational design paid little attention to
the need for organisations to be flexible. Instead, they approached the task of designing organisations as a search
for “the one best way,” seeking to establish the ideal form for all organisations under all conditions – the universal
design. Previously, we described the efforts of organisational scholars such as Max Weber and Frederick Taylor.
These theorists believed that effective organisations were ones that had a formal hierarchy, a clear set of rules,
specialisation of labour, highly routine tasks, and a highly impersonal working environment. You may recall that
Weber referred to this organisational form as a bureaucracy. This classical organisational theory has fallen into
disfavor because it is insensitive to human needs and is not suited to a changing environment.
Unfortunately, the “ideal” form of an organisation, according to Weber, did not take into account the realities of the
world within which it operates. Apparently, what is ideal is not necessarily what is realistic.
29
In response to critics, and with inspiration from the Hawthorne studies, the classical approach to organisation theory
soon gave way to more attention on human relations. Several organisational theorists attempted to improve upon the
classical model, which is why their approach is labeled the neoclassical organisational theory. This approach recognises
that economic effectiveness is not the only goal of an industrial organisation, but also employee satisfaction. The
key to effectiveness, they argued, was not rigidly controlling people’s actions, but actively promoting their feelings
of self-worth and their importance to the organisation. The neoclassical approaches called for organisations to be
designed with flat hierarchical structures (minimizing managerial control over subordinates) and a high degree of
decentralisation (encouraging employees to make their own decisions). Indeed, such design features may well serve
the underlying neoclassical philosophy.
Like the classical approach, the neoclassical approach also may be faulted on the grounds that it promoted a single
best approach to organisational design. Although there may be many benefits to flat, decentralised designs, to claim
that this represents the universal or ideal form for all organisations would be naive. In response to this criticism, more
contemporary approaches to organisational design have given up on finding the one best way to design organisations
in favour of identifying different designs that are appropriate for the different circumstances and contexts within
which organisations operate.
3.7 Strategic Alliances: A Continuum of Inter-organisational Relationships

The three types of strategic alliances identified here may be distinguished with respect to their location along a
continuum ranging, at one end, from weak and distant, to strong and close, at the other end.
Mutual Service
Value Chain
Consortia
Joint Ventures Partnership
(similar companies
(different companies work (different companies that rely
pool resource to
together to fulfill the on each other for
share joint benefit;
same opportunity, each their business; e.g.:
e.g.: hospital share
requiring the other) customer supplier
expenses to build and
relationship)
operate an MRI unit)
Weak Strong
and Closeness of Relationship and
distant close
Fig. 3.5 Continuum of inter-organisational relationships
Mutual service consortia

At the weak end of the scale are strategic alliances known as mutual service consortia. These are arrangements
between two similar companies from the same or similar industries to pool their resources to receive a benefit that
would be too difficult or expensive for either to obtain alone. Often, the focus is some high-tech capacity, such as
an expensive piece of diagnostic equipment that might be shared by two or more local hospitals (e.g., magnetic-
resonance imaging, or MRI unit).
Value-chain partnerships
At the opposite end of the scale is the strongest and closest type of collabouration, referred to as a value-chain
partnership. These are alliances between companies in different industries that have complementary capabilities.
Customer-supplier relationships are a prime example. In such arrangements one company buys necessary goods
30
and services from another so that it can do business. Because each company greatly depends on the other, each
party’s commitment to their mutual relationship is high. As noted earlier, Toyota has a network of 230 suppliers
with whom it regularly does business. The relationship between Toyota and these various companies represent
value-chain partnerships.
Joint ventures
Between these two extremes are joint ventures. These are arrangements in which companies work together to fulfil
opportunities that require the capabilities of the other. For example, two companies might enter into a joint venture
if one has a valuable technology and the other has the marketing knowledge to help transform that technology into
a viable commercial product.
There are clear benefits to be derived from forming joint ventures. These primarily come in the form of improved
technology, widened markets, and greater economies of scale (e.g. sharing functional operations across organisations).
However, as you might imagine, for these benefits to be realised, a high degree of coordination and fit must exist
between the parties, each delivering on its promise to the other.
31
Summary
• Every organisation has a culture which is different from its structure. The structure can be seen on paper, but
culture can only be experienced.
• There are several factors working at several levels which project the culture of an organisation, which need to
be analysed for better efficiency of an organisation.
• As the sum total of the knowledge, beliefs, values, perceptions, attitudes, traditions, customs that are shared by
the groups and resulting into individual and group behaviour of the people working in the organisation over a
period of time is known as Edgar Schiene.
• Organisation charts provide information about who reports to whom – what is known as hierarchy of
authority.
• The three types of strategic alliances identified here may be distinguished with respect to their location along a
continuum ranging, at one end, from weak and distant, to strong and close, at the other end.
• Organisations may have many levels, in which case their structure is considered tall, or only a few, in which
case their structure is considered flat.
References
• Block-2 Organisational Design. [Pdf] Available at: <http://www.egyankosh.ac.in/bitstream/123456789/646/1/
Unit-4.pdf> [Accessed 6 October 2010].
• Cox, T., 1993. Cultural Diversity in Organisations: Theory, Research, and Practice. 1st ed., Berrett-Koehler
Publishers.
• Roberts, J., The Modern Firm: Organisational Design for Performance and Growth, Oxford University Press,
USA.
• Parsons, B., 2012, Aligning strategy, structure and organisational culture, [Video online] Available at: <http://
www.youtube.com/watch?v=2_5JlmmQk20> [Accessed 21 August 2012].
• 2011, Organisation Structure presentation, [Video online] Available at: <http://www.youtube.com/watch?v=B
F2H40sIrUw&feature=related> [Accessed 21 August 2012].
• Roy, H., What is Organisational design?, [Online] Available at: <http://www.inovus.com/organisa.htm>
Recommended Reading
• Jones, G. R., 2009. Organisational Theory, Design, and Change. 6th ed., Prentice Hall.
• Daft, R. L., 2009. Organisation Theory and Design, 10th ed., South-Western College Pub.
• Burton, R. M., 2006. Organisational Design: A Step-by-Step Approach, Cambridge University Press.
32
Self Assessment
1. Division of labour begins to occur at ____________ of an organisation.
a. birth stage
b. youth stage
c. middle stage
d. maturity stage
2. Which of the following is not a determinant of organisational design?

a. Size
b. Technology
c. Strategy
d. People

a. Departmentalisation permits utilisation of expertise of people.
b. Departmentalisation creates a feeling of authority and job appraisal among employees.
c. Departmentalisation helps fix the authority- responsibility relationship of the managers.
d. Departmentalisation facilitates performance appraisals by managers.
4. An organisation can be depicted by a line diagram, which is called ____________

a. organisation chart
b. organisational culture
c. mechanistic systems
d. organisational system
5. Organisational __________ is very important in shaping the organisational behaviour and organisation
culture.
a. knowledge requirements
b. technology
c. instability
d. designing
6. The matrix organisation combines two forms of departmentalisation _________and ___________.

a. line and staff
b. authority and responsibility
c. function and product
d. knowledge and technology
33
7. Match the three levels of organisational culture:

1. Level 1 a. values
2. Level 2 b. Assumptions of employees
3. Level 3 c. Trademark
4. Level 4 d. Company
a. 1-c, 2-a, 3-b, 4-d
b. 1-d, 2-b, 3-a, 4-c
c. 1-b, 2-d, 3-a, 4-c
d. 1-c, 2-b, 3-a, 4-d
8. Which of the following is a characteristic of organisational culture?

a. Organisational context
b. Physical environment
c. Communication systems
d. Responsibility
9. An important factor affecting the organisational culture is_______________.

a. reward system
b. values, norms and systems
c. pragmatic policies
d. conflict management
10. 7- point scale for assessment of organisational climate has been devised by .
a. Edgar Schiene
b. Stephen Robbins
c. Schneider and Snyder
d. Rensis Likert
34
Chapter IV
Perceptions, Values and Attitudes
Aim
• elucidate importance of perception and values in relation with organisational behaviour
• explain perceptual skills
• explicate the significance of attitude in organisational behaviour
Objectives
• examine the processes and factors affecting perception
• classify types of values
• explain the co relation between perception and personality
Learning outcome
At the end of this chapter, the students will be able to:
• enlist the factors affecting perception
• understand the sources of value and types of values
• understand theories, components, functions, factors, characteristics, manifestations of attitude
35
4.1 Introduction
We process and interpret the incoming raw data in the light of our experiences, in terms of our current needs and
interests, in terms of our knowledge, expectations, beliefs and motives. Our behaviour is not only a function of our
personality, values, and preferences, but also of the situation.
Perception is how we make sense of our environment in response to environmental stimuli. Understanding the
perception process gives us clues to understand human behaviour. Perception is:
• The way you look at people/objects/situations in the world
• A process of receiving, selecting, organising, interpreting, checking, and reacting to the sensory stimuli or data
so as to form a meaningful and coherent picture of the world
• An active psychological process by which individuals receive, organise and interpret their sensory impressions
in order to give meaning to their environment
Which of the circle in the middle is bigger?
Fig. 4.1 Diagrammatic representation of perception
At the first glance, the one of the left may appear bigger, but they are in fact the same size. We compare the middle
circle on the left to its surrounding circles, whereas the middle circle on the right is compared to the bigger circles
surrounding it.
What is an attitude?
As noted above, we all hold definite views about things and people—feelings referred to as attitudes.
Formally, we define an attitude as a relatively stable cluster of feelings, beliefs, and behavioral predisposition (i.e.,
intentions) toward some specific target. Attitudes consist of three major components: an evaluative component, a
cognitive component, and a behavioural component.
The evaluative component

The most obvious component of attitudes is how we feel about something. This aspect of an attitude, its evaluative
component, refers to our liking or disliking of any particular target—be it a person, thing, or event (what might be
called the attitude object, the focus of the attitude). You may, for example, feel positively or negatively toward your
boss, your co-workers, or the company logo. In fact, anything can be an attitude object.
Our definition refers to “relatively stable” feelings toward attitude objects. Temporary shifts in feelings about
something may not reflect changes in attitudes. Rather, attitudes are more enduring. So, for example, although people
sometimes change their membership in political parties, their belief about a specific issue that may be endorsed by
a particular political party is generally consistent over time. Hence, the attitude toward it is stable.
36
The cognitive component
Attitudes involve more than feelings, however, they also involve knowledge things you know about an attitude object.
For example, you might believe that your company just lost an important contract, or that a co-worker doesn’t really
know what he is doing. These beliefs may be completely accurate or inaccurate, but they still comprise the personal
knowledge that contributes to your attitude. Such beliefs are referred to as the cognitive component of attitudes.
The behavioural component

Naturally, what you believe about something and the way you feel about it will influence the way you are predisposed
to behave. For example, if you believe that your boss is a crook, and you dislike this, you may be inclined to report
him to the authorities and to begin looking for a new job. What we are saying is that attitudes have a behavioural
component—a predisposition to act in a certain way. It is very important to caution that a predisposition may not
perfectly predict one’s behaviour. In our example, although you may dislike your unethical boss, you might not
take action against him for fear of retaliation, and you might not take a new position if a better one isn’t available.
Hence, your intention to act a certain way may or may not dictate how you actually will behave. Indeed, as we shall
see, attitudes are not perfect predictors of behaviour.
4.1.1 Process of Perception

Following is the process of perception:
• Confrontation with stimulus: The individual comes face to face with another individual/group/situation/
problem.
• Registration: Individual registers the stimulus and its gravity.
• Observation: The individual registers the stimulus and its gravity.
• Perceptual Selection: Individual selects data.
• Perceptual Organisation: Incoming information is organised and patterned in a systematic manner.
• Perceptual Grouping: Certain aspects of the data are filtered.
• Interpretation: Individual tries to understand the real meaning of the situation and interpret it for effects.
• Evaluation and Feedback: Individual evaluates the strengths and weaknesses in a situation and gives a quick
feedback to the sensory and motor mechanics for the next step.
• Response: A positive, negative or neutral response in terms of reaction.
4.1.2 Factors Affecting Perception

There are two types of factors affecting perception as mentioned below.
Internal factors
The below mentioned table discusses details of internal factors.
Factors Importance
1. Family background Good family background cultivates good perception
2. Educational background Good educational background cultivates good , rational perception
3. Work experience Interactions at all levels at work affect perception.
4. Social needs Satisfaction or dissatisfaction of social needs affects perception
5. Psychological needs Satisfaction or dissatisfaction of psychological needs affects perception
37
Individual’s interest in people/situation affects perception favorably or

6. Interests
unfavourably.
Fulfilment or un-fulfilment of expectations affects perception favorably or
7. Expectations
Unfavorably.
8. Learning Higher learning experiences result in better perception
9. Values Good values cultivates good perception
10. Personality Good personality cultivates good perception
Table 4.1 Internal factors
External factors
The below mentioned table discusses details of external factors.
Factors Importance
1. Familiarity Familiarity with other person/object/situation helps positive perception, and vice-versa.
2. Status High status in organisation/society are perceived with respect
3. Appearance Good appearance and body language give a positive perception
4. Intensity The intensity of the stimulus determines the attention and perception of the individual.
5. Size The size of the stimulus (person or object) attracts attention and affects perception.
6. Contrast A contrast between the person/object affects perception

The person /object that are moving or changing attract more attention and affect
7. Motion
perception.
8. Repetition A stimulus that is repeated gets more attention and perceived better.
9. Novelty An unusual sight is noticed and perceived quickly.
Table 4.2 External factors
4.1.3 Developing Perceptual Skills: Suggestions for developing perceptual skills

Following are the points for developing perceptual skills
• Make accurate self-perception
• Enhance self-esteem
• Be empathetic
• Avoid perceptual errors
• Encourage free communication
• Have positive attitude
• Practice good impression management
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4.1.4 Rules of Perception and Personality
Following are the rules of perception and personality:
Secure people  perceive others as warm individuals and not as indifferent
Thoughtful people  do not make extreme judgments about others, but can perceive grey areas
Self-accepting people  perceive things favorably, perceive themselves as accepted, and accept others easily
4.2 Value
Values are manifested through the behaviour of the individual and the group. They have a great influence on the
perceptions, attitudes and motivational patterns of the people.
• The worth of a person, an object or a situation which enables distinguishing between the right and the wrong,
good and bad
• Values provide the standards of competence and morality
• Values transcend specific objects/situations/persons
• Values are relatively permanent and resistant to change
• Values are most central to the personality of an individual
• Values shape and determine behaviour in a group/society
4.2.1 Sources of Values

Sources of values are depicted in the below diagram
Family
Sources
Goverment of Society
value
Workplace
Fig. 4.2 Sources of values
4.2.2 Manifestations of Values

• Freedom
• Pleasure
• Mutual respect
• Honesty
• Obedience
• Equality
• Peace
39
• Co-operation
• Harmony
• Democracy
• Discipline
• Mutual trust
Organisations are highly concerned about these behaviours as they are very costly. The expenses involved in selecting
and training employees to replace those who have resigned can be considerable.
Even unscheduled absences can be expensive. Although voluntary turnover is permanent, whereas absenteeism is
a short-term reaction, both are effective ways of withdrawing from dissatisfying jobs. Research has shown that the
more dissatisfied people are with their jobs, the more likely they are to be absent and to resign. However, we also
know that these relationships are not especially strong. In other words, job satisfaction is only modestly correlated
with voluntary turnover and absenteeism. The reason for this is simple: Job dissatisfaction is likely to be only one of
many factors responsible for someone’s decision to resign or to stay off the job. For example, a dissatisfied employee
may show up for work despite feeling dissatisfied if she believes that it is critical for her to perform certain tasks.
However, still others may care so little that they would not bother to show up anyway. Thus, job satisfaction is not
a particularly strong predictor of absenteeism.
The same may be said with respect to turnover. Whether or not people will quit their jobs is likely to depend on
several factors. Among them is likely to be the availability of other jobs. So, if conditions are such that alternative
positions are available, people may be expected to resign in response to dissatisfaction. However, when such options
are limited, voluntary turnover may be a less viable option. Hence, knowing that one is dissatisfied with his or her
job does not automatically suggest that he or she will be inclined to quit. Indeed, many people stay on jobs that
they dislike.
4.2.3 Types of Values

Types of values are depicted in the below mentioned diagram
Types of
Value
Terminial Instrumental
e.g. Comfortable e.g. Ambition,

life, world of peace, etc courage, etc
Fig. 4.3 Types of values
40
4.2.4 Classifications of Values
Values are classified as follows:
• Theoretical values: discovering truth through a critical approach
• Aesthetic values: form, shape, colour, etc
• Social values: service, help, etc
• Religious values: religion, culture, etc
• Political values: power, influence, etc
• Economic values: exchange, application, etc.
4.3 Attitude
An attitude refers to our opinions, beliefs, and feelings about different aspects of our environment. Attitude is defined
in various ways as follows:
• Attitude is a frame of mind that influences individual behaviour
• Attitude is the mental posture in response to people, objects or situations
• It is the combination of one’s beliefs, perceptions and values
• It is a learned pre-disposition to respond consistently in a favourable or unfavourable manner with respect to a
given individual, group, object or situation
• Attitude is the basic foundation of human behaviour
4.3.1 Theories of Attitude

Cognitive Consistency theories: These theories are concerned with inconsistencies, which arise between the related
beliefs, knowledge and evaluation about an object. These are further classified as:
Theory Theory stated by Importance

Heider and It states that an imbalance in the system leads to change in attitude.
Balance theory
Newcomb It causes stress.
It focuses on evaluation of the source with associative or
Osgood and
Congruity theory dissociative assertion. It states that incongruity leads to changes
Tannenbaum
in attitudes.
Affective cognitive This theory is based on the interrelationship between values and
Rosenberg
consistency theory attitudes.
It is based on the study of various types of attitudes. It highlights
Cognitive Dissonance
Leon Festinger the disagreement between two cognitions and the individual’s
theory
attempt to change either of the two.
Functional Theory Katz and Kelman It assumes that attitudes are related.
Social judgment Sheriff and It assumes that attitudes can produce distortions. Social judgment
Theory Hoveland can mediate for a change in attitude.
Table 4.3 Theories of attitude
41
4.3.2 Components of Attitude

Following are the components of attitude
• Cognitive Component: It is based on the real or assumed knowledge about the object and is governed by a
rational process.
• Affective component: It is based on non-rational commitments and can be positive, negative or neutral towards
the object.
• Behavioural component: It is based on the pre-disposition to act. It determines and controls the actual behaviour
of the individual.
Manifestations
Attitude
Functions Job satisfaction

Characteristics Factors Organisational
commitment
valence,
Muliplicty, family background Knowledge function
Need, Early socialisation Adaptive function
Relationship, Educational Ego-Defensive
Centrality Background function
Work experiences Value-expressive
Group affiliation function
Personal experiences
Fig. 4.4 Components of attitude
4.3.3 Significance of Attitude

Studying concept of attitude is important part of organisational behaviour, for following reasons:
• Determine goals
• Reconciles contradictions
• Organises facts
• Affects employer-employee relations
• Affects health/safety/welfare
• Determines loyalty and integrity
• Facilitates communication
• Affects organisational change
• Creates/avoids conflicts
• Affects inter-personal relationships
• Influences morale and motivation
• Facilitates learning
• Affects job satisfaction
• Affects job performance
42
• Determines organisational culture
• Affects organisational efficiency and effectiveness
• Affects the quality of life
Do people generally like their jobs? Despite what you may hear in the news about dissatisfied workers going on
strike or even acting violently toward their supervisors, overall, people are quite satisfied with their jobs. In fact,
surveys have found that the percentage of people reporting satisfaction with their jobs averages between 80 and
90 percent. These feelings, reflecting attitudes toward one’s job, are known as job satisfaction. As job satisfaction
seems to play an important role in organisations, it makes sense to ask: What factors contribute to job satisfaction?
As we will point out, a great deal of research, theory, and practice bears upon this question.
Theories of job satisfaction and their implications

Although there are many different approaches to understanding job satisfaction, two particular ones stand out as
providing our best insight into this very important attitude—the two-factor theory of job satisfaction, and value
theory.
Herzberg’s two-factor theory of job satisfaction

There is no more direct way to find out what causes people’s satisfaction and dissatisfaction with their jobs than to
ask them. Over 30 years ago Frederick Herzberg did just this. He assembled a group of accountants and engineers and
asked them to recall incidents that made them feel especially satisfied and especially dissatisfied with their jobs.
His results were surprising: Different factors accounted for satisfaction and dissatisfaction
43
Summary
• Values are classified as theoretical values, aesthetic values, social values, religious values, political values,
economic values.
• Components of values are cognitive, affective, and behavioural.
• Individual values are a dominant force that shape and determine individual personality.
• Attitude is studied at all levels, since it concerns people at all levels in the organisation.
• Our behaviour is not only a function of our personality, values, and preferences, but also of the situation.
• Perception is how we make sense of our environment in response to environmental stimuli.
• The most obvious component of attitudes is how we feel about something. This aspect of an attitude, its evaluative
component, refers to our liking or disliking of any particular target—be it a person, thing, or event (what might
be called the attitude object, the focus of the attitude).
• Attitudes involve more than feelings, however, they also involve knowledge things you know about an attitude
object.
• Values are manifested through the behaviour of the individual and the group. They have a great influence on
the perceptions, attitudes and motivational patterns of the people.
References
• Ashraf, T., Organizational Behavior, [Pdf] Available at: <http://www.unesco.org/education/aladin/paldin/pdf/
course02/unit_14.pdf> [Accessed 28 August 2010].
• Fincham, R. & Rhodes, P.S., 2005. Principles of organizational behaviour, 4th ed., Oxford University Press,.
• Powers, W. T., 2005. Behaviour: The Control of Perception, 2nd ed., Benchmark Publications, Inc.
• Prof. Kanda, A., Lecture 18: Organisational behavioural issues, [Video online] Available at: <http://www.
youtube.com/watch?v=YVaTyQHNqdU> [Accessed 27 August 2012].
• Dr. Ahmad, M., Organisational behaviour, [Video online] Available at: <http://www.youtube.com/
watch?v=1SEbAh-Gc0g> [Accessed 27 August 2012].
• Richard, M., Journal o service marketing, [Online] Available at: <http://www.emeraldinsight.com/journals.
htm?articleid=855698> [Accessed 27 August 2012].
Recommended Reading
• Hill, N. & Stone W., 2007. Success through a Positive Mental Attitude Publisher: Pocket.
• Maxwell, J. C., 2006. The Difference Maker: Making Your Attitude Your Greatest Asset, 1st ed., Thomas
Nelson.
• Anderson, M., 2004. The Power of Attitude, Thomas Nelson.
44
Self Assessment
1. Which of the following is not a step in process of perception?
a. Registration
b. Interpretation
c. Learning
d. Response
2. Internal factor that may affect perception is ___________

a. size
b. motion
c. social needs
d. appearance
3. External factor that affects perception is ___________

a. educational background
b. Familiarity
c. work experience
d. expectations
4. Match the following:

1. Theoretical values a. Shape
2. Aesthetic values b. Reasoning
3. Social values c. Custom
4. Religious values d. Help
a. 1-b,2-a,3-d,4-c
b. 1-c,2-a,3-d,4-b
c. 1-b,2-d,3-a,4-c
d. 1-b,2-a,3-c,4-d

a. Self-accepting people perceive things favourably.
b. Self-accepting people perceive themselves as accepted.
c. Self-accepting people accept others easily.
d. Self-accepting people make extreme judgments.
45
6. Match the following

1. Balance theory a. Katz and Kelman
2. Congruity theory b. Leon Festinger
3. Affective cognitive consistency theory c. Osgood and Tannenbaum
4. Cognitive Dissonance theory d. Rosenberg
5. Functional Theory e. Heider and Newcomb
a. 1-e,2-c,3-d,4-b,5-a
b. 1-a,2-c,3-d,4-b,5-e
c. 1-e,2-d,3-c,4-b,5-a
d. d.1-e,2-c,3-d,4-a,5-b
7. Which of the following is not a factor affecting attitude?

a. Family background
b. Personal experiences
c. Stimuli
d. Work experiences
8. Attitude is significant in organisational behaviour because of which of the following?

a. Determines goals
b. Determines loyalty
c. Determines organisational culture
d. Determines organisational structure
9. As per the social judgment theory, a change in an individual’s attitude is possible the__________ and
___________.
a. balance and harmony
b. learning and de-learning
c. ego and value- expression
d. communication and relationships
10. Which of the following is not a characteristic of attitude?

a. Valence
b. Multiplicity
c. Centrality
d. Rational Commitment
46
Chapter V
Personality, Morale and Motivation
Aim
• explain the determinants of personality
• explicate the relation between personality and organisational behaviour
• introduce the concept of motivation
Objectives
The objective of the chapter is to:
• explain the factors affecting personality
• enlist the types of personalities
• determine indicators and determinants of morale
Learning outcome
• understand personality, morale and motivation
• identify determinants and types of personality
• describe the indicators and determinants of morale
47
5.1 Introduction
The term “personality” is derived from the Latin word ‘persona’, which means “Mask”. Among the Greeks, actors
used masks to hide their identity on the stage. This dramatic technique was later adopted by the Romans to whom
persona denoted “as one appears to others”, not as one actually is.
Definitions
Stephen Robbins: A sum total of the effect, actions and reactions of an individual to other individuals, groups or
situations.
Gordon W. Allport: Personality is the dynamic organisation within the individual of those psycho-physical systems
that determine his unique adjustment to his environment.
Thus the concept of personality includes: appearance and behaviour, internal awareness of the self as a force,
organisation of measurable traits (inner and outer)
5.2 Determinants of Personality

There are two determinants that affect personality
• Biological factors
• Family factors
These two factors have been illustrated in the below mentioned figures.
Biological
Factors
Physical characteristics
Heredity and maturity rate.
Brain
Pleasurable v/s painful Planning on the left

areas can be manipulated hemisphere and managing
by Electrical stimulation on the right is done by split
of the brain (ESB) brain psychology(SBP)
Fig. 5.1 Determinants of personality- biological factors
48
Following diagram illustrates the family factors
Family
Factors
Cold, non- Loving,

Family Social Basic
Stimulating Stimulating
Atmosphere Factors Discipline
Atmosphere Atmosphere
Social Social Traditions, Traditions,

Culture Status and Customs and Customs
Early Independence Competition Beliefs, Family,society,

and Situational
Formative and Perceptions, Organisations,
Co-operation Values and Attitudes Factors
Years Aggression Work,money
Every individual Every Every individual-

Every Situation Difference in situation,
is a Complete individual is situation interaction demands, behaviour
Person is different is Different & personality
different
Fig. 5.2 Determinants of personality-family factors
5.2.1 Personality Traits (Cattell’s Traits Test)

Following are the personality traits
• Warmth
• Reasoning
• Emotional Stability
• Dominance
• Liveliness
• Rule-Consciousness
• Social Boldness
• Sensitivity
• Vigilance
• Abstractedness
• Privateness
• Apprehension
• Openness to Change
• Self-Reliance
• Perfectionism
• Tension
49
5.2.2 Types of Personality

Various types of personalities are discussed in the below mentioned table:
Type A Type B
Chronic sense of time emergency Easy going
Impatience Passive
High achievement orientation Lack of achievement
Strong competitive drive Lack of competitive drive
High ambition level Lack of ambition
Aggressive behaviour Submissive behaviour
Quick responses Restrained responses
Quick decision making and actions Slow decision making and actions
Fast speech and walk Slow speech and walk
Low level of tolerance High level of tolerance
Table 5.1 Two types of personalities, Type A and Type B
5.2.3 Personality and Organisational Behaviour

The personality of an employee and organisational behaviour are inter-related and inter-dependent. Organisational
behaviour of the employees depends upon the attitude and personality of the individual.
Certain factors that need consideration to understand organisational behaviour of employees may be mentioned as
follows:
• Locus of control:
Internal Locus of control: Individual believes that his/her behaviour is guided by his/her personal decisions
and efforts
External Locus of control: Individual believes that his/her behaviour is guided by fate, luck, or other external
circumstances
Affected attributes: Motivation, performance, leadership, etc
• Need pattern:
Achievement – need to achieve goals
Affiliation—need for co-operation
Autonomy—need for freedom to make decisions
Dominance—desire to exercise authority
• Introversion v/s Extroversion:
Introverts: Turns inwards, are quiet, unsocial, etc
Extroverts: Turn outward, lively, active, etc
• Authoritarianism: Love authority, rigid, judgmental, lack of tact, etc
• Machiavellianism (Niccolo Machiavelli): Tendency to manipulate others for own goals, pragmatic, try to gain
control, etc.
• Self esteem: Indicator of capability, importance, success, etc.
• Self-monitoring: Ability to adjust with external factors
• Tolerance for ambiguity: The degree of tolerance to uncertainty, ability to change with undue stress.
50
• Risk taking: time taken for decision making, subsequent actions for moderate risks.
• Work-ethics orientation: Balance between work and home results in a rational manager.
5.3 Morale and Motivation

The morale of the people is an extremely important factor in the success or failure of organisations, be it running a
business or providing a service to society. Morale is defined by various scholars as follows.
• Oxford Dictionary: Morale is the prevailing mood and spirit conducive to willing and dependable
performance.
• Edward Flippo: Morale is the mental condition or attitude of an individual or a group which determines their
willingness to co-operate or otherwise.
• Dale Yoder: Morale is the degree of zeal, enthusiasm, willingness and confidence of an individual or a group
to accomplish a task.
Confidence of individual Suggestions to improve

Indicators of morale
members in leadership morale
• Indiscipline • confidence of individual • sound organisation structure

members in the • proper manpower planning
• Grievances
organisational goals
• Lack of communication • systematic and scientific
• confidence of individual recruitment and selection
• Poor listening members in their fellow procedure
• Lack of confidence workers
• appropriate training and
• Aggression • confidence of individual development programmes
• Lack of mutual trust members in organisational
• systematic and scientific
efficiency
• Lack of co-operation performance appraisal system
• working conditions ( wages,
• High accident • efficient and efective
job security,etc)
• Low efficiency organisational communication
system
• sympathetic
Fig. 5.3 Indicators, determinants and suggestions for morale
High morale leads to high job satisfaction, which leads to high productivity and vice-versa.
5.4 Motivation
Motivation is a force or an impulse which makes a man move physically and mentally to achieve certain goals.
High motivation leads to high job satisfaction and in turn to higher efficiency.
Definitions
Michael Julius: A process of stimulating the self or sub ordinates to get into the desired course of action.
Dubin: A force or impulse that moves a person to start and continue an action to accomplish a certain goal.
March and Simon: A function of needs and drives that makes a person takes action to achieve the desired goals.
Performance = (Ability X motivation)
51
5.4.1 Mechanism of Motivation

All motivation starts with an unsatisfied need. The urge to satisfy the need results in the drive which continues till
the ‘goal’ is achieved.
Deprivation
• Need
Drive
• Direction
Barrier/Blockade
• Overt/ covert
Goal
• Achievement
Fig. 5.4 Mechanism of motivation
5.4.2 Motivation and Frustration

An individual is motivated to work to achieve a certain goal in the sequence described; it is not easy in actual
practice. Individual almost always meets with some barriers in achieving goals. This leads to frustration. Frustration
is manifested in one or more following behaviours:
• Aggression: A reaction to a situation where in one’s motives are blocked, causing oneself to turn against the
barriers in terms of verbal or physical injury to the object/person/group causing the barrier.
• Withdrawal: Leaving the field in which frustration, anxiety or conflict is experienced, either physically or
psychologically.
• Fixation: An unreasonable stubbornness, maintaining a persistent non-adjusting reaction. The behaviour is
repeated even though the cues indicate that the response is not appropriate to the situation.
• Compromise: This can be seen in terms of a change in needs or goals, with a ‘give’ and ‘take’ attitude.
5.4.3 Basic Theories of Motivation

Theories of motivation can be classified as follows:
• Traditional theory: It is based on scientific management by F.W. Taylor who advocated that it is the manager’s
prerogative to decide the quantity, quality, method of doing jobs and the system of financial compensation of
work
• Human relations theory: It is based on the research of Elton Mayo and associates at the Hawthorne plant
of the Western electric Co. near Chicago. They proved that the output of employees does not depend only on
extrinsic factors like working conditions alone, but also on intrinsic factors of satisfaction of their social and
psychological needs
• The human resources theory: It is based on the studies conducted by experts like Abraham Maslow, Fredrick
Herzberg, David McClelland, Douglas McGregor, Peter Drucker, etc
52
5.4.3.1 Abraham Maslow’s Theory
Abraham Maslow, an American psychologist, found that work motivation arises from the hierarchy of needs. These
needs can be organised on five different levels. As one need is satisfied, the next level comes into play.
Self-
actali-
sation need
(fulfillment,work
itself is motivation)
Esteem need
(status,achievement,etc)
Social need (affection,

friendship,etc)
Security need
(job security,protection,etc)
Physiological need
(food, clothing, etc)
Fig. 5.5 Maslow’s hierarchy of needs
• The first two levels, i.e., the physiological need and the security needs can be considered as lower order needs,
while the next three levels can be considered as higher order needs
• The lower order needs are primarily satisfied externally by economic rewards. While the higher order needs are
satisfied internally through social and psychological rewards like acceptance, job satisfaction, etc
• The needs identified are inter-related, inter-dependent and overlapping. Each higher level need emerges before
the lower level need disappears
5.4.3.2 Fredrick Herzberg’s Two Factor Theory

According to Herzberg, all needs and their satisfaction do not motivate employees. This can be considered a
modification of Maslow’s theory. There are two sets of factors in motivating a person: Motivating factors and
Maintenance factors.
53
Motivating factors(Intrinsic/
Maintenance factors(Extrinsic/ Dissatisfiers)
Satisfiers)
Personal life Status
Salary Recognition
Job security Advancement
Working conditions Responsibility
Company policy and administration Possibility and growth
Quality of supervision Achievement
Inter-personal relationships Work itself
Table 5.2 Motivating factors and maintenance factors
• Motivational factors are directly related with job and are ‘content-oriented’
• Their presence highly motivates the person, but their absence does not cause dissatisfaction
• Maintenance factors are ‘context-oriented’
• Their presence does not significantly motivate the person, but their absence can cause dissatisfaction. Their
presence prevents dissatisfaction and maintains a certain minimum level of motivation and affect performance
level.
Maslow’s theory Herzberg’s theory
Refers only to needs or motives Deals with goals or incentives
Hierarchy of needs is sequentially ordered in

Does not have any sequential preference.
terms of importance
Any need can be a motivator until relatively Only intrinsic factors of the higher order serve as
unsatisfied motivators.
Table 5.3 Differences between Maslow’s and Herzberg’s theory
Helping others on the job, as you might imagine, often goes beyond merely being polite and attentive. Indeed, it
is a key element in making work a pleasant experience and a productive one as well. With this in mind, we will
now discuss two important forms of prosaically behaviour—acts that benefit others in organisations. These are
organisational citizenship behaviour and whistle-blowing.
Organisational citizenship behaviour: Above and beyond job requirements

Imagine the following scene:
It’s approaching 5:00 p.m. and you’re wrapping up your work for the day. You’re anxiously looking forward to getting
home and relaxing. While this is going on, the scene is quite different at the next cubicle. One of your colleagues
has been working feverishly to complete an important report, but appears to have hit a snag. She now has little
hope of getting the report on the boss’s desk before he leaves for the day—that is, without your help. Pitching in to
help your colleague is something you don’t have to do. After all, there’s nothing in your formal job description that
makes it necessary for you to do so. What’s more, you’re quite weary after your own long day of work.
54
Tips for promoting OCB
Given the importance of OCB, it makes sense to highlight some specific ways of encouraging these forms of
behaviour. Several potentially useful suggestions may be made.
• Go out of your way to help others: The more you help your colleagues, the more likely they will be to help you.
Soon, before you know it, with everyone helping everyone else, prosaically behaviour will become the norm
that is, a widely accepted practice in the company.
• Be an example of conscientiousness: Employees are inclined to model the citizenship behaviour of their
supervisors. If, as a manager, you set a good example by coming to work on time and by not making personal
phone calls, your subordinates may be expected to follow your lead. Although it might not be this easy, at least you
have some credibility when you do insist that your subordinates refrain from these forms of poor citizenship.
• Make voluntary functions fun: It only makes sense that employees will not be motivated to attend voluntary
meetings or corporate functions of one kind or another (e.g., picnics, award banquets) unless these are enjoyable.
People are more likely to show the good citizenship associated with attending corporate functions when the
company makes it worthwhile for them to do so. After all, the more desirable it is for someone to be prosaically,
the more likely that individual is to be a good organisational citizen.
• Demonstrate courtesy and good sportsmanship: When something goes wrong, don’t “make a stink,” rather,
just “grin and bear it.” Someone who “blows up” at the slightest provocation is not only a poor organisational
citizen, but is one who may well discourage good citizenship among others.
5.4.3.3 David McClelland’s Theory

There are three types of needs that motivate a person
Need for
Need for Affiliation (nAff) Need for Power (nPow)
Achievement (nAch)
• High desire for achievement • A desire to belong to a group • A desire to control others
• Moderate risks • A desire to interact with • A desire to manipulate others
• Pre occupation with the task others • political orientation
• Satisfaction of • A desire to be liked by others • Leadership to influence
accomplishment • A desire to make routine jobs others
• Need for immediate feedback. more bearable • High nPow with negative
• A desire to live and work orientation v/s low nPow
together with positive orientation
Fig. 5.6 David McClelland’s theory
5.4.3.4 Douglas McGregor’s Theory

It states that organisations are psychological entities that can be effectively managed by their assumptions about
motivation, human nature, and behaviour. Motivation implies certain assumptions, generalisations and hypotheses
by the management relating to human behaviour in organisations. This can be done on the basis of either of the two
sets of assumptions as Theory X and Theory Y as follows:
Theory X Theory Y
An average human being has inherent dislike The expenditure of physical and mental effort is as
for work and will avoid it, if he can. natural as play or rest.
Most people lack ambition, dislike responsibility, Man exercises self-direction and self-control in the
prefer to be directed and want job security service of the objectives to which he is committed
Most people must be controlled and threatened
The degree of commitment is proportional to the
with punishment to get better results from
rewards associated with the achievement.
them.
55
Under proper conditions, human being learns to

accept and seek responsibility.
The capacity to exercise a high degree of
imagination and creativity in the solutions of
organisational problems is widely distributed
amongst population.
Intellectual potentialities of human beings are
partially utilised in modern industrial life.
Table 5.4 Theory X and Y
5.5 Co-operation: Providing Mutual Assistance

Thus far, our discussion of prosocial behaviour has focused on one persons’ giving help to another. However, it
probably is even more common in organisations to find situations in which assistance is mutual, with two or more
individuals, teams, or organisations working together toward some common goal. Such efforts are known as acts
of co-operation. As you might imagine, co-operation is essential to organisational success. Unless individuals,
teams, and entire organisations cooperate with each other, all are likely to fall short of their objectives. With this in
mind, it makes sense to consider the factors that bring about co-operation, both within organisations and between
them as well. Accommodating is a conflict handling intention. The dimensions of conflict handling intentions are
assertiveness and co-operation. An intention is what mediates between one’s actual behaviour and one’s emotions
and perceptions. Accommodating involves placing another person’s interests above one’s own. It represents the
minimum of assertiveness and the maximum of co-operation. For example, the seller should accommodate the
customer by providing the product the customer wants.
5.6 Co-operation within Organisations

Several factors affect the tendency for people to cooperate with each other within organisations. We will review
some of the key ones here.
5.6.1 The Reciprocity Principle

We all know that “the Golden Rule” admonishes us to do unto others as we would have them do unto us. However,
this doesn’t describe exactly the way people behave.
Instead of treating others as we would like to be treated, most people tend to treat others the way they have been
treated in the past by them. In short, we are more inclined to follow a different principle: “an eye for an eye and a
tooth for a tooth.” Social scientists refer to this as the principle of reciprocity—the tendency to treat others as they
have treated us.
To a great extent, the principle of reciprocity describes the way people behave when cooperating with others. The
key task in establishing co-operation in organisations is straightforward: Getting it started. Once individuals or teams
have begun to cooperate, the process may be largely self-sustaining. That is, one unit’s co-operation encourages
co-operation among the others. To promote co-operation, therefore, managers should attempt to get the process
underway.
5.6.2 Trust: Believing in Others

Earlier, we described trust as a determinant of organisational citizenship behaviour. As you might imagine, it also
is a powerful cause of co-operation as well. In particular, the kind of trust that encourages co-operation involves
demonstrating that you really care for someone and that you will be there for them emotionally when needed (termed
affect based trust). Managers who have helped their subordinates in the past and who interact with them a great deal
are likely to enjoy high amounts of affect-based trust among these subordinates. And, workers are more likely to
cooperate with such supervisors than those with whom they have not developed affect-based trust.
56
5.6.3 Personal Orientation
As you know from experience, by nature, some people tend to be more cooperative than others. In contrast, other
people tend to be far more competitive—interested in doing better than others in one way or another. Not surprisingly,
scientists have found that people can be classified reliably into four different categories with respect to their natural
predisposition toward working with or against others. These are as follows.
• Competitors - People whose primary motive is doing better than others, besting them in open competition.
• Individualists - People who care almost exclusively about maximizing their own gain, and who don’t care
whether others do better or worse than themselves.
• Co-operators - People who are concerned with maximizing joint outcomes, getting as much as possible for
their team.
• Equalisers - People who are interested primarily in minimizing the differences between themselves and
others.
5.7 Organisational Reward Systems

It is not only people’s predisposition that leads them to behave cooperatively, but differences in the nature of
organisational reward systems as well. Despite good intentions, companies all too often create reward systems that
lead their employees to compete against each other. This would be the case, for example, in a company in which
various divisions sell products that compete with each other. Sales representatives who receive commissions for
selling their division’s products have little incentive to help the company by attempting to sell another division’s
products. In other words, the company’s reward system discourages cooperative behaviour.
With an eye toward eliminating such problems and fostering co-operation, many of today’s companies are adopting
team-based rewards. These are organisational reward systems in which at least a portion of an individual’s
compensation is based on the performance of his or her work group. The rationale behind these incentive systems is
straightforward: People who are rewarded for contributing to their groups’ performance will focus their energies on
group performance. In other words, they will cooperate with each other. Although there are many difficult challenges
associated with setting up team-based reward programs that are manageable (e.g., ones based on measurable rewards)
and that people find acceptable (e.g., ones that are administered fairly), companies that have met these challenges
have reaped benefits in the forms of increased job satisfaction and productivity.
5.8 Co-operation between Organisations

Thus far, we have discussed only co-operation between people within organisations. However, co-operation also
takes place between organisations. Indeed, the term inter-organisational coordination is used to describe instances
in which independent organisations coordinate their actions to attain mutual benefit.
Although we ordinarily think of organisations as competing with each other, there also are conditions under which
organisations cooperate with one another. This generally occurs when organisations face external threats that
can be countered by combining forces with others. For example, middle-eastern nations joined forces in creating
OPEC to help control prices in the petroleum market. Another example may be seen in today’s health care industry.
Although organised differently, many of today’s hospitals have joined forces by using a central management to help
save rapidly-rising expenses and to avoid the costly duplication of high-tech equipment and services arrangements
known as multihospital consortia.
57
Summary
• An individual is motivated to work to achieve a certain goal in the sequence described; it is not easy in actual
practice. Individual almost always meets with some barriers in achieving goals.
• There are several factors that need to be considered to understand the individual’s behaviour in an organisation
which is dealt with in the chapter.
• Douglas McGregor’s theory states that organisations are psychological entities that can be effectively managed
by their assumptions about motivation, human nature, and behaviour.
• According to Herzberg, all needs and their satisfaction do not motivate employees. This can be considered a
modification of Maslow’s theory. There are two sets of factors in motivating a person: Motivating factors and
Maintenance factors.
• The dimensions of conflict handling intentions are assertiveness and co-operation. An intention is what mediates
between one’s actual behaviour and one’s emotions and perceptions.
• Managers who have helped their subordinates in the past and who interact with them a great deal are likely to
enjoy high amounts of affect-based trust among these subordinates.
• Workers are more likely to cooperate with such supervisors than those with whom they have not developed
affect-based trust.
• The rationale behind these incentive systems is straightforward: People who are rewarded for contributing to
their groups’ performance will focus their energies on group performance.
• The dimensions of conflict handling intentions are assertiveness and co-operation. An intention is what mediates
between one’s actual behaviour and one’s emotions and perceptions.
References
• Buchanan,D. A. & Huczynski, A. A., 2010. Organizational Behaviour, 7th ed., Pearson Education.
• Fincham, R. & Rhodes, P.S., 2005. Principles of organizational behaviour, 4th ed., Oxford University Press.
• Dr. Wicker, Organisational behaviour lecture 2, [Video online] Available at: <http://www.youtube.com/
watch?v=Kd9oznIM2Ag> [Accessed 27 August 2012].
• Dr. Don, Organisational behaviour, [Video online] Available at: <http://www.youtube.com/
watch?v=R1lA9TH3XS4> [Accessed 27 August 2012].
• Blum, J., Building organisation, [Online] Available at: <http://www.gsb.stanford.edu/news/research/Building-
Organisations-That-Work.html> [Accessed 27 August 2012].
• Blanding, M., Collaborating across cultures, [Online] Available at: <http://hbswk.hbs.edu/item/6687.html>
Recommended Reading
• Powers, W. T. 2005. Behaviour: The Control Of Perception, 2nd ed., Benchmark Publications, Inc.
• Maxwell, J.C., The Difference Maker: Making Your Attitude, 1st ed., Thomas Nelson.
• Anderson, M., The Power of Attitude. Thomas Nelson.
58
Self Assessment
1. Concept of personality does not include ______________
a. appearance and behaviour,
b. internal awareness
c. organisation of measurable traits,
d. organisational culture
2. Which of the following trait is not enlisted in Cattell’s trait test?

a. Warmth
b. Reasoning
c. Intolerance
d. Tension
3. The type B personality characteristics do not include _______________

a. impatience
b. submissive behaviour
c. restrained responses
d. lack of ambition
4. Which of the following characteristics is not a part of Type A?

a. High ambition
b. Easy going
c. Aggressive behaviour
d. Quick responses
5. The tendency to manipulate others for own goals is known as .

a. locus of control
b. authoritarianism
c. Machiavellianism
d. risk taking
6. _______________ is one of the important biological factors determining personality

a. Traditions
b. Basic discipline
c. Low tolerance
d. Heredity
7. _____________ is not an indicator of morale.

a. Sub ordination
b. Lack of communication
c. Aggression
d. Lack of co-operation
59

a. Motivation is a process of stimulating the self or sub ordinates to get into the desired course of action.
b. Motivation is a force or impulse that moves a person to start and continue an action to accomplish a certain
goal.
c. Motivation is a function of needs and drives that makes a person take action to achieve the desired goals.
d. Motivation is the mental condition or attitude of an individual or a group which determines their willingness
to co-operate or otherwise.
9. The human relations theory is based on the study by ______________

a. F.W. Taylor
b. Elton Mayo
c. Peter Ducker
d. Stephen Robbins

1. Abraham Maslow a. All needs and their satisfaction do not motivate
2. Fredrick Herzberg b. Motivation is also by generalisations of management
3. David McClelland c. Motivation is due to desire to satisfy needs.
4. Douglas McGregor d. Motivation is by need for achievement, affiliation and power.

a. 1-a, 2-c, 3-d, 4-b
b. 1-c, 2-d, 3-a, 4-b
c. 1-c, 2-a, 3-d, 4-b
d. 1-c, 2-a, 3-b, 4-d
60
Chapter VI
Group Dynamics and Conflict Management
Aim
• explain the approaches to inter-personal relationships
• elucidate “group dynamics”
• explicate conflict management
Objectives
• enlist the factors affecting inter-personal relationships
• explain advantages and disadvantages of group, and its stages of development
• explicate the sources, types and factors of conflict
Learning outcome
At the end of this chapter, you will be able to
• understand interrelationships, groups and group dynamics
• identify factors, characteristics, functions of interrelationships, groups and group dynamics
• describe sources, types and factors of conflict
61
6.1 Interpersonal Relationships

To understand the subject of group dynamics, it is necessary to understand the meanings of inter-personal relationships,
groups and relevant aspects of work groups.
Achievement of organisational goals requires good inter-personal relationships, which are the basis of co-
operation.
6.1.1 Approaches to Interpersonal Relationships

There are two approaches to study inter-personal relationships.
Needs approach
An individual may be attracted to other, if needs are satisfied. While other unsatisfied needs act as motivating factor.
As per the complementary needs theory, needs are mutually complementary. For example, a dominant person gets
along well with a submissive person.
Exchange approach
In organisational behaviour, people sub consciously think of the exchange value of relationships and continue with
the same as long as rewards outweigh the costs.
6.1.2 Factors Influencing Interpersonal Relationships

There are various factors that affect inter-personal relationship which are shown in the figure below.
Factors
Role of parents
Self identity
Communication
Basic of attraction
Role of rewards
Reciprocity
Norms and rules
Social inteligence
Fig. 6.1 Factors influencing interpersonal relationships
62
6.2 Group
Group is defined by various scholars as follows:
• Robert Bales: A number of persons engaged in interaction with each other in face to face communication.
• Raymond Cattell: A collection of individuals in which existence of all is necessary for the satisfaction of
individual needs.
• Otto Kline berg: Two or more individuals who interact and influence each other for a certain time.
• Krech and Crutchfield: Two or more individuals forming a social unit with specific roles and explicit
psychological relationships among themselves.
6.2.1 Reasons for Joining a Group, Characteristics of a Group, Functions of Groups

Kindly refer to the below mentioned pictorial representation of various reasons for joining a group, its characteristics
and functions.
Reasons for joining a • Satisfaction of psychological needs

group • Satisfaction of social needs
• Satisfaction of security needs.
• Two or more individuals come together for work

Characteristics of • there are common goals, objectives, tasks.
a group • Interaction with each other.
• Sense of belonging
• Norms and values are shared.
• Satisfaction of security needs of memebers.

Functions of • satisfaction of cognitive needs of memebers
groups • satisfaction of psychological needs of memebers
• Satisfaction of social needs of memebers
• Satisfaction of achievement needs of memebers
Fig. 6.2 Reasons for joining a group, characteristics of a group, functions of groups
6.2.2 Advantages and Disadvantages of Groups

The advantages and disadvantages of groups are discussed below:
Advantages Disadvantages
Give better knowledge of information Activities are more time consuming
Have the benefit of collective wisdom Exert pressures on members to conform to group norms.
Group decisions are better accepted by members. Can experience domination by members of groups
Group decisions have a better legitimacy Hazy responsibilities
Facilitate problem solving Decisions are delayed
Table 6.1 Advantages and disadvantages of groups
63
6.2.3 Stages of Group Development

Various stages of group development are discussed below:
Storming
Forming resistance by some, due to Norming
a feeling of uncertainty lack of inter-personal Bettr group cohesiveness
communication
Adjourning Performing
In case of temporary groups Fully functional group , ready
they are dissolved. to perform.
Fig. 6.3 Stages of group development
6.3 Group Dynamics

It is a series of interaction between people working in the organisation.
It may be defined as: The way in which a group is formed, organised and conducted for the achievement of common
goals. It implies common thinking, consensus decisions and consistent actions for common goals.
6.3.1 Factors of Group Dynamics

Following are the factors of group dynamics
• Organisational policies/strategies: Liberal policies may facilitate group dynamics
• Organisational culture: A healthy and co-operative organisational culture helps group dynamics
• Rules and regulations: Very strict rules and regulations do not permit group dynamics to flourish
• Physical working conditions: Healthy working conditions affect group dynamics positively
• Limitations to resources: Adequate quality and quantity of resources help group dynamics
• Authority-responsibility relationship: authority –responsibility should be balanced, for effective group
dynamics
• Organisational communication: Open communication channels are helpful
• Motivation of the members: High morale and high motivation help positive group dynamics
• Inter-personal conflicts: Cordial interpersonal relations are helpful
• Management attitude: A balance between autocratic and democratic style is the best for positive group
dynamics
6.4 Conflict Management

Any disagreement between two or more people is the first step of the process of conflict.
Definitions
• Chung and Meggison: A struggle between incompatible needs/wishes/ideas/interests of people.
• Stephen Robbins: A process in which an effort is purposefully made by an individual/group which results in
frustrating the accomplishments of the other’s goals and furthering interests.
64
6.4.1 Sources of Conflict, Factors Involved in Conflict, Types of Conflicts
Various aspects of conflict are discussed below:
Sources of conflict Factors involved in conflict Types of conflicts
• Goals • Antecedent conditions • Intra-personal conflicts

• Values (differences in opinions ,etc) (personal probles leading
• Cognition • Affective states to stress)

• Inter-personal conflicts.
• Emotions ( stress, anxiety,etc)
(disagreement between two
• Behaviour • Cognitive states
or more people)
(beleifs,values,etc)
• Intra-group conflict (conflict
• Conflicting behaviour (overt
withiin a group)
reaction,etc) • Inter-group conflict
(disagreement between
two or more groups)
Fig. 6.4 Sources of conflict, factors involved in conflict, types of conflicts
6.4.2 Two Views of Conflict

Following are the two views of conflicts
Traditional View Modern View
It is bad, negative and must be avoided at any cost It is natural ,inevitable
Is caused by trouble-makers, boat-rockers and Depends upon physical and structural factors of the
prima-donnas. system
It is inevitable part of change, innovation and organisational
Scapegoats are unavoidable
development
An optimum level can be good for growth, progress and
Can be resolved by formal authority/command
development
Can be resolved by delay in decision-making, bringing It need not be avoided or encouraged, but managed
the defence mechanism in action. properly.
Table 6.2 Views on conflict
6.4.3 Functional Conflict (wanted/constructive)

Following are the features of functional conflicts
• It is based on logical and objective thinking, and consensus decision making
• Clarifies goals to all concerned parties
• It helps in identifying problems, settling differences through discussions
• It helps in application of systematic and scientific problem solving
• It improves perceptions and attitudes of people
65
• It promotes creativity and innovation

• It encourages group cohesiveness and better team work
• It provides with a system of checks and balances within an organisation
• It improves morale and motivation of people
• It improves overall organisational performance
6.4.4 Dysfunctional Conflict (unwanted/destructive)

Following are the features of dysfunctional conflicts
• Implies illogical and subjective thinking
• Goals of the team are not clear to all
• Hampers systematic and scientific problem solving
• Focuses on short-term goals at the cost of long-term goals
• Creates stress and strain
• It creates a lack of mutual trust among members of the group
• Decision-making is replaced by infighting
• It reduces co-operation between members of group
• It discourages creativity and innovation
• Adversely affects overall organisational performance
6.4.5 Conflict Management

In modern organisations
• The number of conflicts should be kept at minimum
• Conflicts are kept at functional and rational level
• Conflicts do not hinder the overall efficiency of the organisation
These goals can be achieved using following suggestions

• Avoidance: This involves withdrawal/ suppression of the conflict
• Smoothening: Emphasising common interests among conflicting parties
• Strengthening the resources: Strengthening the resources can help resolve the conflicts
• Super-ordinate goals: Creating a goal that cannot be achieved without the co-operation of each conflicting
parties
• Problem solving: Face-to face meeting may help in resolving conflicts
• Compromise: Each party gives up something of value, to achieve something else and thus helps to resolve
conflict amicably
• Altering Human variables: Using training and development programmes can alter perception, values and
attitudes
• Authoritative command: Management may use its formal authority to resolve conflict
• Altering structural variables: Changing formal structure and interaction pattern can help resolving conflict
6.4.6 Resolving Conflicts

Johari Window
The Johari Window is a communication model that can be used to improve understanding between individuals
within a team or in a group setting. Based on disclosure, self-disclosure and feedback, the Johari Window can also
be used to improve a group’s relationship with other groups.
66
Developed by Joseph Luft and Harry Ingham (the word “Johari” comes from Joseph Luft and Harry Ingham), there
are two key ideas behind the tool:
• That individuals can build trust between themselves by disclosing information about themselves; and
• That they can learn about themselves and come to terms with personal issues with the help of feedback from
others.
The Johari Window
Known Not known

to self to self
Know Open Blind

to other
Not know Hidden Unknown

to other
Fig. 6.5 Johari window
Quadrant 1: Open area

What is known by the person about himself/herself and is also known by others.
Quadrant 2: Blind area or Blind spot

What is unknown by the person about himself/herself but which others know. This can be simple information, or
can involve deep issues (for example, feelings of inadequacy, incompetence, unworthiness, rejection) which are
difficult for individuals to face directly, and yet can be seen by others.
Quadrant 3: Hidden or Avoided area

What the person knows about him/her that others do not.
Quadrant 4: Unknown area

What is unknown by the person about himself/herself and is also unknown by others.
6.4.7 Conflict Resolving Outcomes

There can be four conflict resolving outcomes:
• Lose-lose
• Win-lose
• Lose win
• Win-win
67
6.5 Group Development over Time: The Five-Stage Model

All groups change over time as group members come and go; group tasks and goals change; and group members
gain experience in interacting with each other. One well-known model of group development is Bruce Tuckman’s
five-stage model. The model’s stages are:
• Forming: Group members try to get to know each other and establish a common understanding as they struggle
to clarify group goals and determine appropriate behavior within the group.
• Storming: Characterised by considerable conflict—group members resist being controlled by the group and
disagree about who should lead the group or how much power the leader should have.
• Norming: Group members really start to feel that they belong to the group, and they develop close ties with
one another.
• Performing: The group is ready to tackle group tasks and work toward achieving group goals—the real work
gets accomplished in this stage.
• Adjourning: The group disbands after having accomplished its goals. Research indicates that though possible
in some cases, not all groups go through the Tuckman’s five stage model or in the order suggested.
6.6 Social Loafing: “Free Riding” When Working with Others

Have you ever worked with several others helping a friend move into a new apartment, each carrying and transporting
part of the load from the old place to the new one? Or, how about sitting around a table with others stuffing political
campaign letters into envelopes and addressing them to potential donors? Although these tasks may seem quite
different, they actually share an important characteristic: Performing each requires the efforts of only a single
individual, but several people’s work can be pooled to yield greater outcomes. Because each person’s contributions
are summed together with another’s, such tasks have been referred to as additive tasks. If you’ve ever performed
additive tasks – such as the ones described here – there’s a good chance that you found yourself working not quite
as hard as you would have if you did them alone. Does this sound familiar to you’? Indeed, a considerable amount
of research has found that when several people combine their efforts on additive tasks, each individual contributes
less than he or she would when performing the same task alone.
As suggested by the old saying, “Many hands make light the work,” a group of people would be expected to be
more productive than any one individual. However, when several people combine their efforts on additive tasks,
each individual’s contribution tends to be less. Five people working together raking leaves will not be five times
more productive than a single individual working alone; there are always some who go along for a “free ride.” In
fact, the more individuals who are contributing to an additive task, the less each individual’s contribution tends to
be a phenomenon known as social loafing.
68
Summary
• Group dynamics is the way in which a group is formed, organised and conducted for the achievement of common
goals.
• The Johari Window is a communication model that can be used to improve understanding between individuals
within a team or in a group setting.
• Group dynamics is a series of interaction between people working in the organisation.
• All groups change over time as group members come and go; group tasks and goals change; and group members
gain experience in interacting with each other.
• One well-known model of group development is Bruce Tuckman’s five-stage model.
• Performing each requires the efforts of only a single individual, but several people’s work can be pooled to
yield greater outcomes.
• Five people working together raking leaves will not be five times more productive than a single individual
working alone; there are always some who go along for a “free ride.”
References
• Buchanan,D. A. & Huczynski, A. A., 2010. Organizational Behaviour, 7th ed., Pearson Education.
• Fincham, R. & Rhodes, P.S., 2005. Principles of organizational behaviour, 4th ed., Oxford University Press
• The Johari Window. [Online] Available at: <http://www.mindtools.com/CommSkll/JohariWindow.htm>
[Accessed 9 October 2010].
• Gerardin, G., Organisational behaviour session one, [Video online] Available at: <http://www.youtube.com/
watch?v=aTjsBh0HDqY> [Accessed 27 August 2012].
• Prof. Champoux, J., Management of organisational behaviour, [Video online] Available at: <http://www.youtube.
com/watch?v=nRLZFJIl1Ls> [Accessed 27 August 2012].
• Meyer. E., Managing teams, [Online] Available at: <http://knowledge.insead.edu/INSEAD-knowledge-managing-
confrontation-in-multicultural-teams-120521.cfm> [Accessed 27 August 2012].
Recommended Reading
• Schulman, L., 2010. Dynamics and Skills of Group Counseling. 1st ed., Brooks
• Barbara, A., 2006. Conflict Management: A Practical Guide to Developing Negotiation Strategies,1st ed.,
Prentice Hall
• Weeks, D., 1994. The Eight Essential Steps to Conflict Resolution, 1st ed., Tarcher.
69
Self Assessment
1. Which of the following is not a basis of behaviour?
a. Similarity
b. Rewards
c. Familiarity
d. Proximity
2. People sub consciously think of the ____________ of relationships.

a. exchange value
b. social value
c. religious value
d. cultural value
3. Factors influencing inter-personal relationships do not include__________.

a. role of parents
b. self-identity
c. physical strength
d. reciprocity
4. People join groups for_________.

a. satisfaction of social needs
b. religion
c. authority
d. responsibility
5. Which of the following is the first step in the process of group development?
a. Storming
b. Performing
c. Adjourning
d. Forming
6. Group dynamics implies common thinking,_________ and consistent actions for common goals
a. consensus decisions
b. common decisions
c. consistent decisions
d. continuous decisions
7. The Johari Window is a __________ model.

a. management attitude
b. motivation of members
c. communication
d. Compromise
70
8. Match the following
1. Inter-personal conflicts a. conflict within a group
2. Intra-group conflict b. disagreement between two or more groups
3. Intra-personal conflicts c. disagreement between two or more people
4. Inter-group conflict d. personal problems leading to stress
a. 1-c,2-a,3-d,4-b
b. 1-a,2-c,3-d,4-b
c. 1-c,2-a,3-b,4-d
d. 1-c,2-d,3-a,4-b
9. In modern organisations, which of the following is false?

a. The number of conflicts should be kept at minimum
b. Conflicts are kept at functional and rational level
c. Conflicts do not hinder the overall efficiency of the organisation
d. Creativity and innovation are not encouraged.
10. To understand the subject of group dynamics, it is necessary to understand the meanings of inter-personal
relationships,______________ and relevant aspects of work groups.
a. group
b. subjective thinking
c. problem solving
d. strengthening resources
71
Chapter VII
Leadership
Aim
The aim of the chapter is to:
• explain the theories of leadership
• elucidate the importance of leadership in business organisations
• explicate the types and styles of leadership
Objectives
• enlist the advantages and disadvantages of different styles of leadership
• explain the objectives of team building
• explicate the pre-requisites, process of effective team building
Learning outcome
• understand leadership and team building
• identify and apply different theories and styles of leadership
• describe the characteristics and values of team building
72
7.1 Leadership
Leadership can be defined as follows:
• Keith Davis: The art and ability of a person to persuade others to seek achievement of group goals efficiently
and effectively.
• Robert Tannenbaum: The art and science of influencing and motivating a group of people in a given situation
towards common organisational goals
7.1.1 Leadership in Business Organisations

Leadership qualities in a manager play an important role in achieving organisational goals
Importance of leadership may be summarised as follows:

• It helps building up the group
• It helps creating confidence among members
• It motivates group members
• It inculcates discipline
• It helps building work teams
• It helps improving organisational efficiency
7.1.2 Evolution of Leadership

This can be best illustrated in the following manner
The mechanistic stage

The Coercive stage (2nd stage, based on The Psychological stage
( 1st stage based on organisational structures, ( 3rd stage based on
authority and power) technology and scientific psychological factors in
management) human behaviour)
• Dictatorial style of • Increasing complexity • Based on Hawthorne

working of organisational experiments by Elton
• Autocratic and structures Mayo and associates
centralised decision • Rapid changes in • Psychological factors
making play a vital role
• force to obey technology
instructions of the • Emergency of scientific in organisational
superior management behaviour
• Fear of job • Efficiency as a function • Extrinsic factors
insecurity of working conditions of motivation e.g.
• Unwilling recognition
acceptance by • Unwilling acceptance
followers by followers • Rewards are more
• Influence of material effective than
factors on behaviour punishment
• Participation ensures
more committment to
the task
Fig. 7.1 Leadership evolution
73
7.2 Theories of Leadership

The major theories of leadership are
• Traits theory
• Behavioural theories
• Contingency theories
Sub components and sub theories, for these theories are as follows:
7.2.1 Traits Theory (Ordway Tead and Chester Bernard)

It is based on the assumption that leadership depends upon the traits of successful leaders.
• It is atraditional theory
• Based on the belief that 'leaders are born and not made'
Features • Assumes that physiological and psychological traits of leaders
detrmine success or failure of leadership
• Traits of effective leadership : knowledge of the job, intelligence,
courage, creativity, positive attitude, etc
• Banks upon the personal qualities of leader

• Draws on the influence of the charisma of the leader
• There is an emotional bond between the leaders and followers
Strengths • There is loyalty by followers
• Inter-personal relationships among members of the group are better
• The traits are not exhaustive

Weaknesses • There is a lack of consideration of variety of internal situations
• There is a lack of consideration of variety of iexternal situations
• Lack of scope for development of followers
• Possibility of exploitation of followers
• Some traits of effective leadership
Fig. 7.2 Features, strengths, weaknesses of Trait’s theory
7.2.2 Behavioural Theories

It has 3 sub types of theories:
• The two- dimensional model
• Rensis Likert’s 4 system approach and
• Situational theories
74
Each of these types is discussed thoroughly below
Two - dimensional model

a) Consideration dimension: The Strengths: Weaknesses:
degree to which the leader Consideration for the behaviour Interpersonal relationships vary
considers the feelings of the of both leader and follower from time to time and task to
people vis-a-vis the task task
consideration to both, the tasks
b) Initiating structure dimension: and the feelings of the people Organisational behaviour is also a
The degree to which the leader function of psychological factors
considers goal attainment vis-s- Better planning and delegation
vis feelings of the people. of authority Group dynamics plays an important
role
Better organising and utilisation
of resources Inter-personal conflicts may affect
group performance
Better team building and group
performance Gap in perceptions of the leader
and the followers may affect group
performance
Fig. 7.3 Two dimensional model
75
7.2.3 Rensis Likert’s 4- system Approach
System 1: Exploitative/ Autocratic Leadership

• The goal setting and decision making is centralisedControl on behaviour is strict
• Limited downward communication
• Fear of punishment for disobedience
• Lack of mutual trust
System 2: Benevolent Autocratic Leadership
• Goal setting,decision making and control systems mostly centralised

• Fair amount of downward comunication
• Punishment along with occassional rewards
• Condescending mutual trust exists Lack of mutual trust
• Better morale and motivation
System 3: Consultative Leadership

• Goal setting and decision making is done by consulting membersd
• Organisational communication is better
• Job involvement , rewards and punishments are fair
• Delegation of authority is with moderate control
• Good performance and productivity
System 4: Participative Leadership

• Goalsetting, decision making done by total participation
• Organisational communication is wide spread
• Igood involvement and co-operation
• There is extensive delegation of authority
• Fair control with positive discipline
• Performance is excellent
Fig. 7.4 Rensis Likert’s 4-systems approach
76
7.2.4 The Situational Theory
THE SITUATIONAL THEORIES

Features: Strengths: Weaknesses:
a) Leadership is a result of Situational leaders are more Leadership is unstable and continues as
particular situation effective long as the situation continues
b) A leader in one situation may Scope for training and Planning is short term and ignores long
not be a leader in another development of new leaders term effects
situation
Demands re-organisation of resources as
c) Leadership is a function of per situation
variables in a situation
Team building is temporary, changes as per
situation
Frequent changes in situation affect

leadership and group performance
Fig. 7.5 Situational theory
7.2.5 Contingency Theories
Path goal theory of leadership by Life- cycle theory by Paul Hersey

Theory by Fred Fielder
Martin Evans and Robert House and Kenneth Blanchard
• Leader member relationship • Leaders behaviour is • Widely practised theories
• Task -structure relationship acceptable to sub ordinates • Close similarity to the
so far as it is a source of situational or contingency
• Leader position power
inspiration and satisfaction approach
• Leader clarifies the path to the • Leadership style depends upon
sub ordinates to achieve goals the maturity level of the work
• Leaders behaviour has an group
impact on sub ordinates’ • Maturity , ability and
motivation, performance and willingness to take
job satisfaction. responsibility
• Task orientation and relation
orientation work together.
Fig. 7.6 Contingency theories
7.3 Styles of Leadership

There are three styles of leadership:
• Autocratic
• Democratic and
• Laissez-Faire leadership
77
7.3.1 Autocratic Leadership

It is based on the belief that authority is the basis for successful leadership.
• Strict autocrat: strict discipline, negative motivation, penalties

Sub classifications • Benevolent autocrat: understanding employees, positive
motivation, appreciative
• Incompetent autocrat: lack of knowledge, indecisive, etc
• Strong centralised authority

• Permits quick decision making
Merits • Better discipline
• Better job security for sub ordinates
• Better job satisfacftion for mediocre sub ordinates
• Lack of motivation leading to frustration among sub ordinates

• Complex problems of conflict management, jeopardising
organisation efficiency
• Dependence on this leadership may cause lack of individual
Demerits
identity
• Lack of succession planning and development
• Disliked by sub ordinates, due to lack of participative decision
making
Fig. 7.7 Sub classifications, merits, demerits of autocratic leadership
7.3.2 Democratic Leadership

Democratic leadership assumes that participation during planning and decision making is the key to successful
leadership.
Merits Demerits
Participation is not meaningful in large
It encourages participation in decision making and complex organisations, due to lack of
understanding of problems.
Decision making is centralised and allows Consensus decision making takes time and
sharing of responsibility delays achievement of results
Sometimes participation may be used to
Appreciation of ideas ensures motivation
manipulate sub ordinates
Better organisational stability by reducing
employee turnover
Improves overall productivity due to better
communication and co-ordination.
Table 7.1 Merits and demerits of democratic leadership
78
7.3.3 Laissez- Faire Leadership
The word is of French origin and literally means “let (people) do (as they think best),” It is based on the assumption
that the leader is supposed to give only information and guidance to members of the group. Other functions like
decision making. Control, responsibility etc are taken care of by the subordinates. Leader has a very minor role to
play.
Merits Demerits
Group members have the freedom of decision making Learning takes place by trial and error
Allows sharing of responsibility Tendency to avoid responsibility
Allows self-motivation and training Lack of accountability
No daily interference by the leader Poor discipline and control
Helps to build interpersonal relationships among
Lack of guidance and direction by the leader
members
Decision making is difficult in case of
Helps team -work
emergencies
Group performance is more by accident than
by design.
Table 7.2 Merits and demerits of Laissez- Faire Leadership
7.4 Functions of Leaderships

There are three basic functions of leadership: Task needs, Group needs, Individual needs.
Task Needs Group Needs Individual Needs
• Defining tasks • Setting standards • Attending to personal

• Making a plan • Building team spirit problems
• Allocating work and • Motivating the group • understanding individuals
resources • Ensuring communication • Utilising individual abilities
• controlling quality and • Training the group • Appreciating good
quantity • Maintaining discipline performance
• Checking performance • motivation towards higher
contribution
Fig. 7.8 Functions of leaderships
79
7.5 Team Building

Work teams outperform individuals, especially when the task requires multidisciplinary knowledge, multiple skills,
judgment and varied experiences.
A team is
• A collection of individuals who happen to have the same work place
• A collection of individuals who happen to have the same line manager
• A collection of individuals who happen to have the same job in the same department
7.5.1 Team Building

A process of bringing together members of a work group, defining individual as well as group goals, and achieving
the desired outputs defined as team building. A group whose members have complementary skills and are committed
to a common purpose or a set of performance goals for which they hold themselves responsible.
The objectives, pre-requisites for team building are as follows:
• To bring peole together to work

• To set goals and priorities more realistically
Objectives • To improve inter-personal relationships
• To utilise employee's talents collectively
• To achieve organisational goals more efficiently and effectively
• identifying orgaanisational goals clearly

• Providing necessary resources
Pre-requisites • Undertaking actual task assignments
• Designing rewards/ incentives for the results
• Providing whole-hearted support.
Fig. 7.9 Objectives, pre-requisites for team building
7.5.2 The Process of Team Building following steps are the part of team building
Identification of the problem
Collection of data
Analysis of the data
Planning action
Implementation of decisions
Evaluation and feedback
Fig. 7.10 Process of team building
80
7.5.3 Characteristics, Values and Suggestions for Effective Team
Characteristics of Building effective

Values of a team
effective team team
• Goals and values are • Helps members to • Set rational and

clear to all understand goals realistic goals
• Committment of full clearly • Clarify objectives to all
contribution to the • It ensures commitment concerned
goals to goals • Prioritse problems and
• Climate of mutual trust • It improves employee tasks
and support motivation • Ensure provision of all
• Organisational • It improves resources
communication inter-personal • Select the right number
channels are open communication and the right type of
• Willingness to share • Increases employee job people on the team
data/information satisfaction • Create a cordial and co-
• Participation in • Generates a better operative climate for
decision making sense of belonging sporting
• Committment to • Expands job skills • Develop a good leader
implementation of • Creates organisational for the team
decisions flexibility • Encourage commitment
• Committment to high • Encourages better to hard work
performance standards creativity and • Develop good inter-
• Individual differnmces innovation personal relationships
are handled tactfully • It helps to improve • Encourage mutual
organisational respect
efficiency • Keep organisational
communication
channels always open.
Fig. 7.11 Characteristics, values and suggestions for effective team
7.6 Path-Goal Theory: Leaders as Guides to Valued Goals

In defining leadership, we indicated that leaders help their groups or organisations reach their goals. This basic idea
plays a central role in path-goal theory of leadership. In general terms, the theory contends that subordinates will
react favourably to leaders who are perceived as helping them make progress toward various goals by clarifying the
paths to such rewards. Specifically, the things a leader does to help clarify the nature of tasks and reduce or eliminate
obstacles will increase subordinates’ perceptions that working hard will lead to good performance and that good
performance, in turn, will be recognised and rewarded. And, under such conditions, motivation will be enhanced,
which may help enhance performance.
Precisely how can leaders’ best accomplish these tasks? Again, as in the case of LPC contingency theory, the answer
is: “It depends.” (In fact, this answer is your best clue to identifying any contingency theory.) In this case, what
it depends on is a complex interaction between key aspects of leader behaviour and certain contingency factors.
Specifically, with respect to leader behaviour, path-goal theory suggests that leaders can adopt four basic styles:
• Instrumental: an approach focused on providing specific guidance, establishing work schedules and rules.
• Supportive: a style focused on establishing good relations with subordinates and satisfying their needs. This
approach is effective when used with employees who are motivated to work, improve themselves and their
abilities, and accomplish goals.
• Participative: a pattern in which the leader consults with subordinates, permitting them to participate in decision
making.
81
• Achievement-oriented: an approach in which the leader sets challenging goals and seeks improvements in
performance. The benefits to the company of the achievement-oriented leader approach include greater employee
confidence and commitment, more employee decision making, increased employee creativity, more challenging
objectives, and reduced supervision for employees who work best independently.
According to the theory, these styles are not mutually exclusive. In fact, the same leader can adopt different styles
at different times and in different situations. (Indeed, as noted earlier in this chapter, showing such flexibility is one
important aspect of an effective leader.) Which of these styles is best for maximizing subordinates’ satisfaction and
motivation? The answer depends on several characteristics of the subordinates themselves. For example, if followers
are high in ability, an instrumental style of leadership may be unnecessary; instead, a less structured, supportive
approach may be preferable. On the other hand, if subordinates are low in ability, they may need considerable
guidance to help them attain their goals. Similarly, people high in need for affiliation (that is, those desiring close,
friendly ties with others) may strongly prefer a supportive or participative style of leadership. Those high in the need
for achievement may strongly prefer an achievement-oriented leader, one who can guide them to unprecedented
levels of success.
The theory suggests that the most effective leadership style also depends on several aspects of the work environment.
Specifically, path-goal theory predicts that when tasks are unstructured and non routine, an instrumental approach by
the leader may be best since much clarification and guidance might be needed. However, when tasks are structured
and highly routine, such leadership may get in the way of good performance, and may be resented by subordinates
who think the leader is engaging in unnecessary meddling.
7.7 Charismatic Leaders: That “Something Special”

World history and the history of organisations are replete with leaders that have had extraordinary success in generating
profound changes in their followers. Indeed, it is not extreme to suggest that some such people (e.g., Napoleon, Bill
Gates, and John Lennon, to name a few) have changed entire societies through their words and actions. Individuals
who accomplish such feats have been referred to as charismatic leaders. These are individuals who exert especially
powerful effects on followers by virtue of their commanding confidence and clearly articulated visions.
Researchers have found that charismatic leaders tend to be special in a number of important ways.
Several specific factors differentiate charismatic leaders from noncharismatic leaders. These are as follows:
• Self-confidence: Charismatic leaders are highly confident in their ability and judgment. Others readily become
aware of this.
• A vision: A leader is said to have vision to the extent that he or she proposes a state of affairs that improves
upon the status quo. He or she also must be able to clearly articulate that vision, and to show willingness to
make sacrifices to make it come true.
• Extraordinary behaviour: Charismatic leaders are frequently unconventional. Their quirky ways, when
successful, elicit admiration.
• Environmental sensitivity: Charismatic leaders are highly realistic about the constraints imposed upon them
and the resources needed to change things. Consequently, they know what they can and cannot do
82
Summary
• A team is a collection of individuals who happen to have the same work place, have the same line manager, and
have the same job in the same department.
• A process of bringing together members of a work group, defining individual as well as group goals, and
achieving the desired output is known as team building.
• In defining leadership, we indicated that leaders help their groups or organisations reach their goals.
• Specifically, path-goal theory predicts that when tasks are unstructured and non routine, an instrumental approach
by the leader may be best since much clarification and guidance might be needed.
• World history and the history of organisations are replete with leaders that have had extraordinary success in
generating profound changes in their followers.
References
• Dr. Northouse, P., 2009. Leadership: Theory and Practice, 5th ed., Sage Publications, Inc.
• Burns, J. M., 2010. Leadership (Harper Perennial Political Classics), 1st ed., Harper Perennial Modern
Classics.
• Prof. Akhilsh, K., Lecture 9: leadership, [Video online] Available at: <http://www.youtube.com/
watch?v=lqC2cfwlILg>[Accessed 27 August 2012].
• Admiral. Mullen, M., Wharton Leadership lecture, [Video online] Available at: <http://www.youtube.com/
watch?v=OD7AfDQhZbw>[Accessed 27 August 2012]
• Nobel, C., Leadership, [Online] Available at: <http://hbswk.hbs.edu/item/7044.html>[Accessed 27 August
2012].
• Covey, S., How the best leaders build trust, [Online] Available at: <http://www.leadershipnow.com/CoveyOnTrust.
html>[Accessed 27 August 2012]
Recommended Reading
• Kouzes, J. M. & Posner, B. Z., 2003. The Leadership Challenge, 3rd ed., Jossey-Bass.
• Nohria, N. & Khurana, R., 2010. Handbook of Leadership Theory and Practice, Harvard Business Press.
• Bassn, B. F. & Bass, R., 2008. The Bass Handbook of Leadership: Theory, Research, and Managerial
Applications, 4th ed., Free Press.
83
Self Assessment
1. Which of the following is not an importance of leadership?
a. Building up groups
b. Motivating group members
c. Promoting indiscipline
d. Improving organisational efficiency
2. Identify the correct order of leadership evolution

a. Psychological stage> mechanistic stage> coercive stage
b. Mechanistic stage > psychological stage > coercive stage
c. Psychological stage> coercive stage > mechanistic stage
d. Coercive stage> mechanistic stage> psychological stage
3. Coercive stage of evolution is based on which of the following?

a. Authority and power
b. Responsibility and power
c. Responsibility and discipline
d. Discipline and power
4. Which of the following is not a feature of mechanistic stage of evolution?

a. Increasing complexity of organisational structures
b. Fear of job insecurity
c. Influence of material factors on behaviour
d. Rapid changes in technology
5. Psychological stage of evolution emphasizes on_____________.

a. extrinsic factors of motivation
b. emergence of scientific management
c. autocratic decision making
d. inculcating discipline
6. Which is one of the greatest strength of the traits theory?

a. It is a traditional theory
b. Inter-personal relationships among group members are better
c. Possibility of exploitation of followers
d. Participation of followers
7. Identify the dimensions of the two dimensional theory.

a. Consideration and initiating structure
b. Authority and performance
c. Responsibility and performance
d. Authority and discipline
84
8. Which of the following is the first system of Rensis Likert’s 4 system’s approach?
a. Exploitative autocratic leadership
b. Benevolent consultative leadership
c. Consultative leadership
d. Participative leadership
9. Which of the following is not a major feature of the Situational theory?

a. Leadership is a result of particular situation.
b. A leader in one situation may not be a leader in another situation.
c. Leadership depends on the leader’s age.
d. Leadership is a function of variables in a situation.
10. Match the following:

1. Contingency theory a. Paul Hersey and Kenneth Blanchard
2. Path-goal theory b. Rensis Likert
3. Life cycle theory c. Martin Evans and Robert House
4. 4- systems approach d. Fred Fielder
a. 1-c, 2-d, 3-a, 4-b
b. 1-d, 2-a, 3-c, 4-b
c. 1-a, 2-c, 3-d, 4-b
d. 1-d, 2-c, 3-a, 4-b
85
Chapter VIII
Stress Management
Aim
The aim of the chapter is to:
• introduce the concept of stress
• explain the sources of stress
• elucidate the consequences of stress
Objectives
• classify different types of stressors
• enlist different consequences of stress
• explain the process of stress management
Learning outcome
• understand stress and state its ways of manifestations
• identify stress with stressors
• describe consequences of stress
86
8.1 Introduction
Stress has myriad meanings to different people. The word stress seems to have originated from the French word
‘destresse’ which means ‘to be placed under narrowness or oppression’.
At one end of the scale, stress represents those challenges, which excite us and keep us on our toes. At the other
end of the scale, stress represents those conditions under which individuals have demands made upon them, which
they cannot fulfill and leads to a breakdown. Thus, at one end, stress is a life-saver, while at the other end it is a
life-destroyer. Thus, stress needs to be prevented, and well- managed if prevention is not possible.
Stress
• ‘An individual’s reaction to a disturbing factor in the environment’.
• ‘An adaptive response to an external situation that results into physiological, psychological and behavioral
deviations’.
8.2 Manifestations of Stress

Manifestation of stress can be of any type mentioned below:
8.2.1 Positive Manifestations
Following are the positive manifestations
• Stress is positive when the situation offers an opportunity to gain something.
• Eustress is positive stress, which is often a motivator since it helps the individual to achieve peak
performance.
• Some people have an ability to handle stress, having ways of taking the rough with the smooth.
• People who can handle stress can keep a sense of humor, renew their energy and resources so that work life
brings pleasure, satisfaction and reward to them as well as to others.
8.2.2 Negative Manifestations

Following are the negative manifestations
• Distress is negative stress when it is associated with a host of physiological, psychological and other behavioral
problems.
• Negative stress can be manifested in different ways: sleeplessness, head-aches, backaches, loss of appetite,
high
• Blood pressure, lack of concentration, anxiety, tension, loss of self-confidence, etc .
• People, who are chronically overstressed, are no fun to work with. They may become irritable, miserable and
self-absorbed.
8.3 Causes of Stress

Stress is always associated with ‘demands’ and ‘constraints’.
8.3.1 External Demands / Expectations

• What are the demands?
• Are they real or virtual
• What are the sources of the demands?
• Can we control them
• If yes, how’ and to what extent?
• What are the strengths and weaknesses in the demands?
• What are the opportunities and threats in the demands?
• What would happen if the demands are not met?
87
8.3.2 Personal Capacities

• How do we react to the demands
• Is it necessary to modify our reactions to the demands
• Can we differentiate between the real and virtual demands
• Can our reactions/responses benefit us in the long run
When the demand is way below the capacity, we may feel under-stimulated. When the demand is way above the
capacity, we may feel over-stretched. Managing stress is to balance between external demands and your personal
capacity to cope with them.
8.4 Sources of Stress

In order for successful management of day-today stress, it is necessary to understand the major sources
of stress, which can be broadly classified as follows:
• Individual stressors
• Group stressors
• Organisational stressors
Individual Stressors
• Role conflicts: lack of role clarity, poor self-image, etc

• Lack of authority: lackof delegation, etc
• Poor leadership:lack of team- building etc
• Perfectionism: unrealistic goals, etc
Group Stressors
• Poor interpersonal relationships : very strong/unsympathetic/, etc

• Group dynamics: lack of group cohesiveness, sense of belonging, etc
Organisational Stressors
• Intra-organisational factors: improper organisational structure, lackof communication facilities, , etc

• Unrealistic task demands: Job design, job analysis, , etc
• Unsatisfactory working conditions: inordinately long working hours,lack of natural sunlight,etc
• Unnecessary/outdated procedures: too much and unnecessarypaper work, etc
• Uncertainty and insecurity : lack of job security, etc
• Unclear job descriptions: lack of proper job analysis, etc
• Poor career prospects: organisational status of the job, etc
• Lack of organisational communication: lack of proper systems,grapevine/rumours, etc
• Unscientific performance appraisal system: lack of scientific systems, training, etc
Fig. 8.1 Sources of stress
88
8.5 Consequences of Stress
The consequences may be classified in two types, Physiological and Psychological. Physiological and psychological
effects of stress go hand-in-hand and are complementary. They vary from organisation to organisation, situation to
situation, time to time and person to person.
8.5.1 Physiological Consequences

The body’s reactions to stress-demands are useful. The human body has evolved over thousands of years to meet
external threats and challenges.
Some of the common physiological consequences of stress may be briefly summarised as follows:
Long- term effects

Short term effects • Long- term effects
• Speeding up of reflexes • Loss of weight
• Improved performance • High/Low Blood pressure
• Increased muscle function • Delayed blood clotting
• Lower load for the digestion system • Cardiovascular disorders
• Stomach troubles • Arteriosclerosis
• Cooling of muscles • Exhaustion
• Increased breathing rate • Heart attack
• Reduced sensitivity to minor injuries • Diabetes
• Reduction in allergic reactions • Damage to the kidneys
• Reduced sexual desire/activity • Lower resistance of the immune system
• Depression in sensory perceptions/
responses
• Impotency/Sterility
Fig. 8.2 Physiological consequences of stress
89
Behavioural effects
• Increase in problems of speech:
Cognitive effects Emotional effects stuttering, etc.
• Decrease in concentration • Increase in tension, reducing • Diminishing interest and
resulting in diminishing the ability to relax by enthusiasm: abandoning short-term
powers of observation switching off worries and goals and life objectives, etc.
• Increase in distractibility anxiety, • Increase in absenteeism: real or
resulting in loss of the thread • Increase in Hypochondria: imaginary illnesses, etc.
of the thinking process, imaginary complaints and lack • Increase in drug abuse: alcohol,,
• Deterioration of memory. of feeling of well-being and etc.
Short term as well as long good health, • Disturbance in sleep patterns:
term • Changes in personality traits: either lack of sleep or disturbed
• Reduction in the response indifferent attitude, over- sleep.
speed, sensitivity, etc. • Cynicism: an increasing
• Increase in error rate resulting • Moral and emotional tendency to be over-critical and
in snap and hurried decisions behaviour: sexual behaviour, sarcasticabout superiors, etc.
and emotional outbursts, etc. • Ignorance of new developments:
• Errors in manipulative and • Fall in self-esteem: a feeling of new people,
cognitive tasks, incompetence, worthlessness, • Superficial problem-solving:
• Deterioration in planning etc. temporary and stop-gap solutions
and organising, disabling the • Increase in problems of are offered, lack of detailed
mind to assess accurately speech: stuttering, stammering, thinking, lack of follow-up, a
existing and future hesitancy,etc. ‘giving-up’ tendency.
conditions, • Diminishing interest and • Lack of self -confidence: decrease
• Increase in delusions and enthusiasm: abandoning in confidence level, avoiding
thought disorders resulting short-term goals and life responsibilities, etc.
into reduced, powers of objectives, etc. • Unexpected and bizarre
objectivity, reality testing and behavioural patterns: odd
a confused thought process mannerisms,
• Unpredictable and uncharacteristic
behaviour, etc.
Fig. 8.3 Psychological consequences of stress

8.6 Stress Management
It is not possible to eliminate stress completely from our day-to-day working life. But, it is, possible (and also
necessary) that we learn to manage stress and its effects on our body and mind. In this process, we have to cope
with stress and to keep the physiological and psychological effects at minimum levels to avoid their ill effects on
our performance. This process is called Stress Management, which consists of mainly 3 stages:
90
8.6.1 Process of Stress Management
It consists of the following stages
Knowledge of the Our action

It is a simple problem and the depends upon
Mobilisation decision to do Knowledge sources of stress is Action the intensity and
something the key to stress the source of the
managment stressors
Fig. 8.4 Process of stress management
8.6.2 Strategies for Coping with Stress

Stress can be managed by following two strategies: Individual strategies and organisational strategies
• Some of the basic principles of time management are:

• Preparing a list of the daily activities to be attended to,
• Prioritising the activities as per their importance and urgency,
Time Management • Re-scheduling activities as per priorities,
• Following up the schedule of activities for early completion,
• Checking up activities and taking corrective actions (if necessary)
• It is observed that effective time management results in: better physical
health, better mental health, better job satisfaction, etc
• It is rightly said that ‘there is a sound mind in a sound body

Physical Exercise • Physical exercise at any age is a must. It helps people to
cope with stress
Relaxation • At least 15 to 20 minutes a day of deep relaxation releases tension and

provides a pronounced a sense of peace of mind.
Social Support • At least 15 to 20 minutes a day of deep relaxation releases tension

and provides a pronounced a sense of peace of mind
Yoga • Yoga and Meditation should be followed

• Under expert guidance for the maximum benefits for reduction stress
Fig. 8.5 Individual strategies
91
Organisational Strategies
Organisational Structure
• It should be simple to understand and easy to follow
Organisational Communication
• Organisational communication with downward and upward channels, when equally open for all
employees, help to reduce work stress
Job Related Activities

• Techniques like job re-design, job analysis, etc may be used to attract and retain good employees,
with a least stressful environment for all
Recruitment/Selection/Placement
• It is necessary to give some kind of induction to new employees in order to orient them with the new
organisational culture, so that they are better prepared to take up stressful jobs
Training and Development

• Training and development programmes for updation of job related knowledge and skills
automatically reduces stress possibilities caused by apprehensions about change
Performance Appraisal
• A systematic, scientific, periodic performance appraisal of employees helps to provide counselling,
ideas for improvement.This helps to reduce stress
Employee Counselling
• Helps improve overall organisational efficiency
• Reduces employee stress
• Improve employee efficiency
Fig. 8.6 Organisational strategies
8.7 Innovation Management

Finally, just as individuals must hone special skills needed to be creative, so too must organisations develop special
ways of managing people so as to encourage innovation – that is, innovation management. Most notable in this
regard is the matter of balance. Specifically, managers help promote innovation when they show balance with respect
to three key matters: goals, reward systems, and time pressure.
• Organisational innovation is promoted when goals are carefully linked to the corporate mission. However, they
should not be so specific as to tie the hands of those who put them into practice. Innovation is unlikely when
such restrictions are imposed.
• Reward systems should generously and fairly recognise one’s contributions, but they should not be so specific
as to connect literally every move to a bonus or some type of monetary reward. To do so, discourages people
from taking the kinds of risks that make innovation possible.
92
• Innovation management requires carefully balancing the time pressures under which employees are placed. If
pressures are too great, people may be unimaginative and offer routine solutions. By the same token, if pressure
is too weak, employees may have no sense of time urgency and believe that the project is too unimportant to
warrant any creative attention on their part.
93
Summary
• A careful study of the concepts and strategies can arm us to manage stress in personal and professional life.
• In highly complex world, most people are introduced to stress. Stress can manifest in many ways.
• People who can handle stress can keep a sense of humor, renew their energy and resources so that work life
brings pleasure, satisfaction and reward to them as well as to others.
• It is very important to know how one can cope with stress. A careful study of the concepts and strategies discussed
in the chapter can arm us to manage stress in personal and professional life.
• Finally, just as individuals must hone special skills needed to be creative, so too must organisations develop
special ways of managing people so as to encourage innovation – that is, innovation management.
• It is not possible to eliminate stress completely from our day-to-day working life.
• But, it is, possible (and also necessary) that we learn to manage stress and its effects on our body and mind. In
this process, we have to cope with stress and to keep the physiological and psychological effects at minimum
levels to avoid their ill effects on our performance.
References
• Greenberg, J., 2008. Comprehensive Stress Management, 11th ed., McGraw-Hill.
• Lehrer, P. M., Robert, L., Wool folk & Wesley, E. S., 2008, Principles and Practice of Stress Management, 3rd
ed., The Guilford Press.
• Prof. Akhilesh, K., Stress management, [Video online] Available at: <http://www.youtube.com/
watch?v=smNBD8dPiys> [Accessed 27 August 2012].
2012].
• Prof. Kanda, A., Lecture 18: Organisational behavioral issues, [Video online] Available at: <http://www.youtube.
com/watch?v=YVaTyQHNqdU> [Accessed 27 August 2012].
Recommended Reading
• Smith, J. C., 2002. Stress Management: A Comprehensive Handbook of Techniques and Strategies, 1st ed.,
Springer Publishing Company.
• Cooper, C., Sutherland, V.J. & Ashley, 2010. Weinberg Organisational Stress Management: A Strategic Approach,
2nd ed., Publisher: Palgrave Macmillan.
• Quick, J. C., Nelson, D. L., Joseph, J. & Jr. Hurrell., 1997. Preventive Stress Management in Organisations, 1st
ed., American Psychological Association (APA).
94
Self Assessment
a. Stress can be manifested in positive or negative
b. Eustress is positive
c. Distress is negative
d. Eustress acts as a de-motivator
2. Stress is always associated with____________.

a. demands and constraints
b. psychology and physiology
c. behaviour and capability
d. strength and weakness
3. A person may feel under- stimulated or over-stretched depending on .

a. self –image
b. demand
c. job- design
d. psychology
4. Which of the following is not a type of stressor?

a. Behavioral stressor
b. Individual stressor
c. Organisational stressor
d. Group stressor

1. Individual stressor a. Poor inter-personal relationships
2. Group stressor b. Unrealistic task demands
3. Organisational stressor c. Poor leadership

a. 1-a, 2-c, 3-b
b. 1-b, 2-a, 3-c
c. 1-c, 2-a, 3-b
d. 1-a, 2-b, 3-c
6. ‘Improved performance’ is which type of stress consequence?

a. Behavioral effect
b. Long-term effect
c. Cognitive effect
d. Short-term effect
7. Identify which of the following is not an emotional effect of stress.

a. Increase in tension
b. Increase in delusions
c. Increase in hypochondria
d. Fall in self-esteem
95
8. State the correct order of stages in stress management.

a. Mobilisation-knowledge-action
b. Action-mobilsation-knowledge
c. Knowledge- mobilisation –action
d. Mobilisation-action-knowledge
9. Which of the following is not an individual strategy to cope with stress?

a. Time management
b. Social support
c. Training and development
d. Dexercise

a. Employee counseling improves organisational efficiency.
b. Employee counseling reduces organisational communication.
c. Employee counseling reduces employee stress.
d. Employee counseling improves employee efficiency
96
Case Study I
KPMG is one of the major accounting firms. It provides accounting, auditing and tax services. Majority of its
employees are Chartered Accountants and CPAs. The company wants to expand its business wings as a part of its
global expansion plan. Company’s policy is promoting within and therefore, most of its senior level employees are
promoted from entry-level accountants. In view of its promotion policy, the company invests heavily on training
of employees in the form of in-house educational and training facilities. Most of its employees receive training at
frequent intervals at the company’s training colleges.
Majority of the training investment of the company is on technical and procedural training for entry-level accountants
in the areas of accounting, finance, tax, auditing, project reports and report writing. However, recently KPMG is facing
problems in attracting dynamic and energetic young graduates from the colleges and universities. This situation,
sometimes, discourages clients to continue with KPMG in case of existing clients and approaching KPMG in case
of new clients. This could be because of lack of customer-service skills and interpersonal skills. The new employees
were not provided with interpersonal or soft skills training.
The training department of the company therefore suggested on providing training in interpersonal skills. But the
line managers informed that the interpersonal skills training was provided before two years. However, there was no
improvement seen and the return on money spent on training was not justified. The senior managers of the company
feel that investment in soft skills training is unnecessary as some of the trained employees joined other organisations.
Thus, there was a conflict in training managers and senior line managers.
However, most of the managers feel that investment in training is essential, but the dilemma is that which part of
the skill should receive more attention and investment.
Questions
1. How can the managers solve the problem of employees lacking in interpersonal skills?1.
Answer
The managers can solve the problem of the employees lacking in interpersonal skills by creating a training
program for soft skills and improve customer service skills. The training of soft skills should be given to every
new employee at the time of technical training. The managers also need to motivate the employees, so that the
trained employees will not think of joining new organisations.
2. Will training correct the problem of interpersonal relations?

Answer
The training can improve the problem of interpersonal relations. However, the employees also need to be
motivated and for that the managers should resolve their internal conflicts.
3. Is training an investment or unnecessary cost involvement?

Answer
Training is an investment for the KPMG Company. This will definitely improve employee’s soft skills and
improve their overall personality. This will automatically bring more number of clients to KPMG.
97
Case Study II
The Coca-Cola Company (NYSE: KO) is the world’s largest beverage company, largest manufacturer, distributor
and marketer of non-alcoholic beverage concentrates and syrups in the world and is one of the largest corporations
in the United States.
Coca-Cola was the leading soft drink brand in India until 1977. It re-entered the scenario with the acquisition of
5 major brands in 1993, Coca-Cola cemented its presence which gave an ownership of the nation’s top soft-drink
brands and bottling network. Sanjiv Gupta joined Coke in 1997 with a clear mission, vision.
Centre for Science and Environment (CSE) issued a press release in August 2003 stating: “12 major cold drink
brands sold in and around Delhi contain a deadly cocktail of pesticide residues”.
The CSE used European norms for maximum permissible limits for pesticides in packaged water. “Because the
standards set for pesticide residues by the Bureau of Indian Standards (BIS) are vague and undefined.” Actual
Standard set by European Economic Commission (EEC) is 0.5 ppb total pesticides 0.1ppb individual pesticides, but
the tests conducted by PML(Pollution Monitoring Laboratory) of CSE revealed that the pesticide residue level was
well above the global standard level by 30-36 times. The pesticides found were known to cause cancer, damage to
the nervous and reproductive systems, birth defects, and severe disruption of the immune system.
Coca-Cola & Pepsi challenged the very authenticity of the CSE report. The companies attacked the credibility of
the CSE and their lab results but promised to provide this data to the public, threatened legal action against the CSE
while seeking a gag order, and contacted the United States Embassy in India for assistance. In a statement published
by Sanjiv Gupta, he mentioned that the allegations made by CSE were misleading & unaccredited data is used to
discredit trusted and world-class brands. He assured that their soft drinks in India are produced to the same level of
purity, regarding pesticides, as the EU criteria for bottled water.
In order to regain trust of public, they carried out test individually & published full data to them by means of
advertisement & corporate websites.
Questions
1. Highlight the qualities which are evident from the decisions and steps taken by Sanjiv Gupta to solve the
problem.
2. Enlist the important steps taken for solving the problem.
3. Suggest more steps which would have helped for better results.
98
Case Study III
Satish was a Sales Manager for Industrial Products Co in City branch. A week ago, he was promoted and shifted to
HO as Deputy Manager - Product Management for a division of products which he was not very familiar with. The
company VP - Mr.George, convened a meeting of all Product Managers. Satish’s new boss was not able to attend
due to some preoccupation. Hence, the Marketing Director - Preet - asked Satish to attend the meeting.
In the meeting, George questioned each manager for their products. Satish, being new was unable to provide
satisfactory answers.
Preet understood that George had failed to remember that Satish was new to the job. He thought of interrupting
George’s questioning and reminds that Satish was new. But George and Satish were very upset by the time.”
George quickly closed the meeting and asked Preet to stay back in the room for further discussions. George asked
whether he was rough with Satish, to which Preet replied positively. George realized that Satish was new, and he
was unfair by being rough. Satish was called in. George apologized accepting that he forgot he had joined recently.
George added that he would expect perfection in few months and had complete faith in his capabilities. That is why
he had been transferred to HO
Questions
1. Was it at all necessary for George to apologize to such a junior employee like Satish?
2. If you were in Satish’s place, how would you to respond to George’s apology?
3. As an HR man, how would you define the character of George - bullying but later regretting?
99
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101
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102
Self Assessment Answers
Chapter I
1. b
2. a
3. b
4. b
5. a
6. c
7. a
8. a
9. a
10. b
Chapter II
1. b
2. c
3. a
4. d
5. d
6. c
7. b
8. d
9. c
10. a
Chapter III
1. b
2. d
3. b
4. a
5. d
6. a
7. a
8. c
9. b
10. d
Chapter IV
1. c
2. c
3. b
4. a
5. d
6. a
7. d
8. d
9. b
10. d
103
Chapter V
1. d
2. c
3. a
4. b
5. c
6. d
7. a
8. d
9. b
10. c
Chapter VI
1. b
2. a
3. c
4. a
5. d
6. a
7. c
8. a
9. d
10. a
Chapter VII
1. c
2. d
3. a
4. b
5. a
6. b
7. a
8. a
9. c
10. d
Chapter VIII
1. d
2. a
3. b
4. a
5. c
6. d
7. b
8. a
9. c
10. b
104

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Prof. H. N. Verma Prof. M. K. Ghadoliya

Dr. Daniel J. Penkar Vijayalakshmi R.H

This book contains the course content for Organisational Behaviour.

First Edition 2013

II. List of Figures...................................................... VII

III. List of Tables.................................................... VIII

VI. Bibliography....................................................... 100

VII. Self Assessment Answers................................. 103

Chapter VII ................................................................................................................................................ 72

• define the concept of organisation

• introduce the basics of organisational behaviour

• explain the importance of organisational behaviour

• describe the factors influencing an organisation

• explain the fundamental concepts of organisational behaviour

• define organisational behaviour

• identify the concepts of organisational behaviour

• understand the importance of organisational culture

1.1.1 Classifications of Organisations

1.1.2 Factors Influencing an Organisation

1.2 Organisational Behaviour

Every individual is a complete person

Human behaviour has cause-effect relationship

Every individual has self – esteem

An organisation is a social system

Mutual interests are inter-dependent

A total view of organisation

1.3 Importance of Organisational Behaviour for Managers

1.4 Behaviour Model for Organisational Efficiency

1.5 Organisational Components that Need to be Managed People

1.6 Contemporary Organisational Behaviour

1.6.1 Characteristics of the Field

1.6.2 An Interdisciplinary Focus

1.6.3 A Descriptive Nature

1.7 Contextual Perspectives on Organisational Behaviour

1.7.1 Systems and Contingency Perspectives

1.7.2 The Systems Perspective

1.7.3 The Contingency Perspective

Fig. 1.1 Universal versus contingency approaches

Fig. 1.2 The interactionist perspective on behaviour in organisations

2. Match the following.

5. Talya Bauer E As a study of human behaviour at work.

5. Which of the following is a type of organisation?

7. Study of ______________ is a very important part of organisational behaviour.

8. Employees are called because they are not commodities.

• explain various approaches to organisational behaviour

• describe the models of organisational behaviour

• elucidate the importance of personal and work life relationship

• enlist four approaches to organisational behaviour

• explain five different models of organisational behaviour

• elucidate the interdependence of personal-life and work-life

• identify approaches to organisational behaviour

• enlist five different models of organisational behaviour

• understand the relationship between personal life and work-life

2.2 Some of the Important Approaches

2.2.1The Inter-Disciplinary Approach

2.2.2 The Human Resources Approach

2.2.3 The Systems Approach

2.2.4 The Contingency Approach

2.3 Models of Organisational Behaviour

The autocratic model

The custodian model

The supportive model