Organizational Behavior ICMR Workbook

Introduction
to
Organizational Behavior
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ICFAI Center for Management Research

Road # 3, Banjara Hills, Hyderabad 500 034
 ICMR March 2004. All rights reserved.
No part of this publication may be reproduced, stored in a retrieval system,

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permission in writing from ICFAI Center for Management Research.
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Ref. No. IOBWB – 032K4 04
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Contents
Part A – Multiple Choice Questions 3
Part B – Caselets 31
Part C – Applied Theory 141
Part D – Model Question Papers 237
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Detailed Contents
Part I: Fundamentals of Organizational Behavior
Chapter 1: Understanding Organizational Behavior
Definition of Organizational Behavior – Management Roles: Interpersonal Roles;
Informational Roles; Decision Roles – Management Skills: Technical Skills; Human
Skills; Conceptual Skills – Generalization about Behavior – Consistency Vs Individual
Differences – Theoretical Framework: Cognitive Framework; Behavioristic
Framework; Social Learning Framework; A Model of Organization Behavior –
Challenges and Opportunities for Organizational Behavior: The Creation of a Global
Village; Adapting to Different People; Improving Quality and Productivity; Improving
People Skills; Management Control to Empowerment; Stability to Flexibility,
Improving Ethical Behavior – Environmental Challenges: Globalization Information
Technology, Total Quality, and Diversity and Ethics – Models of Organizational
Behavior: The Autocratic Model; The Custodial Model; The Supportive Model; The
Collegial Model.
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Chapter 2: Foundations of Human Relations and Organizational Behavior
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Definitions of Human Relations and Organizational Behavior – Historical
Development of Human Relations and Organizational Behavior – Scientific
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Management Movement; Research Studies; Other Developments; Interdisciplinary
Studies; The Mature Outlook; The Emergence of Human Relations and Organizational
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Behavior – Contributions of Other Disciplines to Human Relations and Organizational
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Behavior – Significance of Human Relations and Organizational Behavior:

Development of Skills; Organizational Performance – Research Foundations for
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Organizational Behavior: Hawthorne Studies; Theory X and Theory Y; Theory Z.

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Chapter 3: Understanding People and Organizations

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Uniqueness of Human Beings – Human Limitations – Influence of Internal and

External Factors on Human Behavior: Instinct Vs Environment; Personality Vs
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Environment; Cognition Vs Environment – Understanding Behavior: Learning – Why

Organizations Exist – Organizational Tasks: Task Design and Efficiency; Task Design
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and Motivation – The Social Aspect of Organizations.

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Chapter 4: Diversity and Ethics

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Concept and Nature of Diversity – Managing Diversity in Organizations: Creation of

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Family-Friendly Workplaces; Providing Diversity Training to Employees; Developing

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Mentoring Programs for Employees – Individual and Organizational Approaches to

Managing Diversity: Individual Approaches; Organizational Approaches – Developing
the Multicultural Organization – Ethics and Ethical Behavior in Organizations: Sexual
Harassment; Pay and Promotion Discrimination; Employee Privacy Issues.
Chapter 5: Managing Communication
Definition of Communication – Historical Background of the Role of Communication:
Contributions of Henri Fayol; Contributions of Chester Barnard; The Modern
Perspective – Importance of Communication – The Two-way Communication Process
– Problems Associated With Two-Way Communication – Nonverbal Communication:
Body Language and Paralanguage; Understanding Nonverbal Communication –
Downward Communication: Purposes of Downward Communication – Upward
Communication: Methods of Making Upward Communication More Effective –
Lateral Communication – Interactive Communication: Role of Interactive
Communication; Types of Interactive Communication – Barriers to Effective
Communication: Filtering; Selective Perception; Defensiveness; Language –
Communication Technology: Management Information System; Electronic Mail;
Telecommuting.
Chapter 6: International Organizational Behavior
Conditions Affecting Multinational Operations – How Culture Influences International
OB: Differences in Cultures – Managing a Global Workforce: Cultural Adaptation –
Differences in Managerial Leadership Across Cultures - Cultural Contingencies and
Productivity.
Part II: Individual Behavior in Organizations
Chapter 7: Personality and Attitudes
Meaning of Personality – Personality Determinants: Heredity; Environment; Situation
– Other Personality Attributes that Influence Organizational Behavior: Locus of
Control; Machiavellianism; Self-Esteem; Self-Monitoring; Risk Taking; Type A
Personality – The Development of Personality and Socialization: Levinson’s Theory of
Adult Life Stages; Hall’s Career Stage Model; Argyris’ Immaturity to Maturity
Theory; The Socialization Process – Matching Personalities with Jobs – Concept of
Attitudes: Sources of Attitudes; Types of Attitudes; Functions of Attitudes – Attitudes
and Consistency – Cognitive Dissonance Theory.
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Chapter 8: Motivation
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Definitions of Motivation – Classification of Motives: Primary Motives; General
Motives; Secondary Motives – The Content Theories of Motivation: Maslow’s
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Hierarchy of Needs; Herzberg’s Two-Factor Theory of Motivation; Alderfer’s ERG
Theory – The Process Theories of Work Motivation: Vroom’s Expectancy Theory of
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Motivation; The Porter-Lawler Model – The Contemporary Theories of Work
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Motivation: Equity Theory; Attribution Theory; Other Emerging Theories.
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Chapter 9: Perception
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Meaning and Significance of Perception – Sensation vs Perception – Subprocesses of

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Perception – Perceptual Selectivity: External Attention Factors; Internal Set Factors –

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Factors Influencing Perception: The Perceiver; The Target; The Situation – Perceptual
Organization: Figure-Ground; Perceptual Grouping; Perceptual Constancy; Perceptual
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Context; Perceptual Defense – Social Perception: Attribution; Stereotyping; The Halo

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Effect – Impression Management: The Process of Impression Management; Impression

Management Strategies Used by Employees.
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Chapter 10: Learning

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Significance of Learning – The Theoretical Process of Learning: Behavioristic

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Theories; Cognitive Theories; Social Learning Theory – Principles of Learning: Law

of Effect; Meaning of Reinforcement – Behavioral Management: Steps in the O.B Mod
Process; Application of the O.B. Mod Process.
Part III: Dynamics of Organizational Behavior
Chapter 11: Leadership
Definition of Leadership – Traits of Effective Leaders – Leadership Behaviors Vs
Traits – Leadership Skills – Leadership Theories: Trait Theories; Behavioral Theories;
Contingency Approaches to Leadership.
Chapter 12: Empowerment and Participation
Empowerment – Participation: The Process of Participation; Advantages of
Participation; Essential Prerequisites for Successful Participation – Programs for
Participation: Consultative Management; Suggestion Programs; Programs Emphasizing
Quality; Middle-Management Committees; Industrial Democracy; Self-Managing
Teams – Limitations of Participation.
Chapter 13: Conflict, Negotiations and Intergroup Behavior
Sources of Conflict – Classification of Conflict: Intrapersonal Conflict; Interpersonal
Conflict; Intergroup Conflict – The Conflict Process: Potential Opposition or
Incompatibility; Cognition and Personalization; Intentions; Behavior; Outcomes –
Negotiation: Distributive Bargaining; Integrative Bargaining – The Negotiation
Process: Preparation and Planning; Defining roles; Clarification and Justification;
Bargaining and Problem Solving; Closure and Implementation – Issues in the
Negotiation Process: Biases in Decision-Making; Personality Traits; Cultural
Differences; Third-Party Negotiation – Intergroup Relations: Factors that Affect
Intergroup Relations; Managing Intergroup Relations.
Chapter 14: Foundations of Group Behavior
Nature of Groups – Various Types of Groups: Formal Groups; Informal Groups –
Stages of Group Development: The Five-Stage Model; The Punctuated Equilibrium
Model – Group Structure: Formal Leadership; Roles; Norms; Status; Size;
Composition – Group Tasks – Group Processes.
Chapter 15: Understanding Work Teams
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Definition of Work Teams – Benefits of Work Teams – Difference Between Work
Groups and Work Teams: Broad Job Categories; Role of the Supervisor; Reward
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Systems – Types of Work Teams: Problem-Solving Teams; Self-Managed Work
Teams; Cross-Functional Teams – Team Effectiveness: Essentials for Building
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Effective Teams; Shaping Individuals into Team Players – Teams and Total Quality
Management – Teams and Workforce Diversity.
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Chapter 16: Informal Organizations
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Nature of Informal Organizations – Benefits and Problems of Informal Organizations –

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Informal Communication: Essential Features of the Grapevine; Factors Responsible for

Grapevine; Patterns of the Grapevine; Management Response to the Grapevine;
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Difference between a Grapevine and a Rumor – Managing Informal Organizations.

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Part IV: The Organization System

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Chapter 17: Foundations of Organization Structure

Definition of Structure – Key Elements in Designing an Organization Structure: Work
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Specialization; Departmentalization; Chain of Command; Span of Control;

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Centralization/Decentralization; Formalization – Types of Organizational Designs:

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Simple Structure; Bureaucratic Structure; Matrix Structure – Organizational Designs

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and Employee Behavior

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Chapter 18: Decision Making

The Nature of Decision Making – Decision Rationality – Types of Decisions:
Programmed Decisions; Non-programmed Decisions; Models of Behavioral Decision
Making: Economic Rationality Model; Simon's Bounded Rationality Model; The
Judgmental Heuristics and Biases Model; The Social Model – Behaviorally Oriented
Decision-Making Techniques: Traditional Participative Techniques; Modern
Participative Techniques – Creativity and Decision Making – Group Decision Making:
Group Polarization; Groupthink and Group Problem Solving.
Chapter 19: Power and Politics
Definition and Meaning of Power – Distinctions between Power, Authority and
Influence – Bases of Power: Coercive Power; Reward Power; Legitimate Power;
Expert Power; Referent Power – The Dependency Factor: Importance; Scarcity; Non-
Substitutability; Contingency Approaches to Power: Interdependence and
Influencability; Overall Contingency Model for Power – Power in Groups: Coalitions –
Organizational Politics – Definition and Nature of Politics; Factors Relating to Political
Behavior – The Ethics of Power and Politics.
Chapter 20: Organizational Culture
Definition of Organizational Culture – Characteristics of Organizational Culture –
Uniformity of Culture: Dominant Culture; Subculture – Strong Vs Weak Cultures:
Sharedness; Intensity –Types of Culture – Culture and Formalization – Functions of
Culture – Beginning of Culture in an Organization: Selection; Top Management;
Socialization – Learning Culture: Stories; Rituals and Ceremonies; Material Symbols;
Language – Changing Organizational Culture: The Change Process.
Part V: Organizational Change and Organization Development
Chapter 21: Organizational Change
Forces of Change – Managing Planned Change: First-Order Change; Second-Order
Change – The Change Process: Problem Recognition; Identifying the Causes of
Problems; Implementing the Change; Generating Motivation for Change; Managing
the Transition State; Supporting the Change; Evaluating the Change – Resistance to
Change: Individual Source of Resistance; Organizational Resistance – Overcoming
Resistance to Change – Lewin's Three-Step Model – Innovation: Sources of Innovation
– The Learning Organization: Managing Learning – Work Stress and Stress
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Management: Causes of Stress – Strategies to Cope with Stress – Individual Strategies
to Cope with Stress; Organizational Strategies to Cope with Stress.
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Chapter 22: Fundamentals of Organization Development
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Definitions and Concepts of Organization Development – History of Organization
Development: Laboratory Training; Survey Feedback; Action Research; Tavistock
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Sociotechnical and Socioclinical Approach – Nature of Organization Development:
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Foundations of Organization Development; The OD Process – Client-Consultant

Relationship.
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Chapter 23: Organization Development Interventions

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Meaning of OD Interventions – Types of OD Interventions: Sensitivity Training;

Survey Feedback; Process Consultation Interventions; Team Interventions; Force-field
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Analysis; Intergroup Team-Building Interventions; Third-Party Peacemaking

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Interventions; Structural Interventions.

Chapter 24: Future of Organizational Development
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Strengths of Organizational Development – The Future of OD: Leadership and Values;

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Knowledge about OD; OD Training; Interdisciplinary Nature of OD; Diffusion of OD

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Techniques; Integrative Practice; Rediscovering and Recording History – Possible

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Changes in OD Processes and Practice.

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Part A: Multiple Choice Questions
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This section consists of multiple-choice questions that test the student’s understanding of
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the basic concepts discussed in the textbook. Answering these questions will help students
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quickly recollect the theories they’ve learnt and apply these to real-life business situations.
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Part A
Key
1.d 2.a 3.c 4.d 5.c 6.d 7.c 8.a 9.c 10.a
11.b 12.d 13.a 14.d 15.d 16.a 17.a 18.c 19.b 20.c
21.b 22.d 23.d 24.b 25.c 26.d 27.a 28.b 29.a 30.b
31.a 32.c 33.b 34.d 35.c 36.b 37.d 38.c 39.b 40.c
41.c 42.a 43.c 44.b 45.d 46.c 47.d 48.c 49.b 50.c
51.a 52.a 53.b 54.d 55.c 56.d 57.a 58.b 59.c 60.b
61.d 62.a 63.b 64.b 65.a 66.b 67.b 68.d 69.b 70.a
71.a 72.c 73.b 74.a 75.a 76.c 77.d 78.c 79.c 80.a
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81.b 82.b 83.d 84.b 85.b 86.a 87.a 88.d 89.c 90.a
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91.b 92.c 93.d 94.d 95.d 96.c 97.b 98.a 99.b 100.c
101.c 102.b 103.d 104.b 105.c 106.cof 107.c 108.d 109.c 110.b
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111.b 112.c 113.c 114.a 115.b 116.a 117.a 118.d 119.c 120.a
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121.b 122.c 123.c 124.c 125.d 126.d 127.c 128.d 129.c 130.a
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131.b 132.b 133.b 134.c 135.a 136.c 137.b 138.c 139.a 140.d
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141.c 142.b 143.a 144.d 145.d 146.c 147.b 148.a 149.a 150.a
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151.d 152.b 153.c 154.d 155.b 156.b 157.b 158.d 159.b 160.d
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161.b 162.a 163.d 164.b 165.d 166.b 167.a 168.b 169.b 170.a
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171.b 172.a 173.d 174.c 175.b 176.b 177.a 178.d 179.b 180.b
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181.b 182.b 183.a 184.c 185.b 186.b 187.c 188.c 189.c 190.b
191.d 192.c 193.c 194.c 195.b 196.b 197.c 198.c 199.a 200.b
201.c 202.a 203.c 204.a 205.b 206.d 207.c 208.a 209.b 210.c
211.d 212.a 213.a 214.d 215.a 216.d 217.b 218.a 219.c 220.b
221.c 222.a 223.a 224.a 225.c 226.d 227.c 228.a 229.c 230.d
231.c 232.b 233.a 234.c 235.a 236.a 237.b 238.c 239.b 240.c
241.b 242.b 243.c 244.c 245.c 246.d 247.a 248.c 249.c 250.d
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Part A: Multiple Choice Questions
1. Which of the following frameworks 7. Which of the following behavioral
is used in the development of the scientists proposed the Theory Z?
overall model of OB?
a. Frederick Herzberg
a. The cognitive framework
b. Douglas McGregor
b. The behavioristic framework
c. The social learning framework c. William Ouchi
d. All the above d. F. W. Taylor
2. Which of the following frameworks 8. Which of the following models

is based on the expectancy, demand represents the views of behaviorists?
and incentive concepts? a. S-R Model
a. The cognitive framework b. R-S Model
b. The behavioristic framework
c. S-O-R Model
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c. The social learning framework
d. A-B-C Model
d. The supportive framework
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9. Stimulus-organism-response model
3. Which of the following forms the
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basis for the autocratic model of represents the views of
OB? a. Environmentalists
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a. Obedience b. Social scientists
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b. Authority c. Cognitive theorists

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c. Power d. Behaviorists
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d. Dependence on boss
10. Which of the following plays a
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4. ‘Motivating people in organizational major role in determining the

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settings to develop team work that behavior of individuals as well as

accomplishes individual as well as
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overall performance of the

organizational goals’ refers to organization?
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a. Employee relations
a. Attitudes
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b. Labor relations
b. Task structure
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c. Interpersonal relations
c. Ethnocentrism
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d. Human relations
d. Individualism
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5. The study of which discipline helps

in the micro-level analysis of human 11. Associative learning and
relations and OB? instrumental learning are the two
a. Social Psychology processes involved in
b. Anthropology a. Formal learning
c. Psychology b. Informal learning
d. Sociology c. Haphazard learning
6. Which of the following plays a d. Social learning
major role in enhancing the 12. Which of the following involves
efficiency of Human Resources in
reinforcers and punishers?
an organization?
a. Increase in motivation. a. Social learning
b. Training and personal development b. Cognitive learning
c. Education c. Associative learning
d. All the above d. Instrumental learning
Introduction to Organizational Behavior
13. When members of a group or 19. What is the group which informally
organization differ from each other exchanges the information
in terms of age, gender, ethnicity, pertaining to a shared interest known
and/or education, it is termed as?
_________. a. Grapevine
a. Diversity b. Network
b. Culture c. Ombudsperson
c. Demographics d. Quality circles
d. Globalization
20. Which of the following represents
14. Which of the following is a reason the last stage of the communication
for emergence of diversity at the process?
workplace?
a. Decoding
a. Legislation and lawsuits b. Encoding
b. Changing demographics
c. Feedback
c. Increasing international business
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d. Filtering
d. All the above
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21. The prime element responsible for
15. Which of the following is not a effective relationships in an
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differentiating characteristic under organization is
diversity?
a. Environmental factor
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a. Ethnicity
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b. Human factor
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b. Gender c. Technological factor

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c. Age d. Cultural factor

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d. Competency
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22. Which of the following forms a

16. An organization that maintains the barrier for cultural adaptation?
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dominance of one group over the a. Cultural distance

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others on the basis of criteria like

b. Power distance
age, gender etc is
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c. Culture shock
a. Exclusionary organization
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d. All the above

b. Club organization
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23. An individual’s response to a culture

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c. Compliance organization
d. Multicultural organization with dramatic difference in
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language, country, customs and

17. What does the gangplank concept cultural orientations is termed
relate to? a. Ethnocentrism
a. Horizontal communication system b. Parochialism
b. Vertical communication system c. Cultural distance
c. Cross communication system d. Culture shock
d. Upward communication system
24. What is the amount of difference
18. What is the process of transferring between any two social systems,
an idea into words, symbols or which may vary from minimal to
charts for transmission known as? substantial, referred to as?
a. Bridge of meaning a. Culture shock
b. Decoding b. Cultural distance
c. Encoding c. Power distance
d. Feedback d. Ethnocentrism
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Part A
25. Which of the following processes c. Daniel Levinson

best describes personality and d. F. J. Roethlisberger
attitudes?
a. Psychoanalytical 32. Responses to the vocational
preference inventory questionnaire
b. Behavioral
were used to develop
c. Cognitive
a. Job profiles
d. Psychological
b. Behavior profiles
26. Extroversion, agreeableness, c. Personality profiles
conscientiousness, emotional d. Training programs
stability and openness to experience
are all traits of 33. What is the persistent tendency to
a. Psychology feel and behave in a particular way
b. Attitudes towards some object known as?
c. Sociology a. Perception
d. Personality b. Attitude
c. Personality
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27. What is the attempt made by people
to understand themselves known as? d. Locus of control
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a. Self concept 34. Which of the following motives is
neither learnt nor physiologically
of
b. Self image
c. Self awareness based?
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d. Self efficiency a. Secondary
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b. Achievement
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28. The degree to which people believe

c. Primary
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that they are masters of their own

fate refers to d. General
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a. Self-image 35. Curiosity, manipulation, activity and

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b. Locus of control affections can be categorized as

c. Self-monitoring a. Primary motives
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d. Self-outside b. Secondary motives

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29. The following refers to the degree to c. General motives

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which an individual is pragmatic, d. Achievement motives

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maintains emotional distance and

36. What does the Thematic
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believes that ends justify means

Appreciation Test measure?
a. Machiavellianism
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a. Power drive
b. Locus of control
b. Achievement drive
c. Personality
c. Affiliation drive
d. Valence
d. Security drive
30. What is the individual’s degree of
liking or disliking of himself or 37. What does the VIE theory
herself known as? emphasize on?
a. Self image a. Effort-performance relationship
b. Self esteem b. Performance-reward relationship
c. Self concept c. Rewards-personal goals relationship
d. Self-outside d. All of these
31. Who suggested the socialization 38. Which of the following represents
strategies? the first sub process of perception?
a. Van Mannen a. Registration
b. Chris Argyris b. Interpretation
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c. Situation-person interaction 45. The learning of the association of

d. Sensation the cue and the expectation is termed
as
39. When certain stimuli are below the a. S-R learning
conscious threshold of a person, it is
b. R-S learning
referred to as
c. S-O-R learning
a. Perceptual selectivity
d. S-S learning
b. Subliminal perception
c. Intensity 46. Which of the following forms an
d. Perceptual set essential ingredient of modeling
process?
40. Which of the following provides a. Cognitive learning
meaning and value to stimuli, b. Controlled learning
objects, events, situation, and other
c. Observational learning
people in the environment?
d. Instrumental learning
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b. Perceptual constancy 47. Which of the following are the skills
c. Perceptual context used by leaders?
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d. Perceptual defense a. Technical
b. Conceptual
41. Which of the following occurs when
perceptions are formed on the basis of
c. Human
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d. All the above
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of a single trait of an individual?
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a. Stereotyping 48. The leader’s ability to work

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effectively with the members of the

b. Attribution
organization and accomplish team
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c. Halo effect work is termed as

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d. Perceptual closure a. Conceptual skill

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42. Demotion preventative strategy is a b. Technical skill

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prime strategy associated with c. Human skill

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a. Impression management d. Design skill

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b. Stereotyping 49. Which of the following is a

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c. Halo effect dimension of leadership found by

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d. Cultural adaptation the University of Michigan studies?

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a. Development oriented dimension

43. Which of the following terms refers
to a relatively permanent change in b. Employee oriented dimension
behavior that occurs out of c. Consideration
experience? d. Critical performance
a. Personality 50. The two dimensional matrix model
b. Perceptions was developed by
c. Learning a. Robert Katz
d. Attitude b. Fred Luthans and Stephen Robbins
44. Classical conditioning is also c. R. R. Blake and J. S. Mouton
referred to as d. Hershey and Blanchard
a. Instrumental conditioning 51. Leadership-participation model was
b. Respondent conditioning developed by
c. Operant conditioning a. Victor Vroom and Philip Yetton
d. None of the above b. Hershey and Blanchard
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Part A
c. R. R. Blake and J. S. Mouton c. Group conflict

d. George Green d. Inter group conflict
52. The mental and emotional 58. The situation wherein an increase in
involvement of people in group pay for one employee would mean
situations that encourage them to just that much amount less for the
contribute to group goals and share other is
responsibility for them is known as a. Win-win situation
a. Participation b. Zero-sum situation
b. Empowerment c. Balanced situation
c. Motivation d. Lose-lose situation
d. Self Managing Teams
59. Which of the following statements is
53. Which of the following helps in not true regarding negotiations?
raising the individual perceptions of
a. Two or more parties are involved in
low levels of self esteem?
negotiation process
a. Situation
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b. Distributive bargaining is an
b. Empowerment approach of negotiation
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c. Job enrichment c. Negotiation processes are always
d. Reinforcement smooth
54. The voluntary groups in an
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d. Talks between managers and union
for wages are a form of negotiation
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organization that are trained in
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statistical techniques and problem 60. Zero sum situation is also known as
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solving skills are known as

a. Win-win situation
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a. Self management teams

b. Win-lose situation
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b. Work councils
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c. Lose-lose situation
c. Middle management committees
d. Balanced situation
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d. Quality circles
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61. Which of the following is not an

55. Which of the following is
essential condition for integrative
implemented in the form of ‘work
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bargaining to be successful?
councils’ at lower level and ‘co-
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determination’ at higher levels of the a. Parties who are honest about their
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organization? concerns
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a. Middle management committees b. Sensitivity by both parties to the

other’s needs
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b. Consultative management
c. Ability and willingness to trust one
c. Industrial democracy
another
d. Suggestion programs
d. If one party gains a certain amount,
56. Which of these factors form the the other party suffers an equivalent
basis of conflicts? loss
a. Perception 62. Which of the following is not a third
b. Opposition party negotiator?
c. Incompatibility a. Mentor
d. All the above b. Mediator
57. Threatened self concept, c. Conciliator
incompatible temperament and d. Arbitrator
failure in communication result in
63. Which of the following is the
a. Inter personal conflict
primary source of social identity for
b. Intra personal conflict employees?
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a. Social group a. Quality circle

b. Work group b. Work group
c. Cultural group c. Work team
d. Political group d. Cross functional group
64. Which of the following theories 70. What is the primary motive of
suggests that spatial or geographical mutual interaction in a work team?
proximity is cited as the reason why
a. Perform collectively
individuals affiliate with each other?
b. Share information
a. Balance theory
c. Manage stress
b. Propinquity theory
d. Distribute work among themselves
c. Exchange theory
d. None of the above 71. A group of employees who plan and
schedule their work, hold collective
65. Which of the following plays an control over the pace of work, make
important role in balance theory? decisions related to the operations of
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a. Propinquity and interaction the task and overcome the problems
b. Rewarded-cost outcome during implementation comprise a
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c. Geographical or spatial proximity a. Autonomous team/Self-managed
team
of
d. Formalization and task structure
b. Problem solving team
66. A lunch group in an organization is
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c. Cross functional team
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an example of
d. Quality circle
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a. Friendship group
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b. Informal group 72. Which among the following

comprise a group of employees from
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c. Primary group
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different functional areas who come

d. Formal group
together to accomplish a task and
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67. Performing a task in front of others resume their normal work once the
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can usually have a positive or task is accomplished?

negative impact on one’s a. Self-managed teams
U
performance. This is termed as b. Problem solving team

S
a. Social loafing effect c. Task force

B
b. Social facilitation effect

rI
d. Quality circle
c. Glass ceiling effect
Fo
73. Which of the following teams

d. Law of effect
consist of employees from the same
68. Which of the following does not hierarchical level, but from different
result from team building and by work areas?
having a team-based environment in a. Problem-solving team
the organization? b. Cross-functional team
a. Enhanced performance c. Quality circle
b. Employee benefits d. Task force
c. Organizational enhancements 74. Which of the following studies
d. Increased cost revealed the importance of informal
organization in a work situation?
69. What is a group that interacts a. Hawthorne studies
primarily to share information and to
b. Scandinavian studies
make decisions to help each other
perform within his or her area of c. Ohio State studies
responsibility known as? d. Behavioristic studies
8
Part A
75. Informal communication channel in 81. The degree to which power and
an organization is widely known as authority are concentrated at the top
a. Grapevine most level of the organization is
known as
b. Gossip
a. Formalization
c. Kinesics
b. Centralization
d. Group think
c. Unity of command
76. Which of the following is not a type d. Standardization
of communication network in an
informal organization? 82. The degree of which jobs in an
organization are standardized is
a. Single strand chain known as
b. Cluster chain a. Decentralization
c. Multiple strand chain b. Formalization
d. Probability chain c. Centralization
77. Which of the following is not a d. Work specialization
10
feature of grapevine 83. Which of the following is not a
20
communication? phase in the decision-making
a. Carries information which is process?
of
purposely left unsaid by formal a. Intelligence activity
systems
s
b. Design activity
s
b. Faster than most of the formal c. Choice activity
la
communication methods
d. Creative activity
C
c. Ability to penetrate the tightest

securities 84. What are the three phases of the
y
nl
d. Carries 100% true information decision-making process according

to Herbert A. Simon?
O
78. Grapevine information a. Discussion, consensus and

se
communicated without secure application

standards of evidence is called
U
b. Intelligence, design and choice

a. Gossip activity
S
b. Probability c. Searching, identification and solving

B
c. Rumor d. Identification, development and

rI
d. Intervention selection
Fo
79. The degree to which tasks in an 85. The use and preference of elaborate,
intricate and complex stimuli and
organization are sub-divided into
thinking patterns by a person is
separate jobs is described as
known as
a. Departmentalization
a. Divergent thinking
b. Decentralization
b. Cognitive complexity
c. Specialization
c. Convergent thinking
d. Differentiation
d. Perceptual selectivity
80. On what basis are the activities
86. Groups will have a tendency to take
grouped in departmentalization?
very high risks than individuals
a. Functions acting alone. What is this risk taking
b. Characteristics feature of groups known as?
c. Time consumption a. Group polarization
d. Task structure b. Group think
9
c. Halo effect c. Reward structure

d. Divergent thinking d. Task structure
87. Which group decision making 93. Which of the following factors does
technique attempts to avoid potential not influence the strength of
pitfalls of group decision making organizational culture?
while taking advantage of the
a. Leadership
positive features of employee
participation? b. Sharedness
a. Nominal group technique c. Intensity
b. Delphi technique d. Departmentalization
c. Seeding strategy 94. Which of the following is not a
d. Brainstorming function of organizational culture?
88. X performs all the tasks assigned to a. Plays a boundary defining role
him by his superior, even though the b. Acts as a control mechanism
tasks are not a part of his job profile, c. Builds a sense of identity for its
10
due to the fear of losing his job. people
What kind of power is X being
d. Represents a divergence in values,
20
subjected to?
assumptions and ideologies of the
a. Referent power members of the organization
of
b. Expert power
c. Legitimate power 95. Who among the following is not
s
responsible for managing change
s
d. Coercive power
la
activities in organizations?
89. Which of the following is identical
C
a. Facilitators
to authority?
b. Consultants
y
a. Referent power
nl
c. Change agents
b. Expert power
O
d. Wedge drivers
c. Legitimate power
se
d. Reward power 96. Which of the following statements is

not true regarding second-order
U
90. What is the power that is exerted by change in an organization?

a charismatic person?
S
a. This takes place when organizations

B
a. Referent power
are to be restructured
rI
b. Legitimate power
b. It involves the reframing of
c. Charismatic power
Fo
assumptions about the organization

d. Expert power
c. The change is linear and continuous
91. The extent to which the management d. It is irreversible in nature
considers the impact of its decisions
on the people in the organization is 97. Which of the following types of
termed resistance is subtle in nature and
a. Outcome orientation does not allow management to have
b. People orientation even an inkling of the resistance to
c. Team orientation its actions by the employees?
d. Performance orientation a. Overt resistance
b. Deferred resistance
92. What is the basis for the intensity of
effort put in by an individual to c. Explicit resistance
perform a certain task? d. Individual resistance
a. Organization structure 98. Which of the following results in
b. Team structure individuals’ resistance to change?
10
Part A
a. Selective information processing c. To improve awareness and

b. Threat to expertise understanding of group and
c. Group inertia intergroup process
d. Structural inertia d. To make individuals adapt to the
risk culture of the organization
99. Which of the following is not
involved in the Lewin’s three step 104. Which of the following is described
model? as a collaborative client-consultant
a. Unfreezing effort consisting of preliminary
diagnosis, data gathering from the
b. Manipulation
client group, data feedback to the
c. Refreezing client group, data exploration and
d. Movement to change action planning by the client group
and finally, action?
100. What is an organization that has
developed continuous capacity to a. Organizational survey
adapt and change known as? b. Action research
10
a. Developing organization c. Market research
b. Innovative organization d. Process consultation
20
c. Learning organization
105. Which of the following strategies is
d. Informal organization
of
based on the assumption that people
101. Which of the following involves are rational?
s s
increased involvement of employees a. Normative-re-educative
la
in organizational processes and b. Self realization

decision-making?
C
c. Empirical-rational
a. Facilitation
y
d. Power-coercive
nl
b. Action research
c. Empowerment 106. Which of the following types of
O
d. Process consultation organizational structure is

se
characterized by work specialization

102. Which of the following describes and division of labor, abstract rules,
U
how organizational members hierarchy and impersonality of

S
diagnose situations, solve problems, managers?

B
make decisions, and take appropriate a. Matrix structure

rI
actions in relation to the

organization’s opportunities and b. Simple structure
Fo
challenges? c. Bureaucratic structure

a. Learning processes d. Formal structure
b. Problem solving processes 107. Which of the following refers to the
c. Decision making process set of planned activities which are
d. Empowerment process introduced to bring the desired
change in organizations?
103. Which of the following is not the
a. Action research
basic objective of sensitivity
training? b. Action plans
a. To increase an individual’s c. OD interventions
understanding, insight, and self- d. Process consultation
awareness of one’s own behavior
and its impact on others 108. Which of the following is not a type
of OD intervention?
b. To increase an individual’s
understanding and sensitivity a. Diagnostic activities
regarding the behaviors of others b. Survey feed back activities
11
c. Team building activities threatened. Which of the following

d. O.B. Mod process communication barriers refers to
this?
109. Which approach to team building is
a. Defensiveness
based on a form of psychotherapy
and believes that persons function as b. Selective perception
whole, total organisms? c. Filtering
a. Fayol’s approach d. Language
b. Edgar Schein approach 115. Which of the following attitudes
c. Gestalt approach enables employees to adapt to their
d. Process consultation environment and also helps them
protect their ego by justifying their
110. Which of the following types of action?
organizational structure is a. The adjustment function
characterized by a wide span of b. The ego-defensive function
control, centralized authority and a c. The value-expressive function
low degree of formalization?
10
d. The knowledge function
a. Bureaucratic structure
20
b. Simple structure 116. The job satisfiers are referred to as
c. Matrix structure a. Motivators
of
d. Formal structure b. Hygiene factors
c. Reinforcers
s s
111. Which of the following is an d. Internal set factors
la
approach or method for intervening

117. Which of the following involves any
C
in an ongoing system, where the

consultant works with individuals stimulus that stands out against the
y
and groups to enable them to learn background, or which is not what

nl
people expected, thereby receiving

about human and social processes?
O
maximum attention?
a. System consultation a. Principle of contrast
se
b. Process consultation b. Principle of intensity

U
c. Structure consultation c. Figure ground principle

d. Force field analysis d. Principle of repetition
S
B
112. Which of the following is not a 118. Denial, change in perception,

rI
decisional role played by managers? modification and distortion,

Fo
a. Entrepreneur recognition but refusal to change are

all involved in
b. Disturbance handler
c. Discriminator b. Perceptual mapping
d. Allocator c. Perceptual context
113. An employee’s workweek consisting d. Perceptual defense
of four days with 10 hour-days 119. Which of the following terms is
instead of five days with 8 hour- synonymous with socio-technical
days, is an example of teams?
a. Job sharing a. Work councils
b. Flexitime b. Quality circles
c. Compressed workweek c. Self managing teams
d. Telecommuting d. Committees
114. People refuse to have an open mind 120. The realignment of workgroups,
when they feel that they are being altering rules and regulations,
12
Part A
increasing interdependence, and c. Delphi technique

making similar structural changes to d. Role negotiation technique
disrupt the status quo is known as
a. Restructuring 126. What is a senior employee who
b. Reengineering guides and supports a less
experienced employee known as?
c. Realignment
d. Revamp a. Counselor
b. Facilitator
121. Which of the following exists when c. Trainer
there is an exchange of inputs and
outputs between two groups? d. Mentor
a. Pooled interdependence 127. Which compensation system
b. Reciprocal interdependence necessitates a cut-off performance
c. Sequential interdependence that must be exceeded for team
d. Adjustment heuristic members to receive a part of the
gain (profits)?
122. Which of the following theories is a. Skill based pay systems
10
based on the assumption that the
b. Team bonus plans systems
interests of the principal and agents
20
are sometimes in conflict? c. Gain-sharing systems
d. Fair pay systems
of
a. Theory of cognitive dissonance
b. Exchange theory 128. Which of the following is a process
s
c. Agency theory of power?
s
la
d. Control theory a. Compliance

C
123. Which of the following theories b. Identification

c. Internalization
y
proposes that individuals compare

nl
their job inputs and outcomes with d. All the above

those of others and then respond so
O
as to eliminate any inequities? 129. Which process advocates that the

se
target complies with power so as to

a. Theory Z gain a favorable reaction from the
U
b. Erg theory agent?

c. Equity theory
S
a. Internalization
B
d. McClelland’s theory of needs b. Identification

rI
124. The grapevine pattern of c. Compliance

Fo
communication in which one person d. Contingency

tells everybody else is known as
130. Which of the following terms is
a. Probability synonymous with first order
b. Cluster change?
c. Gossip a. Incremental change
d. Single strand b. Fundamental change
c. Quantum change
125. What is the technique in which the
consultant negotiates between d. Rational change
conflicting parties and reaches a 131. When a manager contacts
settlement where each party agrees individuals or groups, inside or
to make specific changes in its outside the organization, to get some
behavior in return for changes in the required information, then he is said
behavior of the other party? to play a
a. Role analysis technique a. Leadership role
b. Force field analysis b. Liaison role
13
c. Resource allocator role 137. Which of the following principles

d. Monitor role permits a person to have some
stability in this changing world?
132. Which of the following a. Figure ground
organizations attempts to eliminate b. Perceptual constancy
the discriminatory practices
c. Perceptual grouping
prevalent in exclusionary and club
organizations? d. Perceptual defense
a. Multicultural organization 138. Entitlements, enhancements,
b. Compliance organization obstacle disclosures, and association
c. Redefining organization` are all the characteristics of
d. Affirmative action organization a. Self-presentation
b. Demotion-preventative strategy
133. What is the term used to refer to the c. Promotion-enhancing strategy
internal conflict and anxiety that d. Personalization
occurs when people receive
information incompatible with their 139. Which of the following could be the
10
value systems, prior decisions, or reason for low self-esteem and self-
20
other information they may have? efficacy among employees?
a. Rationalization a. An autocratic leader
of
b. Cognitive dissonance b. An effective reward system
c. A stable organization
s
c. Self-revelation
s
d. Feedback d. A democratic leader
la
140. Which of the following is not one

C
134. Employees who would like to have

clear instructions from their among the five intentions in the
y
superiors are said to have a high process of conflict resolution?

nl
level of a. Compromising
O
a. Cultural distance b. Accommodating

se
b. Power distance c. Dominating

d. Rationalizing
U
c. Uncertainty avoidance
d. Individualism/collectivism
S
141. Appointing a critic to purposely

B
argue against the majority positions

135. Which of the following theories held by the group is called as
rI
helps to predict the propensity to

a. Smoothing
Fo
engage in attitude and behavioral

change? b. Negotiating
a. Theory of Cognitive dissonance c. Appointing a devil’s advocate
b. The Job fit theory d. Problem solving
c. The adult life stage theory 142. The subordinates who report directly
d. Psychoanalytical theory of behavior to a manager form a
a. Task group
136. The comparison of the experience of
an employee holding a certain b. Command group
position with those holding a similar c. Interest group
position outside one’s own d. Formal group
organization is referred to as
143. Which of the following theories
a. Self-inside proposes that when individuals
b. Other-outside observe behavior, they attempt to
c. Self-outside determine whether it is internally or
d. Other-inside externally caused?
14
Part A
a. Attribution theory a. Simon’s bounded rationality model

b. Control theory b. Judgmental heuristics and biases
c. Theory Z model
d. LMX theory c. Social model
d. Economic model
144. Which of the following is a type of
rumor? 150. The non-evaluative feedback given
by others to an individual is the most
a. Historical
important feature of
b. Explanatory
a. Coaching and counseling activities
c. Positive rumor
b. Third party peacemaking activities
d. Wedge drivers
c. Process consultation activities
145. The emphasis of scientific d. Structural activities
management is mostly on
151. The dimension of the managerial
a. Division of labor and scientific communication model that refers to
selection
10
one who communicates only on a
b. Placement and training of workers formal basis, that too only when
20
c. Differential piece rate system needed is
d. All the above a. Humanistic interactor
146. Which of the following helps predict of
b. Informal developer
s
the amount of adaptation that is c. Formal controller
s
needed by an expatriate manager d. Mechanistic isolate
la
who goes to another country?

C
152. Non-verbal communication is also

a. Cultural shock known as
y
b. Parochialism
nl
a. Kinesics
c. Ethnocentrism
O
b. Silent language
d. Cultural distance c. Para language
se
147. The labor-management negotiation d. Gestures

U
over wages stands as a best example

153. Employees who go to a foreign
S
for
country for job assignment are
B
a. Collective bargaining known as

rI
b. Distributive bargaining a. Cross cultural entrants

Fo
c. Integrative bargaining b. Immigrants

d. Conflict resolution c. Expatriates
148. The group whose norms a person d. Repatriates
accepts is a 154. Which of the following theories tries
a. Reference group to bring about a match between the
b. Peer group occupational environment and
c. Quality circles personality characteristics?
d. Expert group a. Adult life stage theory
b. Theory Z
149. Managers, sometimes, tend to accept c. Cognitive dissonance theory
and get satisfied with a ‘less-than-
d. Job fit theory
ideal’ solution to the problem on
hand. Which of the following 155. The way in which people explain the
models is based on the above cause of their own behavior is
statement? referred to as
15
a. Social perception 162. The desire for friendly and close

b. Attribution interpersonal relationship is an
c. Stereotyping a. Affiliation need
d. The Halo effect b. Esteem need
156. The A-B-C analysis is involved in c. Safety need
a. Punishment-Positive reinforcement d. Self-actualization need
strategy 163. Which of the following refers to the
b. Functional analysis of the behavior shift in attitudes of members of a
c. Measurement of behavior group towards a more extreme state
d. Reinforcement after having a discussion among
themselves?
157. Which type of leader gives
challenging tasks to subordinates, a. Machiavellianism
and expects them to show their best b. Cognitive complexity
performance? c. Divergent thinking
10
a. Supportive leader d. Group polarization
b. Achievement oriented
20
164. What is the term for a social position
c. Participative leader or rank given to groups or group
of
d. Directive leader members by others?
a. Role
s
158. Which of the following is not a part
s
of participative programs? b. Status
la
a. Consultative management c. Felicitation

C
b. Middle management committees d. Authority

y
c. Suggestion programs
nl
165. Which of the following is not a force

d. Action research of change?
O
159. Which of the following forms the a. People

se
basis for the exchange theory? b. Technology

U
a. Affiliation c. Competition
S
b. Reward-cost outcomes d. Self-esteem

B
c. Propinquity
166. What is the phase of decision
rI
d. Control
making in which the identification,
Fo
160. What stage of a group is development and analyzing possible

characterized by preparations to courses of action takes place?
disband the group? a. Intelligence activity
a. Storming b. Design activity
b. Performing c. Choice activity
c. Norming d. Rational activity
d. Adjourning
167. What are the repetitive sequences of
161. Leaders who provide inspiration and activities that describe and reinforce
intellectual stimulation and possess the key values of an organization
charisma are known as known as?
a. Transactional leaders a. Rituals
b. Transformational leaders b. Stories
c. Democratic leaders c. Culture
d. Charismatic leaders d. Symbols
16
Part A
168. Distorting facts to make them more i. Distributive bargaining assumes that
presentable is known as there can be no solution that satisfies
a. Co-optation both parties.
b. Manipulation ii. The distributive bargaining approach
is based on the assumption that there
c. Innovation exist one or more solutions to a
d. Facilitation problem.
169. Interventions are broadly iii. Distributive bargaining approach
categorized into process leads to win-lose situations.
interventions and structural iv. Distributive bargaining leads to win-
interventions. Which of the win situations.
following statements explains the
difference between the two? a. ii and iv
b. i and iii
a. Structural interventions educate the
employees about the advantages of c. i and iv
collective team work in comparison d. ii and iii
to individual effort while process
10
172. Each party to the conflict will have
interventions bring about a positive
certain high priority objectives. The
20
change in the behavior.
party will not agree to any
b. Process interventions demonstrate negotiation agreement which does
of
the effect of collaboration through not satisfy these objectives. The
experiments or demonstrations in agreement that satisfies these
s
simulated work environments while
s
objectives is referred to as
structural interventions actually
la
__________.
reinforce and sustain collaborative
C
efforts in the workplace. a. BATNA

b. BTNA
y
c. Structural interventions demonstrate

nl
the effect of collaboration through c. BANA

O
experiments or demonstrations in d. BANTA

simulated work environments while
se
process interventions reinforce and 173. Which of the following statements

defines ‘human relations’?
U
sustain collaborative efforts in the

workplace. i. It is a systematic, developing body
S
d. Structural interventions are applied of knowledge devoted to explain the

B
in simulated work environment on a behavior of individuals in the

rI
trial basis while process working organization.

Fo
interventions are applied directly in ii. It deals with the understanding,

real work environment. prediction and management of
human behavior in organizations.
170. Which of the following is a trust-
building intervention? iii. It is the study of how people can
work effectively in groups in order
a. T-group to satisfy both organizational goals
b. Process review and personal needs.
c. Data feedback iv. It involves motivating people in
d. Role-linkage organizational settings to develop
teamwork which accomplishes
171. There are two negotiating individual as well as organizational
approaches that are generally goals effectively.
practiced in organizations –
a. i, ii and iv
distributive bargaining and
integrative bargaining. Which of the b. i, ii, iii and iv
following statements explain the c. ii, iii and iv
distributive bargaining approach? d. i, iii and iv
17
174. Which of the following experiments 177. Which of the following results were
formed part of the Hawthorne obtained from relay assembly room
studies? experiments?
i. Illumination experiments i. When employees were paid
ii. Sound experiments according to the number of units
iii. Bank wiring room experiment they produced, their productivity
iv. Relay assembly room experiment increased.
a. i, ii, iii and iv ii. When two five-minute breaks – one
in the morning and one in the
b. ii, iii and iv
afternoon, were introduced, the
c. i, iii and iv productivity of employees increased.
d. i, ii and iv iii. When the duration of the rest pauses
was increased to ten minutes, it led
175. Which of the following steps were
taken as a part of illumination to a sharp increase in productivity.
experiment in Hawthorne studies? iv. When the number of five-minute
rest pauses was increased to six, it
i. Illumination was not changed for the
led to further increase in
10
experimental group throughout the
productivity.
course of the experiments.
20
v. When the employees were allowed
ii. Illumination was not changed for the
control group throughout the course to leave thirty minutes early, it led to
of
of the experiments. s decline in their productivity.
iii. Illumination was changed constantly a. i, ii and iii
s
for the experimental group.
b. ii, iii and iv
la
iv. Researchers modified the intensity

c. i, ii and iv
C
of light to determine its effect on

employee productivity. d. i, iii and iv
y
nl
a. i, ii and iv
178. Which of the following is one of the
b. ii, iii and iv
O
assumptions of Theory Y?
c. i, iii and iv
se
a. The average person dislikes work

d. i and iv
and tries to avoid it if he can.
U
176. Which of the following observations b. People have to be either coerced by

S
were made during the illumination punishment or goaded by means of

B
experiment? financial rewards to make them

rI
a. When the intensity of illumination work effectively.

Fo
was reduced for the experimental c. The average employee prefers to be

group, the productivity of the group given directions about his work and
decreased. shies away from taking greater
b. When the intensity of illumination responsibilities.
was reduced for the experimental d. People can solve their work-related
group, the productivity of the group problems by using creativity and
did not decrease.
imagination.
c. When the illumination was enhanced
for the experimental group, its 179. The organizations which blend
productivity increased but the American and Japanese style of
productivity of the control group management practices are referred to
decreased. as _________.
d. The productivity of the control a. Hybrid organizations
group (which was not subjected to
b. Type Z organizations
changes in illumination) increased
and the productivity of the c. Type Y organizations
experimental group decreased. d. Ideal organizations
18
Part A
180. The sum total of ways in which an 184. Which of the following statements
individual interacts with people and describe people with high self-
reacts to situations is called esteem?
a. Attitude i. They are confident about their
capabilities.
b. Personality
ii. They prefer to take challenging jobs.
c. Psychology iii. They hardly take a stand which
d. Physiology opposes others’ views.
iv. They are not easily influenced by
181. Which of the following statements
external factors.
are true about highly conscientious
people? a. i, ii and iii
i. They are responsible and b. i and iii
achievement oriented. c. i, ii and iv
ii. They limit the number of goals they d. i, ii, iii and iv
set for themselves, devote their time 185. The ability of an individual to adapt
10
and energy to those goals and often his behavior to the demands of the
succeed in achieving their goals. situation is known as _______.
20
iii. They set too many goals for a. Self-esteem
themselves and often fail to achieve b. Self-monitoring
any of them.
of
c. Machiavellianism
s
iv. They exhibit mediocre performance d. Locus of control
s
in their jobs.
la
186. Which of the following are the

C
a. i and iii characteristics of type A people?

b. i and ii i. They try to be fast in all their
y
nl
c. iii activities.
O
d. iv ii. They try to make the best use of

their leisure time and relax without
se
182. If a person fails to get promoted due any feeling of guilt.

to his poor rating in the annual
U
performance appraisal, but attributes iii. They emphasize numbers and

S
it to poor managerial assessment of quantity and measure their success

B
his capabilities, he is considered to in quantitative terms (e.g. amount of

rI
output produced, number of

have a _________ locus of control.
products sold, etc.)
Fo
a. Internal
iv. They do not consider it necessary to
b. External
reveal or discuss their achievements
c. Agreeable unless the situation demands it
d. Conscientious
a. i and iv
183. People who attribute their failure to b. i and iii
their own actions and attempt to c. ii and iii
learn new skills and improve their d. i and ii
position at the workplace (or
society) are considered to have 187. Which of the following are the
________ locus of control. characteristics of type B people?
i. They do not experience a sense of
a. Internal
urgency when carrying out tasks.
b. External
ii. They are always busy and find
c. Balanced themselves unable to cope with
d. Positive leisure time.
19
iii. They try to be involved in more than d. Argyris’ theory of personality

one thing at a time. development can only describe the
iv. Failure to accomplish tasks within personality of an individual but
the specified time does not make cannot predict his specific behavior.
them impatient. 191. In which of the following
a. i and iii socialization strategies is a
prospective candidate for a top
b. ii and iii
management position rotated
c. i and iv through a series of important
d. i and ii functional specialty positions before
being promoted?
188. According to Levinson’s theory, the
a. Informal
development of an individual is not
uniform. There are four periods of b. Individual
transition and four periods of c. Variable
stability in the life of an individual. d. Sequential
Which of the following is not a
10
192. According to John Holland, the level
period of transition in the life of an
of job satisfaction of an individual is
20
individual?
high if his personality matches his
a. Age-thirty transition occupation. Which of the following
b. Mid-life transition
of
personality-occupation pairs is
s
c. Age-forty transition unlikely to lead to high job
s
d. Late adult transition satisfaction?
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i. Realistic – assembly line worker

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189. Hall’s career stage model suggests

ii. Investigative – news reporter
that an individual goes through four
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iii. Conventional – scientist

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stages during his career. Which of

the following is not a stage in Hall’s iv. Artistic – musician
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career stage model? v. Enterprising – business manager

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a. Exploration vi. Social – counselor

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b. Establishment
a. ii and vi
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c. Growth
b. ii
B
d. Decline
c. iii
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190. According to Argyris’ immaturity to d. i

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maturity theory, human personality

development takes place in the form 193. Attitudes serve four important
of a continuum and not in stages. functions. Which of the following
Which of the following statements is are the four functions?
not proposed by the theory? i. Adjustment
a. The development of an individual’s ii. Ego-defensive
personality can be explained in iii. Affective commitment
terms of seven dimensions. iv. Value-expressive
b. Every individual must display these v. Knowledge
seven dimensions in his personality vi. Continuance commitment
to indicate maturity.
c. Factors such as perception of the a. i, ii, iii, and v
individual, his self-concept and b. i, iii, iv and vi
ability to adapt and adjust also c. i, ii, iv and v
influence his personality. d. i, ii, iii and vi
20
Part A
194. Which of the following comparative 198. Which of the following refers to the
statements is true? psychological process of
a. Organization Theory is more micro recollecting information and past
oriented than OB. experiences?
b. Organization Development is more a. Social learning framework
macro and less application oriented b. Synchronization
than OB. c. Cognition
c. Human Resource Management is d. Social cognition
more macro and application oriented
than OB. 199. According to the social learning
d. Human Resource Management is approach, behavior is the result of
more macro and less application continuous _______ interaction
oriented than OB. between cognitive, behavioral and
environmental determinants.
195. Henry Mintzberg organized a. Reciprocal
management roles into three
b. Informal
categories. The categories are _____
10
c. Non-reciprocal
a. Leader, disseminator and negotiator
d. Formal
20
roles
b. Interpersonal, informational and 200. Which of the following are models
of
decision roles of OB?
c. Interpersonal, interactive and i. Autocratic
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monitoring roles
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ii. Custodial
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d. Spokesperson, motivator and iii. Supportive

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entrepreneur roles
iv. Collegial
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196. The general manager of an

a. i, ii and iii
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organization called a press

b. i, ii, iii and iv
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conference and announced the

launch of a new product by his c. i, iii and iv
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company. What role is being played d. i, ii and iv

by the manager?
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201. Which of the following models

a. Disseminator
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attempts to satisfy the self-

b. Spokesperson
B
actualization needs of employees?

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c. Leader a. Autocratic
d. Resource allocator
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b. Supportive
197. Consider a situation in which a c. Collegial
production manager convinces the d. Custodial
employees protesting against an
increase in workload to put in the 202. Which of the following models
extra effort required to achieve the gives importance to the provision of
targets set for the year in return for job security for employees?
additional leaves and incentives, a. Custodial
which he will persuade the b. Collegial
management to agree to. Which of c. Autocratic
the following roles is being played d. Supportive
by the production manager?
a. Resource allocator 203. In which of the following models do
b. Liaison managers attempt to provide an
appropriate environment that
c. Negotiator
motivates employees to contribute to
d. Monitor the growth of the organization?
21
a. Autocratic 209. Which of the following represents

b. Collaborative the sequence of subprocesses of
c. Supportive perception?
d. Custodial a. Stimulus, behavior, registration,
feedback, interpretation and
204. Which of the following theoretical consequence
frameworks is used to study b. Stimulus, registration, interpretation,
organizational behavior? feedback, behavior and consequence
i. Behavioristic c. Behavior, registration, feedback,
ii. Cognitive stimulus, interpretation and
iii. Social learning consequence
iv. Contingent d. Behavior, consequence, registration,
stimulus, interpretation and feedback
a. i, ii and iii
210. If an employee is reprimanded for
b. ii, iii and iv
violating the company’s rules, he
c. i, iii and iv may then onwards begin to abide by
10
d. i, ii, iii and iv the rules. The behavior of employee
20
is ______.
205. Both internal and external factors
influence organizational behavior. a. Covert
of
The internal causal factors are b. Incognito
_______ oriented and the external c. Overt
s
environment factors are _______
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d. Surreptitious
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oriented.
211. Which of the following
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a. Behavioristically; cognitively
subprocesses of perception can be
b. Cognitively; behavioristically
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observed?
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c. Employee; competition
a. Registration
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d. Employer; competition
b. Interpretation
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206. Which of the following is not an c. Feedback

external stimulus? d. Behavior
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a. Mechanical pressure
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b. Light and sound 212. Which of the following are

B
perceptual dimensions?
c. Taste of food
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a. Selectivity and organization

d. Thirst
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b. Feedback and interpretation

207. Which of the following is not an c. Registration and interpretation
internal stimulus?
d. Selectivity and interpretation
a. Thirst
b. Pain 213. Sometimes the stimuli may be so
c. Smell subtle that an individual may not
d. Hunger even be conscious that he is exposed
to them. This phenomenon is called
208. Which of the following processes is _________ perception.
used by an individual to refine, a. Subliminal
modify or completely alter the raw
data obtained through their senses? b. Intuitive
c. Involuntary
a. Cognitive process
b. Registration process d. Submerged
c. Behavior process 214. Which of the following is an
d. Confrontation process external attention factor?
22
Part A
a. Motivation 219. According to the principle of

b. Personality _______, a group of stimuli that are
c. Learning physically close to each other are
perceived as a single entity.
d. Novelty
a. Perceptual grouping
215. Bright light and strong odor are b. Perceptual organization
noticed more quickly than dim light c. Perceptual proximity
and a faint odor. Which of the d. Perceptual similarity
following principles is described by
this statement? 220. Some research studies have
a. Principle of contrast indicated that people resist
perceiving information which they
b. Principle of proximity
believe would disturb their
c. Principle of attention emotions. What kind of perceptual
d. Principle of closure organization is this?
216. Which of the following situational a. Perceptual constancy
10
factors influence the perception of b. Perceptual defense
an individual? c. Perceptual grouping
20
a. Time, work setting and interests d. Perceptual context
of
b. Work setting, social setting and 221. Which of the following is true with
motives regard to the principle of constancy?
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c. Time, social setting and interests
s
a. A group of stimuli that are
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d. Time, work setting and social setting physically close to each other are
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always perceived as a set of parts

217. The factors which influence belonging together.
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perception include the perceiver

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b. All similar stimuli are perceived as

himself, the object or target being part of a common group.
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perceived, and the situation in which

c. The perception of elements like size,
the perception occurs. Which of the
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shape, color, brightness and location

following factors in the target of an object remains constant and
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influence the perception of an does not change from one individual

individual?
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to another.
B
a. Novelty, motion, time and work d. A person may sometimes perceive a

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setting whole, where it does not exist, and

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b. Sound, size, background and may sometimes, not be able to

proximity perceive a whole when it is present.
c. Attitudes, motives, interest and 222. What is the process of interpreting
experience one’s own as well as others’
d. Situation, social setting, time and behavior by relating it to causal
expectations factors or attributes known as?
a. Attribution
218. A person may sometimes perceive a
whole, when it does not exist, and b. Assignment
may sometimes, not be able to c. Ascription
perceive a whole when it is present. d. Feedback
What is this principle known as?
223. Sometimes people arrive at a general
a. Principle of closure impression about an individual on
b. Principle of continuity the basis of a single characteristic of
c. Principle of proximity that individual. What is this process
d. Principle of similarity known as?
23
a. Halo effect c. Conflict

b. Association d. Group conflict
c. Attribution
230. An individual may have conflicting
d. Stereotyping needs or he may have to overcome
224. In some cases, people generalize the many barriers to achieve his goals.
characteristics of all the members of In the process of achieving his goals,
a group. What is this perceptual the individual may experience stress
error known as? and frustration. What type of
a. Stereotyping conflict does this result in?
b. Projection a. Interpersonal conflict
c. Halo effect b. Personal conflict
d. Association c. Individual conflict
d. Intrapersonal conflict
225. What is the process by which people
try to manage or control the 231. When someone threatens an
perceptions that other people have individual’s self-concept, he
about them? retaliates and tries to maintain his
10
a. Perception management image and self-respect. What type of
b. Halo effect conflict does this result in?
20
c. Impression management a. Intergroup conflict
of
d. Perceptual defense b. Internal conflict
226. Which of the following is a c. Interpersonal conflict
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d. Intragroup conflict
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characteristic of demotion-
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preventative strategies?
232. What type of conflict results when
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a. Entitlements one group in an organization

b. Enhancements
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perceives itself being treated

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c. Association inequitably in comparison to other

d. Disassociation groups in terms of working
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conditions, rewards and status?

227. A person’s behavior can be
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a. Internal conflict
attributed to internal factors such as
b. Intergroup conflict
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personality traits, motivation or

ability. What is this kind of c. Interpersonal conflict
S
attribution known as? d. Intragroup conflict

B
a. Positional
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b. Situational 233. Which of the following are stages in

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c. Dispositional the conflict process?

d. Personal i. Potential opposition
228. In _______ attribution, a person’s ii. Intentions
behavior is attributed to external iii. Cognition and personalization
factors. iv. Behavior
a. Situational v. Input
b. External
a. i, ii, iii and iv
c. Positional
d. Mechanical b. i, ii, iii, iv and v
c. ii, iii and iv
229. What term is used to refer to a d. i, ii and iv
disagreement between two or more
individuals or groups over an issue 234. The occurrence of conflicts is
of mutual interest? dependent on certain conditions.
a. Intergroup disagreement Although the presence of these
b. Individual disagreement conditions may not always lead to
conflict, their absence eliminates the
24
Part A
possibility of a conflict taking place. conflict resolution technique being

Which among the following are used by the management.
these conditions? a. Altering the human variable
i. Communication b. Avoiding
ii. Structure c. Altering the structural variables
iii. Personal variables d. Authoritative command
iv. Personalization 239. Which of the following methods are
a. i and iv used for managing intergroup
b. ii and iv relations?
c. i, ii and iii i. Integrating departments
ii. Task forces
d. i, ii and iv
iii. Planning
235. Following are some generalized iv. Liaison roles
statements about the factors that lead
to conflict. Which of the given a. i, ii and iv
statements is not true? b. i, ii, iii and iv
a. The availability of surplus c. i, ii and iii
10
information eliminates the scope for d. i, iii and iv
conflict.
20
b. If the roles of individuals/groups are 240. Which of the following is not a
not clearly defined and their method for managing conflict?
a. Avoidance
of
responsibilities overlap with those of
others, conflicts become inevitable. b. Smoothing
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c. When surplus information is c. Convincing
s
available, people may differ in their d. Bargaining
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opinions regarding which aspects of 241. In an organization, which of the

C
the information are critical and following refers to the standard of

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which are non-critical. behavior that every employee has to

nl
d. People who have low self-esteem follow and the quantum and quality
are more likely to be involved in of work that every employee has to
O
conflict. deliver?
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a. Organizational culture
236. In which of the following stages of
b. Norms
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conflict do individuals decide on the

action that is to be taken to deal with c. Values
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the conflict? d. Assumptions

B
a. Intentions 242. Organizational _________ refers to

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b. Cognition and personalization the overall impression an employee

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c. Behavior has with respect to the physical

d. Outcomes layout of the workplace, the various
interactions among the employees,
237. In which of the following conflict and the way employees behave with
resolution techniques do the the customers.
conflicting parties meet face-to-face a. Culture
to identify the problem and resolve it b. Climate
through open discussion?
c. Structure
a. Smoothing
d. Behavior
b. Problem-solving
c. Compromise 243. Within an organization, people tend
to identify with others and form
d. Expansion of resources
social groups on the basis of age,
238. In an organization, the management occupational or professional skills,
changed the organizational structure union membership etc. What does
and redesigned the jobs to change this tendency among employees give
the nature of interaction between the rise to?
conflicting parties. Identify the a. Organizational culture
25
b. Dominant culture employee as an individual with a

c. Subculture distinct set of values and principles.
d. Work group 247. Which of the following is not true
244. Which of the following statements is about an effective organizational
(are) true about subcultures? change process?
i. A subculture represents the core a. The organization change process
values shared by a majority of should be gradual, not abrupt.
members in the organization. b. It is advisable to invite an external
ii. Subcultures prevent employees change agent to get a broader
from blindly following the perspective of the change strategies.
prevailing norms and values. c. A top-down approach has to be
iii. The value of organizational culture adopted while attempting to change
is significantly lessened in the the organizational culture.
absence of a subculture since a d. The change process must be abrupt
common interpretation of and not gradual.
organizational procedures and
practices is not possible. 248. Which of the following factors does
10
iv. An effective subculture lays the not help sustain a strong
foundation for emerging values and organizational culture?
20
norms and thus helps the a. Selection procedure
organization adapt to the changing b. Support of top management
of
needs of its various stakeholders. c. Formalization
a. Only i and iv
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d. Socialization
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b. Only i and iii
249. Which of the following factors
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c. Only ii and iv
determine the strength of the
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d. Only iv
organizational culture?
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245. The different members of an i. Sharedness of organizational core

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organization have varying degrees of values

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commitment towards the

organization’s core values. What is ii. Formalization
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this degree of commitment known iii. Selection

as? iv. Intensity
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a. Sharedness of organizational culture

a. Only i and ii
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b. Assumptions of culture
b. Only ii and iv
B
c. Intensity of organizational culture

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d. Outcome orientation c. Only i and iv

d. Only iii
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246. Which among the following is not

true about ‘socialization’? 250. Which of the following is not a
a. It is a formal procedure in which function of organizational culture?
newcomers to an organization are
introduced to the organizational a. Organizational culture plays a
culture so that they can internalize boundary defining role.
the values and ideologies of the b. Organizational culture creates a
organization. sense of identity among the
b. Socialization aims at improving organizational members.
employee productivity and reducing c. Organizational culture enhances the
employee turnover. stability of the social system.
c. Socialization follows a 3-stage
process – pre-arrival, encounter and d. Organizational culture documents
metamorphosis stage. the rules and procedures of the
d. The encounter stage in the organizational system that predict
socialization process treats each and control employee behavior.
26
Part B: Caselets
10
20
of
s s
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The caselets in this section are designed to encourage students to apply theoretical
y
concepts to various business situations. Analyzing these cases requires not only theoretical
nl
knowledge, but also a comprehensive understanding of the business environment. These

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cases test the student’s reasoning and comprehension skills.

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S
B
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Part B: Caselets
Caselet 1
South Indian Technologies had been the largest computer manufacturing company in
the country for almost 15 years. Its collapse in a short span of time came as a jolt to
the nation’s computer industry. Though the company had not been performing up to
the mark for the last couple of years, no one quite expected such a downfall. The co-
founder of the company and its Managing Director, Anil Karthikeyan (Karthikeyan),
stated off the record that the company’s inability to change its organizational culture
was the main reason behind the debacle.
Dr. Krishna Murthy (Murthy), a well-known personality in the Indian PC market,
established South Indian Technologies. An engineer by profession, Murthy had gained
20 years of industry experience, working for numerous players in the PC market. His
flair for innovation and creativity helped him to become one of the most highly paid
10
professionals in the field. Murthy then decided to start up his own computer
manufacturing company with the help of his friend, Karthikeyan. Karthikeyan too was
20
an engineer by profession. However, while Murthy was of the opinion that innovation
and creativity must be given the highest criteria, Karthikeyan was more inclined
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towards making profits. s
Murthy upheld the core values of innovation and creativity and believed that these
s
values would guide the organization towards the accomplishment of its goals.
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Employees received encouragement and generous support from the management and
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their creative talents were nurtured. Every employee at the company was given an
equal opportunity to innovate and each of their ideas were given serious consideration
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by the management. Most of the revenue generated by the company was invested in
nl
developing new products. With the passage of time, the core values of the company
O
were absorbed by every member of the organization. This stimulating work culture led
South Indian Technologies to become the country’s largest computer manufacturing
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firm and it stayed so for 15 years.

U
However, the focus on development of employees caused the management to ignore

S
the changes in the external environment. The markets were changing and so were the
B
needs of the customers. South Indian Technologies failed to positively adapt itself to
these changes. It continued to invest heavily in the development of new products,
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which unfortunately failed to attract customers. It encouraged internal competition and

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kept investing in employee projects without analyzing the competitiveness of the end
product. This resulted in a colossal wastage of investment, as many of the products
did not gain market acceptance. The profits generated by a few successful products
were disproportionate to the investments made in developing newer ones.
Karthikeyan tried his best to convince Murthy about the wastage of financial
resources and the dire necessity of changing this attitude towards investment, in order
to survive. However, the past success of the company blinded Murthy and he was
convinced that the existing culture was the right recipe for success. Even the warnings
of the company’s business managers that it was essential to develop financially
successful products failed to convince Murthy and his followers. They were totally
against changing the organization culture. In fact, the managers who suggested change
were shown the way out. Some of the employees did feel the necessity to change.
However they lacked the willingness to change and ignored every signal that indicated
the need for change.
Karthikeyan made his last attempt to help the company remain dynamic and respond
to external market conditions. He prepared a systematic approach to change the
organization culture. This was also rejected vehemently by Murthy and his followers.
South Indian Technologies could not strike the right balance between being
innovative and being economically successful. It could not make the right cultural
transition at the right time and finally fell victim to, what Karthikeyan termed “the
cultural trap.” That marked the end of business for a company that had almost ruled
the industry for 15 years.
Questions for Discussion:
1. The organizational culture at South Indian Technologies had become a handicap
to the growth of the company. Discuss the effect of a static organizational culture
on a company’s development.
2. An organization’s culture is, to a great extent, influenced by the values of its
founders. Discuss Murthy’s role in shaping the basic organizational culture at
South Indian Technologies. Also discuss the role he should have played in
changing the organizational culture of South Indian Technologies.
Caselet 2
10
The recent collapse of Cosmo Energy Services Ltd. (Cosmo), one of the nation’s
leading energy producers, led the Ministry of Power to set up a panel, headed by
20
Nirmal Mehta (Mehta), the Minister of State for Power, to probe the company’s
functioning. Besides producing and marketing electricity and natural gas, Cosmo also
of
marketed several commodities such as coal, plastics, paper and metal. The company
also had interests in the field of financial and risk management services in the country.
s
Its customers belonged to the commercial and the industrial sectors. The company
s
experienced a constant growth since its inception in the early 1980s and became the
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market leader. Cosmo was rated as the top company on the innovation front. It was
C
also the first company to adapt to technological development. The company never
faced a dearth of financial resources and hired the best talent in the industry. Every
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employee was given due recognition and was paid a salary commensurate with the
nl
profits generated by his/her services. What then, went wrong?

O
The 300-odd-page report, presented by Mehta, disclosed that ‘ethical deficit’ was the
se
culprit. The company had failed miserably on the socio-spiritual aspect as well. Not
only had the senior management been unethical in its business dealings but it had also
U
failed to maintain a relationship of trust and openness with the employees. The report
S
revealed that the organizational culture at Cosmo Energy Services Ltd. was prone to
B
corruption, greed and deception. Interestingly, the report noted that the founders of
Cosmo upheld the values of integrity, honesty and sincerity in all their dealings and
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treated every individual with respect. The founders also believed in having open
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channels of communication at all levels of the organization. Cosmo supposedly

upheld a vision of establishing a work environment that penalized corruption and
encouraged employees to report any violation of this policy. However, within a period
of 20 years, Cosmo had deviated from its core values.
The CEO of the company was affluent and influential and had immense political
support. The report provided evidence that the CEO had influenced the power policy
framed by the previous government. Cosmo was backed by political support that
quelled whatever doubts about its integrity and credibility were raised in public.
The management was involved in illegal activities like fraud and insider trading. The
top management satisfied their own interests at the expense of the company’s
shareholders. The Chief Financial Officer, Raj Agarwal, manipulated the financial
statements to inflate the company’s profits, during its last financial year. A report
submitted by an independent consulting firm rated the company high in terms of its
financial performance and recommended investments in the company. This misled the
general public and the company’s competitors. It was reported that these consultants
were also paid immensely to manipulate the accounts of the company and overstate its
earnings.
32
Part B
Besides, Cosmo’s senior management did not have open channels of communication
with the employees. Any opposition to the decisions of the top management was
ignored or brushed aside. An atmosphere of mistrust and suspicion prevailed
throughout the organization. The panel’s report also revealed that while top executives
were earning in millions, lower level employees were losing their pensions and jobs.
This was because the employees’ money was invested in their own company’s stock
which had plummeted so low that it never recovered.
The probe panel concluded that the toxic culture at Cosmo Energy Services Ltd. had
led to its collapse and that the people who had to bear the brunt of this were its own
employees and the general public who had invested money in it. Cosmo thus stands as
an example of corporate failure to develop a strong and ethical culture.
1. Explain the importance of ethics in sustaining a strong organizational culture,
using Cosmo Energy Services Ltd. as an example.
2. Cosmo Energy Services Ltd. had adequate financial and technological backup.
Despite acquiring the best talent in the industry, it failed to develop its soci0-
10
spiritual capital. Discuss how the effective management of this factor would have
prevented the company’s downfall.
20
Caselet 3
of
We Care, one of the leading manufacturers of health care products in the country, has
s
to its credit a list of 56 healthcare products in the consumer and pharmaceutical
s
market. Its products cover a range of health care areas like infant care, child care,
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women’s care, toiletries, skin care, etc. Ravi Chandran (Chandran) and Srikanth
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Verma (Verma) had founded. We Care eighteen years ago and serve as CEO and the
Managing Director respectively.
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Chandran fondly recollected that We Care was established with a vision of becoming
O
a globally acknowledged health care organization, propelled by constant innovation

and development. It aimed to achieve this by attracting and retaining the right talent
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and focus on product innovation and people development. We Care believed that a
global presence could be sustained by being sensitive to the ever changing needs of its
U
customers. The core values of the company include manufacturing high quality
S
products, continuous employee development, and respect for every individual within
B
the organizational framework. While emphasizing high quality performance by

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employees, the company initiated a variety of people-oriented activities to motivate

employees to perform better. The most striking among these initiatives is the
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involvement and participation of employees in modification and betterment of

existing practices in the organization. The organization has an open feedback system.
Employees are invited to give their opinions on any issue relating to organizational
processes. The feedback, based on various parameters, is used by the company to rate
its overall performance. These ratings reflect employee perception on a variety of
factors like organizational processes, policies, procedures, quality of work life and, the
managerial decision making abilities and its effectiveness. The top management
proposed to use this feedback to decide on future courses of action required for better
organizational performance. These attempts to generate customer delight and at the
same time being sensitive to the needs of employees have resulted in the exceptional
performance of We Care in the highly competitive healthcare industry.
However, the analysis of the recent annual feedback conducted in the company caused
serious concern to Chandran and Verma. Analysis of the feedback highlighted that the
company was rated very low on innovation. It was realized that the R&D department
was not coming up with new ideas of product development or any revolutionary
concepts in the area of healthcare. Chandran called for an immediate meeting of the
top management to identify the cause and come up with possible solutions to the
33
problem. Verma suggested that Amit Das Gupta (Gupta), a newly appointed
marketing manager, also be invited to attend the meeting. Gupta, a relatively less-
experienced but creative individual, was middle level manager at one of the important
branches in the country.
“Gupta is a management graduate from a premier business school and has proved to
be a prudent problem solver. I’m sure that despite the little exposure that he has, he
can come up with bright ideas to solve the problem on hand,” said Verma.
Chandran agreed, though he was not quite convinced. The meeting was attended by
the Marketing Head, the Personnel Manager, the Head of the R&D department, the
Financial Advisor and the new marketing manager, Gupta.
“The agenda of the meeting is to share the results of the recent annual feedback. The
analysis of feedback has highlighted the potential strengths of the company in terms
of providing excellent quality of work life. However, there are other crucial areas
where our company seems to be lagging,” said Chandran.
Verma added, “Employees have rated the company low on the innovation front.”
10
“It is very sad to note that the number of patents we had applied for during the last
year is considerably lower than that of the previous years. The importance of
20
creativity and innovation for survival in this industry cannot be undermined. Our
dismal performance in this crucial aspect may simply put us out of business,”
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continued Chandran. s
The members present were then asked to give their suggestions.
s
“Pay them more,” was the suggestion of the Personnel Manager. This invited
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opposition from the Financial Advisor. Heated arguments were about to begin.
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However they were interrupted by Gupta, who suggested that a high level committee
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be formed to study consumer behavior, to better understand the market and to find out
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how effectively the company was serving the market.

O
Gupta said, “The committee will focus on exploring the expectations of target
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customers and how responsive the company can be to their changing needs.” All the
members agreed to this suggestion and a small committee, headed by Gupta, was
U
formed. In two months time, the committee reported the findings of its study and
S
briefed the R&D team on the customer expectations. Chandran and Verma held
B
another meeting with the Personnel and the R&D Heads. The outcome of this meeting
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was discussed during a general meeting with the members of the R&D team.
Chandran made it clear that the management was willing to enhance the R&D spend
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the following year. This was meant to encourage innovation among the members of
the organization. The management promised a culture that would encourage
employees to come out with their ideas, however weird or absurd they might seem
initially. This decision of the company helped employees present their opinions
without any inhibitions. Thus We Care introduced a culture that fostered creativity
among its employees. It also decided to reward employees whose ideas would bring in
considerable revenues for the company.
Within a year, the company had more than one reason to celebrate. We Care was rated
No.5 in the ‘Best Companies to Work For’ survey conducted by a well-regarded
consultancy in association with a reputed business magazine. Besides the company
saw its profits shoot up by 25% as compared to an 8% increase in the previous year.
1. Discuss the importance of innovation as a characteristic of organizational culture.
Also discuss how the organizational culture at We Care helped foster innovation
among its employees.
34
Part B
2. “Organizational culture, to a great extent, is influenced by the founding fathers of

the organization.” Taking the example of We Care, discuss how the culture of an
organization is influenced by its founders.
Caselet 4
The new CEO of Symphony Technologies (Symphony), Anish Vaidya (Vaidya),
found himself confronted with the most challenging phase of his 26-year-old career in
the industry. The liberalization of the Indian economy and the resultant increase in
competition from foreign companies had hit the company’s sales and revenue badly.
The early 1990s saw Symphony’s profits plummeting to an all-time low since its
establishment about three decades earlier.
Established in 1956, Symphony began as a manufacturer of a variety of electrical
appliances, and gradually spread its operations into various other industries such as
consumer products, power generation, automobiles and insurance. Within four
decades, it grew to become a global company serving customers across the world.
In his first meeting as CEO of the company, Vaidya invited employees from the
middle and top management level to pool their ideas to address a comprehensive list
10
of problems faced by the organization. The meeting brought to the forefront the
20
following areas of concern:
• The bureaucratic and hierarchical structure of the organization was stifling the
of
creativity of its employees as a result of which they were no longer motivated to
come up with ideas pertaining to new products or improvements in the existing
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organizational practices.
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• Competition from multinational companies was eating into Symphony’s market

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share as the technology of these companies was far better than that of Symphony.
• Symphony’s very survival was at stake as most of its subsidiaries were facing
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serious financial crises and increasing losses.

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• The productivity of these subsidiaries was disproportionate to the number of

employees they had.
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• The inability of Symphony’s generic products to effectively penetrate the highly

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competitive market eventually resulted in blocking capital.

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• Most important of all, Symphony failed to adapt to the changes in the external
B
environment. Because of this, it not only lost market leadership in various sectors,
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but also failed to maintain a decent market share in the industry.

Realizing that change management was lacking in the organization, Vaidya, in
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consultation with his team members introduced the following measures to pull
Symphony out of a probable debacle:
• Areas with new and substantial market potential were explored and strategies to
implement them were developed.
• Vaidya endeavored to change the bureaucratic style of management in the
organization to enable easier and faster decision making. This resulted in the
formation of a lean and effective organizational structure and helped enhance
employee participation, and thereby improve employee productivity.
• All the subsidiaries and business units that were making losses were shut down so
that the company could compete only in those areas in which it had proved and
tested competence. This helped it tap the capital that was being invested in units
that were not productive.
• Vaidya also took the difficult decision of cutting down on excess staff, with a
view to cutting down on operational costs. Excess but efficient staff were
retrained and deployed suitably.
35
• Employees at Symphony were asked to undergo numerous training programs at

regular intervals to remain updated with the latest developments in the external
environment, so that they could adapt to technological changes and remain
competitive.
Initially, there was stiff resistance in the company to the tough measures taken by the
new CEO. However, Vaidya was able to gradually persuade the employees to accept
the changes and within a short period of time, a sea change was noticed in the
organizational processes. These revolutionary changes brought about a dramatic rise
in Symphony’s profits, and soon, Vaidya’s bold decisions made Symphony a market
leader in various fields of business.
1. Taking the example of Symphony Technologies, describe the importance of
change management in organizations.
2. Briefly outline the role played by the management and employees in bringing
about a planned change in Symphony Technologies.
Caselet 5
10
Rahul Mehra (Mehra) was annoyed that the week had begun badly. It was Monday
20
morning and it was time for him to provide his manager, Ashish Gupta (Gupta), with
a detailed report on achievement of his weekly targets. Unfortunately, the preceding
of
week too, had been a dull one with not even fifty percent of the targets being met.
s
Mehra worked as a sales representative for the personal loan division of a leading
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private bank. He had to meet weekly targets to become eligible for the special sales
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incentives, the only lucrative monetary benefit offered by the company. The bank set
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the targets for each sales representative in terms of the number of new customers and
the total value of sales to be achieved.
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Gupta was a manager who liked to be in total control of any situation. His
micromanaging tendency made him exercise total control over his subordinates in all
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organizational aspects. (A micromanager is one who does not trust his subordinates
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and who closely monitors them on the job.) He thought of himself as being very
knowledgeable and did not feel he had to seek suggestions from his team members.
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He believed in issuing instructions to his subordinates and expected them to follow

S
the instructions without questioning. He kept an eye on the performance of his 12-
B
member team of sales representatives throughout the twelve-odd hours they spent in
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office. He expected his team members to keep him informed about their progress on
any target on an hourly basis even when they were on the field. The team was
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responsible for obtaining leads (prospective customers) and eventually converting

them into customers. The targets, in terms of the volumes and value of loans were so
high that achieving them seemed a difficult task.
Mehra went into Gupta’s room only to be given a strong warning that if the
achievement of targets for the week ahead was also below expectations, it would cost
him his job. Most of Mehra’s colleagues too had a similar experience to narrate after
they had submitted their weekly report. To make matters worse, Gupta called for an
emergency meeting of sales representatives, and announced that all teams must follow
a systematic procedure to gather data, making cold calls to potential customers from
the leads obtained and then close the deal. No one was permitted to deviate from this
style of working. The team was thus forced to follow a traditional way of marketing,
which included calling up prospective customers and following up until the deal was
finalized. They were not allowed to try out new and innovative ways of marketing
their services. The team members were expected to report to Gupta about their
performance on a daily basis, unlike the weekly reporting that was followed
previously.
36
Part B
The week that followed, was one in which team members struggled under tremendous
pressure. Ultimately, they were unable to meet even the weekly targets. This made
Gupta even more frustrated and he again called for a meeting. But what took place at
the meeting left him in a state of shock, helplessness and despair. Mehra, along with
three others, among the best performers in the organization, quit their jobs.
1. Describe the leadership style that was followed by Ashish Gupta. Also discuss the
effects of such leadership on an organization.
2. Outline the concept of micromanagement and bring out its impact on employee
behavior in the context of the case.
Caselet 6
Milan Khanna (Khanna), HR manager of the GK Group of Industries, found himself
in a pensive mood after studying the annual HR report. The report had serious
implications not only for his job but for the company as well. The annual attrition rate
had grown by 18% during the preceding year, taking the present employee turnover to
10
a glaring 33%. Most of the talented workforce was leaving the organization for better
offers in the industry. Some of them were leaving even when the pay was not as good
20
as that in this company. This was the trend despite the GK Group being considered
one of the best pay-masters in the industry. Moreover, during the previous financial
of
year, the company had given liberal incentives in the form of bonuses to its
exceptional performers.
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The GK Group began as a software firm and later diversified its operations into
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biotechnology and bioinformatics. Its employees were highly talented knowledge

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workers and were motivated by their jobs and the various opportunities that their job
promised to offer.
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However a review of the exit interviews conducted during the past three years
O
revealed a striking fact about employee motivation – “Merely increasing the pay and
doling out incentives have only a marginal value as there are many other companies to
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match your offer.” The exit interviews also revealed that efficient employees left the
organization seeking greater responsibilities, accountability and empowerment. Lack
U
of personal and professional growth opportunities in the organization prompted people

S
to quit and search for greener pastures. The lack of opportunities for learning and
B
growth in the organization, along with little or no attempts towards employee

rI
empowerment proved to be some of the prime reasons for the high attrition rate at the
GK Group.
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In the light of these facts, Khanna came up with a new strategy to contain the rate of
attrition in the company. His strategy was aimed at understanding the complexity of
employee needs and evaluating them. The management charted out a career growth
plan for each of its employees for an average period of three years, with the objective
of developing the overall personality of every organizational member. The plan also
included defining performance benchmarks so as to establish a correlation between
expected and actual employee performance. The employees were to be appraised of
their performance at the end of every six months in relation to these benchmarks so
that they could correct any deviation from the established standards. The strategy
proposed by Khanna aimed at creating a win-win situation for both the individual
members as well as the organization. Therefore, attempts were made to correlate
individual goals and organizational objectives. Recognizing the importance of skill
upgradation and employee empowerment, the management decided to promote
personality development and learning of employees through well established training
facilities. These measures aimed to empower and retain within the organization the
human capital and talent, which form the most crucial factors in the success of any
knowledge enterprise.
37
When the GK Group implemented this strategy in the years that followed, it received
wide acceptance and also brought in the desired results of motivating, empowering
and retaining the workforce in the organization.
1. “Merely increasing the pay and doling out incentives have only a marginal value
as there are many other companies to match your offer.” Substantiate this
statement by describing the various other means of motivating and retaining the
workforce in an organization.
2. Discuss the various challenges faced by HR managers in modern organizations
and outline the measures they can initiate to cater to the ever-changing needs of
employees.
Caselet 7
Komal Mehta (Mehta), Priya Jain (Jain) and Aishwarya Pandey (Pandey) were
childhood friends who were meeting after many years. Among other things, they
discussed their experiences in their respective jobs.
10
Mehta was a project leader in a leading software firm and handled an overseas project
20
with a team of 92 people working under her supervision. Jain was the vice president
of the marketing division in a medium-sized manufacturing company and spearheaded
of
a team of 56 employees, most of whom were men.
Pandey however had not been as fortunate. Despite putting in 3 years of service as a
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junior scientist, at Kalpa Biosciences (Kalpa), she was granted only one promotion so
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far, with a very meager hike in her salary. She even considered quitting her job and
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almost gave up her efforts to carve out a decent career.

C
Mehta and Jain were surprised when they heard this from Pandey, as both of them
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knew that Pandey was much more intelligent and capable than they were and there
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could be no reason for her not being able to perform well in her job. There was
O
another reason which explained Pandey’s frustration – the two male colleagues in
favor of whom she was denied a promotion recently, were her juniors. Moreover, her
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experience and the quality of her work were much better than that of both of them.
U
Pandey attributed the discriminatory treatment towards her by the organization to the
glass-ceiling effect, an invisible barrier that obstructs the growth of qualified women
S
to senior managerial positions. Pandey felt that her company discriminated against
B
employees on the basis of gender. It was not just this instance of Pandey’s promotion
rI
but several other incidents in the organization which made Pandey feel that the
Fo
management at Kalpa had preconceived notions that female employees were suited
only to manage the house and were inefficient as corporate executives. Besides,
Pandey found it even more difficult to manage home and office now that her baby was
only four-months old. Other women employees at Kalpa also had similar experiences
in the organization. This was precisely the reason why not even a single lady member
figured on the company’s board.
In contrast to Pandey’s career, Mehta had a relatively smooth and fast career path.
Within a couple of years after joining as a software programmer at Softpro, she rose to
become a project leader. Within a short period, she was also sent abroad to handle
various overseas projects. Softpro provided a very employee-friendly work
environment, which was sensitive to employee needs. Having employed a sizeable
number of female executives, Softpro provided them with special benefits that offered
them flexibility in their jobs. Some of the benefits included child-care centers,
flextime options, part-time job option etc. This was indeed a boon for all working
mothers in the company.
Jain had similar experiences to share. Having graduated from one of the top-rated
business schools in the country, Jain started her career as a management trainee in
38
Part B
Anand Manufacturing Company (AMC), a medium-sized manufacturing company.

Jain found it smooth sailing for her up the hierarchical ladder and soon became the
vice president of the marketing division. AMC did not discriminate against women
employees and provided them with equal opportunities for growth and development.
The company believed in recruiting individuals on the basis of merit and never denied
them opportunities on the basis of gender. The top management at AMC had a
considerable number of ladies. In fact, Jain was one of the board members in the
company.
Thus, in contrast to Softpro and AMC, Kalpa was a typical traditional organization
which restricted the growth of its female employees despite their capabilities.
1. Describe the phenomenon that best explains the gender bias at Kalpa. Discuss the
reasons behind this attitude of management in organizations.
2. Organizations such as Softpro and AMC are taking initiatives to break the glass
ceiling that affects the career growth of female employees adversely. Discuss the
measures taken by modern organizations to break the glass ceiling, and thereby
10
reduce the adverse effects of gender bias.
20
Caselet 8
of
Indigo Software (Indigo), set up in Hyderabad in the early 1970s, with an initial
strength of 150, grew to become the country’s leading software development firm in
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the year 2000, with around 18,000 employees on its rolls. The company’s success can
s
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be attributed to the values upheld by its founders. Indigo’s founders believed that to
retain its place in the dynamic business environment, the company had to develop
C
leaders of high quality who kept the global perspective in mind while working in the
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organization. With this as its aim, the company established the Leadership Learning
nl
Institute (LLI) to nurture leadership qualities among its employees across the globe.
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The vision of Indigo’s founders was to make it big in the global business arena and to
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transform the company from being just a software developing firm to one providing
consultancy services to organizations to help them create technologies to meet their
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strategic goals. Indigo used its leadership center to direct itself in a planned and
S
controlled manner to achieve this objective. The center was used as an avenue to
B
spread knowledge and corporate values throughout the company.

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During its initial years, the organization was small enough to make it possible for its
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founder, Janardhan Rao, to personally interact with his employees. This allowed the
employees to observe and emulate the leadership qualities of their employer.
However, with an increase in the number of employees, it became difficult for the
chief to address his workforce personally. Therefore, the company set up a leadership
development center with the aim of developing leadership qualities among the
organizational members.
At the center, employees from various operational centers of the company spread
across the globe and of different nationalities were imparted training in leadership
qualities. They were divided into groups of 400, each group being periodically sent to
workshops, where leadership training was imparted to them over four weeks. The
workshops revolved around the objective of developing timeless leadership principles
that would help the company withstand the tough competition outside and other
contingencies. Members of the workshop were also trained in effective decision
making. Once they successfully completed their training, these employees were given
opportunities to hone their leadership skills in the organization and transfer their
knowledge to other organizational members.
39
Thus, with the establishment of the LLI, Indigo attempted to develop leadership from
within and address business risks through succession planing keeping a holistic
outlook in mind.
1. “Modern organizations are developing robust leadership development systems to
identify leaders within the organization and hone their skills to be more effective
in such roles.” Describe the various skills that are necessary to be an effective
leader.
2. Indigo’s founders believed that if the company had to survive in the dynamic
business environment, it would have to develop leaders of high quality from
within the organization, who had a global perspective. Can leadership be taught
in leadership development centers or is it an in-born trait in individuals?
Caselet 9
It was Monday morning and Aditya Sinha (Sinha) was in the conference room
discussing the new employee compensation program for team leaders and call center
10
executives of Pune-based BPO, Excel Networks. Sinha was the HR Manager and
managed a 3700 strong team comprising young and ambitious graduates, just out of
20
college. The meeting was attended by HR directors of all the business units of Excel.
However, a few members of the HR council disagreed with the new proposal and
wanted it to be discussed at another session.
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Sinha then left for another meeting, this time with new recruits. He briefly addressed
s
the 50-odd group about the basic features and functions of the organization and
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introduced them to the new financial services project they were supposed to work on.
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Excel promoted an open and transparent culture that invited employee participation.
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Quarterly meetings were a must and at these, call center agents openly discussed the
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pros and cons of the existing organizational system, and put forth the problems they
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encountered, with the objective of seeking a solution. Employees also suggested better
ways of doing their routine jobs and Sinha promptly accepted valid suggestions.
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Once in a while, Sinha stayed back for the night in the office to oversee the
U
performance of call center agents working on the night shift. He utilized this
opportunity to interact with the agents and to solve their problems, if any. Sinha also
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went to the extent of personally resolving employee grievances in order to make the
B
employees realize how keen he was to help them solve their problem.
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Excel believed in having open channels of communication. Any important

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organizational information was directly communicated by the top management to

employees at the lowest level in the organization. When the controversial law was
passed in the US, placing restrictions on the extent of operations that could be
outsourced to developing countries such as India, both Sinha and the CEO, Kunal
Aggarwal, personally addressed the employees at Excel and cleared their
apprehensions regarding their future in the company, stating that since the law was
confined to projects headed by the US government, only a small portion of their
business would be affected. This helped allay the employees’ fears.
Excel offered its employees a variety of facilities like transportation and food and thus
catered to their basic needs. Other features like an informal work environment, a well-
equipped cafeteria, music at the workstation etc., were also provided to ensure ‘fun-at-
work.’ The agents, as Sinha put it, had to deal with a variety of uncomfortable factors
like working at late hours, the monotonous nature of the job, difficult and irate
customers etc. Any of these factors could demotivate an employee. Therefore, care
was taken to ensure complete employee satisfaction, thereby keeping the employee
turnover low. While the industry average is 40%, Sinha’s efforts have helped keep
employee turnover at Excel Networks at a low of 25%.
40
Part B

1. “The attrition rate at Excel Networks was as low as 25%, while the average in the
industry was 40%.” Discuss the factors that contributed to the low employee
turnover at Excel.
2. “The open channels of communication at Excel helped allay the apprehensions of
its agents regarding their survival in the organization.” Bring out the importance
and advantages of the open communication channels at Excel.
Caselet 10
Kalpana Singh (Singh) graduated from one of the top business schools in the country,
with high aspirations. Although Singh was aware of how difficult it was for a woman
to succeed in the male dominated business environment, she was determined to make
a career in management. She soon joined Able Manufacturers at an entry-level
position. She began as a marketing executive under Anoop Kapoor (Kapoor), the
regional marketing manager. Kapoor, who perceived immense potential in Singh,
constantly guided her throughout her career and played the role of a mentor. Singh
10
proved to be a dedicated, hard-working, and determined employee. Though she was
20
transferred to various departments in the organization, she willingly accepted the
transfer orders even if it meant relocation. Her enthusiasm to learn new things helped
of
her gain a thorough knowledge of all the operations in the organization. Her career
graph progressed slowly but steadily. The intermittent promotions she received on her
s
way up the organizational hierarchy helped her rise to the position of vice-president
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by the time she was 35. but the journey up was by no means smooth.
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Singh’s male colleagues were jealous of her growth and spread the rumor that it was
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her good looks that were responsible for her rise. They refused to accept her as a
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business professional, most of them being of the opinion that women were suited only
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to take care of the house and not to handle serious business. Some of her superiors did
O
not have confidence in her decision making abilities, merely because they felt women
could not make tough decisions. Therefore, even though Singh was given various
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positions that required her to make crucial decisions, she was seldom given the
U
authority to do so. She also had to face constant interference in her job by her
superiors. She had not only to tackle the routine challenges offered by her job, but
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also to fight against the various prejudices of her colleagues. She had to constantly
B
prove to them that women were capable of making tough decisions and did not
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succumb to pressure.
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There were times when Singh felt frustrated and considered quitting the job. However,
she was aware that by doing so she would only reinforce the prejudices of her male
colleagues. She, therefore, continued in her efforts to be successful despite the fact
that she was never given credit for her endeavors. Singh was, however, fortunate that
she had the constant support of her mentor, Kapoor, who was with her throughout her
tough times and constantly encouraged her to perform well.
This dedication towards her profession saw Singh rise above difficulties and emerge
out successful at the end.
1. “It has always been difficult for a woman to succeed in the male-dominated
business environment.” Briefly outline the various factors that inhibit the progress
of women up the corporate ladder.
2. Discuss the qualities of Kalpana Singh that helped her reach the position of a
vice-president despite all the hardships and discrimination she encountered as a
woman, in a male-dominated business environment.
41
Caselet 11
Newage Associates (NA), one of the world’s leading consultancy firms, had hit the
headlines again. But this time, it was for the wrong reasons. Shobhit Ghosh (Ghosh),
the company’s marketing head, was accused of sexually harassing his personal
secretary and dismissing her from her job for no valid reason. Deepali Loya (Loya),
who had worked with Ghosh for quite some time, sued him and the company for
sexual harassment and wrongful termination of employment. She claimed that she was
subjected to visual and verbal sexual harassment by her boss. Loya also accused the
company of wrongful termination of her employment and claimed that she was fired
only because she had refused to have a relationship with Ghosh.
The news caught the company unawares, as Ghosh was considered one of the most
efficient personnel in the top management, widely respected in business circles for his
‘go-getter’ attitude. He was the one responsible for the constant rise in the company’s
profits, and was also the highest paid employee in the organization.
However, this allegation against him put the company’s CEO, Rajneesh Kattar
10
(Kattar), in a spot. Not only was one of the top managers of the company being
accused of unethical behavior, but the company’s reputation was also being tarnished
20
in the process. He realized the magnitude of loss that would result both in monetary
terms and in terms of damage to the company’s reputation.
of
Kattar decided to have a face-to-face meeting with Ghosh on this matter in order to
s
arrive at the truth. During the hour-long discussion with Kattar, Ghosh denied any
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kind of relationship with Loya and rejected the allegations made against him outright.
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Keeping the company’s long-term interests in mind and to prevent its image from
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being further tarnished, Kattar was left with no choice but to ask Ghosh to pay the
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compensation that was due to Loya or to put in his papers. Ghosh preferred to quit the
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organization rather than accept the blame and pay the compensation.
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NA, on the other hand, decided to settle the matter with Loya by means of an out-of-
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court settlement. Loya agreed to give up her claim if the company agreed to pay her
compensation for the mental agony caused to her and her family due to Ghosh’s
U
behavior and her subsequent termination from employment. The out-of-court

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settlement cost the company a colossal sum of money, and Ghosh too was paid almost
B
twice that amount for the termination of his employment contract. However, since he
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had refused to contribute to the compensation amount that was paid to Loya, NA
decided to take legal action against Ghosh.
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Kattar then called for a meeting which was attended by the top brass of the company.
At the meeting, it was decided that the company would take all possible measures to
ensure that such a thing would not recur. For this, the company set up a grievance cell
which had the responsibility of overseeing the problems faced by women in the
workplace. The grievance cell was a part of a redressal mechanism to solve problems
of sexual harassment. It also made adequate efforts to educate the employees about
the existence and the objectives of such a redressal mechanism. Further, the company
made it mandatory for its managers to undergo special courses, which aimed at
eliminating problems such as gender bias, sexual harassment and cross-cultural
conflicts.
1. Deepali Loya charged Shobhit Ghosh with sexual harassment and also sued the
company for wrongful termination of her employment. Define sexual harassment
and mention the various aspects of behavior that can be construed as sexual
harassment.
42
Part B
2. The CEO of Newage Associates introduced a redressal mechanism to solve

problems of sexual harassment at the workplace. Discuss what other measures
modern organizations can adopt to prevent similar incidents from occurring.
Caselet 12
It was the first meeting that was being convened by Raj Malhotra (Malhotra), the new
branch manager of the Tirupur branch of KNB Bank, a growing private sector bank.
In comparison to other branches, the Tirupur branch had performed badly ever since
its inception seven years ago, and Malhotra being young and enthusiastic, was
determined to bring about a dramatic improvement in its performance.
The meeting was the first such in the history of the branch as it involved the
participation of all the employees of the branch, not just to welcome their new
manager, but also to make certain crucial decisions that would result in increasing the
sales of the bank’s products and services. The assistant manager, Abhiram Krishna
(Krishna), had made all the arrangements for the meeting which commenced with
Malhotra thanking everyone present for the warm welcome he was given on taking
10
charge. After a brief mention of the various charges he had held till then in his career,
Malhotra described the bank’s foray into the insurance sector and pointed out the
20
additional responsibility that every employee of the bank had, to make this
diversification a success. Malhotra then emphasized the targets that had to be achieved
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by the branch for that financial year, both in its regular products as well as in
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insurance.
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With the opening up of the insurance sector in India, a majority of the private sector
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banks began to show keen interest in entering the sector by forming joint ventures
C
with established insurance companies. KNB Bank too entered into a joint venture with
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Secure Insurance Services, a UK-based insurance company, to sell life insurance

nl
products to Indian customers. All the branch offices of KNB Bank were instructed by
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the corporate office to promote the sale of insurance products along with the regular
bank products such as loans, fixed deposits, safety bonds, credit cards and various
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types of accounts.
U
Malhotra invited suggestions from all employees to improve the branch’s performance
and achieve the annual target for that year. However, there was very little participation
S
from the employees, despite Malhotra making repeated requests to them to fearlessly
B
voice their opinions. Having received no substantial inputs from his subordinates,
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Malhotra then presented his plan of action.

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Of the various measures put forth by Malhotra to enhance sales, was enforcement of
sales targets even for employees dealing with routine banking operations such as cash
transactions, generation of demand drafts, opening of new accounts and handling of
customer queries. Although this was unacceptable to the employees, none of them
voiced their objection even when Malhotra asked for their opinion. The meeting then
concluded after a few more strategies to develop the branch sales were discussed.
The next day, one of the senior employees, Anand Trivedi (Trivedi), approached
Krishna, with a document in hand. Krishna, who was busy preparing the monthly
reports for the bank, glanced up, and seeing the document in Trivedi’s hand, asked
what it was about. Trivedi replied that it was a representation from the employees.
Krishna immediately stopped what he was doing and reached for the document. In
their representation, the employees requested the management not to impose sales
targets on them. They justified their protest by stating that it would be extremely
stressful for them to concentrate both on processing routine transactions and on
enhancing sales of the bank’s products and services. They claimed that of late, the
number of transactions had increased tremendously.
43
Krishna was visibly irritated after he had read the representation and asked Trivedi
why the employees had not opposed the decision during the meeting itself. Trivedi
replied that while the meeting was in progress, each employee had thought that he
would be the only one to oppose it and had hesitated to voice his opposition for fear of
antagonizing the management. It was only after the meeting was over and the
employees could discuss the matter with each other that they realized that everyone
was equally opposed to the decision. Krishna assured Trivedi that although it was not
possible for him to promise anything, he would certainly make all efforts possible to
make the management reconsider the action plan.
1. Raj Malhotra encouraged employee participation in the decision-making process
of his branch. What is this type of decision-making known as? Also discuss the
possible benefits of employee participation in decision-making.
2. During the meeting, all the employees gave their assent to Malhotra’s proposal
for a new action plan. However, soon after the meeting, they forwarded a written
appeal asking the management to reconsider the action plan. What, in your
opinion, made the employees behave in this manner? What is this phenomenon
10
known as? What are the characteristic features of such a phenomenon?
20
Caselet 13
of
Neha Kapoor (Kapoor) and Tina Menon (Menon) were excited about their first job
offer from a leading multinational company, Meridian Business Solutions (Meridian).
s s
Meridian, a UK-based consultancy, offered business development and improvement
la
solutions to organizations in a wide range of industries. Kapoor and Menon had just
C
passed out from a prestigious business school with a masters degree in business
administration. Both were bright students and Menon had been a topper all through in
y
college. As students, Kapoor and Menon had always dreamt of working for a
nl
multinational company like Meridian. Their dream finally came true when they
O
received a call from Meridian. Having topped the written test and the personality
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interview, both were offered the position of business development executives in the
company. Their job responsibility was to tap potential clients from the corporate
U
world. This seemed to be an ideal break for them as they were keen on getting a job
S
that offered wide exposure to the business environment. The job was a challenging
B
one that provided adequate opportunities for valuable corporate experience. Besides,
rI
the compensation offered was also on a par with the best in the industry.
Fo
The first few months at Meridian were a learning experience for both of them. Kapoor
and Menon were extremely enthusiastic about their jobs. The company had given
them adequate training and reasonable autonomy to perform their job. They soon
began handling clients independently. They were involved in getting new clients and
were also responsible for maintaining smooth relationships with them. Both of them
reported to the regional sales manager, Nitish Bajaj (Bajaj). Of the two, Bajaj was
more impressed with Menon’s performance. Within a couple of months of joining the
company, Menon had obtained and closed a deal with a very high profile client.
Business with this client was expected to rake in huge profits for the company. In a
party organized in the company to celebrate the occasion, Bajaj announced a cash
award for Menon in appreciation of her commitment and dedication to the job. This
served to reinforce Menon’s motivation and made her strive even harder to better her
performance.
After both of them had completed a year of working in the company, the time for their
performance review came up. The company had a yearly performance appraisal
system which rated employees on the basis of their performance throughout the year.
Based on these ratings, the employees were paid hefty performance bonuses that
44
Part B
served as effective motivators for its employees. However, the yearly performance
appraisal brought with it a rather unpleasant surprise for Menon.
Menon had hoped to receive a handsome bonus as an outcome of her performance
review. She was aware that she would be appraised by Bajaj who had expressed
appreciation for her good performance and announced a cash award for her within a
few months of her joining the company. Meridian, however, did not have a
transparent policy regarding appraisals and remuneration paid to employees. So, the
outcome of the appraisal was not immediately known to anyone but the employees
themselves. It was only in course of time that details about the rewards could be
gathered informally. In Menon’s case too, it took a while for her to know the outcome
of her colleague, Kapoor’s appraisal. And what she heard shocked her. Kapoor had
been given a bonus much higher than what she had been given. It came as a surprise
not only to Menon, but to the rest of the employees as well that Kapoor had been rated
higher than Menon, since everyone in the company knew
that Menon was better at the job than Kapoor. The performance bonus thus, served as
a demotivating factor for Menon as she began to feel that she deserved much more
than what she had got and that her performance certainly did not call for receiving a
10
lower bonus than Kapoor.
20
Menon’s demotivation was evident from her subsequent performance on the job. She
stopped working as enthusiastically as she did earlier and was content with doing just
of
the bare minimum required for her job. This change in attitude took place as she
obviously felt that there was no point working so hard when she wasn’t being
s
recognized for doing a good job. On comparing the efforts she had put into the job
s
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and the reward she had received, with the efforts put in by Kapoor and the reward
given to her, Menon began to perceive an inequity in the way employees were
C
rewarded at Meridian. Since she was being paid less than her expectations, she
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decided to put in less effort so as to bring about a perceived equity of pay between
nl
Kapoor and herself.

O
Consequently, Menon’s productivity level deteriorated and, in turn, it affected the

se
performance and profitability of the organization. Thus, Menon’s negative attitude

resulted in negative implications for the organization. Also, this frustration at the job
U
made Menon look around for new jobs.

S

B
1. The annual performance review had a demotivating effect on Tina Menon.

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Briefly discuss the motivational theory that best describes Menon’s response to
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the appraisal.
2. Based on the equity theory, explain in what other ways Menon could have reacted
to the outcome of the performance appraisal?
Caselet 14
It had been only six months since Rajesh Anand (Anand) joined Delta Manufacturers
(Delta), a large shoe manufacturing company, as a general manager. At Delta, Anand
was responsible for various functions in the company such as accounts, operations,
marketing, and human resources. Within six months of taking charge, Anand began to
sense trouble brewing in one of the most crucial areas of the company – the marketing
department.
The head of the marketing department, Vishal Nair (Nair), who had been heading the
department for four years, enjoyed the support of his team members and they
perceived him as an effective leader. However, in recent months, the performance of
the marketing department had not been upto the mark and was becoming a cause for
concern for Anand.
45
The targets which were jointly set by Anand and Nair were not being met on time.
And when Anand proposed measures to help Nair improve the performance of his
department, Nair felt offended and he refused outright to accept Anand’s suggestions.
This led to frequent conflicts between the two.
The problem was also posing a serious threat to the overall performance of the
company as the ineffectiveness of the marketing team was affecting its profits. This
made Anand seriously consider dismissing Nair. Although it was only fair on his part
to give Nair time to prove himself, Anand did not want to take the risk because he felt
that Nair’s non-productivity during the interim period would cost the company more
than it could afford at that point of time. Moreover, Anand was also worried that if
Nair failed to perform during the period, it would completely jeopardize his efforts to
improve the organization’s performance.
However, dismissing Nair could pose other problems. Anand’s lack of knowledge and
experience in marketing made him dependent on Nair for the achievement of
organizational objectives. Also, since Nair enjoyed the support of the team, removing
him could demotivate other members of the team and cause them to turn against him
and reject his efforts to improve the productivity of the organization. Further, since
10
performance in marketing could not be measured on a short-term basis, Anand lacked
substantive evidence to prove his point that Nair’s performance was not up to the
20
expected standards.
of
Though Anand wanted to fire Nair, he could not do so because that would require him
to hire a new person in Nair’s place, who may not be very effective in holding such a
s
responsible position. Besides, the incumbent would require a lot of time to settle down
s
in the new organizational set-up, and that was again not a viable option. Therefore, the
la
problem he faced was to decide whether to let Nair continue to head the marketing
C
team or to fire him.

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nl
1. Discuss the primary problem that Anand and his organization faced. Also discuss
O
the factors that led to the crisis.

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2. Dependency on a single resource in an organization is far more prevalent than is

generally recognized. Briefly describe how Anand could have solved this
U
problem.
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Caselet 15
B
rI
The marketing manager of AMK Enterprises, Roopali Deshmukh (Deshmukh),

Fo
stepped out of the conference hall in a pensive mood after an important meeting called
by the CEO. The meeting was attended by the heads of various departments in the
company and was convened to discuss the targets for the coming assessment year.
Deshmukh had a formidable sales target to achieve and wondered how she would be
able to meet those seemingly impossible goals. This fear was further aggravated by
the fact that the productivity levels of employees in the company had been falling.
Deshmukh was under tremendous pressure from the management to improve the
performance of her team. She also had to deal with the decreasing levels of employee
morale in her 24-member team. As a first step, Deshmukh informed her team
members about a meeting that she planned to hold the next day. She then drafted a
plan of action that she intended to discuss with her team.
The next day, Deshmukh began the meeting by informing her team members about
the corporate meeting she had attended. She then said, “We have a difficult task ahead
for this year, and your participation and involvement is essential to achieve the goals.”
She then invited suggestions from her team members regarding the role to be played
by each of them. The meeting then progressed on to setting of individual targets for
each team member as, it was felt that this would help in accomplishing the
46
Part B
organizational goals. Specific goals were, therefore, set and agreed upon by all the
team members. The team aimed to increase the organizational profits by 18% over the
next six months. They sketched out a plan of action to achieve the targets set for the
team and decided that they would meet once every two months to monitor their
progress.
Two months later, the team met again and reviewed their progress. Deshmukh also
gave a feedback on the performance of every member of the team. The team then
collectively identified the areas of improvement and decided upon the measures they
would take to overcome their deficiencies. This continued for the rest of the year. The
final review meeting was held just before the yearly corporate meeting attended by the
top management. The team was surprised to see that they had achieved their targets.
Thus, effective planning and control mechanisms helped the team achieve their short-
term goals, and this in turn, helped in the achievement of the organizational
objectives. Besides, the employees were also motivated as the management gave
adequate recognition to their involvement and participation in achieving team goals.
The target to be achieved by the team was highly challenging. This further motivated
the team members as they had better opportunities to prove their problem solving
10
skills. Thus, the outstanding performance of the sales team helped the organization
achieve its objectives in the long run.
20
of
1. Roopali Deshmukh followed the practice of management by objectives (MBO)
while setting goals for her team members. Discuss the various phases of the MBO
s
process that helped her team achieve its goals.
s
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2. Explain briefly the process of MBO and the various advantages of implementing
C
MBO in organizations.
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Caselet 16
nl
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Elizabeth Mary (Mary) and Noureen Shah (Shah) had been working as agents for a
leading insurance company for two years and had become good friends. Both were
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satisfied with their jobs and were enthusiastic about achieving their targets. However,
they had recently been facing some problems. Shah’s new born baby required her time
U
and attention, which she found difficult to spare. Mary too had problems taking care
S
of her ailing mother and found it difficult to strike a balance between her personal and
B
professional lives. Both of them agreed that if they had enough time for their personal
rI
lives, they would be able to perform well on the work front as well. While they were
both discussing their problems with each other and trying to find a solution to their
Fo
problems, Shah came up with the idea of job sharing.

The option of job sharing would allow both Mary and Shah to share the same job on a
flexible work arrangement. They agreed upon complementary work timings so that
the entire work was split into two and both would work in their own timings to
achieve a common target. They prepared a plan of action covering all the minute
details of the job, so that they did not miss out on any aspect of their job
responsibilities. They specified all the activities of an insurance agent (handling mails,
customer queries etc.) in precise terms and also how these would have to be split up
on account of job sharing. Mary and Shah also came up with an evaluation and
feedback mechanism that would help them obtain customer feedback and also ensure
that their new work arrangement did not negatively impact their achievement of sales
targets.
The next morning, Mary and Shah presented their new strategy to their manager,
Ashutosh Jindal (Jindal). After listening to their proposal, Jindal felt that it would be a
viable option for the organization as well to give its approval. He could also visualize
other potential benefits to the organization by implementing the concept of job
47
sharing. Job sharing could be used as an effective retention tool, which would help
prevent a talented and experienced workforce from leaving the organization. Job
sharing would also help maintain workforce diversity in the organization by catering
to the various needs of different groups of people. It could be used as a motivational
technique too as it would help increase employee morale and productivity by creating
a balance between the personal and professional lives of organizational members,
thereby reducing work related stress. Jindal not only accepted the proposal but also
made the option available to other organizational members.
1. Mary and Shah came up with the idea of job sharing to enable them to fulfill their
domestic responsibilities as well as their professional duties to their utmost
satisfaction. Discuss the prerequisites for implementing the concept of job sharing
in organizations.
2. While job sharing has benefits for both employees as well as the employers, there
also exist potential problems in implementing this type of alternative work
arrangement. Discuss the various benefits and potential pitfalls of job sharing.
10
Caselet 17
20
Excel Computer Services, a leading software company, is known for its commitment
of
towards transforming itself into a learning organization. To realize this, it has set up a
learning and development center called Excel Development Center (EDC), which
s
provides its employees world-class facilities for continuous learning. EDC aims not
s
just at continuous upgradation of the knowledge and skill sets of its employees in
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technical areas but also at their all-round development.

C
Excel spends around Rs.25 crores every year to meet the training needs of its
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employees. Numerous long-term and short-term programs are arranged to enable the
nl
employees keep themselves updated with the latest knowledge in their field enabling
O
them to meet the intellectual demands of the workplace and the industry.
se
Every employee at Excel is expected to attend 80 hours of training every year. This is
in addition to the need-based training programs which they are expected to attend at
U
regular intervals.
S
The development learning center invites technologists, academicians and behavioral

B
researchers to offer quality training programs to the employees who largely benefit
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from such programs. EDC has taken many initiatives to realize its goal of developing
Fo
into an organization that is constantly learning and improving in order to be successful

in an extremely dynamic business environment.
By identifying the learning requirements of its employees, essential to meet
organizational ends, EDC provides them with adequate inputs. It does this with the
help of reputed training institutions and organizations. EDC establishes short-term and
long-term associations with such organizations and helps its employees to develop the
competencies required to meet the challenges posed by the ever-changing business
environment. It further helps its associates to deal with personal and professional
challenges by offering counseling programs.
1. Excel Computer Services is committed towards transforming itself into a learning
organization. Discuss the aspects and features that would help Excel attain this
goal.
2. Citing the example of Excel Development Center, discuss how organizations can
ensure that continuous learning takes place.
48
Part B
Caselet 18
Ronit Behl (Behl) was excited about his new assignment. This was Behl’s first
overseas assignment, which required him to work in France for the next three years.
There were many contenders for the job but Behl’s fluency in French and the good
rapport he shared with the top management saw him through the selection test. Behl
was heading the marketing division of the company in India, and would now be going
on deputation as the Managing Director of the French unit. Behl felt that it was a
bright opportunity as it would provide him with a wide exposure to the business
environment and help him develop competencies that would help him succeed in his
career.
Behl made all arrangements for the overseas assignment. His wife, who was working
in a software firm quit her job, as they felt that three years would be too long a period
to stay apart. He also made arrangements for the education of his son.
Within a couple of weeks, Behl found himself reporting at the new workplace. He had
to lead a team of 56 employees, a majority of whom were French. Behl found the task
ahead highly challenging but motivating. His wife managed to get a job in her own
10
domain in the new location. Things had just begun to settle down, when problems
started cropping up in Behl’s office.
20
Behl felt completely cut-off from the operations at India. He had the difficult task of
of
managing a team, that refused to take orders from an expatriate. He found the job
mentally exhausting as he could barely manage to meet deadlines. Soon he was
s
slogging for over eighteen hours a day to achieve targets. The lack of support from the
s
la
Indian unit in times of crisis was making things all the more difficult.
C
His family was disturbed too. The compensation he was receiving was not enough to
sustain his family. It was only with the help of his wife’s income that Behl was able to
y
nl
supplement the financial inadequacy his family was facing. They managed in this way
for a year. However, troubles at home and at the office were increasing constantly and
O
Behl finally sought a transfer back to India. A couple of months later, Behl was
se
recalled to India.
U
Things became worse back at home. The relocation cost him and his family dearly.
His wife had a tough time searching for a job again. His son had to repeat a year at
S
school. Things were no better for Behl at the workplace. He had to rejoin his earlier
B
company on a temporary basis till his position was confirmed. He realized that the
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close relationship he had earlier enjoyed with the top management no longer existed.
Fo
Besides, his one year’s stay at France pushed him out of consideration for the annual
performance appraisal. His contribution at France was not taken into account at all.
Having got used to the French style of management, he experienced a culture shock as
he attempted to readjust to the Indian management style.
Thus, Behl found himself in a hopeless situation as he failed to meet the requirements
of the job even after a year of turmoil and exhaustion. Besides, there was stagnation in
his career. It landed him in a financial mess, which took him more than two years to
overcome.
1. Expatriates face a number of problems due to their inability to adapt to the culture
of the new country. Citing the example of Ronit Behl, briefly discuss the
problems faced by expatriates while trying to mold themselves to suit the
requirements of the new work environment.
2. If you were in the top management, what measures would you take to ensure a
successful cultural adaptation of expatriates?
49
Caselet 19
Suggestion systems are quite prevalent in modern organizations. Toyota, for example
gets fifty suggestions for improvement per employee per year. Around 80% of these
suggestions are implemented within the year.
Substantial revenue was saved each year with the help of the suggestion provided by
Johnny Fontaine (Fontaine), a secretary in the department of justice in the US.
Fontaine suggested a novel way of printing brochures and the manner of mailing and
circulating them. He also proposed online course registration system for the various
courses the department of justice offers. This is expected to pool in large revenues for
the department. Not only did Fontaine earn considerable income on the
implementation of his suggestion, but he also helped the organization save and earn
revenues as well.
General Motors (GM) implements suggestion systems in its manufacturing operations.
GM workers have even pooled in 44,000 ideas within a day. Employee suggestions
helped reduce the manufacturing time at GM by 15%.
American Airlines (AA) stands as an outstanding example of employee suggestion
10
programs. This Texas-based airline company earns about $55m a year through its
20
suggestion program, “IdeAAs in Flight,” out of which it spends $15m on employee
development.
of
Another noteworthy example of employee suggestion programs is that of Southwest
Airlines. In the year 2000, the escalating costs of jet fuel became a cause of serious
s s
concern to its CEO, Herb Kelleher. He then invited suggestions from each of his
la
employees on ways to save at least $5 a day. The overwhelming response of

employees saved upto $2m that year. The employees came up with an idea to reduce
C
the cost of heating the aircraft, and this once implemented resulted in significant cost
y
cutting for the company.

nl
These examples prove that organizations today are waking up to the fact that
O
employee participation in solving organizational problems can be beneficial.

se
Therefore, they are adopting novel ways of involving employees in the decision
making process.
U

S
1. Citing various examples of organizations involving employees in problem

B
solving, discuss the various advantages of implementing employee suggestion

rI
programs in organizational systems.

Fo
2. Briefly outline the various measures that organizations intending to introduce

employee suggestion programs should take to ensure the success of these
programs.
Caselet 20
The higher education wing of Swami Vivekananda Educational Society (SVES) was
faced with growing employee-related problems. SVES was a fifteen-year-old public
educational institution employing over five hundred full-time employees with twenty
thousand students pursuing a variety of courses. The institution’s mission was to
deliver quality services to its customers (students) and it valued employees as its
greatest assets. Within a short time, SVES managed to carve a leading position for
itself in the educational industry.
However, the higher education division of SVES had been experiencing low
employee productivity, thereby leading to reduced profits. Employee turnover was
also high in this division. The management perceived that the dismal productivity
50
Part B
level was due to lack of motivation among its employees. The low employee morale
also contributed to negative organizational results like a slump in its profitability,
which resulted in customers losing confidence in the institution. Concerned about the
situation in the institution, the dean of the higher education division invited an
external consultant to solve the problem.
The consultant, having studied the culture and state of affairs in the institution, came
up with the suggestion of implementing the survey feedback methodology to find out
the cause for the growing problems at the institution. The purpose of implementing
the survey feedback was to study the level of employee satisfaction and morale, the
effectiveness of communication within the organization, quality of customer service,
etc.
The survey comprised a comprehensive questionnaire of fifty-six questions, which
covered various employee-related issues. All the members of the institution were
expected to fill up the questionnaire. Employees were also given the option of filling
the questionnaire through an online system, which would then directly reach their
respective supervisors. These questions were supplemented with inputs derived from
10
the personal conversations that the consultant had with a select few organizational
members across different levels in the organizational hierarchy.
20
Confidentiality of feedback was assured as it was found that the employees hesitated
of
to express their opinions openly. A good number of employees were not even willing
to fill up the questionnaire as they were skeptical about its confidentiality as well as
s
the purpose of such an activity. Therefore, various measures were taken to maintain
s
confidentiality of the responses from the participants.
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Fifteen days later, the consultant came up with a report based on an analysis of the
C
data collected through the survey. He presented the report to the top management with
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a brief listing of the various strengths and weaknesses of the institution. The report
nl
stated that while a strong commitment to quality, healthy channels of communication

O
within the departments, and positive attitude of the employees were the strengths that
the institution could boast of, it was at the same time facing serious problems in
se
employee-related issues. People in the organization felt that they lacked the
U
competency and autonomy to perform to the organizational expectations. A lack of

decision-making authority delayed the process of problem solving. Besides,
S
communication across different departments of the organization was perceived to be

B
ineffective.
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With the concerted efforts of the top management, key employees, and the external
Fo
consultant, a set of action plans were drafted to overcome these deficiencies. By

acting upon these action plans, the institution was successful in solving the various
problems identified by the survey feedback methodology and soon, the higher
education wing of SVES also began to generate huge profits. Thus effective
implementation of survey feedback methodology helped solve employee-related
problems at SVES.
1. Citing the example of SVES, discuss the various possible benefits of survey
feedback methodology in solving organizational problems.
2. Confidentiality of employee responses was a major area of concern to the
management of SVES while implementing the survey feedback technique.
Discuss the various measures that organizations deploying this methodology need
to take for effectively managing the issues pertaining to confidentiality of
employee responses, and other ethical considerations involved during its
implementation.
51
Caselet 21
Harshitha Enterprises (Harshitha) was considered one of the best places to work at.
Established seven years ago, Harshitha, a software company, had most of the features
of a successful modern organization. Its CEO, Sidharth Roy, was one of the youngest
and most successful leaders in the corporate world. Roy developed an organizational
culture that focussed on constant development of human talent. Harshitha emphasized
all-round development of its human resources by constantly training its employees
and helping them adapt to changes in the external environment.
Harshitha selected only those employees who had a perfect cultural fit with the
organization. It then offered them a comprehensive orientation program to enable
them to easily adjust to the new environment. This process also facilitated Harshitha
to mold employee behavior in a way that would lead to the achievement of
organizational goals. Adequate training and development sessions were held at regular
intervals to hone the skills of employees. This not only helped the organization to
meet the future demand for skills and talent, but also helped enhance the motivational
10
levels among its employees. Managers were given special training to help them
understand the workforce requirements and also to identify the motivating factors of
20
employees. They were expected to know what motivates subordinates so that
maximum productivity could be derived together with ensuring them total
of
satisfaction. Employees were rewarded according to their performance and
contribution towards achievement of organizational goals.
s s
Employees were divided into a number of work teams with different organizational
la
goals. Team work was emphasized and given prime importance. Employees were also
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encouraged to participate in group decision making processes. Any important decision

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that would affect the routine work life of employees was taken by the employees
nl
themselves. This kind of employee empowerment enhanced their morale and also
O
satisfied their need for belongingness.

Harshitha also set up a career guidance cell that dealt with career-related-issues of
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employees. They were also given the opportunity to pursue higher education. For this,
U
Harshitha had a number of tie-ups with leading educational institutions around the
world.
S
B
There were open channels of communication among the various levels in the
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organizational hierarchy. The transparency that resulted led to increased employee

loyalty and commitment. This also helped the organization make decisions easier and
Fo
quicker, thereby making the organization more flexible and responsive to the growing
competition.
Harshitha also formulated a variety of stress relieving programs for its employees.
This was done with a view to ensure proper health of its workforce. These stress
relievers included tennis courts, gymnasia, cafeteria, adequate breaks during work
hours, and various other options such as flextime, telecommuting, job sharing etc.,
that employees could choose from. Such programs gained wide acceptance from the
employees and resulted in reducing absenteeism due to work-related problems.
Harshitha also arranged a number of other facilities like day-care centers for children,
elderly care centers, etc.
Thus, Harshitha was a modern organization, which treated its employees as its most
important and valuable assets. It created a work atmosphere that emphasized all-round
development of its workforce. It also helped employees strike a balance between work
and personal lives. These features of Harshitha Enterprises, helped it gain a
competitive advantage over its rivals.
52
Part B

1. Harshitha Enterprises upheld the values of human relations and organizational
behavior, which helped it attain an edge over its rivals. Discuss the importance of
human relations and organizational behavior in modern organizations.
2. In the light of emerging trends in human relations and organizational behavior,
discuss the importance of skill development in determining the success of
organizations.
Caselet 22
Nitish Chawla (Chawla), the course coordinator of management studies at Gyan
Mandir, was faced with a peculiar problem. Gyan Mandir was one of the reputed
deemed universities of the country. Chawla’s job responsibilities included
development of textbooks, workbooks and case studies for students pursuing both
regular as well as distance education courses in the university. He had a twelve-
member team of researchers working towards compilation of courseware for
management students of Gyan Mandir. His team had the credit of being one of the
10
most respected teams in the entire university. This was because of the timeliness with
which his team would perform, laying equal emphasis on the quality of work as well.
20
Chawla was an effective team leader and his team members respected him for the
concern he showed towards employee development. He spent a lot of time listening to
of
their queries and issues relating to work and sometimes, their personal lives as well.
However Sonal Mehra (Mehra), the new course assistant in his team, has been posing
s s
a problem. Ever since Mehra became a member of Chawla’s team, issues like low
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productivity, social loafing, and absenteeism have been cropping up in the

C
department. Surprisingly Mehra’s individual performance has been good all the while.
Sensing the negative consequences of the team’s performance, Chawla probed into the
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cause for the team’s deteriorating performance.

nl
He made surprise visits to the workplaces of his team members. While doing so,
O
Chawla observed that there were increasing incidents of employees shirking their
se
work. He also felt that their attitude towards their jobs had changed, and this he
thought might have resulted in the team’s low performance. Casual interactions with
U
senior employees revealed that Mehra constantly disturbed the work of others in the
S
team by engaging them in unproductive conversations, thereby lessening their outputs.

B
The team began spending more time chatting with fellow members which resulted in
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lowering the level of their performance.

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The next day, Chawla called Mehra into his room and explained the impact of her
behavior on the performance of others. He wanted her to spend less time interacting
with others during office hours. Observing no change in her behavior even after a
week, he finally held up her chances of being promoted. Though Mehra was greatly
disappointed she continued to while away time, specially when Chawla was out of the
office premises.
Though Chawla was aware of her behavior, he did not intend to fire her as she was a
great performer. She would complete her work well in advance and the quality of her
work was also good and met the expected standards. So he didn’t want to let her go.
Chawla then decided to consult his mentor, Abhinav Raj (Raj), to seek his advice on
how to manage the situation. Raj had been Chawla’s manager when Chawla first
joined the company. Later he was appointed a member of the board.
After both of them had exchanged pleasantries and were seated in Raj’s office, Raj
asked, “Chawla, tell me something. How long do you spend chatting with your
colleagues while in office?” Chawla immediately understood what Raj was hinting at
– he himself spent hours in the office discussing various issues with senior colleagues.
53
Raj continued, “Employees in organizations learn by observing the behavior of others.

That is what is happening with Mehra. She is just emulating her boss’ behavior – that
is you.” When he said this, Raj observed a sheepish smile on Chawla’s face. Raj then
added quickly, “Instead of punishing unfavorable behavior, you should be rewarding
positive behavior.” Chawla thanked Raj for his advice and headed back to his office.
While on his way to his room, he saw Mehra deeply engrossed in her work. He
proceeded to her work desk and appreciated her, saying, “I’m glad that you are
concentrating on your work. It is showing in your performance.” Mehra was
pleasantly surprised and thanked him. Over the following weeks, Chawla could
observe a marked difference in Mehra’s behavior. Employees too saw a change in
Chawla’s behavior as he reduced the time he spent on discussing non-organizational
matters with his colleagues. The team’s performance also improved and the entire
team seemed to be oriented towards accomplishment of organizational goals.
Thus, Chawla served as the role model for his team members and they emulated his
behavior. This ultimately led to exceptional performance of the team members during
the following months.
10
20
1. Abhinav Raj believed that employees learn by observing others in the group. Do
you agree with Raj? Discuss the significance of observational learning in shaping
employee behavior.
2. of
Discuss the difference in the approaches of Raj and Chawla while attempting to
s
change employee behavior.
s
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Caselet 23
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The Aditya Group, with diversified businesses in industries such as cement, seeds and
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fertilizers, processed food, business process outsourcing (BPO), newspapers, textiles,

nl
and iron and steel manufacturing, operated in various locations across India. Each of
O
these businesses was headed by an able and experienced professional. The CEO of the
group, Pavan Chopra, had taken charge of the business from his father and founder of
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the company, Aditya Chopra.

U
Most of the units of the Aditya Group were performing well, especially the textile
S
business, which was earning huge profits. On 23 December, 2002, the head of the
B
textile designing unit based at Goa, Nikhil Sethi (Sethi), received a letter informing
rI
him of his forthcoming transfer and asking him to choose between Calcutta and
Jaipur. Sethi, however, wanted to request the headquarters to hold his transfer till the
Fo
end of the academic year so that his children’s education would not be interrupted. A
technical problem that arose in the office fax machine made it impossible for him to
fax his request to the headquarters immediately.
In the meantime, the head of the textile designing unit based at Hyderabad, Akhil
Gulati (Gulati), received his transfer order on 23 December, 2002. Gulati was given a
choice between Goa and Chennai. But since Gulati did not want to go to Chennai, he
sent a letter the same day accepting a transfer to Goa. He got the relieving letter before
Christmas and joined the Goa unit on December 28, 2002. The Goa unit had a long
break of three days for Christmas, whereas the other units, including Hyderabad, had
only one day. Prior to the Christmas vacation, Sethi had wished his staff a ‘Happy
Christmas’ and announced that there would be a small party in the office on
December 28. During this period, Sethi got some sad news from his ancestral home at
Lucknow informing him of his grandfather’s death. Therefore, he immediately left for
Lucknow with his family. Before leaving, he asked his immediate subordinate,
Chandar Dayal (Dayal), to follow up the matter regarding his transfer and keep him
informed of any developments.
54
Part B
When they resumed their duties after the Christmas holidays, the employees were
surprised to see a new boss in the office. They tried to come up with reasons for the
sudden replacement. Some opined that their unit was making losses. Others believed
that Sethi had diverted the company’s money for personal use, which led to the losses.
They described how the Sethis wore costly clothes during get-togethers, the expensive
school in which their children studied, how frequently they threw lavish parties, and
so on. Soon, the rumor – ‘the previous boss was dismissed for using office money’
began to spread in the company. The rumor soon reached the other units and also the
corporate office. The corporate office ordered an investigation into the matter.
When Sethi faxed a letter to Dayal enquiring about his transfer, Dayal informed him
of the allegations. On hearing this, Sethi was shocked. He rushed to the corporate
office and told to the top brass that he had not misappropriated company funds. In the
meanwhile, Gulati, the new head of the Goa unit, reported to the corporate office that
all the accounts had been audited and no sign of manipulation of funds was found. It
didn’t take long for the management at the corporate office to understand what had
actually happened. They immediately sent a communique to the various units stating
that the allegations against Sethi were not true and that they had arisen as a result of a
10
difference in perception of the employees and a communication gap.
20
1. The employees of the textile designing unit at Goa believed that their boss was
of
dismissed for taking office money for personal use. What type of perception
would you call this?
s
2. Do you think the management of Aditya Group could have avoided the awkward
s
situation that arose? What steps should the management take to prevent such
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situations from recurring in the organization?

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Caselet 24
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Navya Products Ltd., a Mumbai-based company manufacturing agro products, was

O
established by Ajay Sinha (Sinha) in 1994. By 2000, the company and its brands were
popular throughout India. Sinha believed that it was the hard work and commitment of
se
his management team and employees that led to the success of the company. In order
to keep his employees motivated, Sinha offered awards on an annual basis for best
U
manager, best employee, best PR executive and the most productive department. He
S
also gave awards to encourage quality initiatives in the organization. The marketing
B
manager of the company, Ravinder Shah (Shah) won the best PR executive award
rI
every year. He maintained a very good relationship with the company’s customers.
Shah ensured that once the company obtained a contract from a customer for supply
Fo
of products, the customer continued to source all his requirements from Navya. Shah
had joined the company as a marketing trainee when it was established, and none of
his clients had ever shifted loyalty to other companies.
In 2001, Navya diversified into FMCG and pharma products, and acquired many
companies in these industries. The company which started with 30 employees rapidly
grew to have a work force of more than 3000 people. The company was restructured
to facilitate its growth and achieve better coordination among employees. There was
an increase in the levels of hierarchy. Many people who reported directly to Sinha did
not do so any more. They had to report to a senior manager, who, in turn, reported to
Sinha. With the restructuring of the company, a new person, Arvind Kapoor (Kapoor),
was appointed to head the marketing division. Kapoor had earlier worked as
marketing manager for a multinational corporation. Previously, Shah reported directly
to Sinha, but after the restructuring, he had to report to Kapoor.
Sinha gradually expanded the company and established new units in various places
across the country and the company soon had branches throughout India. Sinha also
had plans to set up offices of the company overseas. He made a beginning by
55
exporting agro products to the US and various countries in the Middle East and
Europe. He also began searching for strategic partners to venture into international
business and held talks with a European company in this regard. These discussions
were also attended by Kapoor, and the heads of the production and finance divisions,
Sunil Devgun and Rajani Mehta. Prior to the restructuring, Shah and some other
colleagues were always invited to attend such strategic discussions. In fact, they
believed that they had played a crucial role in the various discussions that led to the
recent acquisitions by the company. Now, seeing their role in the company
diminishing, Shah and his affected colleagues began to feel neglected and ignored by
the company.
In 2002, for the first time, Sinha observed that Navya was beginning to lose customers
to its competitors. Most of them were customers brought by Shah. He also heard that
the reason for the customers shifting their loyalty to other companies was the
aggressive manner in which Shah had behaved with them. It also came to light that in
the last few months, Shah had not made visits to client organizations to inquire about
their requirements. Kapoor also complained to Sinha that Shah was not cooperative
and was highly aggressive. There were reports that during management meetings,
10
Kapoor and Shah always held opposing views and had argued loudly. Sinha also
heard from some sources that Shah was planning to resign from the company.
20
of
1. How do you think the conflict between Arvind Kapoor and Ravinder Shah can be
resolved?
s
2. Is it wise for the company to lose Ravinder Shah? Discuss the factors that led to
s
conflict between Shah and Kapoor?
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Caselet 25
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Sharp Enterprise (Sharp), a Mumbai based sportsgoods manufacturing company,

nl
adopted the direct marketing model. Sharp delivered sportsgoods to customers

O
throughout India on order. The company was renowned for its superior customer
service. In 1990, Sharp wanted to enter the overseas markets. Before stepping into
se
global business, Sharp conducted a survey to assess the level of customer satisfaction
among its various stakeholders (customers, suppliers and shareholders).
U
The survey revealed that 80% of its customers were satisfied by the customer service
S
offered by the company. Suppliers gave a high rating to the company for its practice
B
of informing them of its requirements well ahead of time and for being prompt in
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making payments. However, the survey of shareholders revealed that they were not
Fo
happy with the dividends declared by Sharp. They believed that the dividends
disbursed by the company to its shareholders were not proportionate to the revenue it
earned.
When the CEO of the company, Rahman Khan, studied the results of the survey, he
called for a meeting of the shareholders. At this meeting, he explained that although
the company was earning huge revenues, most of it went towards clearing the debts
and outstanding expenses of the company. The shareholders were not convinced and
demanded that a committee be formed to investigate the matter. The management
agreed to the demand of the shareholders and a seven-member committee was formed
which consisted of representatives of all the stakeholders of the company.
During its investigations, the committee found that Sharp responded promptly to
complaints regarding quality of products delivered. Many products delivered by the
company were returned because of defects, inferior quality, etc. The company was
prompt in making replacements and reimbursing the customer with the charges
incurred in returning the product to the company. Replacement costs were very high
for the company. The committee suggested that the company should take steps to
ensure that things were done right the first time.
56
Part B
Even though customers placed orders with Sharp for sportsgoods well ahead of time,
the delay in processing made it difficult for the company to deliver the products on the
promised date. In most cases, Sharp used expensive modes of transportation to get the
products to the customers on time. The conclusion reached by the committee was that
the need for adapting expensive modes of transportation was due to delay in order
processing.
Feedback by the committee was used as diagnostic information to identify the
loopholes in the company’s quality management practices. A change program was
designed to improve the quality and cost effectiveness of the company’s products and
services. The feedback suggested that the company had to increase the participation of
employees in decision making activities and entrust them with greater responsibilities
to improve the quality of work and customer service. In response to the feedback
provided by the committee, the company set standards for achieving total quality and
defined total quality as the process of involving employees in improving the way
work is done in order to maximize customer satisfaction in an efficient and effective
way. The HR department facilitated employee involvement in decision making
activities and enhanced the quality of service by conducting training programs for
10
employees. Front-line employees were the first to be empowered to take necessary
decisions. They were also made responsible and accountable for their actions.
20
All employees were educated on concepts of quality and trained in various techniques
of Total Quality Management (TQM). Personnel belonging to the top management
of
were also trained to guide employees and support them in TQM implementation.
s
On completion of the training program, cross-functional teams were formed. The
s
teams held discussions to decide on how to apply what they had learnt in the training
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program at the workplace. Initially, emphasis was laid on the implementation of TQM
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in a few departments, and feedback regarding its effectiveness was obtained from the
employees and managers of these departments. Based on this feedback, necessary
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adjustments were made in the TQM process. After the top management observed the
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desired improvement in the organization, the TQM process was standardized and
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applied throughout the organization. Further, the top management constantly

monitored the progress of TQM. The compensation of managers was linked to an
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improvement in quality in their respective departments.

U
Sharp found that it could improve the profitability of the company, and increase return
S
on sales and equity by implementing TQM. TQM also helped Sharp to enhance the
B
satisfaction of its customers, employees and shareholders.

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1. Though the company was reputed for its excellence in customer service and
customer satisfaction, some of its stakeholders were not happy. A committee was
established to explore the reasons. Do you think the committee was justified in its
suggestions?
2. What was the intervention used by Sharp to increase customer satisfaction?
Explain the process and its advantages.
Caselet 26
Based in Mumbai, Aizwa Enterprises (Aizwa) is a large conglomerate providing a
variety of products and services ranging from FMCG to electronic products. Aizwa
also offered IT solutions to global companies. In 1997, Aizwa decided to spin off the
IT services arm as an independent business. The IT business was named Yani
Services Ltd (Yani). Yani placed special emphasis on communication. The top
management communicated the company’s mission, goals and strategy clearly to
employees. The company also ensured that the behavior of the employees was in
alignment with its goals and objectives. Senior managers frequently organized get-
togethers of employees from various departments where they discussed important
57
issues and shared information pertaining to the company. Employees were also
encouraged to interact with the senior management through mail and intranet. Yani
had a monthly electronic newsletter that covered the progress made in various
departments of the company. Employees were encouraged to give suggestions to
improve the functioning of the company. During the first three years, Yani earned
huge profits.
In 2001, because of the slump in the IT industry, Yani’s business suffered. Yani had
to lay off hundreds of employees. Most of them had come from the parent company,
Aizwa, which had a policy of permanent employment. Communicating the news of
the lay off to employees was a difficult task for the management. The management
called an emergency meeting for the purpose. The HR manager, Seema Kher,
addressed the meeting and explained the reasons that had compelled the company to
take this drastic step. Yani announced huge severance benefits for its laid off
employees. The employees received a service certificate along with a letter of
commendation that described their talents, capabilities, team spirit and other
achievements at the workplace. The company offered counseling to employees who
took the news badly. Managers contacted other employers and employment agencies
and tried to find suitable employment for those losing their jobs. These efforts helped
10
in the successful placement of a majority of the employees in other firms.
20
Yani restructured the organization and took all possible steps to cut costs and
overcome the crisis. Because of these measures, Yani was able to make modest profits
of
even during the slump. Gradually, the situation in the IT sector improved and many
large corporates approached Yani for software solutions. Yani had to hire more people
s
to meet the demand. Yani gave preference to its ex-employees. Many employees
s
chose to return and the company resumed full-scale operations.
la

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1. Do you think the communication strategy of Yani is effective? What are the
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various issues organizations need to communicate to their customers?

nl
2. Is Yani justified in laying-off employees sourced from the parent company which
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had a no lay off policy? Do you think the way in which employees were informed
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about their lay off was right?

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Caselet 27
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Delhi-based Aart Pvt Ltd. (Aart), a leading office equipment manufacturer in India,
B
also exports its equipment to the US, the European countries and to the Middle East.
rI
The company conducted a customer survey in the first quarter of 2002 and found that
Fo
although the customers were satisfied about the quality of its products, they felt that
the prices were too high. The CEO of the company, Prakash Tandon (Tandon),
immediately held a meeting with the managers of all departments and asked them to
suggest ways to cut down the cost of manufacturing without compromising on the
quality of output. Of all the suggestions, the one that attracted Tandon’s attention was
the suggestion made by the HR manager, Ashish Agarwal (Agarwal). Agarwal said
that shop floor employees who had been involved in the the shop floor operations for
many years were more likely than managers to know where there was scope for the
company to cut costs. The shop floor employees could observe where materials
(resources) were being wasted, which processes involved wastage of time, and so on.
Agarwal recommended that Tandon should establish a self-managed team
environment in the company. He justified his stance by explaining how successful
various companies had been by adopting the concept of self-managed teams, and tried
to convince Tandon that such teams would motivate employees, promote a sense of
belonging among them and encourage them to use their latent skills to contribute to
58
Part B
the organization’s growth. Tandon was impressed by the idea and asked Agarwal to
do all that was required to implement self-managed teams in the company.
The progression to self-managed teams in the company was gradual. About twenty
key functions that had to be performed by a team in order for it to be termed self-
managed were identified. These functions varied in complexity from simple
equipment maintenance tasks and control of scrap to complex job designing tasks and
inventory control. The self-managed teams also had to perform managerial functions
like resolving conflicts and determining compensation. As an initial step towards
implementing self-managed teams in the company, employees were divided into
teams, educated about the different functions they had to perform, and given the
necessary training to perform these functions.
At Aart, a team progressed to a self-managed team in five levels. At level I, teams
were given less responsibilities and decision-making power pertaining to the twenty
key functions. At level I, the team members planned how to implement each function
under the guidance of a manager or a consultant. Subsequently, they had to prove that
they could plan and implement each function independently. Once they succeeded,
they became a full-fledged self-managed team. The degree of autonomy,
10
responsibility and accountability of the teams increased with each increasing level. At
level V, teams were fully accountable for all their decisions and activities and their
20
plans were implemented without review.
of
Self-managed teams were directly responsible to the customers. Their performance
was evaluated by means of a 360-degree appraisal method. If the teams found it
s
difficult to resolve a problem, they could approach the concerned experts in the
s
company and seek their help to find a solution.
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After implementing self-managed teams, Aart was able to cut down its cost of
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production by 76%, increase revenue by 220%, work-in-progress turnover by 250%

y
and reduce cycle time by 75% by 2003.

nl

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1. What are self-managed teams? What are their features? How can an organization
se
contribute to the growth of self-managed teams?

2. What are the prerequisites for successful implementation of self-managed teams?
U
What are the barriers a company may face while implementing self-managed
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work teams?
B
Caselet 28
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Anjali Nayak (Nayak ) joined the customer care division of Alekya Financial Services
as a junior manager. Nayak was introduced to other junior managers by the
department manager, Kishore Sharma (Sharma). Sharma described the job to her and
explained how she had to carry out her duties and responsibilities. Nayak was very
enthusiastic about the job and learnt things quickly. She was given a team of 10
employees whom she had to manage. One day, while browsing through the monthly
report of the company on the company’s intranet, she found that the maximum
number of customers in the previous month had been served by her team. She also
found in a customer survey held by the company that the customers had rated her team
members as the best customer service executives. Nayak was overjoyed at her team’s
performance and communicated this achievement to Sharma. Sharma congratulated
her for motivating her team to achieve excellence. Nayak felt that she ought to arrange
a party to communicate the success of her team to the entire organization. She
believed that this would boost her team’s morale. She invited all the managers and
junior managers in the company to the party. When she approached Sharma to invite
him, he was furious that she had taken such an initiative without consulting him. He
asked her to cancel the party and warned her against taking such decisions in the
future.
59
A few days after this incident, Nayak was confronted with yet another problem. She
received information from her team members that more and more customers were
insisting on talking to the Managing Director (MD) directly. Though the team was
able to give them convincing replies to their queries, they still insisted on being put on
to the MD. The employees attending the calls had no option but to give in to the
customers’ demand. Nayak was unable to understand why all the customers suddenly
wanted to speak to the MD and decided to investigate. She found that one of the
company’s advertisements in the newspapers read, “For all your problems, you can
contact our MD – 24 hours.” Further inquiry revealed that the entire problem had
arisen due to confusion caused by letters getting jumbled in the advertisement.
Actually it was the DM (Data Manager) that the customers were supposed to contact
directly, and not the MD. Customer service executives at Alekya were designated as
data managers. Nayak explained the source of the confusion to her employees and
asked them to try and convince the customers with their responses and to avoid
directing calls to the managing director at all cost. Nayak prepared a detailed report on
the matter and filed it in her folder.
Meanwhile, Sharma was bombarded by questions from the MD. The MD was furious
10
that so many calls from customers were being forwarded to him. When Sharma
20
emerged from the MD’s cabin, he asked all the junior managers to assemble for a
meeting in the conference hall. There, Sharma advised them not to forward calls to the
MD and asked them to inform the customers that the MD was not available. He asked
of
them to help him find out why there was an increasing demand from the customers to
s
be put on to the MD. At this point, Nayak submitted the report she had prepared. On
s
seeing this, Sharma was furious that she had known the reason all along for the
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problem but had not considered it worthwhile to keep him informed.

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After another month had passed, Nayak observed that the performance of one of the
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employees, Amit Ray, was declining gradually. He looked dull and did not answer
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calls in his usual pleasant manner. Nayak called him to her cabin and asked him the
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reason for his poor performance. Ray, at first hesitated but later confided that his
father’s health was deteriorating and that he was finding it difficult to spare time for
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his father’s treatment due to the work load in the company. This was affecting his
performance. Nayak assured him that she would talk to the top management and
U
ensure that he was offered flexible work hours or granted some leave.
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On the same day, Sharma called the junior managers in the company for a meeting to
B
review their progress. He asked Nayak to read out the agenda for the meeting. While
rI
doing so, Nayak brought up the matter pertaining to Ray. Sharma became annoyed
Fo
with her saying that she was giving priority to matters of secondary importance and
wasted his precious time. Later, other junior managers told her that such matters
should be referred to the HR department.
Nayak wondered whether she would ever be able to please her manager by
communicating the right message to him at the right time.
1. Anjali Nayak was able to communicate effectively with her team members but
failed to communicate in the same way with her manager. What could be the
reasons for it?
2. For messages to be transferred from sender to receiver, the receiver should be
willing to accept the message. But, in the above case, Kishore Sharma (receiver)
either expressed his unwillingness to listen to Nayak (sender) or expressed his
anger against the latter. In the long-run, the receiver’s behavior could become a
barrier to communication. Do you think Sharma’s behavior is appropriate? Justify
your answer.
60
Part B
Caselet 29
Global Real Estates (Global), a Mumbai-based real estate company, had several
franchises across the country. The company facilitated buying and selling of plots in
all those localities where its franchises were established. The company had been
established in 1920, and it had more than 60 franchises spread across the country by
the year 2003.
Some franchises were single office organizations while some were multiple office
organizations. Global provided all its franchises with technical support, business
assistance and advertising, and offered training to their sales personnel. Global
initiated a change program to improve its support services and the productivity and
profitability of its franchises.
As a part of the change program, the head of each office had to submit to the
corporate office, a detailed report of operations in his office. Also, individual
employees, especially salespeople in each office, were given an ‘opinion survey
questionnaire’ by Global. The questionnaire sought to know the employees’ opinions
regarding the organization’s work environment. Each employee had to fill it and
10
submit it directly to the HR department at the corporate office either in person or by
20
mail.
The executives of Global’s operations department and HR department analyzed the
of
data collected from managers and salespeople of all the offices and produced reports
pertaining to organization-wide performance. After the senior management of Global
s
reviewed the reports, the changes suggested by them were incorporated in the reports.
s
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The final reports were then given as feedback to the head of the unit in case of small
organizations, and to the management team in case of large organizations. The
C
managers used these reports in sales meetings. In these meetings, the managers shared
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the data with salespeople and both worked together to identify the problem areas in
nl
sales personnel’s performance and to come up with measures to improve their

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performance. The managers encouraged the salespeople to participate actively in the

discussions. The salespeople were also required to develop action plans to address the
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problem areas, and the managers intervened only when the salespeople found the
U
problem too complex to resolve on their own. The reports also helped the franchises
recognize their strengths and weaknesses so that they could act upon them.
S
B
The opinion surveys collected data in three main areas – financial performance of the
rI
organization (in terms of income, expenses and net profit), productivity (number of
units produced and sold, number of customers served) and various management
Fo
practices (rules and regulations, creating conducive work environment and motivating
employees). The responses obtained were presented in the form of colored graphs
which enabled easy comparison of the productivity and performance of the franchises.
The graphs helped identify the highest performing franchise so that it could be made
the benchmark for all other franchises to match their performance against.
The section of the questionnaire which contained questions pertaining to managerial
practices was designed to test the managerial practices of franchises for effectiveness
and consisted of three areas – organizational climate, service orientation and
fundamental attitudes. Questions on ‘organizational climate’ tried to evaluate the
perceptions of employees about the work environment and the style of management.
These questions sought to learn whether employees perceived their peers and
superiors as cooperative or not, and also to find out whether the employees felt a sense
of pride in working for their organization. Questions on ‘service orientation’ aimed to
understand the extent to which employees at each office were committed to customer
service. Questions on ‘fundamental attitudes’ tried to identify pessimism in employees
and help them overcome it.
61
Research and analysis at Global indicated that there existed a strong relationship
between the attitudes of employees and the performance of the franchise. The research
also identified the other behaviors, managerial policies and practices that were directly
related to organizational performance. This enabled Global to help its franchises
improve the performance of their employees. The management from the corporate
office visited each franchise and explained to employees how the changes in market
conditions made old beliefs and attitudes obsolete and irrelevant, and they emphasized
the need for employees to adopt new beliefs and attitudes. External consultants were
hired to help bring about this change in the employees.
The feedback offered by Global proved a valuable resource for the managers of the
franchises. The managers of these franchises could now concentrate on developing
and implementing business plans and enhance the profitability of their franchises.
1. Global initiated a change program to improve its services, and the profitability of
its franchises. Is it similar to any of the standard OD interventions used by change
agents? Substantiate your answer. One of the objectives of the change program
was to obtain a positive change in employee behavior. Explain how such a change
10
can be achieved.
20
2. What are the advantages of the change program that Global adopted? The change
program used by Global was aimed at achieving improvement in employee
of
behavior. In what ways are employees required to cooperate with the change
agent in the implementation of such change programs?
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Caselet 30
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Akrur Chemicals Ltd. (Akrur), was a leading supplier of chemicals for various drug
manufacturers in India. But slowly, the company lost most of its clients to its
y
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competitors. Akrur supplied superior quality chemicals but at a premium price,

whereas its competitors delivered chemicals of similar quality at very low prices.
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Therefore, most of Akrur’s clients shifted their loyalty to its competitors.

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When Akrur’s MD Chaitanya Sarathi (Sarathi) observed this, he lowered the price of
U
the chemicals to attract clients. As a result, sales increased. The production capacity
was increased and workers were put on longer shifts to meet the demand. Akrur,
S
however, failed to cut down on manufacturing costs. The margins, therefore, began to
B
fall. Workers pressurized Sarathi to increase their wages. Supervisors and managers
rI
were also dissatisfied with their salaries. They were not given any incentives for
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increasing output and the increment in salary was also nominal. The financial position
of the company did not allow Sarathi to increase wages and salaries liberally.
Frustrated with the situation, Sarathi approached the HR manager, Jayant Sarkar
(Sarkar), to find a solution to his problems.
After listening to Sarathi’s problems, Sarkar suggested to Sarathi that he should
empower shopfloor workers, promote teamwork environment in the organization and
share profits with employees. Although he hesitated to do so initially, Sarathi later
accepted the suggestion after Sarkar explained how these measures could motivate
employees to work out innovative solutions for organizational problems. The next
day, Sarathi called a meeting and communicated to all the workers, supervisors and
managers that the company would promote team culture and share a significant
percentage of the profits with employees. Sarkar then explained the role of the
employees in successfully implementing the culture and sought their cooperation.
The employees were given training to work in teams, and teams began to operate at
Akrur. Within a few days of implementing the idea of team culture in the company,
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Part B
the top management received reports of arguments taking place between employees
and managers. It came to be known that one of the managers, Narayana Murthy, had
asked the employees to carry out a particular task in a particular way. The employees
refused and performed the task in the way they felt was right. Many other managers
faced similar experiences. According to some sources, by performing the tasks in their
own style, the employees were able to finish the tasks much quicker. However, the
managers were not happy and complained that ‘team culture’ was leading to
indiscipline among the employees. They forecasted that such behavior would be
detrimental to the company and requested top management to roll back the
implementation of ‘team culture’.
The introduction of team culture at Akrur led to the elimination of the positions of
middle managers and supervisors. Most of the middle managers and supervisors who
would have lost their jobs otherwise, were given the role of team leaders or coaches or
mentors. They offered training to employees in multiple skills and counseled
employees who were stressed due to the increased workload. Most of these team
leaders complained to the top management that employees ignored the instructions
10
they gave and instead insisted that team leaders should implement their suggestions.
20
The top management had a tough time resolving these conflicts. The senior managers
were so frustrated with the employees’ grievances that they wanted to give up their
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experiment with teams. But Sarathi and Sarkar did not give up. They were confident
that they would find a solution and implementing the concept of teamwork would
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result in success for the company.
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1. Teams encourage cohesion and coordination among employees. Why do you

think, there were conflicts between team members and leaders in Akrur after the
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introduction of the idea of working in teams? What could Sarathi have done to
avoid this situation?
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2. Sarathi and Sarkar strongly believed that team work would enhance
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organizational performance. Do you support their view? If so, what do you think
they can do to resolve the organization-wide conflicts that are taking place? If
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not, explain the reasons.

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Caselet 31
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Bank of Hyderabad (BOH) was a small bank established in Hyderabad in 1990. The
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bank slowly established its branches throughout Andhra Pradesh and became the most
trusted bank in the private sector. The hard work and management expertise of the
founder and CEO of the company, Satyanarayana Murthy (Murthy), was the main
reason for BOH’s success. BOH grew rapidly and soon spread its branches across
India. BOH also entered into the non-banking financial services sector. Murthy
wanted BOH to be a one-stop shop for all financial products and services. With the
help of its committed staff, BOH performed well in the area of non-banking financial
services also, and earned profits. But Murthy wanted BOH to be a leading financial
services provider in India, and not just one of the profitable organizations.
Therefore, Murthy analyzed the strengths and weaknesses of the company. He noted
that BOH was neither a low-cost player nor had it differentiated itself from the other
players in terms of customer service. He immediately identified two leading banks in
the industry to serve as benchmarks for BOH to follow. While one bank raised funds
at the lowest cost, the other understood customers’ needs and developed customized
solutions for them. Murthy directed his managers to strive to outperform these leading
banks. Managers were rewarded based on their efforts to improve the performance of
the bank.
63
Another fact identified by Murthy was that BOH did not offer convenience to
customers. In the existing system, if a client had three different requirements from
BOH, he had to approach the relevant departments separately. The process was time-
consuming, and there was a danger that the client would take a portion of that
business elsewhere. To tackle this problem, Murthy, set up three departments –
Corporate Clients Group (CCG), Individual Clients Group (ICG) and Non-Performing
Assets Group (NPAG). Employees in these groups helped the client to get his job
done without having to make several visits to different departments.
The employees in NPAG complained that they always dealt with lower-end clients
and that this affected their ability to compete with their colleagues in the other
departments for performance ratings. As the chances of recovering bad debts were
always less, the revenue of NPAG was always lower than that of other departments.
The bonus for BOH employees was based on the performance of individual profit
center/department rather than the entire organization. This affected the appraisal
ratings and career growth prospects of employees in NPAG.
While the employees were still struggling with internal problems, Murthy took a
major decision. He decided to merge BOH with a small financial services provider,
10
Akhira Finances (Akhira). Murthy faced stiff resistance to his decision from his
employees who feared that the merger would result in job losses. But Murthy was
20
confident that the merger would benefit BOH and went ahead with it.
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Akhira had a much larger staff than BOH. There was also a vast difference in salaries,
profiles and designations of the employees of the two banks. Akhira paid uniform
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salaries to employees in similar positions while BOH paid salaries to employees based
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on their individual performance and performance of their department. BOH
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concentrated on urban marketing whereas Akhira was a rural-oriented organization.

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Murthy had a tough time implementing the merger of the two unequal organizations.
However, with support from the HR department and an external consultancy, A22 HR
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solutions, Murthy completed the merger successfully.

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1. What were the various changes initiated by Murthy? Was he right in his decisions
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and actions in each of these change initiatives? Substantiate your answer.

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2. Were the apprehensions of Akhira’s employees during the merger justified? What
steps can be taken by the management at BOH to overcome employee resistance
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to change?
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Caselet 32
Fo
Aze, a Mumbai-based mail-order company has distribution centers in the four

metropolitan cities and booking offices in all the major cities and towns of India. It
takes orders from customers to ship books and gift items to their friends and relatives.
Sometimes customers request the company to mail gift items directly to their friends
and relatives on special occasions like birthdays, anniversaries, and festivals. The
company ensures that the gifts are delivered on the day specified by the customers.
As soon as a customer places an order for a product at one of the booking offices, the
booking clerk assigns it to the distribution center that is closest to the destination.
Before assigning the order to the center, the booking clerk calls up the distribution
center to verify whether the product ordered by the customer is available. An
employee at the distribution center then takes out the product ordered and places it in
a crate used to collect all the products ordered by customers. The crates are then
brought to the dispatch section. An employee in this section compares the bar codes
on the products with the order numbers to determine which item is to be dispatched to
which consignee. A worker then packs all the items ordered by customers in
cardboard boxes. For gift items, special wrappers are used to wrap the items. The
packages are then delivered to respective consignees using the governmental postal
64
Part B
service or a courier service. Any mistake by any employee at any stage leads to a
failure in the delivery, with a negative impact on customer satisfaction. An executive
monitors and coordinates the activities of all the above employees.
However, sometimes, Aze made mistakes and made wrong deliveries. One day, the
customer relations (CR) manager at Mumbai received several complaints from
customers. One of the customers complained that the product he had ordered was
delivered two days after the specified delivery date. He had intended to present the
item to his son on the occasion of his birthday but was unable to do so due to Aze’s
failure to deliver it on time. The agitated customer then returned the product to the
company and claimed a refund of his money. Another customer complained that he
had received items which he had not ordered. And then there was yet another
customer who had ordered for a book titled ‘Software Solutions’ for personal reading,
but had instead received a Barbie doll wrapped in gift paper.
On receiving the complaints, the CR manager sought an explanation from the
employees of the distribution center for the failure of the company to deliver the
ordered items on time. The employees responded in different ways:
One employee denied that any mistake had been made. He blamed his superior for not
10
instructing him properly. Another employee argued violently with the CR manager,
20
asking him how he could send a notice to a person who was not responsible for the
mistake. But CR manager argued with same force and asked how a wrong delivery
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could be made if no mistake had occurred at that level. Then the employee softened
his tone and tried to convince the manager that he had not made any mistake.
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One employee agreed that he had made a mistake and promised that he would not
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repeat it in future. One employee stood silently before the manager. He neither denied
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nor accepted that he made any mistake. One employee tried to defend himself by
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blaming his colleagues for the mistake.

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1. When the manager asked the employees to give the reasons for their
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unsatisfactory performance each employee responded in a different way. Explain

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the possible reasons for the variations in their behavior?

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2. Is the behavior of employees of Aze justified? If so, in what way is it justified and
how will it contribute to the growth of the organization? If you consider that the
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employees’ behavior was not justified, substantiate your opinion with reasons and
B
give suggestions on how to improve the behavior of employees. Describe any one
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technique to help the employees solve their problems as a team.

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Caselet 33
Icare Electronics (Icare), a US-based manufacturer of electronic goods, offered
products ranging from air conditioners to electric cookers. Icare began its international
operations in 1986. The company’s profits improved year after another till 1993. From
1994, profitability took a downturn and in 2000, for the first time, the company
reported huge losses. One of the major reasons for these losses was the luxurious
facilities it offered to its top management, which far surpassed anything offered by
other comparable firms. Icare’s salaries to its managers in its Asian units were on par
with international norms and it also provided them free accommodation in large
independent houses in posh localities. Several managers purchased cars and vans on
the office account when they were actually for personal use. The management at the
headquarters also doubted the genuineness of the sales figures sent in by one of its
units in Asia. The company hired external auditors for its Asian operations. Their
report revealed that the company’s unit in Malaysia was deliberately falsifying the
information it sent to the headquarters. Most of the electronics goods it produced were
65
defective. The management transferred the defective products from the manufacturing
unit to some other place. Then management reported to headquarters that these pieces
were sold. Later, the defective units were brought back to the unit. The managers, then
reported to top management that they were returned by customers. It also gave a list of
expenses incurred by it on customer service. The top management issued show cause
notice to the managers of the unit at Malaysia. The managers responded that they were
compelled to do this because they were given unrealistically high targets which could
not be achieved because of the intense competition in the market.
Icare hired an external consultancy, Ashika People Solutions (Ashika), to suggest
ways to recover from its losses. Ashika suggested a massive restructuring exercise
focusing on the company’s human resources. The first task was to put in place a new
organizational structure. Each plant was designated as a profit center and the plant in-
charge (manager) was made responsible for the financial performance of the plant.
The compensation of managers was linked to the performance of the plants in which
they worked. Each country was divided into regions based on consumer preferences.
Each region had a separate head (Regional General Manager), who had the regional
10
functional managers reporting to him. All the Regional General Managers reported to
the VP (Operations), who reported directly to the CEO, Alex J. Wilson (Wilson).
20
Wilson recognized that the biggest weakness of Icare was its excess manpower.
Hence, he initiated a Voluntary Retirement Scheme (VRS) for its employees. Wilson
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also conducted a performance appraisal of all the managers. About 50 managers were
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rated low and demoted. About 10 managers were promoted. Some were laid off. Some
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of the demoted managers resigned to join other companies.
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1. What were the circumstances that led to the restructuring exercise at Icare? What
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were the various changes made in the organization? What further steps can the
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company take to improve its functioning?

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2. The management of Malaysia misreported sales figures. Who do you think is

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responsible for this practice? Justify your answer.

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Caselet 34
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Midhila Products Ltd. (MPL), based in Gujarat, manufactured food products. It was a
B
well established and leading player in the food and beverages industry. Till 1995,
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Gaurav Agarwal (Gaurav) was the managing director of the company. His father,
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Mohan Agarwal (Mohan) was the chairman of the company and had inherited the
company from his father, Kishan Kumar Agarwal. At MPL, top positions like head of
sales and marketing and head of operations were held by members of the Agarwal
family. The food products of MPL were divided into four segments – Health care,
Nutrition, Snacks, and Drinks. The organization structure of MPL consisted of sales
and marketing, finance, exports, corporate communication, operations, human
relations (HR), quality control, purchase and packaging divisions. The sales and
marketing division was headed by Aditya Agarwal (Aditya), the son of the Mohan
Agarwal’s brother. The finance, exports and corporate communication divisions were
headed by Gaurav’s cousins. Operations, HR, quality control, purchase and packaging
were all headed by other members of the Agarwal family.
Towards the end of 1995, many leading global players in food products announced
their plans to enter the Indian food and beverages industry. Gaurav felt that MPL
needed to be professionally managed in order to face the competition. He told his
father, Mohan about his plans to hire professional managers to give strategic direction
to the company. At first, Mohan was not convinced but after having an hour-long
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Part B
discussion with his son, he agreed to hire professional managers. Gaurav immediately
met a leading consultancy in the country, People Solutions, and requested its head to
visit MPL and suggest measures to make the company competitive. Consultants from
People Solutions visited MPL, made a thorough analysis of the organization and
suggested that the organization structure needed to be changed and professional
managers needed to be hired in strategic positions in order to make the company
competitive.
The consultants suggested that MPL should make the following changes to its
organization structure. Gaurav and Mohan should join the Board of Directors and
make only strategic decisions. They should hire an able and experienced professional
from a multinational company as a CEO. The senior family members should join the
management committee but should not interfere in the day-to-day management
activities except when the management is faced with strategic issues. All the food
product segments should be divided into business units with each unit’s head
reporting directly to the CEO. Every function, whether it is operations, finance, HR,
or quality, should be headed by a functional head who will in turn report to the CEO.
10
When People Solutions observed that there was no formal performance appraisal
20
system and employees were rewarded according to their seniority at MPL, it
immediately suggested to Gaurav that the appraisal and compensation systems should
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be redesigned.
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1. MPL was a leading player in the food and beverage industry in India. Do you
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think Gaurav was justified in approaching a consultancy to make changes to an

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organization that was performing well?

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2. People Solutions suggested that MPL should change its appraisal and
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compensation system? Do you think MPL should implement this suggestion?

Explain with reasons.
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Caselet 35
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Aastha Manufacturers (Aastha), a Pune-based wires and cables manufacturing

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company, was second only to Swiz W&C Ltd., the subsidiary of a Swedish
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multinational firm in India in the industry. The management of Aastha shared all the
B
information relating to the company with employees. Each employee at Aastha was
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aware of the mission and goals of the organization. They knew clearly what was
expected from them, and how to match their performance with the management’s
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expectations. Employees from different departments formed quality circles. They met
regularly and discussed how to improve quality in the organization. The employees
were given formal training to work in teams, and team members had clear shared
objectives and met regularly to review their objectives and strategies. Cross-functional
teams comprising of employees belonging to different departments also existed. The
team members discussed a range of organizational issues and did not hesitate to
challenge decisions and actions of the management. The management encouraged a
free flow of communication. This attitude facilitated upward and downward
communication, and horizontal communication and coordination among various
teams. The management was receptive to new ideas irrespective of their origin. The
ideas given by shop floor employees, supervisors and engineers were noted down and
discussed in meetings. If an idea was found to be good and adopted, the employee
who contributed the idea was rewarded. Aastha was always proactive in its strategies.
The top management was of the view that an organization should constantly change
and innovate to stay ahead of its competitors. Therefore, the management introduced
change initiatives continually, and sought employee participation and involvement in
each of these initiatives.
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Akina Wires and Cables (Akina), a Lucknow-based company, was the third important
player in the industry. It was a financially sound company and paid its employees
well. Akina’s top management believed solely in scientific management techniques.
As a result, there was high division of work and job specialization in the company.
Every worker on the shop floor specialized in the skills required to perform a
particular task and repeated the same task throughout the day. The average job cycle
time was two minutes. The management did not attach importance to employee
training and development, team work and communication. The employees were,
therefore, hardly aware of any developments taking place in their company except for
developments pertaining to their work. The company initiated change programs only
when it observed its competitors’ moves threaten its position in the market. However,
it was observed that employee involvement and participation in these change
programs was minimal. Rather than willingly accepting the change, the employees felt
compelled to change. The management in Akina did not encourage or appreciate
suggestions or ideas from employees.
10
1. If competition intensifies further and more multinational firms enter the industry,
which of the two firms (Akina and Aastha) do you think would be able to secure
20
competitive advantage over other players? Explain with reasons. Does Akina
need to change?
2.
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Suppose both Aastha and Akina have vacancies in the junior management
positions for which they have conducted a recruitment test. You have appeared
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for the tests of both the companies, cleared them and have been offered a job in
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both the companies. Suppose that your friends working in these companies have
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made you aware of the culture in both. Which company would you choose to
join? Justify your answer.
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Caselet 36
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In 1997, after an internal HR meeting at Excel Software Solutions Ltd. (Excel), a

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Hyderabad-based company, it was decided that the company should strive to obtain
Six Sigma certification. To achieve this, Excel would have to adopt PCMM standards.
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PCMM (People Capability Maturity Model) is a set of standards established for IT

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companies by the Software Engineering Institute (SEI), Carnegie Mellon University

B
(CMU), USA.
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The head of the Human Resources division, Deepak Paranjey, and his team studied
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the HR policies of various companies such as Wipro, AT&T, GE and British Telecom
which had achieved Six Sigma certification. After completing their study, the HR
team identified 20 competency areas spread across the five levels of PCMM. The
behavioral issues for each level were identified and the procedures to address them
were also clearly defined.
At Level 1 of PCMM, the emphasis was on selecting the right people. At Level 2,
Excel concentrated on improving its compensation system, training and development
programs, performance management system, communication and coordination in the
organization. The company’s top management took a special interest in educating
employees about PCMM concepts. Every new recruit in the company was put through
a well-structured induction/training program, which covered all aspects of software
development skills required. Excel also offered on-line learning courses for
employees. Any employee who felt that he lacked certain skills, could request
training. These measures enabled the company to meet the requirements of the PCMM
Level 2.
Having successfully implemented the process areas for Level 2, Excel focused on the
employee’s career development path in Level 3. The first stage in the career path was
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Part B
to develop as a ‘team member.’ Employees with less than one year of work experience
operated as team members for their first few projects. Their primary task as team
members was to gain experience with various tools and software development while
developing programs. After this stage, the employees moved on to become ‘team
representatives,’ where they interacted with customers in addition to developing
software and leading the team.
If team representatives wanted a career in consulting services, they were allowed to
work independently. If they wanted to continue in software development, they were
given responsibilities like setting standards for a project, building customer
relationships and providing technical assistance for their team. Employees who
completed these responsibilities successfully became project managers. Project
managers were also in charge of developing of a good work culture and environment
for their team, besides interacting with other internal departments. Project managers
became Technical Managers and managed multiple projects. Successful technical
managers could become a Head for any of Excel’s strategic business units (SBUs).
Employees were allowed to alter their career path midway to suit their core
competencies. The opportunity to shift to either functional or technical specialization
10
eventually was dependent on the employee’s interest and expertise.
20
Excel also conducted a ‘Employee Perception Survey’ to get to know employee
perceptions and to help the management understand the requirements for high
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employee morale. The management ensured that the outcome of the survey was
implemented to motivate, empower and recognize the employee’s performance.
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After integrating the career development of employees with its strategic HR policies,
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Excel concentrated on integrating the key process areas at the PCMM Level 4. One of
the important requirements for reaching PCMM Level 4 is the organization’s ability to
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develop leadership qualities in employees and empower them to take decisions which
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will result in better capability management in the organization. Excel recognized the
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need to groom employees and develop leadership qualities and started the ‘Excel
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Challenge Program.’ The program was designed to enable employees face the
challenges in their career path and make their way to leadership positions.
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Excel sought to develop the competencies of the employees through training,

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coaching, exposure, delegation of authority, counseling and value clarification. While

selecting the employees for the programs, Excel set certain parameters. The company
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tested not only the employees’ IQ and technical knowledge but also potential
B
leadership competencies. The company delegated enough responsibilities to the

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employee to prove his leadership abilities and groom his people skills. These
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initiatives filled the gaps for reaching the PCMM Level 4.

To reach PCMM Level 5, Excel began putting in place measures to further streamline
its manpower planning and HR policies. Excel made a resource commitment of 5% of
its overall manpower costs towards employee training. In 2001, Excel achieved the
PCMM Level 5 certification.
1. What is PCMM certification? What benefits can Excel expect by obtaining
PCMM certification?
2. What is Six Sigma? Why is it implemented in organizations?
Caselet 37
Smile Hotels Group is a leading hotel group in India. It has about 40 hotels in various
cities across India and 25 in overseas locations. The group emphasizes employee
training and development, and customer service. But the CEO of the group, Hari
Prasad Thakur (Thakur), observed that the customer growth rate of the group’s hotels
69
had not been high for the last three years. He approached a consultancy and asked it to
conduct a customer survey to find out their opinion about the hotel’s customer service.
The survey revealed customer satisfaction to be average. It was almost equal to the
rating given to some of the new hotels in the industry. Thakur was shocked to see the
results of the survey and called all the senior managers in the company for a meeting.
Addressing them, he began, “Good morning, Ladies and Gentlemen! As you all know,
I had recently hired a consultancy to conduct a customer survey for us. I have the
results here with me. It is with great disappointment that I have to inform you all that
our group of hotels have rated very low on customer satisfaction. I had never
imagined that our customers have such a poor opinion about us. You can see that we
are rated at par with some not-so-known hotels.”
On hearing this, most of the managers were shocked. Some of them expressed their
disbelief saying, “Oh! We can’t believe this.”
After giving them sufficient time to digest this unpleasant news, Thakur continued, “I
had gone in for the survey because customer growth rate has been declining
considerably for the last three years. What do you think we can do to attract
customers?”
10
The managers suggested various plans to attract customers. The marketing manager of
20
the company, Milind Patil (Patil), said, “It might be a good idea to offer our loyal
customers free holiday trips, discounts in holiday packages, discounts in room rent,
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coupons and lucky draws.” s
The associate marketing manager (corporate sector), Hitesh Chaudhary (Chaudhary),
s
added, “We can increase our number of corporate clientele by providing them extra
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facilities. This, I am sure, will help us attract more executives to stay with us.”
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However, Thakur was not convinced. When both, Patil and Chaudhary, were trying to
convince Thakur, the HR manager, Soma Roy (Roy), interrupted them saying, “I am
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sorry to interrupt you but what I wish to point out to you all, in case you have missed
the fact, is that these techniques will work only for a short period of time. If we are
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looking for a permanent solution, I suggest we should focus on our customer service
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aspect which is crucial for our business. Our employees are trained to deliver good
quality service to our customers. But, I believe that we have to motivate them to serve
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customers still better. Only by doing this will we be able to improve our customer
satisfaction level.”
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B
On hearing this, the operations manager responded, “What else do we have to give to
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our employees? Our employees already get the best salaries in the industry.”
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Roy replied, “Salary alone won’t do. Why can’t we begin an employee recognition
program? We will reward employees who offer superior customer service. It would
motivate other employees to serve customers better. Improved service will fetch us
more customers.”
Thakur appreciated Roy for his suggestion and said, “That seems to be a good idea.
We will implement it. Can you tell us how we should go about it?”
Roy replied, “We will categorize high performers into three categories – good
performers, very good performers, and excellent performers. The performance can be
measured in terms of integrity, honesty, kindness, respect for customers,
environmental awareness, teamwork, coordination, cooperation and trustworthiness.”
Thakur then asked, “What type of rewards would you suggest should be given to each
of these categories of high performers?”
Roy replied, “For good performers we may give special two-star badges which they
can pin to their coat. For very good performers we can give three-star badges and cash
rewards, and excellent performers can be given five-star badges. They can be
felicitated in the anniversary celebration function of the group and may be given good
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Part B
ranking that would get them faster promotions.” Suggestions from other managers
were also invited and the recognition program was launched.
1. The salaries of employees of Smile Hotels Group were the best in the industry.
Do you think the recognition program was needed to motivate employees? The
CEO didn’t accept the suggestions offered by the marketing managers to attract
more customers but accepted the suggestion given by the HR manager. Why do
you think he liked the HR manager’s suggestion? Substantiate your answer.
2. What more do you suggest can be done by Smile Hotels Group to motivate the
employees and improve customer service?
Caselet 38
Mumbai-based Arkay Supplies Ltd. (Arkay) manufactured office equipment. The
CEO of the company, Robert Franco (Franco), believed in employee empowerment
and participation. He entrusted his immediate managers with a lot of responsibility.
The head of procurement division, Rajiv Gulati (Gulati), enjoyed full autonomy.
10
Gulati could finalize purchase deals amounting to Rs 90 crore without consulting
Franco. The marketing manager, N. Shivamani, could design and launch an expensive
20
promotional campaign and then make it known to Franco. Franco did not reprimand
the manager if the campaign failed to generate the desired response among customers.
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But he would not tolerate it if the manager repeated the same mistake again. He
wanted his managers to analyze the reasons for failure and take steps not to repeat
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them in future. He expected his managers also to empower their subordinates, allow
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them to take risks and develop their leadership skills.
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Ravi Raj (Raj) was a procurement manager in the division headed by Gulati. Raj
reported to Gulati. Under Raj, there were three subordinates designated as purchase
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executives who assisted him in his work. When the vendors submitted their tenders,
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the purchase executives scrutinized the proposals, selected the top 10 proposals and
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forwarded them to Raj. Raj studied the proposals, selected the best of them and then
sent his purchase executives to the vendor’s site to examine the quality of the raw
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material. The executives personally examined the quality of the raw material, and
brought some samples back to their firm for examination. The quality control
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department at Arkay tested the samples and determined the quality of raw material
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supplied by the vendors. On the basis of the reports from the quality control
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department, Raj selected the best vendor(s) and explained to Gulati why he chose
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those vendors. If Gulati was not satisfied with the explanation, he obtained proposals
from other vendors and examined them as well. But if he was satisfied with Raj’s
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explanation, he called the vendors concerned and negotiated on price, the date of
delivery, amount and quality of material to be supplied, with them. Gulati ensured that
everyone in his department completed their work and did it perfectly before they left
for the day unless there was a valid reason for the employee to leave the work
pending. If Raj or his subordinates did not understand what they were expected to do,
Gulati explained it to them patiently. They could walk in any time and get their doubts
cleared if they had any.
Gulati never allowed Raj to negotiate with vendors to finalize the price. If, for some
reason, Gulati was not free on the given date, he asked the vendors to postpone the
date for negotiation. Otherwise he asked Raj to consult him throughout the negotiation
and not to finalize the agreement until he came and read all the clauses. Gulati never
asked Raj to participate in the negotiations he held with the vendors. Raj also did not
insist on participating because the negotiations lasted till late in the night and Raj was
glad that boss did not ask him to stay during the negotiations, so that he was free to
leave for home. The final documents of the contract were typed by a clerk the next
day and formally signed by Gulati and the vendors. Franco praised Gulati for striking
the best deals.
71
However, in the marketing division, it was a different story altogether. The marketing
manager, Shivamani, set sales targets for the marketing executives. Most of the
executives complained that the targets he set were very high and difficult to achieve.
But Shivamani never agreed to lower the targets once they were established. Many
executives complained that Shivamani expected high level of performance from them
but never offered them the support required. If Shivamani observed that any executive
did not achieve at least 80% of the sales target by the date he gave them, he punished
the marketing executive by denying him leave, preventing him from claiming
reimbursement for expenses incurred by refusing to sign his form, and so on. Many
executives who could not stand Shivamani’s highhanded behavior left the
organization.
1. Do you think Gulati should assign greater responsibility to Raj or allow Raj to
continue to work to the extent he does at present?
2. Compare and contrast the leadership styles of Gulati and Shivamani using a
leadership grid.
10
Caselet 39
20
Ashrita Airlines (Ashrita), a Mumbai-based company, operated flights to all the Asian
of
countries. In all these countries, Ashrita had subsidiaries which offered Airport
Terminal Services. The services included traffic control, cargo services, security
s
services and catering (for staff and passengers). The subsidiary in each country was
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headed by a country manager who enjoyed a great degree of freedom and could take
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many decisions without having to consult the headquarters.

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The organization structure at Ashrita was flat in nature. Under the CEO, there were
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country managers. Under country managers, there were functional managers. All
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functional executives reported to the respective functional managers. For example,

finance executives reported to finance manager and sales executives reported to sales
O
manager.
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Ashrita rotated its employees through different jobs to help them acquire cross-
U
functional expertise. But the policy of job rotation did not apply to specialists such as
engineers and technicians.
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Ashrita’s country manager in India, Ajay Arora (Arora), focused on improving the
B
efficiency of the organization’s terminal services. Arora paid close attention even to
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minute details of the company’s operations. He ensured that the food served on flight
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conformed to the customers’ tastes and preferences, and that the passengers’ luggage
was transferred from the flight to the luggage room within minutes and they did not
have to wait for more than 10 minutes for their luggage. If any customer reported any
problem in dealing with any employee at Ashrita, Arora immediately took action in
the matter. He called the employee who had interacted with the customer and brought
to his notice the customer’s complaint about his service. Arora also pointed out to the
employee that if one customer left Ashrita, it meant a loss of business for the
company. He emphasized the fact that if Ashrita were to continue to lose business
each day due to inappropriate behavior of employees, soon the organization would
become bankrupt and would not even be able to pay salaries to its employees. Arora,
thereafter, cautioned the erring employee to rectify his behavior to prevent such a
situation from recurring. If it came to his notice that there have been more than three
occasions in which a customer has complained against an employee, he demoted the
employee or fired him.
Arora wanted to further improve the service offered to customers. He hired the
services of leading consultancy – Apple Consultants which offered special training
programs in customer service to airline employees. The training enabled Ashrita to
72
Part B
improve its quality of customer service. In a customer survey conducted a few months
after the employees had been trained, most of the customers who traveled by Ashrita
Airlines rated the organization’s customer service as excellent.
Ashrita’s terminal services division in India received many awards for its excellent
customer service and superior quality services. The subsidiary in India offered
engineering services apart from other regular services like cargo, security and
catering. Some international airlines used Ashrita’s services and paid for them. This
became an additional source of revenue for Ashrita and its profitability increased.
On the founders’ day celebrations of the organization, the CEO of the organization
praised and rewarded Arora for his efforts to improve customer service. The other
country managers present at the function were impressed and announced their plans to
follow in Arora’s footsteps, and make their subsidiaries efficient and profitable in a
similar way.
1. What type of organization structure did Ashrita have? Discuss the advantages and
disadvantages of this structure. What are the different methods of
10
departmentation used in organizations?
2. Was the process of decision making centralized or decentralized in Ashrita? How
20
did it benefit the organization? What are the possible negative effects of
decentralization?
Caselet 40 of
s s
Zet Manufacturers (Zet) manufactured iron and steel rods used in construction. The
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general manager, K. Giridhar Prasad (Prasad), was unhappy with his management
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team. The managers were not able to fulfill the responsibilities given to them properly.
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Prasad hired a renowned HR consultant in the city, Sudheer Sharma (Sharma) to

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counsel and conduct development programs for the managers.

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Sharma visited the firm and held one-to-one meetings with the managers. These
meetings revealed something interesting – the actual reason for the poor performance
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of the managers was Prasad himself. The managers did not like Prasad’s style of
U
management. Prasad was always keen on self-promotion in his meetings with

superiors and subordinates. He lacked respect for other people. He would point out
S
even a small mistake committed by a manager and criticize him a lot in the presence
B
of other managers. He imposed a high degree of control over his managers. He always
rI
pressurized managers to do whatever task he gave them on priority. Moreover, he

Fo
changed priorities frequently. Sometimes, Prasad assigned the same task to different
managers. Managers believed that this was because Prasad did not have faith in their
abilities.
However, they respected Prasad for his intellectual capabilities. Prasad was a very
good speaker and articulated things in a way that quickly convinced listeners. He was
a visionary and encouraged change. He welcomed new ideas and thoughts. He could
analyze large volumes of data in a short period of time and took decisions quickly. As
a result, he wound up meetings so quickly that managers could not contribute much. If
he decided to implement a new process or system in the organization, he worked hard
till he achieved it by solving all the problems that came in the way of its
implementation.
Prasad always boasted of his own achievements and those of his management team.
He sent wrong reports to the head office stating that many projects were completed
before they were actually completed. The head office, therefore, assigned more work
to Prasad’s office, overburdening the managers. The managers were frustrated and
wanted to complain about Prasad’s behavior to the Vice President of the company.
Some managers tried to cope with the problem by keeping aside the tasks assigned by
73
Prasad intermittently, unless they were really urgent. Each manager had 30-50 tasks
pending with him. Last minute rush and errors were therefore common in the
organization.
When Sharma spoke to the managers and observed the work practices in the firm, he
found that the organization lacked proper planning and the management focused on
solving problems rather than preventing problems. Also, there was lack of
coordination among the various organizational processes. When Sharma presented the
results of his findings to Prasad, Prasad was surprised to know that he was responsible
for the demotivation of his managers. Prasad wondered how it was that the managers
had such a huge number of pending projects. He went to one of the managers and
examined the pending list. After seeing the projects on the list, he told Sharma that
some of them were just ideas which had come to his mind, which he had conveyed to
his managers. He did not want the managers to take them up as projects. However,
Prasad told Sharma that he wanted to change his behavior and improve his leadership
style so that the problems would not reoccur in the future.
1. If you were the HR consultant Sharma, what suggestions would you make to
10
Prasad to improve his leadership style?
20
2. Last-minute rush and errors were common in Zet. Who was responsible for the
problems – the managers, Prasad or the system?
Caselet 41
of
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US-based Regal Pharmaceuticals (Regal) was a leading multinational that operated in
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more than 50 countries across the world. It had subsidiaries in all these countries and
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each subsidiary enjoyed a great degree of autonomy. Regal had three divisions – one
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division manufactured over the counter (OTC) drugs, the second manufactured
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prescription drugs, and the third manufactured drugs for animals.

nl
Though Regal manufactured products under different popular brands, the corporate
O
name ‘Regal’ was not known to many. Regal had never given attention to advertising
its brands and improving public relations. But the growing competition and the way
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new players were becoming increasingly popular with the public and eating into the
market share of leading players, compelled Regal to review its communication policy.
U
When an opportunity to sponsor an International Science Exhibition to be held in the

S
US came up, Regal grabbed it. It advertised its sponsorship in the print and electronic
B
media. The company also publicized its sponsorship widely in its in-house magazines.
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Regal invited employees to contribute their ideas to set up a unique stall in the
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exhibition.
Employees from different subsidiaries and divisions were invited to form a cross-
functional team. The objective of the cross-functional team was to contribute ideas to
improve the company’s stall in the exhibition. Each employee gathered ideas from
his/her respective division or subsidiary and presented it during team meetings. The
team members scanned and evaluated the ideas and forwarded the best among them to
the top management. The top management reviewed these ideas and implemented the
feasible ones.
Finally, the top management finalized the design of the stall. In the stall, Regal set up
a six-foot high transparent human body in a standing posture. People could see all the
organs inside the body like kidney, heart and lungs. With the help of special inbuilt
electronic circuits, it was demonstrated to visitors how Regal’s different
pharmaceutical products acted on different parts of the human body. Large screens
were also used to demonstrate the use of products like the ‘special inhaler’ for asthma
patients. Animated pictures were used to demonstrate the use of veterinary drugs.
Documentary pictures on quality control at Regal’s plants and the research efforts of
scientists in the company’s R&D laboratory were shown to visitors.
74
Part B
Regal encouraged its employees from different countries to visit the stall. The top 3
high performers among the employees from all the subsidiaries got a free return ticket
to visit the exhibition in the US. They could stay for a week at the company’s guest
house. The trips enabled employees from different divisions and subsidiaries to
interact with each other. They learned about each other and shared their experiences.
They expressed their willingness to continue their friendship and form an informal
network.
All the employees who attended the exhibition expressed their views and opinions
about the company and the exhibition. These views were posted on the company’s
intranet and notice boards. Many employees wanted the company to sponsor such
events frequently. Some wanted the management to set up exhibitions at their
locations.
The exhibition lasted for 20 days. Each day, an employee gave a presentation at the
stall about a particular product of the company. He/she explained how Regal
undertook intensive research to come out with safe medicines without any side-
effects. Regal kept its employees and customers up-to-date about the developments at
10
the stall using the company’s intranet and website.
20
After the exhibition, Regal conducted an employee survey and a marketing survey.
The results showed that that there was a significant increase in the productivity of
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employees and sales of Regal’s brands in retail outlets. Internal communication
increased and employees across different divisions communicated with each other
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frequently. Projects were progressing at a faster pace than earlier. At drug stores, it
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was seen that customers specifically asked for medicines manufactured by Regal.
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1. Why did Regal sponsor the science exhibition? Do you think the company
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achieved what it wanted? What are the ways in which Regal can improve internal
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communication?
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2. Why do you think the productivity of employees increased after the exhibition?
Also explain the possible reasons for the increase in the company’s sales?
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Caselet 42
B
Situation A
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John Morgeld (Morgeld) received an appointment letter from Akay Enterprises

Fo
(Akay). It was his first job and he would be joining the company as an executive
trainee (production). He had got offers from two other companies but he selected
Akay because the company promised a cooperative and supportive work environment
for newcomers, an informal organizational culture and excellent growth opportunities
for employees who stayed with the company.
On the day of joining, he wore an executive dress, tie and shoes and went to the
office. The receptionist looked at him and asked him whether he was a marketing
executive from any company. When Morgeld answered in the negative and introduced
himself as a new employee, the receptionist wished him and began to attend her calls.
Morgeld did not know whether he should go inside the office or wait in the reception
till he was called in. He chose the second option and waited. He waited for two hours
and nothing happened. So, he got up and asked the receptionist what he was supposed
to do. The receptionist asked him to go inside.
Morgeld entered into a large hall having several cabins. He did not know, of all the
square cabins, which one he should go to. Randomly, he chose one and introduced
himself to the occupant. The occupant looked at Morgeld and began to laugh. After
75
laughing for two minutes, he told Morgeld that all employees come in casuals to
office and Morgeld looked like the CEO of the company in that suit. He advised
Morgeld to come in casuals. But he didn’t seem to know whom Morgeld should
approach and asked him to ask the person in the cabin next to his. When Morgeld
knocked on the next cabin, the person inside asked him to go to the big cabin at the far
end of the hall where the general manager (GM) of the company sat. Morgeld went to
the GM and introduced himself. The GM looked irritated on being disturbed by
Morgeld. When Morgeld stated his reason for being there, the GM directed Morgeld
to approach the production manager, Shashank Ray (Ray). When Morgeld went to
meet Ray whose office was on another floor of the same building, Ray’s secretary
took the appointment letter from him and told him that Ray was busy in a meeting
with some important guest. The secretary asked him to sit in the reception till he was
called. After two hours, Morgeld was called in. Ray saw Morgeld and he also laughed
for a few minutes and told him to come to office dressed in casuals.
Ray told Morgeld he had another urgent appointment and asked him to sit with his
colleague Dheeraj Patel (Patel) who would instruct him regarding the work he would
have to do. Patel’s appraisal was done recently and he was given grade ‘D.’ He was
10
not given any increment. Patel told all the possible negative points about the
workplace to Morgeld and asked him to leave the place as quickly as possible to have
20
a better career. Patel also warned him not to be seen interacting with other employees
during office hours as it was unwritten rule that no employee should be caught
of
socializing during office hours. Patel then told Morgeld that he had some urgent work
and left. It was one o’clock and no one seemed to leave for lunch. Morgeld waited and
s
waited. Then at three o’clock, the office boy came with tea. When Morgeld asked him
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where he should go to have his lunch, the office boy told him that lunch was available
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in the office canteen between 12 to 2.30 pm and at three o’clock in the afternoon, he
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cannot expect to get anything but coffee and tea in the canteen. On the very first day
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of his joining the new office, Morgeld returned home hungry and sad.
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Situation B
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Morgeld had completed two years of working at Akay. He was always constantly
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instructed and closely monitored by his team leader, Sadgun Chari (Chari). Morgeld
was never allowed to take any decision on his own. After two years, for the first time,
U
he was given a very important task by Chari. Chari told Morgeld that he would not be
S
able to guide him because he had several other projects on hand. Morgeld felt very
B
happy. But Chari told him, “If you can do this task, you can be sure of a promotion
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this year, but if you can’t, I can’t even assure you of your job.” Hearing this, Morgeld
felt highly pressurized. He was suddenly given a very important task and Chari was
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not ready to offer help. He prayed to God and began to work on it. He put his heart
and soul in it. He worked 14 hours a day. Sometimes he spent sleepless nights.
However, he finished the task successfully on time. He went to office and found that
Chari was on leave. He remembered what Chari had said when he had handed him the
project. Chari had cautioned Morgeld that if he couldn’t finish the project by the due
date, it would put their boss, Ray, in a difficult position since he was answerable to
the head office. Therefore, Morgeld went to Ray’s cabin since Chari was on leave.
Ray looked at him with a puzzled look on his face. Morgeld drew his own
interpretation of the expression on Ray’s face and thought inwardly, “I guess he is
thinking – Why did he come directly to my cabin?” Ray asked Morgeld “Where is
Chari?” Morgeld replied, “He is on leave, Sir. Hence I came to submit this file to you.
Chari told me that it is urgent.” Ray looked at the file and told Morgeld, “You keep it
with you. After Chari comes, he will have a look at it and then forward it to me.”
Morgeld said, “But, Sir, it is urgent, I believe.” Ray got irritated and said, “I know
that. You take this file back and start with the next task which is more urgent, OK?”
Morgeld came out of Ray’s cabin in no mood to take up the next task.
76
Part B

1. “The first impression is the best impression,” What kind of impression did
Morgeld get about his organization? Would this be good for the company?
2. In Situation A and B, Morgeld was demotivated in many ways. Comment on the
urgency of the task given to Morgeld and the way he was treated upon completion
of the task. What was the impact of the work environment on his morale?
Caselet 43
Mumbai-based Ashika Textiles Ltd (Ashika), was a small but highly profitable firm in
the textile industry. Meena Chowdhary (Chowdhary), who had just completed her
engineering in textiles joined as a management trainee in Ashika. She was teamed
with three other management trainees (Amini Murthy, Anand Sharma and Rajiv
Arora) with one to two years of experience in the firm. The team was led by Akash
Madhur (Madhur) who had experience of 10 years in the industry, and had been
working with the firm for the last three years. Madhur established goals for the team
and developed plans and strategies to achieve them. His 4-member team worked
10
according to the plan developed by him and achieved the goals. Chowdhary was the
most active member of the team. She was always a step ahead of her team-mates. She
20
completed her tasks ahead of time and helped other team members in completing their
tasks. Madhur liked the quality of her work.
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Madhur frequently conducted meetings with his team members to discuss plans and
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strategies for achieving their goals. In these meetings, Amini Murthy (Murthy) always
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concentrated on estimating the extent of increase in work-load of team members as a
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result of the new project. Whenever she felt that the deadlines set by Madhur were
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impossible to achieve she objected to it, and Madhur made adjustments to the deadline
and tried to come up with a more feasible deadline. This required him to make other
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changes in the project plan accordingly.

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Anand Sharma (Sharma) always gave good ideas to Madhur to impress clients.
Whenever Madhur wanted to get new clients or find business partners to start a new
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venture, Sharma took care of the task. He had a very strong informal network. He had
U
friends in many organizations. He talked to them and arranged Madhur’s meetings

with the desired client. If Madhur invited the client, Sharma took care of all the
S
arrangements for welcoming the guest. Madhur relied on Sharma so much that he did
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not plan client visits without consulting Sharma. However, as a result of his
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involvement in these activities, Sharma could not complete his tasks on time. He
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always took the help of Chowdhary to complete them.

Rajiv Arora (Arora) never liked attending meetings and felt that meetings were a
waste of time. He always looked forward to action. He only asked Madhur to brief
him what he had to do. Once he was told that, he finished his task and reported to
Madhur.
Chowdhary was a patient listener throughout the meetings. She listened to all the
instructions given by Madhur and sought clarification from him for any point that was
not clear to her. She knew not just her task but also the tasks of all the team members.
Sometimes, during meetings, the team members held opposing views on various
issues. Sharma always supported Madhur’s views. Murthy always argued against the
view proposed by anyone in the meeting. She argued violently and did not allow
others to support their views. Arora was a neutral member while Chowdhary patiently
listened to the views of all the people present and then expressed her view and
substantiated it with facts and figures. As was her habit, Murthy tried to oppose
Chowdhary’s suggestions as well but always failed because she often did not have
enough strong points to support her stand.
77
After a year of Chowdhary joining Ashika, Madhur was promoted to the post of
general manager and he had to work from the headquarters thereafter. The president
of the company, Ashok Desai (Desai), asked Madhur to name a suitable candidate to
fill his position. Madhur suggested Chowdhary’s name to Desai. The same week,
Chowdhary was handed the letter of promotion. Although Chowdhary accepted the
letter, she was worried about the new developments and approached her friend for
advice.
1. What are the pros and cons of Chowdhary accepting the new post offered to her?
If you were Chowdhary’s friend, what would you advise her? Justify your
answer.
2. Do you think Madhur was right in his decision to suggest Chowdhary’s name for
promotion to his position? Why do you think Madhur did not recommend the
name of any of the other team members for the position even though they had
more experience of working in the organization? If Chowdhary accepts the
promotion, how will her new role be different from her previous role in the
organization?
10
Caselet 44
20
Geek Enterprises (Geek) was a leading cement manufacturing firm in India. The CEO
of
of the company, Niranjan Paul (who took control of the firm from his father and
founder, Arjun Paul) did not want to remain confined to the cement business. Because
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of his efforts and those of his senior management team, Geek diversified into other
s
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industries – steel, plastic and agricultural equipment. Each of Geek’s units was among
the top ten leading firms in its industry. As Geek entered more and more businesses
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under Niranjan’s leadership, the group lost its focus, and profitability began to
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decline. Niranjan was of the opinion that in order to beat the competition, an
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organization should have a young person heading it, a person who would be able to
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lead the organization effectively by formulating and implementing superior strategies.

Therefore, he decided to step down and handed over control of the organization to his
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eldest son, Vinay Paul (Vinay).

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Vinay had hardly shown any interest in his father’s business till then. He was
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interested in sports and event management. Niranjan also did not consider it necessary
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that Vinay should be formally trained to assume the position of a CEO. Niranjan was
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very confident of the skills and expertise of his senior management team and advised
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Vinay to take the advice of the senior managers in the organization before he took any
decision and formulated any strategy. But Vinay never heeded his father’s advice.
One day, the senior managers informed Vinay that Geek’s competitor, K&K
Enterprises, was rapidly gaining market share with its emphasis on quality and
employee empowerment and there was a threat of it making an attempt to acquire
Geek. The senior management suggested that Vinay should hire an OD consultant to
devise a change strategy for the organization and make it more competitive. Vinay did
not like the advice given by the senior management and failed to abide by it. Vinay
wanted to increase supervision to deal with the quality problems and therefore, added
more layers to management. However, this failed to improve the quality of products
being manufactured at Geek. Vinay believed that if the company’s size was increased,
it could be protected from acquisition by K&K. Consequently, he spent huge sums of
money acquiring small firms in various industries. This further affected Geek’s
profitability. Since Vinay was left with no funds to pay the yearly bonus to the
employees, he planned to take loans to pay the bonus for that year. Vinay also wanted
to sell off Geek and start afresh. He called his close friend Akshay, working as a
faculty member for business strategy in a leading business school in the UK, and
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Part B
asked for his advice. Akshay assured Vinay that he would study the problem and
come up with a solution. He also informed Vinay that he would be coming to India
during that week to visit his parents and would personally meet him then.
When Akshay visited India, he met Vinay and advised him not to sell off Geek. He
suggested that Vinay call a meeting of all employees and explain to them the financial
problem being faced by the company. Vinay reluctantly agreed to this suggestion. At
the meeting, Akshay asked the employees if they were willing to forgo the bonus for
that year in return for assured employment. Akshay assured them that bonus would be
paid to them in the year when the organization would make huge profits. The
employees took some time but agreed to the proposal.
Akshay later explained to Vinay the benefits of lean structures, quality circles,
employee involvement and empowerment. He assured Vinay that he would not lose
control over the firm by empowering employees. He also explained him how
companies were benefiting by listening to their employees’ ideas and suggestions.
Akshay asked Vinay to call in an OD consultant to bring about the desired change in
organization and help it cope with the changes in the competitive environment.
10
20
1. What do you think are the reasons for Geek’s downfall? What was the role of the
company’s CEOs in Geek’s downfall?
2.
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Do you think Akshay did the right thing by stopping the sell-off and suggesting to
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Vinay that he should continue holding the loss-making business? Since change
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programs involve emphasis on quality and productivity, employees often resist
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change. What are the various measures used by change agents to overcome
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employee resistance?
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Caselet 45
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Kartik Ahuja (Ahuja) completed his bachelor’s degree in electronics engineering from
Osmania University, Hyderabad at the age of 22. He immediately joined as a junior
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engineer in Ajanta Electronics Ltd in Chennai. He worked there for 7 months and quit
U
the job to pursue higher studies. He went to the US and completed his MS at the age
of 25. He joined a leading firm in the US, CNT Innovative Products Ltd (CNT), as
S
assistant manager in the electronics division. After working for one year at CNT, he
B
switched to a leading MNC, KLN International, also in the US. He hardly developed
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any close relationships with the employees in the firms he worked for. He greeted his
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colleagues when he entered the workplace and that was all. He never engaged in
conversations with other employees either inside or outside the organization.
After Ahuja had completed one year at KLN, he returned to India and joined a leading
firm in the country, ATB Global, that manufactured steel radials and steel bars, as a
production manager. In ATB, he developed very good relations with his peers and
subordinates. He worked hard to improve the production processes and the methods
used by workers, and increased overall production by a multiple of five. He also
devised methods to reduce the scrap in the production department to one-fourth. He
was soon promoted as head of the production department. One year later, at the age of
28, he married Sudeshna Ray (Sudeshna), who worked as an assistant manager in the
finance division of the same company. In his position as head of the production
department, Ahuja restructured the entire division and introduced a team culture
among the employees. Though some employees and managers were displaced because
of his restructuring efforts, they were placed in other divisions after being given the
necessary training. Ahuja conducted training programs for employees to help them
acquire new skills and expertise. He also acted as a coach and mentor for his
employees. He played a crucial role in identifying talented employees and promoting
79
them to higher positions. In the process, he also went up the career ladder and reached
the position of country head. When he reached the age of 50, Ahuja identified his
successor in the company and retired.
But Ahuja did not choose to enjoy his post-retirement life by relaxing. He started his
own firm, Suryateja Consumer Electronics Ltd. (Suryateja), with the help of his wife
and two sons, Nikhil and Chaitanya. Meanwhile, Sudeshna, who had reached the
position of senior finance manager at ATB Global, also quit her job. Nikhil, Ahuja’s
elder son, had completed his MBA from Stanford University and worked for two
years as a marketing manager in a leading multinational electronics firm. He too quit
his job to help his father set up the new venture. Chaitanya, the younger one, had just
completed his PhD in logistics. Ahuja planned to manufacture and market a range of
electronic products like rice cookers, oven, mixers, grinders, air coolers and air
conditioners. Ahuja was hopeful that Suryateja would outperform other leading firms
in the industry.
1. Explain Ahuja’s career in terms of Hall’s career stage model.
10
2. What is Levinson’s theory of adult life stages? Why did Levinson change his
assumptions? Can Ahuja’s career be expressed in terms of Levinson’s theory?
20
Explain.
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Caselet 46 s
Suman Juneja (Suman), president of Ankita Consultancy Services Ltd. (Ankita), was
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upset with the high employee turnover in her company. She felt that employees did
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not have any sense of belonging. The exit interviews conducted by the personnel
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department revealed that employees were dissatisfied with the company’s

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compensation system. The employees at Ankita were given a fixed salary every
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month. Ankita maintained equity in compensation by ensuring that all the employees
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with the same designation received the same salary. The compensation package
offered by Ankita was one of the best in the industry. Employees also received annual
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bonus, festival advance, medical reimbursement and leave travel compensation. Apart
U
from statutory leave, the company gave 10 days of paid leave for marriage and for
appearing for competitive exams and six weeks of leave for child adoption. They were
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also given sabbatical leaves and flexible work options. Employees were allowed to
B
adjust their working time according to their convenience. They did not have to stick to
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the company’s timings of 9-to-6. They could come to work at any time before twelve
Fo
o’ clock in the morning and work for 8.5 hours. Some employees like consultants
were allowed to work from home. Some employees were allowed to work half-day at
home and half-day in the office.
Although Ankita was one of the few Indian companies which offered flexible work
options to its employees, the employees were still dissatisfied with the company.
Suman observed that most of the employees who left the company were highly skilled
and talented. Suman began to realize that Ankita did not make any special efforts to
reward their performance. She began to consider various incentive programs that can
be offered to employees. She surfed the Internet and collected information about the
incentive programs offered by various companies in the industry.
Most of the companies offered cash incentives, fringe benefits and profit-sharing
plans. Some companies distributed a certain percentage of profits equally among all
the employees at the end of each year. Some companies distributed profits equally
among all the departments and divisions. But the share of each employee in the
various departments was determined on the basis of his/her individual performance.
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Part B
Some companies adopted a deferred profit-sharing plan. According to this plan,

employees are informed about their share of profits, but the payment is not made to
them immediately. It is reinvested by the company in business (with the employee’s
consent) or allowed to accumulate till the retirement of the employee.
Suman carefully analyzed the pros and cons of each incentive program and finally
planned to implement a deferred profit-sharing plan at Ankita. She also decided not to
distribute profits equally among employees but base it on their individual
performance.
1. The compensation package offered by Ankita was one of the best in the industy.
Ankita was one of the few companies which offered flexible work options to
employees. Despite these distinctive characteristics, why were employees at
Ankita not content with the compensation system?
2. Do you think Suman will be able to motivate employees and reduce turnover by
implementing a deferred profit sharing plan in the company? What are the various
10
ways in which referent comparisons can be made by employees to compare their
income with that of others?
20
Caselet 47
of
ABZ organization recruited twelve new employees. On the first day, the HR manager
s
addressed the new recruits and explained to them about the company’s operations,
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various facilities offered by the company, the dress code to be followed by employees,
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and the behavior expected of them. Then each new employee introduced
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himself/herself to the group. The induction program lasted till lunch. After lunch, the
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employees were taken on a guided tour in a company van to all the units of the
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company. The new employees were not assigned any work or given any training for
O
the first two days and were encouraged to get to know one another, and informally
learn about the company and its philosophy.
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On the first day, the employees were very formal and polite to each other. They
U
exchanged their names and information about each other’s educational background
S
and previous work experience. On the second day, they discussed their views on
B
various issues – national politics, international politics, social problems, changes in

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technology, pollution, business ethics and so on. If any person made any statement on
any issue, the people who agreed with him spoke in his support. Most of the people
Fo
who disagreed with him did not speak out. Even if they expressed their disagreement,
they did not do it in a forceful manner and avoided arguments.
After two days, the new employees were given training for a week and then they were
assigned job duties and responsibilities. As they began to work, interaction among
them increased. Some employees formed sub-groups. If differences in opinions arose
on any issue, employees argued vehemently and were supported by their sub-group.
After a few months, the employees became familiar with their work. They also
realized the importance of cooperation and coordination in getting the work done
smoothly. The employees also learnt the importance of listening. They tried to listen
to their colleagues’ views and understand their point of view. Therefore, the frequency
of violent arguments reduced and the work environment improved. Each member of
the group was able to express his views openly. The group took decisions only after
considering the opinions of all the members. Since everybody participated in decision-
making and planning, the group had little difficulty in implementation. The group
completed any project assigned to it successfully.
81

1. The development of a group takes place in stages. Explain how the group
developed in ABZ.
2. What is the type of group described in the above case? What are the different
types of groups that are formed in organizations?
Caselet 48
The UK-based Maganta Motors (Maganta) was a leading automobile manufacturing
firm which made profits year after year. But in 1998, for the first time, its profitability
declined significantly. Customers did not like their new models as they felt they did
not have any significant new features. The CEO of the company, James Herr (Herr),
approached a leading consultancy firm which suggested that the organization had too
many rules and procedures that restricted creativity and innovation. The consultant
advised Herr to change the structure of organization from formal to informal. But Herr
thought that if the new structure also failed then the entire company would have to
suffer losses.
10
When Herr was still considering the suggestions of the consultancy, a few engineers
20
and managers came to him with a new product idea. They wanted to work away from
the site for a few months so that they could implement their idea and release new
of
models into market fast. They explained that Herr’s hierarchical system for approving
new ideas delayed the release of new models. They proposed the names of some
s
workers for their team. Herr agreed and a group of managers, engineers and workers
s
were immediately shifted to a new plant. Herr provided them with all the resources
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required to design and manufacture new cars. The new plant was named Proton X.
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The employees of Proton X were free from all the rules and regulations that were in
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force at Maganta. At Maganta, communication flowed from top to bottom. Though

nl
the top management facilitated upward communication, in the absence of proper

O
support and encouragement from superiors, employees hesitated to communicate their

se
views and opinions to them. But at Proton X, managers invited suggestions and ideas
from workers. Whenever workers gave good suggestions, they were given a lot of
U
appreciation. An employee suggestion scheme was implemented at Proton X. The

S
worker giving best suggestion was given a free holiday trip to Disneyland in Paris.
B
While there was an organizational chart for Maganta which clearly specified the levels
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of hierarchy and working relationships between people, there was no such chart for
Proton X. Any employee could approach anyone (either a colleague or a superior) to
Fo
discuss any matter. Most employees knew ‘who knew what.’ So, they could easily
approach the right expert to solve their problem.
There was no formal head at Proton X. All the employees unanimously agreed to
consider a deputy manager, Rupesh Mittal (Mittal), as their head. Mittal was the eldest
of all employees. Also, he was knowledgeable and benevolent person. He always
listened to people’s problems and helped them find a solution. Therefore, no one
objected to accepting him as their informal leader. Mittal listened patiently even to
suggestions given by the lowest level employee in the organization. One day, when
Mittal was reviewing a new product design, an office boy came to him and informed
him that he had a suggestion to offer. He told Mittal that the company could reduce its
expenditure on milk, sugar and coffee powder because employees were drinking more
soft drinks and juices and the coffee being prepared was being wasted every day.
Mittal appreciated the boy for the suggestion and decided to act on it immediately.
The employees at Proton X did not just share a working relationship. They considered
themselves as members of the same family working towards common objectives.
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Part B
Mittal played an active role in promoting this close relationship. If any employee
deviated from the expected behavior, his colleagues tried to correct him instead of
reporting his behavior to the superior. The employees did not mind listening to their
colleagues because they too did the same when they saw others do something wrong.
Superiors accepted suggestions from subordinates if they had pointed out a real
problem in the project and offered a good solution. At Maganta, however, the
situation was very different. The superiors were highly conscious of their position and
did not tolerate it if lower level employees tried to offer suggestions.
Due to the collaborative efforts of employees at Proton X, four new models came onto
the market within a year, and all of them were received very well. But Herr believed
that the cost of operating the two units separately was high and planned to merge
them. He consulted an OD practitioner to seek his advice.
1. Can Proton X be called an informal organization? Justify your answer.
2. Herr wanted to merge Proton X with Maganta? Do you think Proton X will be
10
able to offer the same benefits after merger? Will Herr be able to transfer the
benefits of the parallel structure, Proton X, to Maganta?
20
Caselet 49
of
The CEO of Karthik Group of Financial Services (Karthik), Kiran Patil (Patil),
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observed that the group was unable to maintain a consistent financial performance
s
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from year to year. An increase in profit and rise in market share in one year was
followed by sharp declines in the next. The group was never able to maintain its
C
profitability for three consecutive years at a stretch. Upset by this trend, Patil
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approached his friend and OD consultant, Diwakar Jeet (Jeet) and sought his help to
nl
improve the company’s profitability.

O
Jeet came to the organization and visited all the departments. Patil introduced Jeet to
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the heads of all the departments. Jeet spent about five to ten minutes in each
department and attempted to understand how the work was done in each department
U
and how information flowed from one department to another. On the next day, a
S
weekly meeting was scheduled for all the department heads. Jeet told Patil that he
B
would like to attend the weekly meeting.

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The meeting was scheduled to start at 10 AM but started at 11 A.M as the heads
Fo
arrived late for the meeting. Some heads failed to turn up for the meeting. The
meeting did not seem to have a clear agenda. One of the heads of the department,
Venkata Mani (Mani), also the chairman of the company, convened the meeting. He
wanted to discuss about the performance of the various departments. Some HODs
wanted to discuss only certain issues like scarcity of resources while some were
reluctant to discuss anything at all. Each HOD wanted to discuss the issue he desired
and the meeting concluded without any decision on any issue. Jeet concluded that first
and foremost thing to be done to improve the company’s profitability was to make
these meetings productive. When he discussed the matter with Patil, the latter too
expressed the same concern. Patil, too, wanted the meetings to make a positive
contribution to the organization. Jeet, then spoke to the heads of the various
departments individually. He asked them whether they too desired an improvement in
the quality of the meetings held in the company. They responded positively. Then Jeet
asked Mani to obtain the individual opinions of the various heads of departments
about the meetings. Mani collected the data which indicated that the HODs did not
like the way meetings were conducted and considered these as a waste of time.
83
Jeet then asked Mani to think of three possible actions on his part, which could make
the meetings more interesting and productive. Mani took some time to think and
suggested that the following actions could enhance the effectiveness of the meetings:
• The post of chairman for the meetings should not be permanent. Instead, the
chairman should be appointed on a 3-monthly basis rotating between the HODs.
• The chairman should not decide the agenda on his own, but on the basis of
suggestions given by all the HODs.
• The meetings should not be conducted every week but on a fortnightly basis.
Jeet suggested another point - that the chairman should encourage members to discuss
issues openly, and should not respond negatively if their opinions contradicted with
his.
In the next meeting, Jeet and Mani presented the action plan to the heads of
departments for discussion. Some more ideas were added to the action plan after
prolonged discussions with the various heads. The method of implementation was also
discussed. Soon after the meeting, the implementation phase began. An analysis of
10
the consequences of implementation of these actions indicated that most of the actions
20
had a positive impact on employees. Cooperation and coordination between the
different departments increased. Transactions were processed speedily, and it took
of
only one-third of the time taken in the past for them to be completed. Customer
satisfaction improved and the company’s earnings before interest and tax (EBIT)
s
increased by 8% compared to the previous year.
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C
1. What type of intervention did the OD consultant use at the Karthik Group of
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Financial Services?
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2. It is believed that the changes in the global economy, the workforce, technology
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and organizations will have a major impact on OD practices. What are the
changes that are likely to take place in OD practices?
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Caselet 50
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When Manisha Sharma’s (Manisha) uncle, Hariprakash Sharma (Hariprakash), visited

B
her at work in Modern Technologies (Modern), he was pleasantly surprised and

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amazed to see his niece working leisurely under a tree in the company’s sprawling
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garden. Later, over a cup of coffee in the company cafeteria, Hariprakash asked
Manisha how the company allowed its employees to be away from their desks.
“Doesn’t this affect employee productivity?” he asked. Smiling at her uncle’s
amazement, Manisha explained, “My company believes in providing its employees
with the flexibility of working in an ideal environment rather than imposing
restrictions upon them regarding the place of work. The company’s effort towards
creating a relaxed work environment has helped it in more than one way. It has
resulted in developing a motivated and highly productive workforce. In fact the
company is rated among the top three companies in the country for the fifth
consecutive year, with regard to work culture and quality of work life.”
Manisha went on to elaborate, “In fact, like Modern, there are many other companies
that also believe in providing their employees with an ideal work environment. These
efforts are made to help employees cope with the stress associated with working on
time-bound projects. Modern aims at creating a stress-free work environment. It does
this by providing its employees with natural surroundings in which to work and with
facilities such as a hygienically maintained cafeteria, a well-equipped gymnasium,
tennis grounds, and a golf course.”
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Part B
Hariprakash listened to Manisha keenly. As they walked past the golf course,
Hariprakash wondered aloud whether such strategies really worked. Manisha clarified
his doubt stating that Modern was among the very few companies that had performed
well during the last few years despite the economic recession.
The conversation between Manisha and Hariprakash revealed that Modern
implemented many such strategies to nurture a motivated workforce.
It offered facilities like telecommuting, flextime, and a holiday on completion of
every six-week project schedule. All these were a part of the company’s HR policy.
Besides, the company provided excellent growth opportunities for exceptional
performers. It had exclusive employee development plans that helped its members
progress through the career ladder. In addition to all this, the high salary structure in
the organization enhanced employee loyalty and motivated them to attain
organizational goals. The enhanced commitment and loyalty towards the organization
resulted in bringing down the attrition rate to a considerable extent.
Hariprakash could now comprehend how the company benefited from its various
strategies to provide its employees with a congenial work environment. “These efforts
of Modern to provide a people-friendly work environment,” agreed Hariprakash,
10
“helped retain the invaluable assets of the company – the people.”
20
1. “The modern corporate world has redefined the rules of work efficiency and aims
of
at employee wellness, in order to obtain maximum productivity from its
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employees.” In the context of the present case, discuss the various measures taken
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by organizations to enhance employee productivity by catering to employee
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wellness.
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2. Organizations have introduced alternative work schedules to help their employees

tackle work-related stress, thereby increasing their productivity. Describe the
y
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various alternative work schedules that help increase employee productivity.

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se
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B
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85
Part B: Caselets (Suggested Answers)
10
20
of
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C
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Every caselet will have more than one possible solution. The guidelines are intended to
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help students develop their abilities to analyze business situations and develop feasible
solutions.
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S
B
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Caselet 1
1. South Indian Technologies created and developed a culture that encouraged
innovation and creativity. Employees who came up with innovative ideas for products
or organizational processes received encouragement and support from the
management. Every employee in the organization was provided with equal
opportunities to innovate and to be creative and their suggestions were considered.
The employees were given a free hand to experiment and develop their ideas at the
company’s expense. However, many of the new products failed in the market and
resulted in loss to the company. While focusing on employee development the
management failed to recognize the developments taking place in the external
environment and the changing needs of the customers. Karthikeyan cautioned the
management against blindly following old values and assumptions and urged it to
change in tune with the external environment However, South Indian Technologies
10
failed to do so and eventually fell into a “cultural trap,” which prevented the further
growth of the organization.
20
Therefore, in the case of South Indian Technologies, a static organizational culture
of
and the organization’s inability to meet the demands of the external environment
resulted in the downfall of the company.
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2. The culture of any organization is greatly influenced by its founders. The values,
la
assumptions and personal traits of the founders influence the culture of the
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organization they establish. At South Indian Technologies the personal beliefs of the
founder of the organization, Murthy, were gradually ingrained into the members of the
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organization and these beliefs ultimately became the norm at South Indian
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Technologies.
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Murthy, an engineer by profession, always felt that constant innovation and creativity
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by the employees would give the company a competitive edge over its rivals. He
nurtured a culture that gave employees immense opportunities to be creative. Murthy
U
invested huge capital to develop the ideas of the employees into marketable products.
This finally resulted in plummeting profits for the organization, as most of the new
S
products developed were not successful in the market. The organization failed to keep
B
in tune with the changing external environment. Murthy stuck to his deeply held
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values of constant innovation and refused to heed Karthikeyan’s advice that only
Fo
profitable ventures should be implemented. Murthy continued to invest all the revenue
generated by the company into the development of new products without giving a
thought to the returns on investment. He was supported in his actions by most
members of the organization. Thus the personal values of the founder, Murthy, were
instrumental in shaping the culture of the organization.
In order to sustain in the highly dynamic business environment, Murthy should have
adapted the organizational culture to suit the changes in the external environment. He
should have focused on the outcome of the innovations and the revenue generated by
them, rather than continuing to maintain same organizational culture. Murthy should
have taken steps to make the organization dynamic and sensitive to the ever-changing
needs of the customers.
Caselet 2
1. Corporate ethics govern the behavior of employees within an organization. The
ethical code of an organization helps the employees differentiate between right and
wrong and between favorable and unfavorable behaviors. Ethics therefore play a vital
role in sustaining the culture of an organization.
Cosmo Energy Services Ltd. was a leading producer of energy in the nation. The
company had everything that was required to succeed in business. Cosmo was among
the first ones to adapt to technological developments. It had sufficient funds for
investment and the best talent available. However, all this proved to be of no use when
the company went bankrupt due to “ethical deficit” within the organization.
Though Cosmo Energy Services Ltd. was built on the values of integrity, honesty and
sincerity in all its dealings; its values began losing ground over time. The CEO
himself was involved in numerous unethical dealings. Being an affluent personality,
he managed to muster political support whenever the integrity of the company was
questioned. The top management was more interested in filling their pockets at the
expense of the workers and the general public who had invested in the company.
Fraud and insider trading became a common feature. Cosmo ended up developing a
culture of greed, corruption and deception.
These developments in the organization led to a toxic organizational culture that
finally resulted in the downfall of the organization. None of the positive attributes of
Cosmo in terms of financial success, technological expertise, or superior human talent
could stop the eventual debacle of this highly successful company which lost out on
10
the factor crucial to organizational survival – Corporate ethics.
20
2. The success of any organization depends on four important factors – financial
resources, technological expertise, human capital and socio-spiritual capital. Cosmo
of
Energy Services Ltd. had abundant financial resources; it was adept at adapting to
changes in technology; and hired the best talent in the industry. However, it failed
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miserably in one crucial factor – the socio-spiritual capital.
s
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The development and maintenance of a strong socio-spiritual capital is crucial for the
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success of an organization. It is the most challenging responsibility of today’s

managers. Owing to the global nature of the labor market, the workforce of any large
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organization is a complex mix of people from a wide range of cultures. The values,
nl
beliefs and assumptions that guide each of these cultures vary. However, all these
O
people have the same basic needs of belonging and should be able to understand the
significance of their role in the organization. The challenge to management is to
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capitalize on these factors and develop this complex workforce to the advantage of the
U
organization.
However, Cosmo Energy Services Ltd. failed develop and maintain a strong socio-
S
spiritual capital. It nurtured a toxic and unhealthy work culture where human
B
relationships were given no value. Besides, the initial values and norms of the
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organization were not given any consideration. The management failed to maintain an
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open and transparent channel of communication with its employees. The top managers
felt that their decisions were final and binding, and any opposition to these decisions
were ignored. The top management was busy making money at the expense of the
stakeholders of the company. This ultimately led to the bankruptcy of the company.
Therefore, the inability of Cosmo Energy Services Ltd. to effectively handle its rich
socio-spiritual capital resulted in its eventual downfall.
Caselet 3
1. Innovation is one of the most important characteristics of an organization culture.
Innovation determines the extent to which an organization encourages its employees
to generate new ideas and take risks to implement the ideas. Considering the highly
competitive and dynamic nature of today’s business environment, it is not
unreasonable to state that only an innovative organization can survive. Organizations
have to constantly innovate and improve upon their products and services in order to
stay competitive. Therefore organizations need not only to encourage creativity and
innovation among the employees, but also empower them to take risks in
implementing the ideas for the benefit of the organization.
90
Part B
The organization culture at We Care was built on the core value of continuous
development through constant innovation. It was sensitive to the ever-changing needs
of its customers. It encouraged employee-participation in all major decisions that
affect the employees at the workplace. Their opinions were considered important. This
helped to attract good suggestions from the employees.
When a recent feedback showed that the rate of new product development in the R&D
department was decreasing, the management of the company took immediate action to
encourage the employees to be innovative and to experiment upon new products and
processes. These initiatives were backed by the willingness of the management to
increase the R&D spend. The management assured complete support to any new
product idea that the employees might come up with. This not only helped enhance
the creativity of the employees but also motivated them to take calculated risks in the
development of new products. The risk-taking behavior of employees was further
reinforced by the management’s decision to reward employees whose new ideas
brought in revenue and profits to the organization.
Thus, the top management developed an organizational culture that nurtured
innovation and creativity among its employees, which eventually led to the success of
10
the organization.
20
2. The culture of an organization is greatly influenced by its founders. The values,
assumptions and personal traits of the founders influence the culture of the
of
organization they establish. The founders of We Care, Ravi Chandran and Srikanth
s
Verma, upheld the values of continuous development through creativity and constant
s
innovation. They believed that employing the right talent in the organization would go
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a long way in sustaining a culture of innovation. According to them, the organization

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could be successful only if it was sensitive to the changing customer needs. Hence,
they concentrated their efforts on developing products of high quality. These personal
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values of Chandran and Verma eventually developed into the core values of the
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organization.
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We Care thus nurtured a work culture that encouraged creativity among employees. It
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welcomed employee participation in the decision-making processes of the company. It

developed an open feedback system with the help of which employees could voice
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their opinion about any process or system in the company. The top management used
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the findings obtained from feedback to further develop the existing organizational
B
processes for the benefit of the company. It gave consideration to all the new ideas
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generated by the employees to develop existing organizational processes. The

organizational culture at We Care was thus greatly influenced by its founders.
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Caselet 4
1. The modern business era has witnessed a tremendous change in the factors that
determine the success of organizations. A large organization, with an ample amount of
capital and a talented workforce no longer ensures success in the industry. It is the
ability of organizations to adapt quickly and effectively to changes in the external
environment that determines the rate of success in today’s highly competitive
environment. This is the reason why large organizations, which are averse to change,
fail to succeed while smaller ones, which are flexible enough to adjust to new
developments, end up making huge profits and gaining large portions of the market
share. The major drivers of change can be identified as people, technology and
competition.
The needs of customers keep changing rapidly and an inability to cater to their
expectations regarding quality of products and services might cause them to switch to
brands that satisfy their needs. Therefore, it is imperative for a business organization
to change according to the changing needs of customers.
91
Also, an organization should learn to quickly adapt to development and sophistication

in technology so as to remain competitive in the market.
Besides, the increased competition not only from domestic organizations but also
from foreign corporations due to liberalization of the economy, forces indigenous
organizations to be responsive to external changes.
The same was the case with Symphony Technologies. Before the Indian economy was
liberalized, Symphony was a market leader in many sectors. It was content with its
market share and did not feel the necessity to introduce new products or processes to
cater to the changing needs of its customers. However, with the opening up of the
economy, the nation witnessed a huge inflow of investments and technologically
sophisticated products that were welcomed and accepted by the Indian market. This
came as a jolt to domestic companies such as Symphony.
Not only did Symphony’s bureaucratic organizational structure hamper the decision-
making process at the company, but it also stifled employee participation and
creativity. Symphony’s very survival was in question as most of its subsidiaries were
10
making huge losses. Moreover, the employees were not trained to cope with
technological advancements.
20
These factors resulted in Symphony coming out with products which were no longer
in demand and thereby running into losses. Had the organization been sensitive to the
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external environment and to the changing needs of customers, it would have sustained
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its profitability and market share.
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Anish Vaidya’s strategy of bringing about a drastic change in Symphony’s

organizational structure and its processes finally succeeded in sustaining the
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organization. Thus for any organization to survive in a highly dynamic external

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business environment, it is imperative that it is flexible and adaptive.

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2. A planned change is one which is deliberately initiated by the management to cope

with changes in the business environment. The success of a planned change is greatly
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dependent on the extent of involvement shown by the top management and employee
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participation in the change process. In the case of Symphony Technologies, the

change process was a planned one initiated by the top management under the
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leadership of its CEO, Anish Vaidya. The process also had the support of the
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employees, despite their initial resistance.

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The change process included changing the organizational structure from one of a tall
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hierarchy to that of a flat organization. It also saw a phenomenal increase in employee

participation in organizational processes. The subsidiaries running into losses, and in
which there was no scope for improvement were shut down. Excess staff were either
retrenched, or the more efficient among them were retrained to occupy suitable
positions. New business areas with a market potential were ventured into. Training
and retraining sessions were a common feature in the organization to keep the
workforce constantly updated on technological advancements.
All these changes were initiated and supported by the top management and in order to
be successful, they required the wholehearted participation of and acceptance by the
employees. The change process was successful only because the employees accepted
it wholeheartedly.
Thus, from Symphony’s example, it is clear that any planned change process initiated
in an organization to survive in a dynamic and changing business environment,
requires the involvement and participation of both the management as well as the
employees.
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Part B
Caselet 5
1. Leadership involves directing people’s behavior towards attainment of a particular
goal or objective. Different leadership styles can be seen in organizations depending
upon the extent to which employees in the organization are allowed to participate in
crucial decision making processes. The leadership style exhibited by Ashish Gupta
was that of autocracy, wherein the leader makes the decision based on the information
available to him, without consulting his team members. In such a style of leadership,
the leader is the sole decision maker and pays no heed to the suggestions of the
organizational members who are likely to be affected by the decisions.
An autocratic form of leadership has the following outcomes –
• The information which the decision maker possesses may or may not be
sufficient. Therefore, the decision made may or may not be an informed one, as
the knowledge of the decision maker is limited. Besides, no suggestions are taken
from those who would be affected by the decision.
• Sometimes, autocratic leaders do invite suggestions from employees without
10
revealing the actual problem on hand. The decisions, however, are made only by
the leaders.
20
• Such a style of leadership results in a demotivated workforce. Since no
suggestions are invited from the employees, their participation in the
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organizational processes is minimal. This demotivates them as they are only
s
required to perform routine and mundane jobs, which are neither challenging nor
s
exciting.
la
• The performance of employees is appraised based on the extent to which an

C
employee conforms to organizational rules and policies. They are thus

y
discouraged from experimenting with innovative ways of doing routine jobs.

nl
Thus, their creativity is curbed and innovation ceases within the organization.
O
The autocratic style of leadership that Gupta exhibited is thus not advisable in the
current business scenario. It is recommended instead that organizations seek the
se
enhanced participation of their employees in organizational processes.

U
2. Micromanagement arises out of a manager’s tendency to keep every organizational

S
process and system under his complete control. A micromanager is one who delegates
B
a job to his employees but minutely inspects the way it is being done. Thus, in his
rI
attempt to ensure that the job is performed in the right way, he keeps interfering and
Fo
meddling with the way it is being done. He feels that employees work effectively only
when they are being constantly monitored. So, he not only keeps a constant watch on
the employees while they are on the job, but also expects them to do it the way he
wants it done. This kind of manager ends up over-analyzing things and
subconsciously frustrates his/her subordinates by disempowering them. The
employees are also demotivated as they perceive that their superior thinks they are
inefficient. They get the impression that the manager doesn’t trust their capability.
In the present case, just because the targets for a week weren’t met, the manager,
Ashish Gupta, forced his subordinates to follow the procedure laid down by him,
saying that only then would the targets be achieved. The procedure designed by
Gupta, however, did not consider the real market situation in which the sales
representatives had to work. This demotivated the staff as they felt that they were in a
better position to design an effective procedure to achieve their targets. Further, Gupta
observed and monitored the actions of each employee on a continuous basis. This
further reduced the autonomy of the employees and served to demotivate them. This
continuous monitoring and reduced autonomy even in the case of routine tasks
resulted in Mehra and his colleagues deciding to quit their jobs.
93
If Gupta had just explained the problem to his subordinates (in this case, achievement
of a huge target) and left it to them to work out how to achieve the target, he would
have got better results. This is because the employees would have been encouraged to
participate more in problem solving. Thus, micromanagement has a negative impact
on employee behavior and motivation.
Caselet 6
1. Due to the increased competition in the present business scenario, organizations are
vying with each other to hire the best talent in the industry. They offer large salaries to
their employees and numerous other perks and benefits just to retain them in the
organization. But today’s professionals seem to need something over and above the
financial benefits they receive from the organization. They seek greater
responsibilities, autonomy, and challenging job profiles. They also desire to work for
organizations which allow them to be creative and innovative. The employees want to
remain thoroughly updated on the latest developments in their field. To fulfill this
need of their employees, organizations should conduct periodic training and
development sessions. This enables organizations to ensure that the skills of their
10
employees are constantly upgraded, and this in turn, helps employees as well as the
organizations to adapt to changes in the external environment. The realization among
20
the employees that the organization is facilitating continuous development and
upgradation of their skills acts as a psychological barrier to their leaving the
of
organization. Thus, mere financial gains do not encourage employees to stay on in a
particular organization. Rather, employees look for self-actualization and
s
empowerment along with growth in an organization.
s
la
Therefore, management in any organization must also concentrate on other means of

C
employee retention like providing learning opportunities to its employees, constantly

upgrading their skills, and empowering them to effectively take up new
y
responsibilities. They should also endeavor to design the career graph of employees
nl
and direct individual goals of employees towards the achievement of organizational

O
goals. Thus, any effort by the management to cater to the changing needs of
employees, will go a long way in retaining efficient employees in an organization.
se
2. The chief cause for concern for every personnel manager is the dearth of talented
U
workforce. This means that personnel managers have to ensure retention of the human
S
capital in their organizations to minimize the costs of acquiring and training new
B
employees. However, due to the growing competition in the industry and the high
rI
demand for talent, employees shift from one organization to another more frequently
than in the past. Thus, in the current business scenario, the escalating rate of employee
Fo
turnover is a major challenge faced by HR professionals. The needs of employees and

the factors that motivate them are constantly changing and HR professionals across
organizations are trying their best to cater to these needs. Further, technological
changes in the external environment demand that employees constantly upgrade their
skills. Continuous upgradation of employee skills not only helps organizations to
counter the growing competition in the market but also to motivate and retain existing
staff.
HR professionals can overcome these challenges by taking the following measures:
• The HR policy must help identify employee needs and ways to satisfy reasonable
demands. This helps organizations maintain a low attrition rate.
• The HR policy should emphasize employee training and constant upgradation of
skills so that employees are quick to respond to the technological changes in the
external environment.
• The HR manager should not only select those candidates whose skills and
interests match the nature of the job, but also draw up career graphs for individual
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Part B
members of the organization. This enhances employee motivation and ensures

their all-round development. In other words, personal growth must be linked with
organizational growth.
• Learning must be facilitated by offering new and responsible tasks to employees.
Addressing these factors helps HR managers in modern organizations to motivate
their workforce as well as to retain them.
Caselet 7
1. The phenomenon experienced by Aishwarya Pandey and her female colleagues at
Kalpa Biosciences is called the glass ceiling effect. Glass ceiling refers to the invisible
barrier in organizations that prevents women from being promoted to top managerial
positions.
Research indicates that around 40% of the workforce in organizations consists of
women. However, their share in the top management is negligible. Even though
modern organizations offer management jobs to women, these tend to be jobs at entry-
level positions only. Many factors contribute to this effect, known as the glass-ceiling
10
effect, which restricts the growth of women in organizations. Some of these factors
are:
20
• The typical mindset of a male-dominated society that believes that women are
of
capable of doing only the domestic chores and not capable of surviving in the
corporate world. This view evolved out of the belief that the primary
s
responsibility of women is family care and welfare. Such a mindset has a major
s
impact on the recruitment and promotion systems in organizations.
la
• Women are considered unfit for certain types of career, particularly those which
C
demand long working hours and constant mobility.

y
•
nl
Management in some traditional organizations believe that women employees are

suited only for junior and middle-level managerial and organizational roles that
O
support senior managers. They are therefore selected only for secretarial
se
positions, irrespective of their educational qualifications and capabilities.

• Women are believed to turn down offers of promotion if the new position
U
requires relocating to a different place or if it involves frequent mobility. They are

S
therefore not offered jobs that demand such challenges.

B
• Lack of adequate education and training of women employees also forms one of
rI
the major reasons for the glass ceiling. Women tend to give preference to family
Fo
and hence skip training sessions conducted by their employers.

• There prevails a belief that women are not capable of making tough decisions
which might be demanded by crucial decision making positions in organizations.
Therefore management in organizations does not promote them to positions that
involve crucial decision making responsibilities.
• An economic consideration from the organization’s point of view may be the
increased cost of employing a woman, in terms of maternity leave.
These are the most prominent factors that contribute to the existence of glass ceiling
in organizations and need to be overcome in order to eliminate gender bias in
organizations.
2. Having realized the negative effects of the glass ceiling phenomenon, organizations
are taking various initiatives to provide their female workforce with equal
opportunities for growth and development. Some of these initiatives are:
• Organizations have introduced various policies and programs that focus on
development of women employees. Some of these include developing detailed
95
career plans for women, training them to handle responsible and decision making
positions, effectively. These initiatives have a positive impact on women,
specially those belonging to the younger generation.
• Organizations also implement various support initiatives like mentoring,
coaching, and training, which are found to be effective in encouraging women to
perform well and climb up the career ladder.
• Other initiatives include part-time jobs, child care centers, day care facilities for
the elderly, etc. which are provided by organizations to facilitate women
employees to concentrate on their jobs and help them to strike a balance between
their personal and professional lives.
• In some organizations, female employees are given a choice to accept or reject
job responsibilities that require them to relocate frequently. This helps them
manage their family along with handling the demands of their job in the
organization.
Thus, the various initiatives taken by organizations to encourage the growth of female
workforce will help shatter the glass ceiling that exists in most organizations and will
10
allow women to carve a career path for themselves along with managing the domestic
front successfully.
20
Caselet 8
of
1. According to behavioral expert, Robert Katz, in order to be effective, leaders should
s
possess the three skills – technical, human and conceptual. Technical skill refers to the
s
knowledge and ability of a leader to effectively use a particular process or technique.
la
Employees working at the operational level or individuals offering professional

C
services are expected to possess good technical skills. However, as one goes up in the
y
organizational hierarchy, these skills lose their importance and other managerial skills
nl
become more relevant.

O
The ability of an individual to cooperate with other employees and work in teams
determines his human skills. Effective human skills, which develop with a willingness
se
to help other people in the organization, and involves maintaining good interpersonal
relationships, helps a leader gain the acceptance of employees. This acceptance plays
U
an important role in determining an individual’s success as a leader.

S
An individual’s ability to analyze, process, and interpret complex situations and

B
contingencies describes his conceptual skills. Conceptual skills are of more

rI
significance to individuals at the top of the organizational hierarchy. These skills

Fo
enable an individual to analyze an existing problem, process the information available,

and make effective and informed decisions in a problem solving situation. Good
conceptual skills enable leaders to predict the consequences of decisions.
Thus, while all the three skills are important to individuals in organizations, the
relevance of each depends upon the position the person occupies in the organizational
hierarchy. Organizations today are trying to inculcate these skills in their emerging
leaders by establishing training and learning centers for organizational members.
2. The trait theory of leadership, one of the earliest theories on leadership, stated that
leaders are born, not made. In other words, the qualities of leaders cannot be learnt or
developed. They are inherent abilities that only a few individuals possess. Therefore,
only people with a particular set of traits can become leaders. According to this
theory, a great leader would have been great even under different circumstances.
However, studies in the field of behavioral management showed that leadership was a
skill and an art that could be learnt and developed. Behavioral theory stated that
leaders demonstrated a particular trait which played a role in making them leaders.
These studies identified behaviors associated with successful leaders.
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Part B
Later, with the development of the contingency theory of leadership, it was believed
that leadership qualities changed according to the situation or contingency facing an
organization. In other words, a particular style of leadership, which was successful in
a particular situation might or might not be successful in another. Therefore, leaders
should analyze the current situation and evaluate the suitability of that style in the
current situation.
Thus behavioral studies propounded that leadership was a quality that could be
developed over time with appropriate orientation and training. However, the
individual must be open-minded, and must accept and welcome new ideas. Taking
this into consideration, organizations now strive to provide their members with
excellent learning opportunities. Satyam’s Learning Center, Wipro’s leadership
workshops, and Tata Consultancy Services’ leadership development system, are
examples of how some organizations are attempting to nurture leadership qualities
within their employees.
Caselet 9
1. Due to the increasing competition among the various players in the call center
10
industry and the unconventional work environment, employee turnover in this
20
industry is as high as 40%. However, the constant efforts by the HR Manager, Aditya
Sinha, helped provide a people-friendly work environment in the company and so,
of
helped contain employee turnover at a low of 25%. The following features of
corporate culture contributed to the low employee turnover at Excel:
s
•
s
The regular revision of the financial incentive policy at Excel ensured that the
la
company paid its employees on par with the industry. It ensured that employees
C
did not leave the organization for the sake of a couple of hundred rupees.
Employees were, therefore, by and large satisfied with the remuneration offered
y
at Excel and were hence loyal to it.

nl
•
O
The new recruits were welcomed by the HR manager himself. This showed
Sinha’s genuine interest in guiding and helping the agents in their jobs. It also
se
showed that the top management was easily accessible to the employees. This
enabled the employees to easily voice their concerns, if any, directly to the top
U
management.
S
•
B
Open channels of communication existed between the employer and the

rI
employees. The management created a transparent communication channel to

ensure the accuracy of the messages communicated. Transparency in the
Fo
communication channel also made it possible for the employees to air their
grievances directly to the management.
• The quarterly meetings arranged with the employees also allowed them to express
their views about the organization’s systems, policies and procedures. Not only
were employee grievances given a patient hearing, but they were also solved to a
great extent.
• The appraisal system in place encouraged the team as a whole to improve its
performance in every quarter.
• Basic facilities like transportation and food for the agents were taken care of by
the company. This helped the agents concentrate on their job despite the
inconveniences arising due to the odd working hours.
• The work culture at Excel was employee-friendly. The workplace was made
lively with piped music, and monitors flashing news items on the latest
developments in various regions of the US, etc.
97
All these factors contributed to making Excel a fun place to work for, thereby
effectively tackling the potential negative factors at the work place. This, in turn,
helped Excel maintain an attrition of 25%, while the industry average stood at around
40%.
2. Although Excel Networks promoted an informal work culture, there were open
channels of communication among the different levels in the organizational hierarchy.
The management at Excel ensured an open and transparent channel of
communication, where any important organizational matter was communicated
directly by the HR manager, and sometimes by the CEO himself, so that the accuracy
of the message was maintained. This helped effective communication take place
among the various levels of the hierarchy in the organization and prevented unwanted
grapevine activity which would completely distort the original message that the
management intended to communicate.
The formal communication system helped both the management and the employees to
openly express their views and come up with solutions to various problems. For
example, the recent US legislation placing restrictions on outsourcing to other nations
10
made the employees anxious and apprehensive about their future in the organization.
However, the organization responded immediately. The top management directly
20
addressed the employees and provided them with the assurance of job security,
thereby preventing a panic situation from arising in the organization.
of
Besides, the employees were free to discuss matters pertaining to the organizational
s
systems and procedures directly with a representative of the top management. This not
s
only enhanced employee participation in improving systems and procedures in the
la
organization, but also helped solve their problems at a very early stage. This was
C
made possible by the open channels of communication which drew the attention of the
y
management towards employee concerns at a very early stage.

nl
Caselet 10
O
se
1. Having been dominated by men for decades, the business environment offers stiff
resistance to the professional growth of women in organizations. It is extremely
U
difficult for a woman to progress to the middle and top management levels, despite
S
the fact that women’s participation in business has been constantly on the rise. The
B
various factors that inhibit the progress of women up the corporate ladder are
discussed below:
rI
• Even today, women are not given the same opportunities for professional growth
Fo
as their male counterparts. This is because, women are still not accepted,
recognized or considered on par with men in most organizations.
• Women are often asked to assist male workers. They are seldom given the
opportunity to lead and are given routine and mundane jobs to handle, which
offer little challenge or motivation.
• Women are generally offered entry level positions, because of the misconception
that they cannot make effective decisions that are crucial for the growth of an
organization.
• The management in organizations generally feel that women do not willingly
accept challenging or responsible positions. Women are perceived as being
susceptible to pressure. Many men in organizations feel that a woman’s place is
in the home and that she is incapable of managing both, home and office
effectively.
• Women are rarely appreciated for delivering exceptional performances. Instead,
they become the target of malicious gossip within the organization.
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Part B
With this kind of biased environment prevailing in organizations, it has become

extremely difficult for women to rise up the corporate hierarchy.
2. Organizations have witnessed very few cases where women have reached the top
level of management, within as short a time as Kalpana Singh. Her journey to the top
was not an easy one. She had to face discriminatory treatment from her male
colleagues who refused to accept her capabilities. However, it was her constant
determination and untiring efforts that enabled her to become the company’s vice
president.
Singh’s keen interest in making a career in business made her take up an entry-level
job in a manufacturing firm. She was extremely hard-working, and wanted equal
opportunities for growth and promotion within the firm. She was even willing to
relocate and never asked for special favors on the grounds that she was a woman. She
was willing to take on any kind of responsibility on a par with her male colleagues.
This made her a versatile member of the organization, and one who was aware of all
the operations in the organization.
10
Even though she accepted and held decision making authority, her superiors were
doubtful about her ability to make tough decisions just because she happened to be a
20
woman. They, therefore, interfered in her job to ensure that she made the right
decisions. However, this did not demotivate her. On the other hand, she put in extra
of
efforts to gain the confidence of her superiors. Lack of appreciation by her superiors
s
or malicious gossip by her colleagues did not deter her nor did she succumb to work
s
pressure. She tried to maintain a good relationship with most of her colleagues in the
la
organization. Thus, her dedication and commitment to her job helped her reach the top
C
level in the organization structure.

y
Caselet 11
nl
O
1. Sexual harassment is defined as the unwelcome advances, requests for sexual

favors, and other verbal or physical conduct of a sexual nature that working women
se
could be subjected to by their male colleagues at the workplace. The victim’s implicit
U
or explicit rejection of these gestures could lead to her employment being jeopardized.
Sexual harassment not only affects the individual’s performance at work, but also
S
creates an intimidating, hostile or offensive work environment. Like gender

B
discrimination, sexual harassment is considered an illegal act and forms a very

rI
complicated part of the employment law. Other forms of sexual harassment include
Fo
undesirable looks or comments, jokes that are in bad taste, sexual artifacts in the
workplace, or the boss being “too friendly” with the employee.
2. With incidents of sexual harassment at workplaces increasing by the day,
organizations have now become sensitive to this issue. In order to prevent talented
women from leaving the organization, organizations are taking all possible measures
to address this problem. The following are the measures that organizations most
commonly use to curb sexual harassment:
• In most organizations, a concerted effort that involves all the members of the
organization is taken to change their attitude towards women workers. These
organizations ensure an attitudinal change in their members by conducting
various awareness programs aimed at changing their behavior.
• Organizations initiate programs to address problems associated with gender
biases that may lead to sexual harassment.
• In many organizations, the organizational policy itself caters to solving these
problems, by strictly prohibiting activities that may lead to charges of sexual
harassment.
99
• Most organizations have set up special redressal bodies that deal with problems
faced by working women. These look into any allegations of misconduct and try
to protect the women in the workforce against any kind of harassment or
discrimination.
Thus organizations today, in their attempts to attract and retain talented women in the
workforce, are striving to provide a safe and encouraging workplace for women.
Caselet 12
1. Going by the belief that two heads are better than one, organizations of late have
been encouraging employees belonging to the middle and lower levels of the
organizational hierarchy to participate in the decision-making process. Such a process
where decisions are made by a group rather than a single individual at the top, is
known as group decision-making. There are various advantages in having employees
participate in the decision-making processes. Some of them are:
• The information and knowledge gathered from the participation of several
individuals in the decision-making process is more complete and comprehensive.
10
• Since individuals working together in organizations show wide diversity in terms
20
of educational qualifications, culture, gender and demography, the ideas
contributed by them to solve a problem on hand are also diverse. In other words,
of
various aspects of the decision-making situation are explored in a group decision-
making process and the decision made is the most effective one.
s s
• The decisions made are generally of higher quality than those made by a single
la
individual as various aspects of the decision-making situation are considered.

C
• It has been observed that when decisions are made collectively, acceptance of the
y
new decision becomes easier. This is because the participants themselves were
nl
involved in making that decision.

O
2. One of the demerits of group decision-making is the conformity pressures of being

se
in a group. Because of their desire to be accepted by the group and its members,
individuals tend to let go of their values, opinions, views, etc., in favor of the majority
U
opinion or views. In this case, the group pressures for conformity inhibited the
S
employees from evaluating the new proposal critically, though it was against the
B
existing norms and procedures. When a group succumbs to such pressures of

rI
conformity, ‘groupthink’ takes place. Groupthink hinders the process of effective

Fo
decision-making in groups. It also results in the deterioration of the mental efficiency

and, moral and rational judgements of individuals participating in the decision-making
process.
The characteristic features of groupthink are as follows -
• There appears to be an illusion that the entire group subscribes to the decision
made, even if it contradicts the basic values and norms upheld by the group.
• Even those members who are momentarily opposed to the group’s opinion are
pressurized into conforming to the decision made by the majority.
• Sometimes, members themselves remain silent even if they hold differing views
about a situation so as to avoid deviating from the group consensus. They also go
to the extent of rationalizing the decision made by the rest of the group, thereby
devaluating the rationale behind their own opinion.
Thus groupthink occurs when members of a group find it better to be in agreement
with the group they belong to, rather than raise doubts, however genuine and rational,
against the opinion or decision of the group.
100
Part B
Caselet 13
1. Menon’s response to the performance appraisal illustrates the role equity plays in
motivating employees in organizations and is best explained by the equity theory
proposed by J. Stacy Adams. According to the theory, individuals compare their
efforts and the outcome of their efforts with that of others. If individuals perceive that
the ratio of their efforts to outcome is the same as that of others, they feel that the
organization has been fair. However, if they feel that this ratio is unequal, inequity
results and they tend to react in such a way that this inequity is eliminated. The equity
theory thus proposes that individuals are not concerned only with the rewards they
receive for their efforts. They also compare their rewards with what others receive for
their efforts.
In this case, Menon compared her input to outcome ratio with that of her colleague.
When she observed an inequity in the ratio, she was demotivated and so began
considering other job options.
2. As suggested by the equity theory, once an individual perceives an inequity
between his/her input to outcome ratio and that of others, he/she behaves in a way that
10
eliminates this inequity. The inputs might be effort, experience, education and
20
competence while the outcomes could be the salary, hikes, recognition, incentives,
etc. In the above case, Tina Menon could have reacted in any of the following ways to
reduce the inequity:
• of
She could have enhanced her outcome quantitatively at the cost of quality.
s s
• Menon could have changed or modified her perception of herself. In other words,
la
she could have seen the outcome of the performance appraisal in a more positive
C
sense. She could have made a self-assessment of her performance, assessed

whether there were any shortcomings in her performance, and in what aspects her
y
performance was not up to the mark and then tried to perform better in order to
nl
get the desired outcome.

O
• She might have changed her opinions and perceptions of Kapoor, in terms of her
se
inputs, performance, etc. In other words, Menon might begin to feel or realize
that her performance might not have been as good as that of Kapoor, thereby
U
justifying the actions of her superior.

S
• Menon could even have chosen a different referent. In other words, she could
B
have compared her input-outcome ratio with that of some other person in the
rI
organization.
Fo
• She could have quit her job and looked for some other option that rewarded her
equitably in comparison with Kapoor.
Caselet 14
1. Anand and his organization were facing the consequences of being too dependent
on a particular person – Nair. In other words, the primary problem that Delta
Manufacturers faced was that of dependency. When someone possesses a resource
that is scarce and required by others, it gives the person possessing the resource a
certain amount of power over others. Dependency increases when the resource
possessed is important, scarce and non-substitutable. Also, the greater the dependency
of B on A, the greater the power A has over B.
In the above case, the marketing department was dependent on a single individual,
Vishal Nair. Nair’s four-year experience as head of the marketing department
equipped him with expertise and skills that were difficult to replace. This expertise in
his domain made the organization and its members dependent on him. The general
manager’s lack of experience in marketing further enhanced his dependency on Nair.
Nair’s excellent interpersonal relationships with the rest of his team made it all the
101
more difficult for Anand to sack him as it would have made the rest of the employees
in the marketing team hostile towards the management. Besides, the post held by Nair
was crucial to the performance of the entire team. Thus, all the above factors
contributed to the extreme dependence of the marketing team on Nair. And with Nair
refusing to cooperate with Anand, the efforts to improve the performance of the team
were affected. This, in turn, reduced the productivity of the organization as a whole.
2. Dependence on a single entity in the organization has to be maintained at a low
level, as this kind of dependence increases the chances of a crisis occurring. Delta
depended excessively on Nair because he possessed skills that were rare in the team
and played a crucial role in the organization’s development. The inability of the
general manager to find a qualified replacement for Nair also added to the problem.
Anand could have handled the problem better if he had acted in one of the following
ways:
• Anand could have identified and recognized the extent to which the department
and the organization were dependent on a single person, i.e. Nair, and could have
developed a strategy to reduce this dependence.
10
• Alternatively, he could have started looking for a replacement for Nair, right from
20
the beginning. He could then have dismissed Nair for poor performance and
recruited a more capable person for the post.
• of
Anand could have sought the help of the heads of those departments which were
s
dependent on the marketing department and could have worked out a strategy to
s
improve the marketing team’s performance.
la
C
• He could have come up with innovative parameters to measure the short-term

performance of the marketing team, rather than wait for more than six months to
y
nl
actually obtain the results of the team’s performance.

O
• He should have also alerted the top management about Nair’s poor performance,
so as to prepare them for a change.
se
Caselet 15
U
S
1. Roopali Deshmukh implemented the MBO process as an intervention to improve

B
the productivity of her sales team. She successfully implemented the process by
rI
following a sequence of effective planning, control and development. The following

are the various phases of the MBO process that led to its success:
Fo
• The MBO program was initiated by the top management which set the overall
organizational goals and communicated them to the people down the hierarchy.
However, the management did not interfere much with the means of achieving
the objectives. In other words, it gave adequate autonomy to its employees to
implement the process.
• Deshmukh then drafted a plan of action to achieve the targets decided by the
management for the year.
• She invited employee participation in various aspects of implementation of the
program. She encouraged her team members to decide the role each one would
play in order to achieve the team’s target. She sought their suggestions to
determine, in specific terms, the short-term targets that each individual would
achieve. These short term targets were in line with the team’s long term goals and
objectives.
• Deshmukh also set specific time frames for the accomplishment of the targets.
Thus the goals were not only specific but also time bound.
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Part B
• Deshmukh closely monitored the performance of all the team members without
actually interfering in their job. She also offered positive feedback to her
subordinates and this helped them overcome their shortcomings and perform
effectively.
Thus the MBO program implemented in the sales team proved to be beneficial to both
the employees and the management.
2. Management by objectives is a goal-setting tool where goals are set by employees
in collaboration with the management. The aim of management by objectives is the
achievement of organizational goals. MBO involves setting up short-term goals for
employees in line with the long term objectives of the organization. MBO is thus an
effective tool for planning, control and development.
Most organizations use MBO as a control mechanism to ensure that there is no
deviation between employee performance and organizational objectives.
Organizations also use MBO as a performance measurement tool. Since MBO is a
bottom-up approach, the organization gains from the participation of employees in the
establishment and achievement of employee goals. Since individual goals are set
10
collaboratively by employees and employers and are closely linked to the
organization’s mission and objectives, achievement of individual goals results in
20
accomplishment of organization’s objectives. Thus an effective MBO program not
only motivates employees to achieve their individual goals but also helps in attaining
of
organizational goals. s
Caselet 16
s
la
1. Job sharing has numerous benefits to both the organization as well as the
C
employees. However, its successful implementation requires fulfillment of certain

prerequisites which are as follows:
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• Job sharing is a tool that is generally used to cater to the varying needs of the
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organization’s diverse workforce. Therefore, only organizations that value

workforce diversity can successfully implement the system of job sharing.
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• Employees should be trained properly in order to coordinate with each other

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under the new pattern of work arrangement.

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• Employees who adopt this type of alternative work arrangement must ensure that
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there is proper communication and coordination between themselves so that every

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aspect of the job is accomplished and communicated effectively to the other

partner despite both working on the same job during different work timings.
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• Trust and work ethics are two important factors that determine the success of job
sharing. People who opt for job sharing must have adequate trust and confidence
in each other. They must act like a single individual and must value the end result
rather than their own personal goals.
• Employees who share their job with another person must keep meeting each other
often to ensure effective planning and implementation of their job
responsibilities.
2. Job sharing provides a variety of benefits for both employees as well as employers.
Employees benefit from job sharing by having the flexibility and freedom to work at
convenient timings. They also find it easy to balance their personal and professional
lives by adopting this type of alternative work arrangement. This also helps reduce
work-related stress in them.
The employers also reap several advantages by implementing the concept of job
sharing in their organizations, provided they take the necessary measures to
implement the system effectively. Job sharing, of late, has been used as an effective
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retention technique, and to attract, employ and retain talented women and retired
persons in the workforce. The organizations have the advantage of paying only for
one employee although they utilize the skill sets of two persons. Job sharing also
helps maintain workforce diversity as it is a tool to cater to the needs of different
groups of people in organizations. It helps motivate people and enhance their morale,
thereby leading to enhanced productivity. Thus, job sharing proves advantageous to
both employees and the employers.
However, there are also a few pitfalls and serious repercussions that could arise by
implementing the job sharing arrangement in organizations. A lack of communication
between employees sharing a particular job might lead to a counterproductive
organizational outcome. There have been cases where customers of organizations
implementing the concept of job sharing felt neglected as there was no single person
to solve their problems. Also, organizations sometimes find it difficult to split
employee benefits between two individuals although the salary would be shared by
both equally. Thus, job sharing can prove effective only if these pitfalls are addressed.
Caselet 17
10
1. An organization that is open to changes and adapts itself to those changes is called a
20
learning organization. A learning organization is one which has developed the
capacity to adapt and change in a planned and systematic manner so that it stays ahead
of
in the competition. s
The establishment of a learning and development center, Excel Development Center,
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indicates a conscious effort on the part of the company to enhance the skills and
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knowledge of its employees. With the help of EDC, Excel ensures that all employees
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of the organization are given constant training to upgrade their knowledge and skills
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in their respective domains. Apart from the mandatory 80 hours of annual training, it
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also facilitates its employees to attend other training sessions as and when a need
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arises. It also endeavors to ensure the all-round development of its employees by

allowing them to attend training sessions conducted by behavioral experts, who help
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them understand the dynamics of the organizational behavior.

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EDC spends an average of Rs.25 crores merely to ensure that its employees are
technically updated. The world class learning facilities provided by EDC and the
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various tie-ups it has entered into with academic institutions has made Excel
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Computer Services an effective learning organization.

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2. In order to ensure that continuous learning takes place in organizations, the

management must initiate the following measures –
• Commitment of the management towards ensuring constant change and
innovation in the organization is essential to foster a learning environment. Apart
from investing in technology and installation of advanced equipment, the
management must also invest in development of its human talent. Employees
must be trained in such a manner that their skills are enhanced to adapt to changes
in the external environment. It should also constantly encourage innovation and
creativity among its employees.
• The traditional hierarchical structures in organizations may sometimes pose
barriers to effective learning and knowledge-sharing. Reducing the number of
hierarchical levels within the organizational structure may facilitate learning
across the organization. Cross-functional teams can also be set up to increase the
interaction among employees, which in turn enhances coordination and learning
among the various departments of the organization.
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Part B
• A change in organizational culture may sometimes become imperative if the

conservative values of the organization are seen to hinder creativity and
innovation. A culture of openness, risk-taking and growth has to be fostered in
order to ensure continuous learning and development. The organization must
encourage innovation among employees even if this involves investment of
substantial resources.
Implementation of the above measures enables management to manage learning in the
organization effectively and to make the organization a learning organization.
Caselet 18
1. Every expatriate is faced with the challenge of understanding a new culture and
appreciating the differences between the host culture and the culture of his home
country. He must then utilize his business skills and abilities to manage his
responsibilities in the new context effectively. In the present case, Behl also had to
face a lot of other problems, as discussed below:
• The new workforce, dominated by French nationals, was tough to deal with. Behl
10
had to face a culture shock as their cultural practices, norms, and work values
were significantly different from those in India.
20
• The people refused to accept him as their leader and refused to cooperate with
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him.
• The inadequate support he received from the parent organization was also a
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demotivating factor, as Behl found himself completely cut-off from the
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operations in India.
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• The compensation offered to Behl was also not enough to meet the financial
requirements of his family.
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• Once back in India, Behl had to face a host of repatriation problems like
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readjusting to the home culture, losing a year of experience in his own domain,
etc. Besides, his relationship with his colleagues was now strained due to the
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communication gap that had developed over the past one year.
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All these resulted in a total mental and emotional exhaustion for Behl and his family.
Most expatriates face similar problems even though overseas assignments seem
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lucrative and challenging.

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2. To ensure a successful cultural adaptation of expatriates, organizations must

formulate an effective expatriation policy. The policy must cater to various aspects of
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adaptation which include organizational efforts to change and develop an efficient

workforce to meet the requirements of a multicultural work environment. The other
factors that require the management’s attention are as follows:
• Selection of the employee – Although technical expertise is a crucial factor for
organizations when they select employees for foreign assignments, there are
various other factors that determine the success of cultural adaptation of the
employee. It is important to select only those who have the flexibility to learn and
accept the values and norms of the new culture. A self-assessment tool such as a
questionnaire may be used to determine whether or not the timing, the country to
which the employee is being sent and the duration for which he will have to stay
abroad are acceptable to him as well as his family. The perception of the
employee about the new culture and his attitude towards learning that culture is
also an effective criterion for selection.
• Effective training – Organizations must provide adequate training to prospective
expatriates to help them adjust to the new environment. The expatriate must be
trained in the local language of the host nation. This would help him
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communicate effectively with the natives. He should also be made aware of the
values, norms, customs and cultural orientations at the new workplace. Family
members of the expatriates should also be trained in the new culture.
• Domestic support – Organizations must help expatriates relocate themselves and
their family by offering assistance in getting a job for their spouse, and providing
educational allowance for their children.
• First assignment – The first assignment of the expatriate must essentially be one
in his own area of expertise. This would help him gain confidence in the new
work environment.
• Constant support – The expatriate must receive constant support from the parent
organization as this would motivate him to perform better. A mentor often plays a
crucial role in enhancing the performance of the expatriate by offering him
adequate moral support to help him perform effectively at the new workplace.
• Home leaves – If employees are granted leave to visit their country once a while,
difficulties in readjusting to the home culture will be minimized. The number of
home leaves may differ with differences in the tenure of deputation.
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• Repatriation policy – Organizations must also have an effective repatriation
20
policy which addresses the needs of people coming back to the home country
after a specific period. Issues like performance appraisals of the expatriates,
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effective placements once they are back, assistance in relocation, etc. should be
taken care of by the repatriation policy. This is done to ensure an easy integration
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of repatriates into the parent organization.
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The above measures, when adopted effectively, help in a successful cultural

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adaptation of expatriates, which is crucial to the success of any globally operating

organization.
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Caselet 19
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1. As is evident from the examples given in the caselet, implementation of employee

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suggestion programs that encourage employees to participate in the problem-solving

process of the organization, creates a distinct competitive advantage for these
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organizations. Some of the significant benefits of employee suggestion program are as

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follows:
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• Cost savings – Inviting suggestions from an in-house team is definitely more

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cost-effective than employing an external consultant for the purpose of problem

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solving within the organization. Besides, employees might also propose new
alternatives to existing organizational systems and procedures, which might help
reduce operational costs.
• Increased revenues – Employees might also suggest ways and means of earning
extra revenues like the suggestion given by Fontaine of the Justice Department,
which helped it cut down its costs by a significant amount. These suggestions
may not only reduce costs but enhance profits as well.
• Improved quality – As employees are the ones who are actually on the job, they
are aware of the difficulties of existing procedures. They are thus in a better
position to come up with alternate suggestions to the existing systems that would
result in enhanced quality. Therefore employee participation enhances the quality
of organizational systems.
• Better customer service – The variety of ideas generated by employees in an
organization caters to the ever-changing needs of customers. By pooling together
all these ideas, the organization will be in a better position to satisfy these needs,
thereby providing better customer service.
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Part B
• Employee satisfaction – Participation in organizational problem solving processes

encourages employees to involve themselves in various organizational processes.
This, in turn, motivates them and creates a sense of belongingness in the
organization, thereby enhancing their job satisfaction.
• Improved corporate culture – With enhanced employee participation, resulting in
a satisfied and motivated workforce, the overall culture of the organization
improves.
Thus suggestion systems prove to be an effective tool to motivate employees, enhance
their performance, and increase their productivity, thereby contributing to the
organization’s bottom-line.
2. Employee suggestion programs are aimed at encouraging employee participation
and also to reward employees for contributing innovative, novel and creative ideas
which benefit the company. However a few measures must be taken by organizations
to ensure the success of employee suggestion programs. These are:
• At times, managers or people in supervisory positions in organizations hesitate to
10
invite employee suggestions. They feel that seeking the views of subordinates to
solve organizational problems might threaten their power and authority in the
20
organization. Therefore, organizations must encourage and reward supervisors
and managers who invite employee participation in improving organizational
systems and procedures.
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• The employee suggestion program must be an open one and should encourage
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participation of employees from all levels of the organizational hierarchy. It
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should be a simple and easy to use system accessible to all the organizational
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members.
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• Employee suggestions must be reviewed at regular intervals, preferably not by a

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single individual in a position of authority but by a committee comprising

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members from a cross-section of the organization. Organizations are therefore

introducing online suggestion systems to facilitate regular and speedy review of
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the suggestions obtained.

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• Organizations must ensure that employee suggestions that are worthwhile are
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speedily implemented. Employees expect a quick feedback or a response of some

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sort from the management regarding their suggestions. The management’s failure
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to give timely feedback might demotivate employees from providing further ideas
for organizational improvement.
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• Employees who contribute effective suggestions, the implementation of which

helps the organization cut costs or earn revenue, must be rewarded. Timely
rewards stimulate employees to generate more ideas, which in turn might result in
improving organizational performance. Therefore employees who generate
productive ideas must be adequately rewarded. Both, intrinsic and extrinsic
rewards prove to be effective in motivating employees.
• Finally, the suggestion system must also include vendors, suppliers, customers
and other stakeholders as they might also offer valuable suggestions for
organizational improvement.
Caselet 20
1. The survey feedback methodology is a widely implemented tool to bring about
organizational change and organizational development. The methodology involves the
use of questionnaires to identify employee perceptions of various organizational
processes and systems. The responses to these questions are evaluated and feasible
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solutions to such problems are collectively arrived upon. In other words, in survey
feedback methodology, employee suggestions and views are used to solve
organizational problems.
Organizations benefit in a number of ways by deploying survey feedback technique.
The direct benefits include the identification of the organization’s strengths and
weaknesses, and drafting of action plans to capitalize on its strengths and work upon
its weaknesses to achieve organizational goals. The implementation of survey
feedback enhances employee morale as it encourages employee participation in
solving organizational problems. It also works as an effective tool for empowering
organizational members.
Survey feedback methodology is an effective problem-solving technique. The entire
process, right from problem identification to drafting an effective solution to the
problem, involves the participation of the members of the organization who are in a
better position to handle the situation as they are the ones who are most familiar with
the job processes. Therefore the survey feedback methodology results in solving the
problem most effectively.
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However, the success of the survey feedback methodology depends on the extent of
employee participation, in terms of how open they are in expressing their areas of
20
concern and how enthusiastic they are in suggesting probable solutions to the
problems. The greater the participation of the employee, the more is the effectiveness
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of the technique. s
2. Employee participation is one of the key factors for the success of survey feedback
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methodology. However, employees tend to hesitate expressing their concerns through
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this technique due to an inherent fear of confidentiality. Employees are generally

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apprehensive about negative consequences if their point of view happens to differ

from that of their superiors. Therefore, in order to ensure complete employee
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participation, organizations have to take a number of measures. Some of these are:

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•
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All the members of the workgroup dealing with the analysis of the feedback must
conform to the confidentiality norms. They must not take advantage of their role
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and position in the workgroup to misuse the information or any part of the
discussion that follows in the work group.
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• All the responses of the employees to the questions asked in the questionnaires
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must be confined to the knowledge of the members of the workgroup.

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•
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Any information regarding the survey must be shared with others only with the
consent of all the members of the group.
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• The varied opinions of people must be accepted and appreciated.

• All members of the workgroup must be treated with respect and honor even
though their perspectives and opinions might differ.
• Different points of view within the workgroup that bring in varied opinions about
a particular work situation must be encouraged as they provide the group with a
wide range of options to solve the problem on hand.
• The workgroup must work together in mutual trust and harmony that yields
satisfaction and motivation and an improvement in organizational systems and
processes.
The above measures, when adopted ensure confidentiality of the survey responses,
and play an important role in determining the success of survey feedback
methodology.
However, at times it becomes important to trace back the identity of the respondent.
Under such rare circumstances, a unique code may be given to each employee, which
can be used by responsible officials.
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Part B
Caselet 21
1. Human relations is the study of how people can work in groups and teams to satisfy
both organizational goals as well as personal needs. Unlike postulates of scientific
management, human relations movement focuses on the attitudes and feelings of
workers. It propounds that informal groups and norms influence individual behavior
in organizations. In other words, human relations is the integration of personal needs
and organizational goals. Human relations is a blend of various interrelated disciplines
like psychology, social psychology, sociology, anthropology etc., that has enabled a
better understanding of individuals in organizations.
Organizational behavior, on the other hand, is the study and application of knowledge
about how people as individuals and groups behave in an organization. In other
words, it is a study of the human aspects in organizations. Organizational behavior is
very important in understanding the factors that motivate people at workplace, how to
motivate them, and how to enhance and constantly develop their skills and abilities.
OB thus taps potential human performance by the effective utilization and constant
development of human talent.
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With significant contributions from various fields of psychology, social psychology,
20
sociology, etc., HR and OB facilitate effective problem solving processes in
organizations. Contributions from these fields have enhanced the comprehension of
both macro aspects of human behavior like group processes and organization
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development, and micro aspects such as decision making, communication, leadership
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and innovation that facilitate individual and organizational change.
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Thus HR and OB have helped organizations gain competitive advantage by
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facilitating a harmonious working of human performance and other resources.

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2. Human relations and OB play a significant role in the development of skills of

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employees and improvement of organizational performance.

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In today’s rapidly changing business environment, employees undergo more stress,

greater frustration, and have higher job expectations. These factors may affect their
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performance. Realization has now dawned upon organizations that employees, i.e.
human resource is its most important asset. Hence, organizations are leaving no stone
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unturned to develop the skills of their employees to keep their employees prepared for
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any new development in the external environment. Talent and skill of employees can
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be honed by training, motivation and provision of opportunities for education and

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personal development. Organizations are seen investing substantial amounts for

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training their employees and for upgrading their skills regularly.

A manager today spends ample time in improving interpersonal relations and
directing employees to improve their quality of performance. It is very important for
the superior to know the factors that motivate an employee since the present day
employees are more educated and more demanding. Organizations too have become
more complex than what they were earlier, and so require greater managerial skills for
effective management. Further, government regulations, labor problems and the
growing demands of customers subject managers to higher levels of stress. In such a
scenario, a knowledge of human relations and OB contributes significantly toward
effective management of organizations.
Caselet 22
1. Employees in organizations learn in a number of ways. One of the most effective
learning processes is observational learning. Employees tend to learn more by simply
observing others at the workplace and emulating their behavior. This is called
observational learning. It takes place in two phases – first, the employee merely
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observes the way in which others behave in a team. He frames a mental picture of that
behavior and its consequences. He then enacts the learnt behavior and studies the
outcome of displaying it. If the outcome is favorable, he tends to continue with that
behavior and keeps repeating it. However if the outcome is unfavorable, he is likely to
discontinue exhibiting such behavior.
Observational learning plays an important role in shaping employee behavior in
organizations. Employees modify their behavior according to the expectations of the
environment in which they work. In other words, employee behavior is a function of
the environment and the behavior of others in the organization. Thus, an individual’s
behavior depends on his cognition and the social environment.
Observational learning gains even more significance in case of new employees. While
the incumbents do possess a basic knowledge of their functions, other important
aspects like expectations that the organization has from its members in terms of
discipline, the way its members dress to work, etc. are learnt by observing other
members of the group. This form of learning therefore helps employees adjust
themselves in a new environment.
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Thus, observational learning plays an important role in shaping employee behavior, so
that a cultural fit is established between the employees and the organization.
20
2. The case deals with effecting a change in the behavior of Sonal Mehra, a new
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member in Chawla’s team. The behavior and attitude of Mehra affected the behavior
and thereby the performance of other members of the team, which in turn resulted in
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negative organizational outcomes. Chawla therefore wanted to shape Mehra’s
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behavior in a way that would facilitate achievement of organizational goals. He
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attempted to do so by implementing one of the most important principles of learning –

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punishment.
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Punishment is an attempt to decrease the probability of occurrence of a behavior by

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introducing something aversive that discourages the behavior. Since, punishment is an

unfavorable outcome, an individual tends to abstain from such behavior to avoid
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negative consequences. Chawla showed displeasure about Mehra’s behavior by

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curtailing her chances of promotion to a higher position in the organization. This loss,
he thought, would bring about a positive change in her behavior. However, he found
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that despite being punished, Mehra did not change her behavior. Thus, in this case,
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punishment was an ineffective tool as far as changing Mehra’s behavior was

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concerned.
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The learning process suggested by Abhinav Raj is known as ‘reinforcement.’

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Reinforcement is a positive way of shaping employee behavior. To

reinforce/strengthen a certain behavior, means to encourage that behavior by
rewarding the employee when he/she exhibits that behavior. In other words, when a
particular behavior is rewarded with a positive consequence, employees are
encouraged to repeat it. In this case, Abhinav Raj intended to shape Mehra’s behavior
by rewarding her whenever she behaved in a way that was favorable to the
organizational goals and objectives. This indeed helped change Mehra’s behavior,
which in turn led to positive organizational outcomes.
Caselet 23
1. In the given case, the principle of closure was in operation. According to the
principle of closure, a person may sometimes perceive a whole, where it does not
exist, and at other times, a person may not be able to perceive a whole although one
exists. The employees of the textile designing unit at Goa perceived a complete
picture although there were many missing gaps. They saw that their boss, Sethi did
not return to office after the holidays and a new boss, Gulati, had assumed his
position. This led them to believe that a strong reason must exist for such a sudden
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Part B
replacement to have taken place. Although they were aware that Sethi was on
extended leave, in light of the new development, they attributed their own reasons to
his absence. They focused on only one fact – without an official announcement and
without a formal farewell being given to the old boss, a new boss had assumed office.
Sethi’s mention of having a party after the holidays led them to assume that either
Sethi himself was unaware of the change that was to take place or he had intentionally
concealed the information from them. The employees perceived that such a situation
could not have arisen unless he had done some wrong. Further, the employees
attempted to support their views with the observations made by them regarding the
extravagant lifestyle of the Sethis. They presumed that Sethi had been dismissed for
misappropriating company’s funds.
2. The corporate office should not have sent a relieving letter to Gulati without
confirming Sethi’s transfer or, at least it should have mailed a copy of the letter to the
Goa unit. The management should have asked Gulati not to report at Goa until the
issue of Sethi’s transfer had been sorted out. If the management had taken any of these
steps, it would have avoided the embarrassing situation that arose at the Goa unit.
10
The situation that arose, and the subsequent allegations made against him, would no
20
doubt, have hurt Sethi’s feelings and demotivated him. Since the management was
unable to prevent the situation from arising, the least it can do now is to take measures
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to correct the unfortunate happening. The corporate office can arrange a farewell party
for Sethi and ensure that a representative from the top management attends the party
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and explains to the staff at the Goa unit what actually happened and the circumstances
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that had led to the misunderstanding. This will assure Sethi that the company cares for
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him and respects his feelings.

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Sethi faced this embarrassing situation because of poor communication between the
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corporate office and the units. In the absence of proper information, rumors spread
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fast and lead to unpleasant situations. Therefore, the management should take steps to
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improve the flow of formal communication in the organization to prevent such

situations arising in the future. The management should also keep track of the
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informal communication within the organization, and if they observe that any wrong
information is being circulated, they should immediately use formal channels to
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communicate with the employees. When information flows freely between various
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hierarchical levels and across levels, employees will depend less on their perceptions
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to fill the gaps in information and the probability of undesirable situations arising will
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be less.
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Caselet 24
1. There are five methods that are widely used to resolve conflicts. These include
avoiding, dominating, accommodating, compromising and problem-solving. In
‘avoiding’, conflicting parties stop interacting with each other and eliminate the need
for resolving the conflict. This is not an effective method because the conflict remains
unresolved. Moreover, Kapoor and Shah are in the relationship of superior and
subordinate which requires them to frequently communicate with each other. In the
‘dominating’ method, each individual tries to satisfy his own interests without concern
for the other individual. This is also not an effective method of resolving a conflict
because while one of the conflicting parties may win over the other, the one that loses
will develop hostility towards the other party. Therefore, they are likely to get into
conflict again in the future. In ‘accommodating,’ one party subjugates its interests to
satisfy the other party. In ‘compromising,’ the conflicting parties give up some of
their demands in order to resolve the problem. These methods lead to dissatisfaction
and discontentment among the parties. In ‘problem-solving,’ both the parties sit
together, discuss all the factors that led to the conflict and try to arrive at a solution
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that is mutually acceptable. This is the most effective method of resolving a conflict.
Kapoor and Shah can resolve the conflict between them by using the problem-solving
method.
2. As an employee with Navya Products Ltd since its establishment, Shah got many
clients for the company and contributed to its growth. He reported directly to Sinha
until Kapoor was appointed in the higher management cadre. This resulted in a
decline in the importance given to Shah. Prior to the restructuring of the company,
Sinha called Shah and his colleagues for all important meetings and strategic
discussions. Now Kapoor attended such meetings and Shah had to depend on him for
all information. Although the change was not acceptable to Shah, he could not give
vent to his feelings. Therefore, he expressed his anger through his actions and
behavior. He always opposed Kapoor’s views during meetings. He stopped
responding to customers’ queries in his usual polite manner. Shah must have felt that
when Kapoor was given so much importance, the responsibilities also should be given
to him. Therefore, he stopped visiting customers. He ceased identifying himself with
the company and decided to part with it.
Sinha must not lose an efficient manager like Shah. Sinha should have a personal talk
10
with Shah and explain the factors that necessitated the appointment of Kapoor and
20
other personnel in the senior management cadre. Since Kapoor and others have the
experience in dealing with international companies, which Shah lacks, Shah should
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understand the need of the situation. He should also recognize and improve upon his
shortcomings in order to go up the ladder in the company. Sinha may create separate
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divisions for international operations and regional operations. Shah may be given a
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responsible position at the regional level and the need for him to report to Kapoor can
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be avoided so that his self-esteem needs are fulfilled. These measures would help
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Sinha to retain an experienced employee like Shah.

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Caselet 25
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1. The quality awareness of Sharp was poor prior to the survey. It did not check the
quality of products before shipping them to customers. Most of the complaints from
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customers concerned the quality of products delivered to them. It had become a

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regular feature for the company to reimburse the customers with the mailing charges
as well as replace defective products. Although the customers placed the orders well
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in time, the delay in processing orders prevented the company from being able to
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deliver the products in time and make use of economic modes of transportation. The
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recurrence of such instances will certainly drain the company’s resources in the long-
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term. The means are as important as the end. While the company was able to satisfy
its customers it had to spend more resources than necessary to achieve the objective. If
the company continues to incur such high costs on rectifying its mistakes rather than
preventing them, the financial health of the company will be badly affected and it may
find it difficult to survive.
The committee was, therefore, right in suggesting that the company should improve
the way it functioned, implement TQM and empower its employees.
2. Sharp Enterprise used TQM to improve the quality of its processes and services.
TQM involves giving attention to each and every aspect of an organization’s
operations to ensure quality. TQM emphasizes continuous improvement of quality. As
part of TQM, organizations may use one or more of the techniques of self-managed
teams, task forces, quality circles and statistical control.
Self-managed work teams comprise employees selected from different departments
who are empowered to take decisions related to their work and the work environment.
These teams attempt to identify the requirements of customers and the problems
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Part B
associated with existing products and services. They collect information pertaining to
the organization and try to identify the reasons for the failure of the organization to
meet customers’ requirements. They then list out the measures to be taken to improve
the products and services of the organization. If the list is too long, the teams hold
discussions and determine the measures that need to be given priority. They also
develop strategies to implement these measures. Such measures are initially
implemented in selected departments and feedback obtained from the employees.
Based on the feedback, they make necessary changes in their plans and strategies. The
process is repeated till the desired improvement is achieved in the organization. The
procedure is then standardized and applied throughout the organization. Necessary
monitoring and feedback processes are established to track the improvement made in
various processes. Statistical quality and process control techniques are used to
analyze and control deviations in products and processes.
TQM helps to increase the productivity and efficiency of an organization. It also
improves the quality of products and services, cuts down the costs of the
organization’s operations, and improves customer satisfaction and profitability of the
organization.
10
Caselet 26
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1. The communication strategy of Yani is effective because it encouraged free flow of
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information across the organization. The mission, goals and strategies of the company
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were communicated to employees. When employees know the mission and goals of
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their company, they are motivated to achieve them. Yani sponsored get-togethers of
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employees from various departments where they interacted with each other and
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exchanged information. Employees could also read about their company by accessing
the in-house electronic newsletter. Yani encouraged two-way communication.
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Employees could communicate with senior management through e-mails and intranet.
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Management encouraged employees to give suggestions to improve the processes of

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the company.
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The mission, goals and values of the company are what the management needs to
communicate clearly to their employees. Employees should also be made aware of
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their role in the organization and the importance of the work done by them. Some
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companies also share information about financial performance, like sales and profits,
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with their employees. Employees are increasingly demanding that management share
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more information about the company with them. Companies like Wal-Mart, Home
Depot and Sears share key information with their employees. These companies also
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accept suggestions from their employees to improve the way their businesses are
conducted. These measures have helped companies improve their productivity and
profitability.
2. Yani was not able to procure business from clients as there was a slowdown in the
IT industry. If it retained all its workforce, it would not have been able to pay salaries
to its employees. Yani did the right thing by laying off the excess manpower. The
employees could seek jobs elsewhere. Yani even assisted them in finding
employment. When Yani’s business improved, it recruited more manpower and gave
preference to its ex-employees.
The management communicated directly with the employees in an emergency
meeting that they were being laid off. Yani also explained to the employees the
reasons leading to the decision. Yani announced a benevolent severance package and
offered counseling sessions for employees who were badly affected by the news. The
management was right in conveying the information in a face-to-face session. There
was no point in delaying the bad news. If the employees were not informed formally,
they would get the information from the grapevine. This would lead to confusion
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among employees and they would be wondering whether they should continue to
work for the organization or look for another job. The formal communication
eliminated any ambiguity.
Caselet 27
1. A self-managed team is a leaderless group of employees in organizations where
employees themselves are responsible for a variety of functions like developing
production schedules, improving the quality of work life, resolving conflicts within
the group, increasing output and organizational effectiveness. Self-managed teams are
characterized by multiple skills, common goals, interdependence of members,
authority and accountability. Each member of the team masters a variety of skills and
all the members work towards a common purpose and cooperate with each other in
accomplishing it. The teams are entrusted with a high level of responsibility.
Organizations can contribute to the growth of self-managed teams by designing tasks
in such a way that they interest and motivate the team members. The tasks should not
be pieces of work but be whole, meaningful and significant. Team members should be
given reasonable autonomy to complete the tasks without having to consult senior
10
managers unless a major problem arises. The tasks should require application of a
20
variety of skills so that all the members need to cooperate with each other to complete
them. Organizations can help employees acquire a variety of skills by job rotation and
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giving them the necessary training to perform those jobs.
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2. Some of the essential prerequisites for successful implementation of self-managed
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teams are:
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• The top management should develop a clear vision and establish values and
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articulate them to employees in such a way that they share these values and are
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committed to achieving them.

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• The management should entrust employees with higher responsibilities.

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• Employees should be given appropriate training programs to develop skills to

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carry out their responsibilities.

•
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Employees should be encouraged to take risks and the management should

tolerate mistakes in the initial stages.
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Following are the barriers which often come in the way of effective implementation of
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self-managed teams:
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• The top management does not give much desired support to self-managed teams.
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• The management does not trust employees and hesitates to give them greater
responsibilities.
• Supervisors and middle managers often resist change because they perceive it as a
threat to their job.
• Employees also resist change due to the fear that they may be expected to achieve
ambitious production targets.
Caselet 28
1. When Anjali Nayak joined the company, she was given a certain job description.
The manager, Kishore Sharma explained to her how she had to carry out her roles and
responsibilities but did not tell her anything about the communication policies in the
organization. The management left it to the employees to learn the communication
procedures through experience. She was able to communicate effectively with her
team members because she was their superior. They accepted her instructions in
whatever way she communicated them. In fact, she kept her team members happy by
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Part B
encouraging upward communication. This is evident from the way she handled the
decline in performance in one of the employees. She did not deal harshly with the
employee. Instead, she called him and asked him the reasons for it, listened carefully
to his problem and promised to take necessary action to solve it. Therefore, it is clear
that she is an effective communicator. When she came to know that the customers
wanted to be put on to the MD directly, she investigated the matter, found the reasons
for it and communicated it to her team members. Her communication with her team
members was always smooth. She hesitated in communicating matters to the manager
because she was never sure when he would shout at her for conveying some matter.
Also, she had not spent enough time in the company to be able to observe her
colleagues and know about the communication policies.
Therefore, the absence of clear directions regarding the company’s communication
policies was the major reason for Nayak’s failure to communicate effectively with the
management.
2. When Nayak arranged for a party to felicitate her team on being rated best by the
customers, Sharma got it canceled. He warned her that she should never take such an
initiative without consulting him. Sharma could have developed better relations with
10
Nayak if he had warned her against such behavior in the future, but allowed the party
20
to be conducted. As things went, Sharma spoilt the employees’ plans and demotivated
them. It was true that Nayak had committed a mistake by not consulting her manager
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before making arrangements for the party. But Sharma could have communicated the
mistake to her without being harsh. In fact, Sharma could have used this opportunity
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to explain to Nayak about the organizational hierarchy and the importance of
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following hierarchy in all matters.
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When Nayak informed Sharma about the reason for customers contacting the MD
directly, he could have appreciated her efforts in finding out the cause. He could have
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explained to her that such information was crucial to the management and asked
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Nayak to inform the management immediately whenever she came across such crucial
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information.
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When Nayak informed Sharma at a review meeting about the problems of a team
member, he told her bluntly that she was wasting his time. Instead, he could have
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appreciated her concern for an employee’s problems and asked her to approach the
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personnel manager regarding such issues. Sharma’s behavior was inappropriate from
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an organizational point of view. He should have encouraged Nayak to communicate

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the employees’ problems to him since a sympathetic attitude on the part of the
management towards employees’ problems helps improve relations between them.
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Caselet 29
1. The change program initiated by Global resembles the survey feedback technique
used by change agents in organizations. In the survey feedback technique, data
pertaining to an organizational problem is collected from employees at all levels of the
organization. The data is collected using tools like attitude or (organizational) climate
surveys. The questions are so designed that responses to them reveal employees’
opinions about organizational processes and the problems faced by the organization.
The data collected from employees is then given to the managers or heads of units
who share it again with their employees. The managers conduct a meeting with
employees where they discuss the details of the data collected, analyze and interpret it
and try to identify the problem areas and the need for change. Then they develop plans
and strategies to bring about the desired change in the organization.
All the above steps were followed in the change program that Global initiated. Thus,
the program initiated at Global was a survey feedback technique used by change
agents.
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Global’s change program sought to change the behavior of employees by creating

awareness in them about the obsolescence of their beliefs and attitudes and
encouraging them to think rationally. As they begin to think rationally, they recognize
the need to change themselves and their attitudes. With the help of the change agent
and managers, they take the actions necessary to adopt new beliefs and attitudes and
achieve the desired change in their behavior.
2. The data collected through the opinion survey questionnaires can be used to analyze
employees’ perceptions about organizational policies, culture and structure, and their
attitude towards the work environment and organizational climate. The employees of
Global were involved in data analysis and interpretation. They not only identified
problems but also contributed their ideas to develop solutions to these problems. The
managers and employees together developed plans and strategies to bring about
organizational change. As the employees were involved right from the beginning in
the change initiatives, they are likely to contribute well to the successful
implementation of the change program.
Employees need to cooperate with the change agents in the following ways in order to
10
implement such change programs:
20
• Agree with the facts revealed by the survey questionnaire: Sometimes, employees
may deny the facts revealed through questionnaires. For example, suppose that
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the responses to the questionnaire indicate that the manager of a particular work
group is lenient and highly people-oriented, and gives too little importance to
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work resulting in a lot of pending work. If the change agent attempts to discuss
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this with the employees, the employees may refuse to agree with the fact fearing
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that the present manager may be replaced by an autocratic manager. Employees

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should not resist and deny facts to avoid change. If they are doing so in order to
escape work, in the long-term, it will result in lower productivity and
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inefficiency, and finally may even lead to closure of the unit. Hence, employees
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should attempt to find solutions to problems rather than denying their existence.
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• Accept responsibility: If the questionnaire reveals that some mistakes had been
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committed, the employees should accept responsibility for the mistakes and
attempt to rectify them. The leaders of work groups should act as role models by
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owning responsibility for the problems.

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• Make commitment to solve problems: Employees should be committed to solve

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the problems identified in the system. They should actively involve themselves in
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the problem-solving process by suggesting alternative solutions.

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Caselet 30
1. The introduction of teamwork at Akrur encouraged workers in the company to take
many decisions on their own and question managers about their decisions and
strategies. This made the managers feel uncomfortable because they were used to
working in an environment where workers followed their orders without questioning.
The managers, therefore, tried to retain their power and control over organizations
whereas workers tried to be independent. This tug of war led to conflict between the
workers and managers.
Akrur’s top management made a mistake by designating middle managers and
supervisors as team leaders. Because of being designated as ‘leaders’, middle
managers and supervisors could not do away with their old habit of controlling their
subordinates. This affected the team spirit in the employees and the expected level of
cooperation and coordination could not be realized.
The MD, Chaitanya Sarathi should have hired a consultant to educate the middle
managers and supervisors about the changing organizational environment, the
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Part B
importance of team work and the need to change their behavior, listen to the
suggestions of employees and implement the best ones. The consultant could be
requested to conduct team interventions like role analysis technique and role
negotiation technique. This would enable managers to clearly know what their role is
and the expectations that workers have from them.
2. Sarkar and Sarathi are right in their belief that team work would enhance
organizational performance. Teams offer many advantages to organizations. Since
teams are not confined to a particular unit or department or project, they make
organizations agile. After completion of a particular project, the team members
disperse and each member is put on to another project where his/her skills are
required. This enables organizations to leverage the skills and expertise of employees
effectively, and cope with changes in the competitive environment. Teams help
organizations find effective solutions to problems through collaborative thinking and
brainstorming. Effective implementation of team culture helps organizations attract
and retain talented employees.
The conflicts between managers and employees can be resolved by training managers
to adapt to change along with the workers. Managers should accept the challenges
10
posed by the implementation of team culture in the company. They should be
prepared to face criticism. They should take decisions after a thorough analysis of all
20
the available information and after considering all the alternatives. This will help
managers to convince the workers easily, and to face their questions with confidence.
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Similarly, if the workers point out that the solution suggested by the managers is not
effective and propose a much better alternative, managers should learn to appreciate
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the contribution of the workers and accept the solution. The managers should
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recognize that they are being paid to contribute to the growth of the organization.
Therefore, they should implement a solution that is in the best interest of the
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company, rather than a solution that serves their own interest.

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Caselet 31
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1. Though BOH was a profitable organization, the founder and CEO of the company,
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Murthy was not happy with its performance. Murthy wanted BOH to be a leading
financial services provider in India. To realize his dream, he initiated many changes.
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He identified two leading organizations in the industry as benchmarks and instructed

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his managers to plan and develop strategies to surpass the standards of these
organizations. The pay package of managers was linked to the performance of the
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organization. Although this increased the pressure on the managers and increased their
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workload, it was essential for the growth of the company.

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Murthy restructured BOH to improve customer service. He eliminated the need for
customers to approach separate departments individually for each service they wanted
from the company. He set up three new departments – CCP, ICG and NPAG. CCP
dealt with corporate clients, ICG dealt with individual clients and NPAG dealt with
lower-end clients. Employees in NPAG were apprehensive that since they primarily
dealt with near-bankruptcy clients, they would be unable to perform as well as their
peers in the other departments. They feared that this would reflect badly in their
appraisal ratings. Murthy should assure the employees that the difficulties involved in
each department would be taken into account during employee appraisal. Employees
may be rotated across departments to ensure that they acquire multiple skills and no
one is stuck in a particular department for too long.
2. The apprehensions of Akhira’s employees were justified as the working culture at
BOH and Akhira were quite different and the emphasis of the respective
managements was also different. Akhira was a rural-oriented financial services
provider. As employees of Akhira were unfamiliar with urban marketing practices,
they were uncertain about their future in BOH. Moreover, Akhira was overstaffed and
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some employees could be laid off. While Akhira’s management concentrated on the
overall profitability of the bank and gave uniform pay packages to employees in
similar positions, the management of BOH considered each department as an
individual profit center and the pay packages of employees differed from one
department to another. At BOH, bonus for employees was based on the performance
of individual profit centers rather than profits of the entire organization. This would
mean more work pressure on the employees of Akhira who were new to the system.
To ensure employee participation and to decrease the employees’ resistance to
change, the management at BOH should establish clear communication channels
throughout the organization to avoid any communication gap or incorrect
communications. Training programs should be conducted to upgrade the skills of all
employees. The management should also work on contingency plans and initiate
direct dialogue with the employees to maintain good employee relations. If there is
any downsizing resulting from the merger, the management should communicate the
message clearly to reduce uncertainty. It should also provide assistance to the
employees being laid off to find new jobs elsewhere.
Caselet 32
10
20
1. When employees were asked to explain the reasons for their inefficiency at work,
each employee behaved differently. Their behavior could be attributed to various
external and internal factors. External factors include the work environment.
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Environment plays a significant role in influencing the behavior of an individual.
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Internal factors include instincts, personality traits, and cognition of the individual.
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Instinctive actions are actions taken by a person without considering the consequences
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of those actions. Behavior such as anger and frustration result from instincts. Instincts
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have their origin in genes and pass from one generation to another. Personality traits
also influence human behavior to a great extent. Some of the traits are hereditary
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while some are learned and adopted by people. Cognition also influences an
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individual’s behavior. A person may respond in a particular way when he is subjected

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to a certain stimulus for the first time. If the consequences of this behavior are
positive, the person is likely to respond in the same way in the future as well. If the
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consequences are negative, he would change his behavior. This is also seen in the
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given case. One of the employees tried to behave aggressively with the manager
thinking that the manager would not question him further. But the manager also
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reacted equally aggressively. If the employee continued with his aggressive behavior,
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he could lose his job. Therefore, he changed his behavior and talked softly afterwards.
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2. The behavior of the employees of Aze is not justified. The employees are trying to
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pass on the blame to one another. No one was ready to accept the responsibility for
the delayed delivery of the products. If the same situation continues in the company,
mistakes are likely to recur, and the complaints from customers regarding product
deliveries will increase. Ultimately, dissatisfied customers will leave the company and
take their business to competitors. For a mail-order company, precision and on-time
deliveries are crucial for success. Therefore, the management needs to take measures
to ensure that these do take place as scheduled. It must warn employees of the
consequences of the company’s failure to deliver the products on time, and the
repercussions it would have on their own jobs. The management may initiate training
programs to improve employee behavior. The employees may also be trained in team-
building. Unless employees learn to work as a team and cooperate with each other, it
will not be possible to accomplish organizational goals.
Management should invite employees in all the departments to form teams. The teams
should be responsible for identifying all the problems in the existing system. After
that, the teams should interact and discuss the problems they identified and prepare a
list of the total number of the problems identified and the nature of the problems. One
problem can be displayed on the board at a time, and the teams can brainstorm to find
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Part B
all the possible solutions for it. The solutions should be considered by the
management, and the best of them selected for implementation. One by one, all the
problems should be discussed and the solutions finalized. If the employees are
involved at the stages of problem identification and solution-finding, they would be
committed to implementing the solution. The employees should also be made
responsible for monitoring implementation, and ensuring that the problem does not
recur.
Caselet 33
1. Icare had been a highly profitable company till 1993. Therefore, the company spent
lavishly on its managers. They were provided with luxurious houses in posh locations.
The salaries of managers in the Asian units were on par with those of their
counterparts in developed countries. After a time, managerial expenses went out of
control. For some years, the company could cope with the spending patterns of
managers in various units. But as competition increased, the sales declined and profits
fell, but the spending continued. As a result, the company began to incur losses. The
top management was alarmed and initiated change in the organization. The
10
organization structure was changed to facilitate better communication between the top
management and managers in various units.
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The responsibility and accountability of managers was increased. Plants were
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considered as profit centers, and the manager in-charge of each plant was held
responsible for its performance. Managers’ pay was linked to the performance of their
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respective plants. Countries were divided into regions. Each region was headed by a
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regional General Manager. Regional functional managers reported to the regional
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General Manager who in turn reported to the VP (Operations) at the headquarters. The
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VP reported directly to the CEO.

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Excess manpower was laid off and managers who were performing poorly were
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demoted. Talented people were promoted to higher positions. Apart from these
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changes, Icare can also take some steps to cut costs. It should shift its managers to
smaller accommodations in less expensive areas. It should put a freeze on buying new
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cars. It should adjust managerial salaries so that they are comparable with leading
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companies in the country rather than having them on par with the highest international
standards. But the top management should communicate to the managers that this
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reduction in their salaries is temporary and they would be hiked once the profitability
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of the company improves.

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2. The management of the Malaysian unit had misreported sales figures, in order to
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achieve what they claimed were “impossible” targets. This implies that the top
management did not devolve enough responsibility to the units for determining targets
and maintaining genuine profitability. The management of the unit at Malaysia was
wrong to misreport sales and produce defective items. It should, instead, have
communicated to the top management the difficulties it faced. The fact that the top
management was unaware of these practices for quite a while, until it was unearthed
by the consultants it hired, also indicates that adequate control mechanisms were not
in place. Both the managers (of the Malaysia unit) and the top management were
responsible for the situation.
Now that the top management has decided to change the organization structure,
reporting relationships and responsibilities, it reduces the scope for misreporting.
Further, the members of the top management should periodically inspect the units to
wipe out deceptive practices. The top management should set sales targets after
analyzing the market conditions and consulting with unit managers. If unit managers
are involved in establishing targets, they are more likely to be committed to achieving
them honestly.
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The top management should announce rewards for units that are most profitable. This
will encourage units to improve their sales. At the same time, external auditors should
check the accuracy of accounts kept by the various units on a regular basis. The top
management should allocate more resources to units for training and development of
sales executives and managers so that they can improve their skills and enhance sales.
Caselet 34
1. MPL was, no doubt, in a leading position in the food and beverages industry in
India. But the company until this time, had faced only Indian players who had less
marketing clout than MPL. In the future, however, MPL will have to face competition
from experienced international players. If MPL remains unprepared, it may lose its
market share to its competitors. Traditional and outdated organization structure and
processes may come in the way of MPL’s ability to compete with its rivals. Therefore,
Gaurav has done the right thing by being proactive. He approached a good
consultancy called ‘People Solutions’ and sought its help in making the company
competitive.
People Solutions advised MPL to hire professional managers in strategic positions.
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This would help the company leverage their expertise to design competitive strategies
20
and stay ahead of competitors. It is also likely that the members of the Agarwal family
may feel sidelined and resist change. Therefore, Gaurav has to explain to them the
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problems that may arise in the future because of competition from foreign players, and
the necessity for change. They may be encouraged to observe the professional
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managers in action and obtain the expertise to lead the company in the future.
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Younger family members who are interested in running the firm may be sent to
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business schools to be formally trained and educated about the changes in the
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organizational environment, the latest trends in leadership style and competitive

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strategies.
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2. MPL should accept People Solutions’ recommendations regarding a change in

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MPL’s appraisal and compensation system. MPL rewarded its employees according to
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their seniority. This is not an appropriate technique for rewarding employees because
it ignores high performers and demotivates them. MPL should begin to reward
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employees based on their performance. At the beginning of the appraisal period, each
employee should be informed about the goals he is required to achieve by the end of
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the appraisal period. The goals should be established by the manager only after
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discussing them with the employee, and convincing him that he is capable of
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achieving the established goals.

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Generally, the goals of individuals (like improvement in QWL and increase in salary)
are different from the goals of the organization (like increase in production, sales and
profits). The management should talk to employees and try to identify such personal
goals which can be aligned with organizational goals. They may include career
advancement, employee stock option schemes, and so on. The goals set for employees
should be clear, objective and measurable. Laying down clear and quantifiable goals
would make it easier to obtain commitment from employees. The link between
performance and reward should be clearly established. For example, an employee
who is able to get business worth Rs 1 crore for the company may be given a spacious
flat worth Rs 20 lakhs in the center of the city. The management should determine
the time period for achievement of goals and ensure that goals to be achieved are not
too ambitious. The manager should review the progress of the employee at regular
intervals and in case the progress is less than expected, the manager should suggest
measures to ensure the goal is achieved. The manager should extend his support as the
employee attempts to implement the suggestions given by him.
The parameters for appraisal of a plant manager may include the number of units
produced in the year, reduction in costs and reduction in job cycle time. The
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Part B
parameters of appraisal for senior management may include return on investment,

customer satisfaction and shareholder value.
Caselet 35
1. Aastha Manufacturers is more likely to secure a competitive advantage over the
other players because it is proactive in its strategies and makes constant efforts to
innovate and change in tune with changes taking place in the environment. Thus,
Aastha would be able to come out with innovative products and services continuously
and maintain its position in the market. Akina, on the other hand, has a traditional
management style. Akina wants its employees to do the way they are told by the
management. It does not encourage innovation and creativity and is not receptive to
new ideas. Moreover, the company responds only when it is threatened by its
competitors’ strategies. Adherence to principles of scientific management has made
the company efficient in its operations. But operational efficiency can be easily
duplicated by other players in the industry. Therefore, modern companies need agility
to achieve competitive advantage. Aastha has made itself highly agile by making
change a part of its culture, whereas Akina is highly rigid in its structure and
10
processes. Therefore, if competition intensifies, Aastha is more likely to succeed than
Akina.
20
If it is to survive in the changing business environment, Akina needs to change its
management style. It has to implement a organization-wide change program to bring
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about a change in its culture, business processes, leadership style and employee
behavior. Employees should be encouraged to communicate upward freely. Akina
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may announce rewards for the employees who contribute good suggestions. Managers
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should be willing to listen to employees and appreciate those giving good suggestions.
Akina should deemphasize job specialization. It should attempt to give entire tasks
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rather than a part of a task to employees. Akina should encourage employees to work
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in teams, learn new skills, share information and seek greater responsibilities.
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Employees should be trained to identify problems (e.g. defective equipment, poor

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quality inputs and outputs) in their departments and develop solutions for them.
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2. I would choose to join Aastha Manufacturers for the following reasons: Aastha has
an organizational culture that encourages innovation and creativity. All ideas – big or
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small – from employees are welcomed and discussed. Akina, on the other hand, never
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welcomes ideas and kills creativity. In Aastha, all the employees are encouraged to
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work in teams. I will, therefore, get an opportunity to learn to work in a team, which is
essential in modern organizations.
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Moreover, in Aastha, employees are free to interact with each other, share information
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and discuss various issues. Employees can also challenge the decisions of
management if they do not agree with them. Therefore, Aastha will help me develop
as an individual. By participating in quality circles, I will be able to develop my
knowledge about quality and the ways to improve it. At Akina, employees are not free
to socialize at work. They are not informed about any developments in the company.
Upward communication is almost non-existent and even downward communication is
not effective.
Aastha tries to move ahead of competitors by encouraging continuous change and
innovation in organizational processes. By participating in change initiatives, I will be
able to acquire the flexibility and agility required to compete in the modern business
environment. In Akina, there is no emphasis on team work, training and development.
Akina neither offers training nor the opportunity to learn. Therefore, employees will
not be able to develop their skills and abilities to take on higher responsibilities. The
rigid structures and policies at Akina would prevent me from developing the
flexibility to adapt to change. This will hamper my career growth. Therefore, I would
prefer to work with Aastha rather than Akina, even if both of them offer the same
salary.
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Caselet 36
1. PCMM stands for People Capability Maturity Model. To achieve PCMM
certification, an organization should achieve maturity at five levels. At the first level,
an organization concentrates on improving its staffing process. At the second level,
the organization seeks to improve its compensation system, training and development
programs, performance appraisal process and communication and coordination. At the
third level, the organization encourages employee participation in planning and
decision making, develops workgroups, improves manpower planning, evaluates the
competencies of its employees, and helps them in their efforts for career development.
It also adopts better workforce practices. At the fourth level, the organization
emphasizes mentoring, organizational capability management, quantitative
performance management, competency-based assets, empowered workgroups and
competency integration. At the fifth level, the organization seeks to achieve
continuous workforce innovation, organizational performance alignment and
continuous capability improvement.
PCMM certification will help Excel enhance the skill sets of its employees and
increase their productivity. Excel will be able to focus both on people development
10
and business process efficiency. It will be able to implement change management
20
effectively. It will be able to adapt itself better to the changes in the Indian
information technology industry.
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The PCMM certification will help the company motivate its employees to work
toward organizational goals. It will also provide employees with better training and
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on-the-job experience. Employees will feel more involved in the processes of the
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company and become more committed to the company. The certification would go a
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long way in helping Excel integrate its human resources with its strategic objectives
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and organizational goals.

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2. Six Sigma is a disciplined, data-driven technique adopted by organizations to

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reduce defects in their processes and output. To achieve Six Sigma certification, a
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process should not produce more than 3.4 defects per million opportunities. Many
global companies like Motorola, ABB and GE have implemented Six Sigma.
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Six Sigma is achieved in eight stages – Recognize, Define, Measure, Analyze,

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Improve, Control, Standardize and Integrate (RDMAIC). By following these phases,

organizations collect data systematically, conduct statistical analysis, pinpoint the
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factors that lead to poor quality and strive to eliminate those factors. In order to
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implement six sigma, employees are trained as Champions, Master Black Belts, Black
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Belts, and Green Belts. Champions are employees who lead Six Sigma within specific
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businesses in the organization and ensure that all the key functions of the organization
are linked to Six Sigma. Master Black Belts are employees who are entrusted with the
responsibility for disseminating information on Six Sigma throughout the
organization. Black Belts work full-time under the Master Black Belts and apply the
tools of Six Sigma to specific projects. Green Belts work under Black Belts and lead
small-scale Six Sigma projects.
Six Sigma enables organizations to achieve defect-free performance in its
manufacturing, designing, engineering, and business processes. It also helps
organizations reduce the costs of generating quality products and services.
Caselet 37
1. According to Herzberg’s two-factor theory of motivation, there are two major
factors that play a major role in employee motivation – hygiene factors and
motivating factors. The absence of hygiene factors like fair pay, working conditions,
organizational policies leads to employee dissatisfaction and demotivation. But even
if the hygiene factors are provided above the usual level, they fail to motivate
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Part B
employees. The motivating factors include nature of work, recognition for good work,
rewarding good performance, etc. The presence of motivating factors is essential for
employee satisfaction and motivation.
2. Since salary is a hygiene factor, Smile Hotels Group failed to motivate employees
by giving more salary. To motivate employees they have to make their job interesting,
appreciate them when they perform well and give them greater responsibilities. The
employee recognition program proposed by Roy aimed at providing these
motivational factors. Therefore, the CEO of the group, Hari Prasad Thakur agreed to
implement the suggestion offered by Roy. The program was essential to motivate
employees and improve customer service.
The marketing manager and the associate marketing manager suggested that the
company should offer free holiday trips, discounts in holiday packages, discount in
room rent, coupons and lucky draws to loyal customers, and extra facilities for
customers from the corporate segment so as to attract more number of customers.
These techniques work only as long as the schemes are being offered. Once, the
company stops spending on gifts, the problem of customer switching will recur.
10
Hence, the CEO chose to concentrate on addressing the problem from a long-term
perspective by improving customer service which would, in turn, help increase the
20
customer satisfaction level and thus help the company retain customers for a long
time. For this to happen, the employees had to be motivated to offer still better service
of
than they were currently offering to customers. Therefore, keeping the long-term
benefits of the company in view, the CEO decided to implement the suggestion
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proposed by the HR manager.
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3. The management of Smile Hotels Group has initiated an employee recognition

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program which recognizes employees who work very well. In addition to it, the
management should invite ideas from employees to improve customer service and
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reward good suggestions. If the management implements a suggestion and obtains a

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good response from customers, the employee who made the suggestion should be
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rewarded by giving him a higher rating and due weightage in his performance
appraisal. However, the management should not discourage employees whose
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suggestions are not implemented. A training program may be started for employees to
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tell them how to develop ideas and refine them so as to be applicable in organization.
The training will help employees review their ideas before submission. This will
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reduce the time taken by management to review employees’ ideas, and concentrate on
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other strategic issues of significance. Also, this will nurture creativity in the
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organization and improve customer service and satisfaction.

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Occasionally, managers should also attend to customers, find out their opinions on the
service being delivered by the staff, and note any suggestions they may give to
improve the service. Abiding with the company’s philosophy of delivering superior
customer service, the managers should not hesitate to serve a customer if they find
that none of the staff is available. This will not only set an example for the employees
to follow but will also demonstrate the importance given to customer service at Smile.
In this way, Smile Hotels Group will be able to retain existing customers, attract new
customers, and improve its profitability.
Caselet 38
1. Gulati never asked Raj to participate in the negotiation process. If Gulati asked Raj
to participate and Raj refused because he had more important responsibilities at home,
then we could say that Gulati was right in his approach. However, this is not the case
here. Even when he was not able to attend the negotiation session and Raj conducted
negotiations on his behalf, Gulati did not allow him to take any decision on his own.
He insisted that Raj should consult him before he took any decision. The CEO,
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Franco, wanted his managers to delegate greater responsibilities to their subordinates.

But Gulati never delegated responsibilities to his subordinates. It was wrong on
Gulati’s part to prevent Raj from developing the skills he would need to progress in
his career. He enjoyed the autonomy given by his boss but was not willing to pass on
the same benefits to employees in his department. Even though Gulati may be
concerned about his employee’s life after work, it is his responsibility to explain to
Raj the advantages of learning negotiation skills and taking on greater responsibilities,
and help him understand the importance of career growth. Gulati should make Raj
understand the importance of perfecting these key skills, without which Raj’s career
would stagnate. Gulati should ask Raj to attend some of the negotiation sessions so
that he can learn these skills. If Raj does not show any interest even then, Gulati can
assume that Raj is not interested in personal growth and can stop making efforts to
develop him as a potential leader. However, at the same time, Gulati should identify
an employee with potential in his department, and train him in managerial skills so
that he can succeed Gulati, in case the latter gets promoted or leaves the organization.
2. Gulati had great concern for his employees and did not want to make his employees
work after scheduled working hours. He set well-defined rules within which everyone
10
worked. Each of his subordinates knew his role and performed it. There was no role
ambiguity. He offered support the employees needed at work. He gave equal
20
importance to people and work. Therefore, according to the leadership grid, Gulati
exhibits 5, 5 leadership style (middle of the road management). Gulati however failed
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to develop his employees to assume leadership roles. There was no one in Gulati’s
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department who could carry out his responsibilities in his absence.
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In contrast, the marketing manager, Shivamani, was not at all concerned about his
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employees. He set difficult targets for his employees and expected them to achieve the
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targets at any cost. He misused his power to punish them. He did not sanction them
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leave and prevented them from claiming reimbursement for the expenses they
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incurred on duty. It was an inhumane way of treating employees. Shivamani gave

more importance to work than people. Therefore, Shivamani exhibits 9, 1 leadership
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style (authority-compliance).
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Both the leaders have to strive hard to reach 9, 9 leadership style (team management)
U
which is considered ideal. If Gulati cannot develop anyone in his department to be his
successor, someone external to the organization can be chosen to head the department.
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But the autocratic style of leadership displayed by Shivamani demotivates employees,

B
and drives down their performance thereby affecting the entire organization. The
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negative effect of Shivamani’s leadership style is more immediate and more

detrimental to the organization than that of Gulati. Hence, Shivamani has to strive
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harder than Gulati to improve his leadership style because his style is not desirable at
all.
Caselet 39
1. Ashrita was characterized by a functional structure; the various departments were
set up based on their management function. In this structure, employees who use
similar skills are grouped into a unit. For example, the finance department consists of
people who have accounting skills, the marketing department consists of people
having good marketing skills, and the human resources department consists of those
who have people skills. This kind of structure helps organizations use the skills of
their employees efficiently and reap the benefits of economies of scale.
Functional departmentation can also lead to conflicts. This happens because different
departments have different interests, and the functional heads hold their interests
above those of the others. For example, the HR department may want to offer special
incentives and rewards for high performers to retain them, but the finance department
may want to minimize expenditure. Functional departmentation does not encourage
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Part B
employees to have a sense of ownership of the final output, as employees in each

department perform only a small part of the entire process involved. Another
disadvantage of a functional structure is that employees develop expertise in a
particular function but lack knowledge of other areas. They do not have a holistic
picture of the organization.
Apart from departmentation by function, the different types of departmentation used
in organizations are: departmentation by geography, by process and by customer.
In organizations having departmentation by geography, jobs are grouped on the basis
of territory. For example, different marketing departments may be set up for Middle
East countries, South Asian countries and the US. This will enable the organization to
formulate strategies depending on the competitive conditions in the region.
In organizations having a departmentation by process, various departments are created
based on the processes performed in them. For example, in a textile manufacturing
company, there are different departments like cleaning, weaving and dyeing.
Some organizations classify departments based on the type of clients they serve. For
example, an organization may have different departments to serve individual
customers, corporate customers, and overseas customers.
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Some organizations may also use a combination of two or more of the above
20
departmentation methods.
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2. The process of decision making at Ashrita was decentralized, and this was possible
because of its flat structure. There were only a few levels of hierarchy in the company,
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namely the CEO, the country managers, the functional managers and the functional
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executives. Each manager enjoyed a certain degree of autonomy in this structure. The
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country managers could make most of their decisions without having to approach the
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CEO for his assent. Since the country managers understood the nature of local
markets and competitors’ strategies better than the headquarters, they were able to
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allocate resources efficiently and formulate customized strategies. Decentralization

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helped the company promote internal competition between various subsidiaries and
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strive for efficiency.

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Ajay Arora, the country manager of India, used his autonomy to take bold decisions
and make his subsidiary efficient, self-sufficient and profitable. He invested time and
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resources to educate his employees about the importance of customer service and
customer satisfaction and achieved desired performance from them. The quality of
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services offered by his subsidiary attracted even foreign players and earned revenues
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for the company. The subsidiary became a role model for the other subsidiaries and
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initiated healthy internal competition between them.

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Decentralization is not without its drawbacks. In the case of Ashrita, as decision-

making power lies in the hands of the country manager, the performance of the
subsidiary will depend entirely on the manager’s efficiency. Under decentralization,
vesting the power of decision-making in incompetent managers may result in bad
managerial decisions and losses for the company. Each subsidiary tries to be
independent by acquiring all the resources it needs, and not having to depend on other
subsidiaries for resources. In doing so, duplication increase occurs and the cost to the
organization as a whole also increases. The headquarters has to make special efforts to
get up-to-date information pertaining to all its subsidiaries. The costs of collecting and
processing information in the organization will also therefore be high.
Caselet 40
1. I would make the following suggestions to Prasad:
• He should inform his managers about the agenda of meetings in advance. This
would help managers to be prepared, and contribute their ideas and suggestions at
the meeting, improving the quality of decisions.
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• He should give the managers enough time to express their ideas. Currently,
Prasad calls for a meeting, presides over it, quickly goes through the available
information, makes decisions, communicates his ideas and winds up the meeting.
He should also allow the managers some time to communicate their views and
suggestions.
• He should make it clear to the managers whether he is simply expressing an idea
or whether he wants his idea to be implemented as a project. This would help
managers reduce their workload by not adding unintended projects to their list.
• He should stop giving false report about the status of various projects to the head
office. The build-up of work with the head office sending fresh projects to
Prasad’s team would then be prevented. As a result, the managers would no
longer be overburdened and would be able to complete their work peacefully
• He should stop labeling every task as urgent. This would help managers
recognize truly urgent tasks and complete them first. This will eliminate chaos
and confusion in the organization.
• He should conduct a regular employee survey. A questionnaire which includes
10
questions related to employees’ satisfaction with their job, and the behavior of
their superiors, peers and subordinates, will help Prasad to obtain feedback about
20
his behavior. He should ask his employees to explain the changes they would like
to see in his behavior. He should also convey to them what changes he expects in
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their behavior. Both parties should then discuss the pros and cons of making
changes in their behavior. If they realize that there are many advantages to be
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gained by changing their behavior, they should try to adopt the new behavior or
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seek the help of a change consultant.

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2. I believe that the managers were responsible for the situation in the organization.
The managers were finding it difficult to cope with the behavior of their general
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manager, Prasad. Since all the managers were facing similar problems, they should
have gone to Prasad and discussed their problems with him. Instead of finding a
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solution to the problem, they were finding their own ways to disguise the problem
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temporarily. They tried to disobey Prasad by keeping all the tasks he assigned them
pending. Since no one dared to approach Prasad, the situation worsened, and both
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Prasad and managers were unhappy and frustrated with each other. Their feelings of
resentment affected their performance, and made their life at the workplace miserable.
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B
Prasad also did not take any initiative to find out whether the managers were
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comfortable with his style of management and the work pressure he put on them.
People like challenging work to a certain point, but beyond this point, it induces stress
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and results in burnout. That was what had happened in his office. However, finally,
Prasad did the right thing by approaching an HR consultant to resolve the problems in
his organization. He even offered to change his behavior when the HR consultant
explained to him that his behavior had caused many of the problems.
Caselet 41
Regal wanted to improve its communication with its employees and customers in
order to be able to face intense competition from emerging players in the industry. By
sponsoring an international science exhibition and setting up a uniquely designed stall,
Regal wanted to attract the attention of the larger public. Regal believed that
familiarity with the company’s name would increase the sales of its over-the-counter
(OTC) drugs. Regal also wanted to improve its internal communication
(communication between employees of different divisions) and keep all its employees
informed of the developments taking place in the organization. By inviting employees
from different subsidiaries across the world, Regal was able to facilitate interaction
among them. As these employees spent a week together, they exchanged lot of
information about their jobs and the way of functioning of their own subsidiaries.
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Part B
They continued communicating even after they returned to their original places of
work. Knowledge exchange improved as the employees tried to learn from the
experiences of one another. The findings of the survey conducted after the exhibition
revealed an increase in employee productivity and sales and clearly indicated that the
company attained its objectives.
Regal can further improve internal communication by using the following methods:
• Rotate employees through various departments and subsidiaries. This will help
employees realize the importance of cooperation and coordination between
departments and subsidiaries.
• Encourage team-building activities between heads of various departments and
subsidiaries. The friendly relations between heads of departments and subsidiaries
will encourage communication among their subordinates as well.
• Make internal communication an essential part of standard operating manuals.
They should not only specify when and how the product components should flow
between various departments or subsidiaries but also the nature of flow of
information.
10
2. Many employees from different divisions met for the first time during the
20
exhibition. They shared their experiences and exchanged personal mail addresses.
Thus, in a way the interactions led to the development of informal networks which
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would be useful in the future. The employees were able to get to know of other
employees’ skills and expertise. In their future projects, if they want some information
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from other divisions, they know the person to contact. Because of the informal
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relationship between them, the desired information will flow much faster and the
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projects will also progress fast.

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As employees from different divisions were able to interact with each other, they
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learnt more about each other’s roles in their respective divisions. They knew how the
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activities of different divisions were interrelated. They could visualize how their
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division and they themselves contributed to the overall performance of the

organization. As the significance of their role in the organization became clear, the
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employees were motivated to work better.

U
As employees from different divisions worked together as a team for a few days, they
developed a sense of belonging, and they could identify themselves with the
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organization and their divisions in a much better way than in the past. This might have
B
been a reason for the increase in productivity in the employees. When the people who
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came to the science exhibition saw that the brands they bought actually belonged to a
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company called ‘Regal’, they must have been surprised. As Regal had never
advertised its corporate brand before, many customers did not know about it. To
attract more people to its stall, Regal, had advertised its sponsorship as well.
Therefore ‘Regal’ became a very popular corporate name. When customers found that
their favorite brand was associated with a big corporate name, they must have been
reassured in continuing to buy Regal’s products. Therefore, the sales of its products
increased.
Caselet 42
1. Morgeld joined Akay because it promised him a supportive and encouraging work
environment, informal culture and growth opportunities. But on the day of joining, he
found that the employees working in the organization were not very helpful. No one
cared to guide him through the procedures when he came with his appointment letter
to join the company. He waited for almost two hours in the reception but no one came
to receive him. There were absolutely no efforts made by anyone in the organization
to introduce a new employee to the other employees. The receptionist did not try to
find out whom he should meet. He had to ask and find his way between the various
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cabins to find out the person whom he had to report to. He was not told anything
beforehand about the dress code and when he came dressed in formals, many in the
organization laughed at him and commented that he should come dressed in casuals.
Further, no one in the office bothered to inform him about the lunch-break or where
lunch was available. No one bothered to show him the way to the canteen. As a result,
he had to come back from office hungry. Morgeld must have experienced
dissatisfaction and must have regretted his decision to join this company. He must
have also thought that if the company could not keep its promise of a supportive work
environment for newcomers, how could it keep its promise of opportunities for career
growth.
Akay failed to facilitate a smooth induction of new employees into the organization.
Poor induction and socialization processes dampen the spirits of new employees who
join the organization with a lot of hope and ambition. This can have a negative impact
on their work performance as well. Moreover, if an employee is not allowed to
interact with other employees, he will not develop any sense of belonging to the
organization and coworkers. Therefore, he is likely to switch jobs at the earliest
opportunity.
10
2. During the first two years of his joining the company, Morgeld was not allowed to
20
do tasks on his own. He was constantly instructed, guided and monitored by his team
leader, Sadgun Chari. Such constant monitoring prevents employee development and
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reduces their growth prospects.
One day suddenly, Chari gave an important task to Morgeld and asked him to
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complete it on his own. He induced psychological pressure on Morgeld saying that it
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was a high priority task and had to be done perfectly within a short time. Although
Morgeld was tense, he worked hard for 14 hours a day and completed the task. When
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he went to report to Chari that he completed the task, the latter was on leave.
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Therefore, Morgeld went to submit the file directly to his boss, the Production
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Manager. This was not appreciated by the manager. He wanted the file to come only
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through Chari. Even after Morgeld tried to remind him that it was a priority task, he
insisted that he would accept the file only through Chari. This showed that the
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organization had a bureaucratic culture. The boss communicated only with his
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immediate subordinates. When the Production Manager asked Morgeld to take up

another priority task, Morgeld was too demotivated to work on it. He was sad that he
S
hadn’t got even a word of appreciation from his boss for completing the previous task
B
on time. The Production Manager, in fact, did not even have a look at it. Morgeld felt
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that probably his team leader had given him a normal task and made it appear as
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urgent to ensure that he slogged on it and completed it in time. Morgeld was

depressed with the kind of response he received from his superiors for his successful
performance. He was also disheartened by the kind of work environment that
prevailed in the company. This adversely affected his morale and he failed to display
enthusiasm and commitment in his next assignment.
Caselet 43
1. If Chowdhary accepts the promotion, she would gain power and authority. By
performing well in her new role, she can gradually climb up the career ladder. But she
has to lead people who were her colleagues for a certain period of time. Her
colleagues may be demotivated because of her promotion since she is younger than
them and has lesser experience than them. They may try to express their
dissatisfaction and resentment by disobeying her orders and not cooperating with her
in achieving organizational goals and objectives.
As Chowdhary’s friend, I would advise her to accept the offer. But I would also
caution her to be prepared for initial resentment and resistance from her co-workers.
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Part B
She has to accept the challenge of managing a tough team and develop the required
courage to face it. Soon after assuming her new role as team leader, she should
conduct a meeting with her team members and make it clear to them that although her
position has changed, her relationship with her team members would not change. She
should convince them that each member of the team has unique skills and she would
like to learn from them. She should involve all the team members in developing
proposals for new projects. While accepting or rejecting a suggestion, she should
clearly explain to them why she is doing it. She should also hire another person to
replace her position in the team. She can give the responsibility of induction and
orientation to Sharma who has good social skills. This will allow her to make good
use of his skills in the right direction. Chowdary should treat all the members of her
team with respect, and emphasize the importance of their participation and
involvement in all projects. When team members face any problem in project
implementation, she should not only find a solution to the problem but also explain to
them how she developed the solution so that if such a problem recurs in the future,
they would be able to solve it themselves. All these strategies would help Chowdary
gain respect from her team members and be accepted as their leader.
10
2. Madhur was right in his decision to suggest Chowdary’s name for promotion to the
position of team leader. A person who leads the team should be a team player. He
20
should have good knowledge of the work done by the team. He should be able to
express his views in a convincing manner. He should be able to solve the problems of
the team.
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Madhur did not recommend the name of any of the other team members because he
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found that each one of them lacked one or other quality that was required to be an
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effective team leader. Rajiv Arora was an individual player. He was hardly interested
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in knowing about the tasks of the other members of the team. He was concerned about
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his own work. Also, he never took a stand on any issue or express his own views and
nl
opinions. Therefore, Madhur did not consider him suitable for the position. Sharma
had a good social network, which is one of the desired characteristics of a leader.
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However, he had very poor work knowledge. He would not be able to solve the
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problems of the teams and hence, would not be able to gain the confidence of his team
members. Moreover, he blindly supported the views of his superior and didn’t have
U
any individual opinion and view. Therefore, Madhur did not select him for the
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leader’s position. Murthy had analytical ability but did not possess the articulation
B
skills (ability to communicate a view in a way that convinces the other person).
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Although she opposed any view that was presented by another person, she was unable
to support her own views. A manager has to accept a good suggestion or view even if
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it is offered by an employee of a lower rank. Therefore, Murthy cannot make a good

manager.
Chowdhary, on the other hand, has a good knowledge about the work in the
organization, a helping nature and also has problem-solving skills. She listens to the
views expressed by everyone in the team and votes for the best of them, or expresses
whatever point of view she feels is appropriate. As she has more desirable skills than
the rest of the team members, Madhur selected her as his successor in the
organization.
Caselet 44
1. The following are the factors that led to the decline in Geek’s profitability:
• Niranjan Paul, the second CEO of Geek, concentrated only on diversification of
the company and not on its performance. When the company had its operations in
a limited number of industries, it was among the leading firms in each industry
and earned huge profits. But with the increasing diversification of Geek, Niranjan
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was unable to concentrate on so many businesses and, as a result, the profitability

of the organization suffered.
• Niranjan handed over the control of Geek to his son Vinay Paul without ensuring
that he was formally trained for the position. Vinay was not aware of the
company’s problems and requirements. Moreover, Vinay had an autocratic style
of leadership and did not listen to anyone and did what he felt was right. When all
other organizations were trying to cut down extra layers in the organization,
Vinay added additional management layers to his organization. This simply
added to its costs.
• Instead of trying to solve the existing problems of the company, Vinay spent huge
sums of money on acquiring businesses, simply to increase the size of the
company and prevent it from being taken over. The acquired businesses increased
the cost of operations of the company.
As none of the CEOs took steps to improve the quality of products and services and
cut down the costs of operations, the company’s profitability declined.
2. Yes, Akshay was right in advising Vinay not to sell off Geek. However, Vinay
10
could dispose off the company’s units in unrelated industries. When Akshay requested
20
the employees to forgo their bonus for a year for the sake of the company, they
agreed. This implies that the employees were very cooperative. Therefore, Vinay
of
could seek their cooperation in implementing the necessary change programs in the
organization and bringing the company back to the path of success. Even if there is
s
some initial resistance to the change initiatives, the change agents can overcome it by
s
using the following measures:
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• Educate employees and improve communication: Change agents should

C
explain the factors that necessitate change in the organization, and the benefits
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that would accrue to the organization and its employees by adapting to change.
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Employees should be allowed to express their fears about the impact of change on
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their work. Change agents should assure employees that there will be no lay-offs
or unreasonable increase in workload as a result of the change program.
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• Encourage employee participation: Change agents should seek the active

U
involvement of employees right from the initial stages of the change program
implementation. This will help management reduce employees resistance to
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change and increase their commitment to the change program.

B
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• Facilitation and support: Employees whose skills become obsolete because of

introduction of advanced and latest technology as a part of the change program,
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should be given the training to acquire new skills required to make use of the
technology. Employees who find it difficult to cope with change and become
anxious about it should be given support and counseling to help them overcome
their fears.
• Negotiation: Sometimes, union leaders or other powerful groups resist change.
The management should negotiate with them to obtain favorable terms.
As far as possible, the management should avoid techniques like manipulation, co-
optation and coercion because they do not contribute to a healthy long-term
relationship between employees and the management.
Caselet 45
1. According to Hall’s career stage model, there are four stages in the career of an
individual – exploration, establishment, maintenance and decline. In the exploration
stage, an individual searches for a suitable job, and in the process he may switch from
one job to another. Ahuja joined many firms in the beginning. At first, he joined
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Part B
Ajanta Electronics but he left the job to pursue higher studies in the US. Then, in the
US, he joined CNT Innovative Products Ltd, and later joined KLN International Ltd.
But he worked only for one year in each of these firms. Then he returned to India and
joined ATB Global.
In the establishment stage, an individual is relatively more stable than he was in the
earlier stage. He develops a rapport with peers, superiors and subordinates. His
productivity is also comparatively high. Once, Ahuja joined ATB Global he did not
look out for another job. He developed good relations with fellow employees as well
as superiors and subordinates. He took steps to increase the productivity of the
organization.
In the maintenance stage, the individual wants to coach his subordinates and new
employees and prepare them for higher positions.
In the decline stage, the individual becomes weak, his productivity declines and he
seeks to take retirement. However, advances in the field of medicine have resulted in
changes in this stage, and individuals are still active in this stage today. In Ahuja’s
case, he started his own organization with the help of his wife and sons.
10
2. According to Levinson’s adult life stages theory, there are four transition periods in
an individual’s life – age-thirty transition, mid-life transition, age-fifty transition and
20
late adult transition. Age-thirty transition lasts between twenty-eight and thirty-three
years, mid-life transition takes place between forty and forty five years, age-fifty
of
transition begins at fifty and ends at fifty five years, and late adult transition takes
place between sixty and sixty five years.
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According to Levinson, during these transition periods, an employee’s attitudes are
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shaped or modified more significantly as compared to periods of stability. Levinson

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also specified the four periods of stability: twenty-two to twenty-eight, thirty-three to

forty, forty-five to fifty and fifty-five to sixty.
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But Levinson could not prove his theory. He could not explain the reasons for the
O
differences in personalities of people of the same age. For example, some people
develop clear life goals in their early twenties itself. Therefore, he reclassified the
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stages into three eras – early adult, mid-life and late adult. He also changed his
assumption that some periods were characterized by stability while some were
U
characterized by change in behavior. He suggested that each era included a transition-

S
in period and a transition-out period, i.e, both stability and mobility were part of each
B
stage.
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In his early twenties, Ahuja was not sure what he wanted to do. After completing his
Fo
engineering degree at the age of 22, he joined Ajanta Electronics. But he left it within
7 months to pursue his post graduation in the US. After completing MS at 25, he
worked in two US firms successively. He worked for not more than a year in each of
these firms. He then returned to India and joined ATB Global where he worked till his
retirement. Ahuja did not show any interest in socialization with other employees in
the two firms where he worked at the beginning of his career. But after joining ATB
Global, he actively interacted with superiors and subordinates. According to the old
assumption of Levinson’s theory, in the period between twenty two to twenty-eight, a
person’s personality is stable. But Ahuja’s personality seems to have undergone a
transition in this period. Therefore, Levinson’s new theory which assumes that an
individual’s lifecycle is characterized by an interplay of mobility and stability holds
true in Ahuja’s case.
Caselet 46
Ankita paid the best wages and salaries in the industry. It also allowed employees to
work according to their convenience. But the firm failed to reward high performing
employees. It gave the same salary to all employees at the same level irrespective of
131
their skills, talent and individual performance. This was the major factor that
demotivated talented employees. Employees generally compare their outcome-input
ratio with that of others. They expect the company to compensate them reasonably for
their efforts.
According to the equity theory, equity takes place when:
Person’s outcomes = Other’s outcomes
Person’s inputs Other’s inputs
When talented and high performing employees at Ankita compared their salaries with
their colleagues they found that their efforts were not adequately rewarded.
Person’s outcomes < Other’s outcomes
Person’s inputs Other’s inputs
Talented employees, despite putting in more efforts and achieving greater output than
others, received the same salary as those who put comparatively lesser efforts at work.
This led to dissatisfaction among the skilled and talented employees and resulted in
high turnover.
10
2. Suman has chosen to implement a deferred profit-sharing plan in the organization.
20
This plan is likely to motivate employees to improve their performance in order to be
able to obtain maximum share of the profits. As the amount of individual
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compensation will be proportional to the company’s profitability, employees will
share a sense of ownership. They will cooperate with the management in achieving
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organizational goals and objectives and contribute to organization’s success. As
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Suman has decided to distribute profits to employees based on their performance, this
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will motivate talented employees to improve their performance and increase the
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organization’s profits so that they can benefit from it. When their efforts are fairly
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rewarded, talented employees are likely to stay with the company for long. Hence,
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Suman will be able to motivate employees and reduce turnover by introducing a

profit-sharing plan in the company.
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The various ways in which employees compare their compensation with others are:
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Self-inside: An employee compares his experiences with that of employees in a

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similar position in his organization.

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Self-outside: An employee compares his experiences with that of employees in a

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similar position in a different organization.

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Others-inside: An employee compares his experiences with that of employees in a

different position in the same organization.
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Others-outside: An employee compares his experiences with that of employees

working in a different position in a different organization.
Caselet 47
1. The development of a group takes place in four stages: forming, storming, norming
and performing. In ABZ, groups developed in the following manner:
• When a group of employees joined ABZ, they were new to its values and work
culture. They were uncertain about the nature of work they would be assigned,
their colleagues, the way in which they worked (workgroups, teams or
independently) and the style of leadership. They tried to identify the behavior
acceptable to others in the group and mold their own behavior accordingly. They
did not refute the opinions of others strongly, even if they were in contradiction
with their own opinions. This stage in the development of the group at ABZ is the
‘forming’ stage.
• The new employees then acknowledged the existence of a group. But they
resisted the constraints imposed by it. They tried to form their own sub-groups.
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Part B
They were often involved in conflicts with the members of the main group. This
indicates that the employees had entered the stage of ‘storming.’
• After spending a few months on their work, the employees developed close
relationships with their group members. They realized that cooperation between
group members was essential to achieve their group goals. The common goals
and interdependence of activities encouraged employees to develop a strong sense
of identity with other group members. This indicates that the group had entered
the phase of ‘norming.’
• The members of the group respected each other’s point of view. Thus, there were
fewer unproductive conflicts. As all the group members were involved in decision
making, the group was able to make better decisions and implement them
successfully. They achieved their group goals. This indicates that the group had
entered the phase of ‘performing.’
2. The given caselet describes the development of a formal group. The goals of the
group were set by the organization. The group was formed and strengthened because
of the interdependence of the activities performed by the employees in the
10
organization, and not as a result of the will of its members to form a group.
Organizations generally have two types of groups depending on the degree of
20
formalization: Formal groups and Informal groups.
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i. Formal groups: These groups are formed by the organizations, and have well-
defined tasks and goals. The management determines the size of the group and selects
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its members after considering their skills and abilities carefully.
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Formal groups can be further divided into two groups – Task groups and Command
groups.
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Task groups: These are most temporary in nature. The management forms task groups
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to achieve specific organizational goals. The members of a task group may come from
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the same department or different departments in the organization, depending on the

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purpose for which the group is formed. After the group accomplishes the purpose for
which it was formed, the management dissolves the group. Employees return to their
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permanent groups (The permanent group represents the group in which employees
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work regularly). Sometimes employees may not be able to do justice to their roles
both in the task group and in the permanent group. In such cases, their duties as
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members of the permanent group are reduced, or temporarily eliminated to facilitate

B
the progress of their work in the task group. Investigation committees or problem-
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solving groups formed by selecting employees from different departments to find out
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the reasons for certain quality-related problems can be considered as task group.
Command group: It is permanent in nature and is clearly shown in the organizational
chart. The members of a command group work in the same department and report to
the same superior. The functional departments in an organization are the best
examples of command groups. For example, employees working in a marketing
department form a command group.
ii. Informal groups: They are formed by the employees themselves and lack any
specific structure. They are formed mainly by people who share common interests.
Informal groups serve the employees’ needs for socializing, having fun, and for
deriving moral support and help in times of need. Employees from different
departments but residing in the same neighborhood can be considered as an informal
group.
Informal groups are divided into two types – friendship groups and interest groups.
Friendship groups are formed because of close relationships between its members.
Therefore, they are relatively permanent in nature as compared to interest groups. The
members come close to each other because of similarity in age, educational
background, family background or views.
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Interest groups comprise of people who work on things of common interest. The
members will disperse once their purpose is served. Therefore, interest groups are
temporary in nature. For example, a group of employees coming together to organize
a cultural program on the occasion of the foundation day of the company constitute an
interest group.
Caselet 48
1. Yes, Proton X can be considered as an informal organization because it has all the
essential characteristics of an informal organization. The job titles and reporting
relationships at Proton X were not represented in the form of an organization chart.
The employees shared close personal relationships with one another, which reinforced
their official relationship. They considered each other as friends rather than colleagues
or members of the same organization. Proton X did not have any formal leader.
Rupesh Mittal was the informal leader of the employees at Proton X. He acquired
informal power through his knowledge, the respect the other employees gave him, his
empathetic nature and his problem-solving abilities. At Proton X, information flowed
freely among the employees through all the levels of the organization. Employees did
10
not hesitate to discuss organizational problems with superiors and suggest new ideas
to them. If one of the employees deviated from expected behavior, the other
20
employees would correct him. Even those in managerial positions did not mind being
corrected if they made any mistake. The managers accepted a good suggestion from
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anyone, irrespective of his/her position in the hierarchy. Mittal accepted a suggestion
given by an office boy. People who offered good suggestions were rewarded with a
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free holiday trip to Disneyland in Paris, under the employee suggestion scheme.
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The informal culture of the organization encouraged employees to be genuinely

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concerned about their work responsibilities, the quality of their work and the
profitability of the organization. They worked hard on their own and did not have to
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be directed by the management to put in extra effort when required. At Proton X, no

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one was considered as a permanent leader. Depending on the need of the situation,
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anyone who had the relevant knowledge and expertise could become a leader.
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Because of the informal culture and structure, employees at Proton X were able to use
information and other organizational resources efficiently and produce more output
U
than the parent organization in a short period of time. They were able to design and
manufacture four new models of cars in a single year.
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B
2. I think, James Herr should not take a decision in haste. If Proton X is merged with
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Maganta, the smaller Proton X may not be able to influence the larger workforce of
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Maganta to adopt the informal culture. Instead, members of Proton X may have to re-
adapt to Maganta’s bureaucratic structure. This will adversely affect the speed and
agility Proton X achieved when it functioned as a separate entity, and the old
problems will tend to recur.
Hence, Herr should retain Proton X as it is for some time. Proton X may be
considered as a parallel learning structure, operating parallel to the formal
organization and seeking to solve problems which the latter is unable to resolve.
Parallel learning structures can be temporary or permanent. But before eliminating a
parallel learning structure, the top management should ensure that its characteristics
are imbibed into the formal organization so that the learning and expertise acquired by
that structure is not lost.
Employees of Maganta should be allowed to observe and experience the differences
between the work practices of the traditional organization and those in the parallel
learning structure. Towards this end, Herr should encourage employees from different
levels of the formal organization to work in the parallel learning structure for some
period of time. When they return to the parent organization, these employees should
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Part B
explain to other employees the practices adopted in the parallel learning structure and
the advantages of using them. They should try to implement in their own departments
what they learnt in the parallel learning structure. The management should also
support such efforts. In this way, the culture of Proton X will be imbibed in Maganta.
Maganta will acquire the speed and agility and the problem-solving abilities of Proton
X. When employees at Maganta are able to imbibe the culture of Proton X, then
Proton X can well be closed down and Maganta will be able to succeed on its
own.
Caselet 49
1. The type of intervention the OD consultant at the Karthik Group of Financial
Services used, is called Action Research.
Action research intervention consists of the following steps:
• Making a preliminary diagnosis
• Collection of data from the client
10
• Providing feedback about the data to the client
20
• Exploration of data by the client
• Development of an action plan by the client
• Implementation of the action plan
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All the above steps were implemented at the Karthik Group of Financial Services.
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Kiran Patil, the CEO of the group was worried about the inconsistent performance of
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the group. Patil approached an OD consultant who identified that the major problem
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affecting the profitability of the company was the practice of conducting weekly
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meetings of HODs which tended to be unproductive always. The consultant’s view

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met with a positive response from the CEO and the HODs. They showed a keen
interest in improving the effectiveness of the meetings.
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Further information was gathered by Venkata Mani, the current chairman of the
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meetings, at the request of the OD consultant. The information gathered indicated that
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the HODs too did not like the way meetings were being conducted. They felt the
meetings were simply a waste of time. The meetings lacked a proper agenda, did not
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allow them to discuss issues they wanted and ended without any conclusion. This
B
information formed the basis for the development of a three-point action plan, to
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which, further actions were added after discussing it with the other HODs. When
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implemented, most of the actions elicited a positive response from employees.

Attendance increased at the weekly meetings of the heads of departments, a larger
number of issues were discussed, and many decisions were taken at these meetings.
Cooperation and coordination among departments increased. As a result, customer
satisfaction increased and organizational profitability improved.
2. Some of the changes that are likely to take place in OD practices are:
i. Employees and managers will also acquire OD skills:
Not only professional OD consultants, but employees of organizations will also learn
and implement some OD interventions. Therefore, implementation of change will be
much easier and faster in the future. Moreover, OD interventions will not be limited to
HR problems and team-building activities, but will extend to important business
processes such as strategic planning, product development and order fulfillment.
ii. Extensive use of IT:
In future, organizations will have many of their employees working from home using
the Internet. OD practitioners will therefore have to implement their interventions
135
online. They have to adopt online methods of monitoring discussions and offering
their suggestions while the participants discuss their problems and action plans using
chat rooms and video conferences. OD practitioners may have to redesign the
interventions so that they can be applied virtually.
iii. There will be more emphasis on learning, innovation and radical changes:
OD interventions will not be designed just to manage change but will seek to
encourage innovation and learning in organizations. Interventions like parallel
learning structures will be given more importance. OD practitioners will not attempt
to make small changes in organizational processes so that they adjust to
environmental changes temporarily. Rather, they will attempt to bring about a
permanent change in the organization by creating entirely new processes, structures
and behaviors.
iv. OD will derive concepts from more disciplines:
OD derives concepts from disciplines such as industrial engineering, industrial
relations, organization theory and corporate strategy. In the future, OD will have to
resolve new and more complex problems related to e-business, virtual teams
10
networks, and workforce diversity. Therefore, it will derive more concepts from other
disciplines such as labor economics, entrepreneurship, international relations,
20
sociology and IT.
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v. OD will have to serve diverse cultures and diverse organizations:
As more and more organizations expand globally, they employ people from diverse
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cultures. OD practitioners have to help these organizations design new structures and
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processes that accommodate diverse cultures. The interventions they develop will aim
to help organizations to build cross-cultural teams and improve coordination among
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subsidiaries.
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In the past, OD interventions were implemented only in large corporate firms. But in
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the future, even small start-up companies, government organizations and non-profit
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organizations like Amnesty International will be among the clients of OD

practitioners. Therefore, OD practitioners will have to design and implement
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appropriate OD interventions for these diverse organizations.

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Caselet 50
S
B
1. In the present day scenario, the workforce in most organizations is no longer

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motivated to deliver exceptional performance merely on hikes in salary or extravagant

bonuses. The overall feeling of wellness experienced by employees is a prime factor
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in determining how satisfied the employees are with the organization. Organizations
are therefore thinking of innovative ways to motivate their employees and ensure their
loyalty to the organization.
A few examples of the innovative methods adopted by organizations to ensure
employee motivation and satisfaction are discussed below:
• Many large organizations provide employees with large open workspaces such as
beautiful gardens, in which to work. Employees are allowed to go for long walks
to beat stress.
• Tennis grounds, table tennis courts, golf courses, gymnasia etc. are all commonly
used stress-busters in companies.
• Employees in most organizations also have the facility of a company cafeteria
along with coffee or coke-vending machines.
• Organizations also offer their employees the option of alternative work methods
such as telecommuting, flextime, a much-deserved holiday after a particularly
long work schedule, etc.
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Part B
• In most organizations, the HR department is also engaged in developing career

plans for their employees so as to establish a correlation between employee
growth, and the growth of the organization as a whole.
• Provision for an excellent career path, a challenging job profile, unlimited
learning opportunities are some of the expectations of the modern workforce and
organizations are striving to cater to these needs.
Thus, most modern organizations concentrate on catering to the overall wellness of
their members, and also give them attractive incentives for exceptional performances
in an attempt to absorb and retain the best talent in the industry.
2. Keeping in mind the high cost of acquiring new employees, modern organizations
are coming up with innovate ways to motivate and retain people. In doing so, they are
ensuring that they help employees manage stress that arises from the monotonous
nature of their jobs. This, in turn, will help organizations get the best out of their
employees. Most organizations today offer their employees various work alternatives
that increases their productivity. Some of them are discussed below -
• Flextime - As the name suggests, it allows the employees to choose their working
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hours, but within some specified limits. For example, if a firm requires an
20
employee to put in 40 hours of work during a week, he is allowed to do it by
varying the number of hours he puts in everyday.
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• Telecommuting - It is the practice of working from home or while traveling,
keeping in contact with the office. New developments in the field of information
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technology have made this a feasible concept. By operating from home,
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employees are able to avoid rush hours and thus save traveling time. This, in turn,
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allows them to be more productive.

C
• Job sharing - This takes place when two or more part-time employees share the
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work of a full-time employee. It is advantageous both for the organization as well

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as the employees. The employees can reschedule their work hours to suit their
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personal needs and can concentrate better on their job, without any distractions.
The organization can enjoy the benefits of some cost savings and also have a
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better performance from its employees.

U
• Condensed work week – This option involves compressing the work week by
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increasing the number of working hours per day. Normally, a 40 hour, five day
B
work week is condensed into four days, by increasing the number of working
hours from eight to ten hours per day. This would reduce absenteeism and
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tardiness at the work place and give the employees more time for their personal
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needs.
• Working from home – This is another concept which has become quite popular in
the recent times. Employees work from home on a regular basis and visit the
office only once or twice in a week. This results in a great saving for the
employers too in terms of office space and other facilities. The employees of
course save time and resources as they need not spend time and money traveling
to and from the office. The biggest advantage to employees is that they can cater
to the needs of their family which helps them balance their personal and
professional lives.
Most organizations offer some or all of the above work alternatives that not only help
employees cope with stress but also help in increasing their productivity.
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Part C: Applied Theory Questions
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The applied theory questions in this section are intended to deepen the student’s
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understanding of theoretical concepts and their practical implications. Students have to

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apply the theories they’ve learnt to a wide variety of business situations and come up with
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innovative solutions to the problems posed.

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se
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B
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Part C: Applied Theory (Questions)
1. Organizations must adapt to changes in the external environment in order to
survive. This may involve bringing about a change in the organizational culture
as well. Sketch a brief strategy for bringing about an effective cultural change in
an organization.
2. “Socialization is the formal procedure in which new employees in an organization
are educated about the organizational culture, and are encouraged to internalize
the values and ideologies of the organization.” Describe the various stages in the
process of socialization which help in improving employee productivity and
commitment.
3. Organizational culture acts as a powerful control mechanism that helps predict
and control employee behavior. Explain how culture acts as a mechanism to
control employee behavior in an organization.
4. “The communication gap within institutions and between groups in society has
10
been widening steadily – to the point where it threatens to become an
20
unbridgeable gulf of total misunderstanding,” observes Peter Drucker. Elaborate
on this statement explaining the various barriers to communication in
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organizations.
5. “Effective management of organizational diversity helps build strong and
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competitive organizations due to the synergy created by the talents of a diverse
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workforce.” Discuss the advantages of workforce diversity and explain how
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management in organizations are trying to capitalize on the synergy obtained

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from such diversity.

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6. “Research provides evidence that an increasing number of people are investing in

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health club memberships, cosmetics, plastic surgery, etc. to make themselves

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attractive to others and to create an impression.” Discuss how employees in

organizations as well as the organizations themselves use impression
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management to project a good image of themselves.

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7. The top management of a large manufacturing organization had a tough decision

to make. It had to decide whether or not to invest in a new venture, whose returns
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on investment were uncertain. An informal opinion poll among the members

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revealed that 62% of them were in favor of investing in the new venture.
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However, during discussions, it was found that around 90% of the same group
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favored investment in the venture. Describe what could have been the probable
reason for this difference in results. Also discuss the characteristics and the
implications of such a phenomenon.
8. “Choosing the right people for the right job ensures a long-lasting, motivated
workforce.” Discuss this statement in the context of the current business scenario.
9. “People in their third or fourth job seek opportunities to contribute their best to
their organizations, while people in their first or second job are motivated purely
by the pay checks.” Correlate this finding to Maslow’s theory of hierarchical
needs.
10. “While a shared set of values and beliefs does help to draw a group of people
closer, it could stifle creativity and growth in an organization.” Explain how a
strong organizational culture can become detrimental to the survival of an
organization.
11. Consider a situation in which an employee’s superior gives him instructions to
carry out certain tasks that are against his values and principles. The employee is
faced with the dilemma of whether he should obey his superior’s orders or act
according to his personal values and principles. The employee thus experiences a
‘role conflict’ What is role conflict and what are the effects of role conflict on
employees and organizations?
12. Employees at Flash Technologies felt constantly demotivated by the behavior of
their new boss, Narendra Reddy. Reddy was fond of giving instructions and
directing his staff on how to do their work. He expected them to follow his
instructions without questioning him and hated receiving suggestions from his
subordinates. His staff therefore, considered him a one-way communicator.
Which type of manager is Reddy? Discuss the typical characteristics exhibited by
this type of manager.
13. While stereotyping in some forms is useful and efficient, it sometimes leads to a
prejudiced notion about an individual or a group of individuals. It makes
managers ignore individual differences among employees in an organization.
Describe the process of stereotyping and discuss its impact on managing
workforce diversity.
14. Employees who are new to an organization observe other employees and their
behavior and tend to modify their own behavior according to what suits the new
10
environment. What is this process known as? Also discuss the importance of this
20
process in an organization.
15. Atul Goyal wanted to enhance the sales performance of his team members which
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seemed to have stagnated since the previous quarter. To do this, he attempted to
enrich the jobs of the sales representatives by allowing them to determine for
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themselves the frequency at which they could call upon their customers. They
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were also authorized to finalize deals independently to a certain extent, without
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the intervention of their supervisors. Goyal’s initiatives enhanced employee

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morale and the profits of the sales team increased by 20%. Briefly describe job
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enrichment and discuss how Goyal’s job enrichment initiatives helped enhance
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employee productivity and motivation in the organization.

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16. Carefully implemented, self-managed teams (SMTs) can be used as effective

empowerment tools in organizations. Briefly enumerate the features of a self-
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managed team that make it a potential empowerment tool in the organizational

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context.
17. Rahul Khanna was extremely pleased with the performance of Anjali Sharma, the
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new creative executive of his advertising agency. Within six months of

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appointment, Sharma’s performance brought fame to the company which, in turn,

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helped the company obtain many new contracts. Her creative genius and hard
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work was evident in all her projects. Impressed with her performance, Khanna
called her to his cabin and offered her a cheque in recognition of her outstanding
performance. He felt that a monetary incentive would boost her morale and
motivate her to perform even better. However, Khanna failed to see any
happiness or enthusiasm in Sharma’s face when she received the cheque. She
thanked him for it and left. Besides there was no expected improvement in
Sharma’s performance during the weeks that followed. What do you feel was
wrong with the way Khanna intended to motivate Sharma? Discuss the
motivational theory that best accounts for Sharma’s reaction.
18. Although T-group has been one of the greatest training innovations that helps
gain better understanding about the dynamics of groups and teams, there are
instances where this technique has failed to achieve its basic objectives. Discuss
the possible problems that might crop up during the implementation of T-groups.
19. Nikhil Khanna, the CEO of Sizzlerz, a leading player in the cosmetics industry
had to make a crucial decision. Due to a financial crisis in the company, he had to
decide between two equally profitable products. He had to choose between
investing into the production of more number of products of a particular brand
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Part C
which was doing reasonably well and another new product which, he felt, would
do exceptionally well if introduced into the market at that point of time. Khanna
knew that he neither had time nor sufficient information to make a rational
decision. He decided to go ahead with the latter option. What are the factors that
prompt managers to show bounded rationality in decision-making?
20. Individuals tend to exert power over others in the organization, which may or
may not be sanctioned by the formal organization. Discuss the various tactics
employed by such individuals that might, based on their legitimacy and
acceptability in the organization, be categorized as good, bad, and neutral
political behaviors.
21. Aniketh Basu was recently promoted as the safety inspector at the manufacturing
unit of a leading chemical weapons manufacturing company. Prior to that, he
served the company as a supervisor in the stores department. Going through the
old records of the safety measures to be followed by the company, Basu realized
that the company violated a number of laws relating to environmental protection.
The hazardous wastes let out by the company into the nearby river was likely to
have serious health implications on the people staying close to the manufacturing
10
unit. Besides, the callous attitude of the employees and the management towards
20
controlling pollution tempted Basu to bring the issue to the notice of an eminent
social worker who he thought might help him blow the whistle. However, he later
withdrew the idea of making this a public issue after listening to the plight of
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various whistle-blowers across different organizations. Do you think Basu was
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right in his decision to blow the whistle on his own company? Bring out the
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various problems he might have to face in the process and also propose a plan to
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blow the whistle.

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22. In a particular brainstorming session that was intended to solve a serious

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organizational problem, it was found that members of the group were not actively
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participating in the problem solving process. After a futile attempt, the leader of
the group finally gave up and split the group. He asked the members to contribute
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their suggestions individually to him. In contrast to the commonly accepted fact

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that groups create a synergy of ideas, the team leader found more valuable
suggestions in the latter case. In other words, members of his team performed
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better when they were isolated than when in groups. Discuss the group
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phenomenon that is evident here. Also discuss the reasons for such behavior.
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What can organizations do to prevent such behavior?

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23. Ketan Malhotra, a middle-level manager at a large manufacturing firm was

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worried about the rumors that were fast spreading in his organization about the
company’s trademark being acquired by its rival. These rumors were
demoralizing his sales team and creating feelings of insecurity in them. The lack
of accurate and complete information further demotivated them which in turn
resulted in decreasing their productivity. Malhotra knew that if this continued for
some more time, it would cause serious damage to the company in terms of lost
productivity and reduced profitability of the organization. What are the measures
that Malhotra and the top management of the company should take to manage the
spread of the rumor?
24. Sheetal Enterprises was a leading jute manufacturing company in the nation and
the workers were on an indefinite strike demanding an increase in the tenure of
their wage contract. The strike had entered its sixteenth day. Negotiation efforts
between the labor and the management failed to reach any mutual agreement. It
was therefore agreed that they would resort to third party negotiation and take the
assistance of the Arbitration and Conciliation Advisory Board set up by the state
government to resolve the issue. Briefly discuss the various options or
alternatives available to a third party to help resolve a conflict.
143
25. The increasing rate of employee turnover was posing a problem to Abhinaya Iyer,
the head of the production department of a medium-sized manufacturer of leather
goods. Her goal for the new assessment year was to contain employee turnover
considerably. Her initial analysis of the problem showed that while a number of
factors contributed to a reasonably commendable high rate of retention, there
were an equal number of forces that made employees leave the organization as
well.
Discuss an Organization Development (OD) intervention that can be used by Iyer
to effectively enhance employee retention. Also discuss the steps required to
ensure high employee retention in the organization.
26. At Eureka, a leading manufacturer of computer chips, it is common to find groups
of people involved in serious discussions in the cafeteria. However the employees
are not trying to while away time during office hours by indulging in gossip, but
are actually involved in exchange of information relating to possible
improvements in the organizational systems and procedures. In other words, they
strive towards developing a learning organization by creating an informal group
that functions in parallel to the formal organizational structure. Discuss the
10
importance and characteristics of parallel learning structures within an
organization.
20
27. Fads Today (Fads) was a lead player in the garment manufacturing industry.
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However, a recent change in the top management resulted in increased friction
between the management and the workers. These constant conflicts between them
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had a negative impact on the company’s performance. In an attempt to resolve
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these conflicts, it was decided that an external consultant would help the two
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parties to understand the various human and social processes in the organization
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and its impact on interpersonal relationships. Thus, the rising problems at Fads
were contained with the concerted efforts of the organizational members and the
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external process consultant. Discuss the various stages of process consultation

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and the role played by the external consultant in the successful implementation of
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this intervention.
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28. Sandeep Battacharya, the new CEO of a large hospital, proposed a plan for a
complete restructuring of the organization. He wanted to transform it into a
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matrix organization. This invited a lot of opposition from employees across all
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departments. However, the top management insisted on the restructuring as they

B
felt that it would help organize the firm’s operations more efficiently.
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Nevertheless, they could not ignore the objectives of their employees. Discuss the
various advantages and disadvantages of a matrix structure.
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29. Meghna Patel was excited about her new job as financial advisor to a medium-
sized manufacturing company. However, one day her boss wanted her to
manipulate the financial status of the organization to gain short-term tax
exemption. She experienced a conflict between the values she upheld and the
tasks she had to perform in the organization. She now had to choose between
holding on to her personal values or conforming to the expected norms of
behavior at the organization. Discuss the concept in organizational behavior that
best explains such a situation and the ways in which Patel might react to the
situation.
30. Armaan Dev, the operations manager at one of the busy branches of a private
sector bank just received a call from the regional manager. The regional manager
wanted a report on the performance of the branch during the past year. It was
almost the end of the day and most of the staff members had left office. Dev was
however glad that one of his subordinates, Sheetal Deshpande, was still in the
office. He requested her to stay back to help him prepare the report. As Dev was
Deshpande’s reporting officer, she agreed to stay back and help him prepare the
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Part C
report despite having other commitments at home. Describe the power exhibited
by Dev in influencing Deshpande to stay back after office to help him prepare the
report.
31. In modern organizations, employees from different departments are required to
work together to achieve various tasks. Employees often hold opposite views on
various issues and get into conflict. Explain how these conflicts can be resolved?
Do you think management should allocate time and energy to resolving each and
every conflict that occurs between them? Justify your answer.
32. During negotiations, each of the conflicting parties tries to obtain the maximum
benefit from the final agreement. Some people may be very aggressive and try to
win by all means. What are the tactics generally used by such people and what
could be done by the other party to deal with them?
33. Different researchers suggested different communication models to improve the
effectiveness of organizations. What is the importance of a communication
model? Discuss any modern communication model with an organizational
example.
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34. In an organization there may be several barriers to communication. The
management may believe that it has taken all possible steps to keep employees
20
informed of organizational matters, but employees often complain that they have
not received the information. Why is internal communication so important in an
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organization and what are the barriers to it?
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35. Supervisors play an important role as mediators between employees and
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management. They have to be effective communicators to be successful. Discuss
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various communication problems that are likely to be faced by supervisors and

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how they can be tackled.

36. Changes introduced in organizations often fail to achieve desired objectives
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because of the management’s failure to address issues relating to planning and

implementation. What are these issues and how should organizations address
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them?
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37. Bhargav Raj, the HR manager of Aditi Manufacturers Ltd. (Aditi), suggested to
the management of the company that employees be allowed to work in teams to
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improve organizational productivity and performance. The management agreed

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and the team culture was introduced. However, to the surprise of management,
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the programme not only failed to achieve desired results but also caused decline
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in performance. The management called a meeting to decide whether the

company should revert to the traditional style of working. Do you think Aditi
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Manufacturers Ltd. should do away with team culture? Justify your answer.
38. Ashok Dwivedi, Vice President (Operations), Zintac Plastics, wanted to resign
because of health problems. Ashok, being a very efficient and capable manager,
the CEO, Niranjan Dev, asked him to identify his successor before quitting the
organization. How can Ashok fulfill his responsibility?
39. According to the White Paper on Science and Technology published by the
British Government in 1993, “Firms which are skillful at innovation, the
successful exploration of new ideas – will secure competitive advantage in
rapidly changing world markets; those which are not will be overtaken.” In this
context, explain how an organization can develop an environment conducive for
creativity.
40. In a typical organization, the ideas suggested by superiors are easily accepted but
those suggested by people at a lower level are often ignored. In this way,
organizations run the risk of curtailing creativity and losing brilliant ideas in this
way. PMI, a thinking tool developed by Edward de Bono, aids organizations in
analyzing ideas and identifying practical and feasible ideas. Discuss the
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importance of management support in promoting creativity and innovation in

organizations and describe how organizations can enhance the creativity of
employees by using PMI as a tool.
41. Every employee wants to be recognized for his/her good performance. How can
organizations address the need for recognition in employees? Explain with the
help of an example.
42. Zeta Metals Ltd, adopted teamwork culture in 1999. Employees performed well
in teams and the organization’s productivity shot up. However, the performance
appraisal of the employees the following year was carried out in the same way as
it had been in the past. This demotivated the employees as in their perception,
teamwork was not given any special recognition for the purpose of appraisal. As a
result, their productivity declined. Explain how Zeta can determine the
accomplishments of teams and reward them appropriately.
43. Organizations are increasingly employing knowledge workers to develop
innovative products to serve customer needs and innovative solutions to address
clients’ problems. The personality traits, skills, needs and expectations of these
highly skilled employees are different from that of unskilled workers. What are
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the general characteristics of knowledge workers? Describe how they can be
motivated by organizations.
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44. Abhay Bedi joined Esha Electronics Ltd., as an engineer. When he had completed
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five years in the firm, his manager resigned to join another firm in a higher
position. After evaluating the performance records of 10 engineers in the firm, the
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top management decided to promote Abhay to the position. When Abhay was
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handed the promotion letter, he was happy but also tense about his new role.
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What are the different roles that Abhay will have to perform as a manager?
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45. The factors that differentiate leaders from non-leaders include initiative, desire to
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lead, integrity, self-confidence, analytical ability and knowledge of the specific

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company or industry. If these factors are supplemented by traits such as charisma,

creativity and flexibility, an individual is likely to be an effective leader.
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Substantiate this point giving an example of a business leader.

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46. Unlike many organizations which employ teams at the workplace, the employees
at Neha Manufacturers were divided into work groups with each group being
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assigned a different task. The general manager of Neha Manufacturers, Phani

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Desai, observed that the groups often committed errors and failed to complete
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their tasks on time. Even at the group meetings, Desai found that all the members
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of the group did not participate in decision making and action planning.
Differentiate between work groups and work teams and suggest how the
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management at Neha can deal with the work group problems.

47. The personnel manager of Sai Office Equipment Suppliers, Sesha Ratnam, was
upset that the members of work groups in various departments were always
involved in conflicts and complained about the behavior of their fellow members.
They pestered Ratnam to transfer them to another group or department. Ratnam’s
past experience, however, had taught him that it was likely that they would face
the same problems again in another group or department. Recommend ways in
which Ratnam can find a solution to this problem.
48. The concern of every manager in today’s competitive business world is to
improve the performance and productivity of his employees. Only motivated
employees can perform well and increase the productivity of the organization.
Discuss how managers can motivate employees and improve their productivity.
49. There is an increasing emphasis on quality in organizations. This increases the
pressure on employees to attain perfection in their work. Do you think that the
emphasis on quality has benefitted employees in terms of improving the quality
of their work life?
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Part C
50. High quality products are possible only when an organization hires high quality
employees and trains and develops them to suit its needs. In most modern
organizations, employees work in teams. It is the responsibility of the team leader
to shape the attitudes of team members and foster a culture that emphasizes on
quality. As team members strive to attain quality, they may come across many
problems. Explain how a team leader can help improve the problem solving skills
of his team members, and thereby improve their quality of work.
51. According to the equity theory, people not only relate their rewards to the efforts
they have put in, but also try to relate their rewards to those of others. Any
perceived inequity would lead to employee dissatisfaction and demotivation.
Comment on the inequity resulting from the disparity in compensation packages
offered to top executives and ordinary workforce in organizations. Further discuss
how organizations are trying to reduce this inequity.
52. At Paragon, a leading cosmetics manufacturing firm, CEOs change every two
years. Some stakeholders expressed concern about this policy of the firm. The
board of directors explained that Paragon was in the growth stage of its life cycle
and the swift changes taking place in the fashion industry demanded a change in
10
leadership style. Therefore, the company changed leaders constantly. What are
the various stages in a company’s life cycle and what are the responsibilities of a
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leader in these stages? Do you think Paragon was right in changing leaders so
rapidly?
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53. Innovation results from thinking. A leader has to continuously encourage his
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employees to think creatively. It is only the thinking power of employees that
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makes great companies. Suggest how leaders should encourage thinking in
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organizations.
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54. Whether leaders are born or made is always a debatable issue. According to some
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people, an ordinary person cannot be developed into a leader by being given the
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required skills. Do you agree? Substantiate your answer with examples.

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55. Harita Safety Equipment Manufacturers (Harita) gave special gifts in the form of
premium brand watches, executive coats and gold-framed spectacles to
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employees who had completed 10, 15 and 20 years of service respectively.

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However, the general manager of the company, Keshavaram Pillai, came to know
that employees having less than 5 years of experience in the company were
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dissatisfied with the reward system of the company and desired to have a reward
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system that recognized performance and not just the duration of employment in
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the company. How could Harita enhance its reward system for the satisfaction of
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all its employees? If Harita wants to introduce a new recognition program for
employees, how should the company go about doing it?
56. Studies have shown that flexible work options improve the quality of work life of
employees and improve organizational productivity. By the late 1990s, almost all
leading companies in different industries across the world, particularly in the US
and Europe, had started offering a variety of flexible work options. What do you
understand by flexible work options? Can you name some companies in India
which are offering flexible work options, and the facilities that are being provided
to employees as part of these options?
57. APZ Bank, headquartered in Mumbai, employed about 25 people in 2001 to fill
vacancies for bank tellers at various branches across the country. The minimum
qualification required was post graduation. They conducted a rigorous entrance
test followed by an interview in which the candidates were thoroughly tested for
their knowledge on various subjects. Appointment letters were posted to the top
35 candidates. Ten opted out for various reasons and 25 joined the bank. The
general manager commented in a company meeting, “This year, we’ve got real
gems.” But within two years, about 19 out of the 25 new employees left the
147
organization. What could be the reasons for such high employee turnover in APZ
Bank? Did the organization fail to match personalities with jobs? Explain with the
help of Holland’s personality-job fit theory.
58. Global competitiveness is one of the greatest challenges confronting
organizations in the new millennium. Can you give an example of any Indian
company that has brought about considerable changes in its HR policies in
response to the challenges of globalization?
59. According to Herzberg’s two-factor theory, hygiene factors (such as reasonable
pay and conducive working conditions) are essential to retain employees. A
survey conducted by Whirlpool Foundation in 1997 revealed that employee
wellness programs reduce absenteeism and turnover, enhance employee
satisfaction and morale, reduce health care costs of employees and enhance
organizational efficiency. Describe the employee wellness programs being
implemented by any well-known company and the benefits of these programs on
its employees.
60. Some people as well as organizations believe that successful leaders exhibit
similar behaviors. They believe that a person needs to learn those behaviors to
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become a successful leader himself. Do you support these beliefs? Explain with
20
reasons.
61. The Managing Director of Akhita Tool Designs, Ashutosh Dev, instructed his
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personnel manager, Anita Jain, to begin the process of recruiting new people for
the company to meet the company’s manpower needs after its expansion into new
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sectors. Jain suggested that the company should use a questionnaire to assess the
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personalities of applicants and to know the personality-job fit. However, Dev

disagreed with the utility of the personality-job fit theory and forbade Jain from
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relying on such a technique of recruitment. If you were in Jain’s position, would

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you obey Dev or try to convince him of the benefits of using personality tests in
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recruitment? How will you support your stance?

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62. Most organizations prefer to hire people who have already worked in other firms
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in similar positions as it saves the time and money needed for training new
employees. Some organizations emphasize knowledge and experience. But there
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are companies which emphasize attitude above everything else. Which of these
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companies will be more successful according to you? Explain giving

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organizational examples.
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63. Right culture is crucial for organizational success. Organizations spend

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substantial resources in developing and maintaining their culture – but only a few
are successful. Describe the organizational culture of any one of the successful
companies.
64. Kurt Lewin suggested a three-step approach to change – unfreeze, change and
then re-freeze. If change is as simple as that, then why do managers in large
organizations find it difficult to implement change? Explain the reasons for
complexity in implementation of change initiatives in corporate firms.
65. Informal groups and informal networks play a crucial role in product
development, product improvement and process improvement initiatives.
Research studies have shown that individuals in organizations tend to rely more
on friends and acquaintances for information and assistance than impersonal
sources of information such as books and the Internet. Managers encourage such
informal communication and networks because they help employees to
informally contact the experts concerned, obtain requisite information and
complete their projects speedily. Explain what management can do to develop
informal networks in the organization.
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Part C
66. Organizations conduct formal training programs to help employees learn the
desired skills, work culture, values and norms. But the training programs are
effective only when a relatively permanent change occurs in the employees’
behavior. Apart from the formal methods of learning, learning can also take place
informally. How can organizations make their training programs effective? What
are the various methods of informal learning?
67. Bradley Sullivan, CEO of Alka Electronics Ltd., encouraged semi-autonomous
work teams in the various units of his organization. Task forces were also
commonly used in the organization. Although Alka could rapidly imitate the
competitor’s products, it lacked ability to innovate. When Sullivan approached an
internationally renowned OD consultant with his problem, the consultant pointed
out the necessity of creating a climate conducive to innovation and learning in
Alka. He suggested that Sullivan implement parallel learning structures and
described the process. Sullivan told him that he already had a parallel learning
structure in his organization and gave the example of the teams implemented by
Alka. The consultant, however, refused to consider them as parallel learning
structures.
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What are the characteristics of parallel learning structures? Why do you think the
consultant did not consider teams as parallel learning structures? How can a
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parallel learning structure be implemented in an organization?
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68. The CEO of Deepseas ship manufacturers, Sam Blair, realized that his
organization would be in deep trouble if he did not take adequate measures to
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solve the problems resulting from organizational bureaucracy, and improve the
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deteriorating union-management relations. Blair sent his HR manager to consult a
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famous OD consultant, Gervase Cohn, to seek his help in improving the

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organizational situation. What are the various issues that need to be considered
when an external OD consultant is hired? Discuss any three of them in detail.
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69. OD consultants are increasingly playing a critical role in organizations. But

selecting the right consultant is always a difficult task for management. Explain
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how executives can determine the right consultant to help them resolve
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organizational problems.
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70. In future, individuals will not be required to come together at one place to
participate in OD interventions. They can participate in these interventions even
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virtually by using the Internet. Discuss how an OD practitioner can help

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organizations manage virtual teams?

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71. Of all the change initiatives undertaken by OD consultants, cultural change is a

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challenging task for them. Manoj Verma, the CEO of CBT Chemicals Ltd,
invited a leading OD consultant in India, Sanjay Chopra to help him change the
conservative culture of his organization. With the help of an organizational
example explain why it is difficult to change organizational culture. How can
Chopra help Verma in implementing cultural change in his organization?
72. James Kitt, the CEO of Yugandhar Manufacturers, hired the services of Jagan
Mehra, a popular OD consultant, to suggest changes in his organization that
would improve its productivity and efficiency. But after Mehra submitted his
report, Kitt felt that Mehra’s recommendations were impractical and
unacceptable. He felt that the consultant did not deserve the fees he was paid. Kitt
conveyed his opinion on the report to Mehra. Mehra was unhappy at this, and felt
that Kitt either lacked the management skills to implement his recommendations,
or the courage to do so. Discuss the reasons for differences in perception of the
client and consultant. How can these differences be overcome?
73. According to French and Bell, “The OD process is basically an action research
program in an organization designed to improve the functioning of that
organization.” Most OD approaches are, however, not implemented in their
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original form, but are slightly modified to suit the unique requirements of
organizations. Discuss the importance of action research and how it is
implemented in organizations.
74. Nikhil Khanna was a very efficient employee of Mithila Data Processors.
However, recently there has been a change in organization structure, policies and
procedures at Mithila to meet the challenges of a more competitive environment.
After the change, Khanna’s performance declined. Though his manager, Atyut
Kumar wanted to know the reasons for the deterioration in his performance,
Khanna did not give him a convincing explanation. Therefore, Kumar asked the
HR manager, Jayant Chowdary, to counsel Khanna. How can Chowdary help
Khanna adapt to the change and improve his performance?
75. Organizational politics is a reality in most organizations. Researchers and
practitioners of OB have also acknowledged the role played by politics in
organizational dynamics. Discuss how OD practitioners can deal effectively with
organizational politics.
76. As the departments/units of an organization are interrelated, the impact of many
10
OD interventions will not be confined to the department or the unit in which it is
20
implemented. In international organizations, the impact is far-reaching.
Therefore, when working in international organizations, OD practitioners need to
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have a holistic perspective. How can OD practitioners develop a holistic
perspective?
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77. Interventions seek to change the status quo in an organization and bring about a
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desired and effective state. What are the various factors that need to be considered
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by an OD consultant for designing effective interventions?

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78. Akshita Garment Manufacturers was a leading company in India. The managing
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director of Akshita, Rakhi Kohli, wanted to expand the business by establishing

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subsidiaries in various countries in Asia and the US. Rakhi wanted to promote
one of the managers in the domestic firm as the manager for international
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operations. Since global managers must have a special mindset that allows them
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to manage international operations, Rakhi wanted to exercise utmost care while

selecting the person. What are the characteristics Rakhi should look for, while
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selecting the person to manage the international operations of her company?

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79. Due to changes in market conditions and technology, organization structures have
also undergone a major change. Comment on the changing organizational
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structures and work patterns across the world.

80. For some organizations, empowerment is a form of delegation, and for some, it is
a way of passing blame for failure to employees down the hierarchy. What is
empowerment? When does empowerment take place in organizations? Explain
with examples.
81. PeopleSoft, a developer of client/server software for financial and human
resource management, is known as one of the best places to work in. One of the
main reasons for the employee turnover at PeopleSoft being as low as 10% even
while the employee turnover rate in the industry hovered between 25 and 30%,
was the flexibility the company offered to its employees. Telecommuting was the
most popular work arrangement offered by PeopleSoft to its employees, which
helped the company raise its productivity and contain its employee turnover.
Citing the example of PeopleSoft, briefly explain how telecommuting helps the
employees and the employer. Also, discuss the limitations of telecommuting and
the pitfalls that could arise from its implementation.
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Part C
82. “It is not the cultural differences themselves, but the strategies to overcome the
cultural barriers, that are important for a successful cultural adaptation.” In the
light of this statement, briefly state the various barriers to cultural adaptation, and
the strategies to cope with them.
83. Integrating grapevines into the formal communication system reduces the
negative effects of grapevines. Briefly discuss how organizations can benefit by
effective management of grapevines.
84. A leading staffing company based in the US believes that people are the most
valuable assets of any organization, and that organizations can derive a
competitive advantage by developing their human resources through effective
mentoring. In the light of the above statement, briefly explain how organizations
benefit from mentoring programs, and also discuss the various roles a mentor
plays during the mentoring program.
85. Technological developments help employers monitor many aspects of their
employees’ jobs. However, this is construed as violation of employee privacy.
Organizations thus run a risk of liability while monitoring employee performance.
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Discuss the various aspects of employee jobs that are subject to monitoring at
20
workplaces. Also, discuss how organizations can effectively avoid getting
involved in litigation.
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86. Rakesh Ranjan, a senior manager at a twelve-year old software firm was facing a
difficult time. Six months ago, he had taken a wrong decision and given the green
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signal to a project which ideally should have been rejected. Preliminary studies
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and the cost-benefit analysis of the project had indicated that it should be rejected.
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Despite this, Ranjan had given his assent to the project. This wrong decision was
now posing serious problems to the organization.
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Decision makers tend to stick to a bad decision even though they are aware that it
will lead to undesirable consequences. What is this phenomenon called? Discuss
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the various factors that cause managers to take such decisions.

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87. Organizations today are inviting and appreciating employee participation in the
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organizational decision making process due to the benefits involved. However,

certain prerequisites must be satisfied to ensure effective participation of
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employees in making decisions. What are the prerequisites for effective employee
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participation in organizations?
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88. Imagine that you are the head of the production department of a large
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manufacturing concern. You observe that employees are not performing to the
desired standards. The quality of the products is also deteriorating. What would
you do to shape the behavior of employees in a way that benefits the
organization?
89. According to Peter Senge in his book The Fifth Discipline, “A learning
organization is a place where people are continually discovering how they create
their reality and how they can change it.” Briefly discuss the characteristics that
distinguish a learning organization.
90. “Theory Z, propounded by William Ouchi is a blend of the American and the
Japanese styles of management.” Briefly discuss the various characteristics of a
Theory Z organization.
91. The existence of an informal organization within a formal structure is inevitable.
Organizations must attempt to exploit the benefits of this informal organization
rather than trying to combat its dysfunctional characteristics. Discuss the various
functional and dysfunctional aspects of informal organizations.
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92. A research conducted on a large Russian factory and a cross section of

organizations in the US reveals that while 42.5% of Russian managers
concentrate on traditional management practices, only 32% of the managers in the
US emphasize on these practices. Likewise, many such differences in leadership
styles exist across different cultures. Briefly explain the factors that contribute to
such differences in managerial leadership across cultures.
93. Of late, researchers have come to believe that leaders are made, not born. This is
in sharp contrast to the traditional belief that leaders are born, not made.
Substantiate your stance on this long-standing debate.
94. The structure of a group helps determine the behavior of its individual members.
Discuss the various structural variables of the group that shape the behavior of its
members.
95. Robert Katz has identified three essential management skills or competencies that
managers must possess. These skills are also related to the various roles played by
managers in organizations. Discuss the essential competencies of effective
management as explained by Katz.
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96. Cross-functional teams (CFTs) at 3M’s Industrial Specialties Division, play a
vital role in managing its overall business activities. CFTs manage almost all the
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product families. At 3M, CFTs comprise members from the laboratory,
manufacturing and sales departments, who manage routine functions as well as
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activities pertaining to new-product development. Likewise, there are many other
organizations who deploy CFTs for effective management of business operations.
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Discuss the major benefits of cross functional teams that prompt organizations to
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form such teams to achieve their business objectives.
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97. Every individual is subjected to numerous stimuli at a given point of time.

However, different people respond differently to the same stimuli leading to a
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difference in their perception. What are the factors responsible for the differences
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in perception of individuals? Briefly discuss any set of factors.

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98. Eshwar Dayal is a middle level manager in a manufacturing concern. He heads a

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team of sixteen members. Most of his team members perceive him as a biased
supervisor as he overly tends to support and take a positive view of the actions of
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one of the team members just because he graduated from a top-rated business
school in the country. The other team members feel that Eshwar Dayal is making
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a serious error of perception. What is this kind of error in perception known as?
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Describe its main features and compare and contrast it with another perceptual
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error.
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99. Span of control is one of the key elements to be determined while designing an
organizational structure. However, there is no foolproof method to determine the
optimal span of control. What is span of control? What are the various factors that
must be considered to arrive at an ideal span of control?
100. The constant friction between the Marketing and the R&D departments of Smilez,
a lead player in the cosmetics industry, was a serious cause for concern to the
General Manager, Raj Gopal. While the members of the R&D department felt
that the marketing team was unduly pressurizing the R&D department to produce
new products at frequent intervals, the marketing team felt that the R&D
department was not working hard enough to meet the changing demands of their
customers. Gopal had to take immediate action on this conflict situation to ensure
the smooth functioning of the organization. Accordingly, he invited an
Organization Development (OD) practitioner to solve the problem. After studying
the case, the consultant suggested that the two groups discuss the problem and
arrive at a mutually acceptable solution. Do you think this is possible? If so, what
might be the prerequisites for this process to be successful?
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Part C: Applied Theory Answers
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Each question can be answered in a variety of ways. Students should be able to come up
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with reasoned answers that reflect their knowledge of theoretical concepts and the current
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business environment.
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Part C: Applied Theory (Answers)
Answer 1
In order to remain competitive in today’s dynamic business environment,
organizations are expected not only to react to the changes brought about by external
factors but also to anticipate these changes well in advance. Organizations may be
forced to transform their culture either due to a change in the top management or due
to changes in the external business environment. However, such a change is not easily
received by the organizational members. The resistance to change on the part of
organizational members may be due to their lack of willingness to shed their closely
held values and assumptions. It is, therefore, the responsibility of the management not
only to identify the need for change but also to develop a change strategy that is
accepted by its members.
The change process ideally begins with an assessment of the existing organizational
10
culture and a realization of the need to change it. This stage also involves
determination of the drivers for change and definition of the desired objective. The
20
change process can be made more effective by the presence of an external change
agent, who has the advantage of recognizing those aspects which the management or
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the employees have failed to identify. However, the change agent must study the
organizational processes thoroughly before venturing to design the change strategy.
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An open channel of communication should exist between the change agent and the
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members of the organization to facilitate a better understanding of the existing culture.

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Changing the culture of an organization is not an easy process because of the

pervasive nature of culture. The values and assumptions upheld by the founders of the
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organization are generally internalized by its members over a period of time.

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Therefore, transforming the organizational culture necessitates a well- planned change

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strategy. The top management plays a vital role in effectively changing the culture of
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an organization. A lot of uncertainty is bound to prevail among the members during

the process of change. It is the responsibility of the top management to reduce the
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levels of anxiety among them. It must also ensure that the change process is a quick
one, and not a gradual transition. This reduces the tendency of the employees to revert
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to the old methods of doing things. It should present a clear picture of the desired state
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of the organization. This ensures that the behavior and actions of the employees are
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directed towards the objective.

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As members of the organization have been blindly following the widely accepted
ways of doing things, they tend to ignore better alternatives for the task. In such a
scenario, the change agent must present such alternatives to members of the
organization and get them to appreciate the benefits of the new procedures.
Acceptance of new procedures can be facilitated by educating the members about the
paradigm of the changed culture that they are actually working to bring about.
Employee participation in the change process cannot be ignored as encouraging their
contribution not only helps get their perception of the change process but motivates
them to accept the changes as well. The change agent, in collaboration with the top
management, must design an effective set of guidelines and reference points that the
employees can rely on during the transformation process. This would also help the
members to easily shed their old practices.
A change strategy that is initiated by the top management, guided by an external
change agent and backed by employee participation, is bound to be a successful one
which, in turn, will help the organization remain competitive in the dynamic business
environment.
Answer 2
Socialization helps maintain and sustain the culture within an organization. The other
factors that help maintain the organizational culture are the selection procedure and
the top management. The actions of the top management have a tremendous effect on
the culture of an organization as they are the ones who guide and control employee
behavior. The selection procedure also plays a vital role in sustaining the
organizational culture. By selecting only those applicants whose interests and
behavior match the expectations of the organization, the management ensures that
minimum deviations from expected employee behavior occur. However, no selection
process succeeds in inducting candidates whose behavior is fully in tune with the
organizational expectations. This is because an element of subjectivity always creeps
into the selection procedure. In such cases, socialization helps tune the behavior of
these newcomers to the organizational requirements. Socialization is thus a formal
program which educates new employees on the prevailing organizational culture and
encourages them to internalize the values of the organization.
10
Socialization aims at establishing a perfect fit between employees and organizational
culture. Ensuring a cultural fit among the employees helps enhance their productivity
20
and reduce employee turnover. Socialization is generally conducted during the
induction program, as it is the best time to mold the employees’ behavior to the
organizational culture.
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The process of socialization can be divided into three distinct stages namely,
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prearrival, encounter and metamorphosis.
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C
When a new employee enters an organization, he/she is gradually introduced to the

norms, values and rituals of the organization. At this stage, every employee is treated
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as an individual with a distinct and unique set of values and principles. The greater the
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accuracy with which the employee is able to anticipate the organizational expectations
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from him/her, the greater is the success of the prearrival stage of socialization.
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The next phase is the encounter stage, which is considered to be the most important
phase in the entire process of socialization. At this point of time, the employees face
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the actual organizational culture, i.e. they are exposed to the reality existing in the
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organization. Here, the newcomers compare their expectations of the organizational

B
culture with the actual culture prevailing at the workplace. The process of
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socialization is said to be effective if the comparison results in minimum deviation. If

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the deviations are large, the chances are that employees become completely
disillusioned with the culture and this might have a counter-productive effect on
employee behavior. In other words, the lesser the differences between the employee
expectations and the real conditions at the workplace, the greater the success of the
encounter stage of socialization. This stage, therefore, attempts to obtain a cultural fit
between the employees and the organization.
Metamorphosis is the final stage of the socialization process where the actual change
takes place and the employee behavior conforms to the organizational expectations.
Once the newcomer embraces and internalizes the organizational culture and value
system, the metamorphosis stage is said to be complete and successful. This stage
aims at creating a sense of identity and belongingness among the employees thereby
enhancing employee productivity and commitment and reducing the chances of
his/her leaving the organization.
Thus, the three-stage process of socialization enhances organizational profitability and
decreases the attrition rate at organizations.
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Part C
Answer 3
Organizational culture comprises the various assumptions, values, beliefs and norms
shared by the people in an organization. It refers to a pattern of learned behavior that
is shared and passed on among organizational members. Although culture might seem
implicit and intangible, it cannot be taken for granted. This is because, over a period
of time, every organization tends to develop and uphold a set of values and beliefs that
govern employee behavior. The organizational members tend to follow and abide by
these core values. Therefore, uniformity of behavior is found in most organizations
that have a strong culture.
One of the important functions of organizational culture is to predict and control
employee behavior. The accepted norms and assumptions of an organization actually
guide the behavior of employees. Management rewards favorable employee behavior,
i.e. any individual who behaves in a manner that upholds the culture of the
organization is adequately rewarded. The rewards are very attractive and serve to
encourage other employees to emulate them. Performance appraisals and reports of
the employees are also influenced by their behavior at the workplace. In other words,
these rewards act as positive reinforcements to improve employee performance.
10
Conversely, any deviation in behavior from the accepted standards is taboo. An
20
individual behaving in a way that conflicts with the organizational culture is looked
down upon and is liable to be penalized. Any undesired behavior will lower the rating
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in the performance appraisal, thereby affecting the career growth of individuals within
the organization. Conformity to organizational culture thus becomes the basis for
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organizational rewards and upward mobility of the employee in the organizational
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hierarchy. Organizational culture, therefore, acts as a powerful tool not only to
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encourage favorable behavior but also to punish unfavorable dispositions.

C
Newcomers to the organization are given adequate training on the expected standards
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of behavior. They also go through the socialization process which acquaints them with
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the organizational culture. They are familiarized with the actual work conditions and
organizational environment through these programs. The employees are then molded
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to obtain the right employee-organization fit. The newcomers are also taught about
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organizational culture through stories, rituals, material symbols and jargon. Until they
absorb these values and conform to the existing organizational culture, they are not
U
treated as members of the organization. Thus, organizational culture plays a vital role
S
in predicting and controlling employee behavior.

B
Besides, organizational culture has assumed even greater importance with the widened
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spans of control, flattened structures, and the introduction of teams. The different
teams have a ‘shared meaning’ because of the common organizational culture. This, in
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turn, provides them with a common direction towards attainment of organizational

goals.
There are numerous examples of well-managed organizations with strong
organizational cultures. Disney and Wal-Mart are good examples of organizations
where employees exhibit uniformity of behavior. This can be attributed to the culture
prevailing in these organizations.
Thus, organizational culture acts as a powerful mechanism to control the behavior of
employees. It not only predicts and controls their behavior but binds them socially
within the organization.
Answer 4
Despite constant efforts at effective communication within organizations, people end
up miscommunicating messages. In other words, messages get distorted by the time
they reach the receiver and sometimes, they are not communicated at all. This happens
due to the presence of a number of barriers to effective communication and these are
discussed below:
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Semantic barriers: Communication tends to become ineffective when words or

symbols with more than one meaning are used. This generally happens when the
words used during communication convey different meanings in different contexts to
different people. Also, for the message to be communicated effectively, the body
language has to match the oral communication.
Psychological barriers: These are the basic, inherent obstacles present within
individuals, which prevent effective interpersonal communication.
Mental state: Various emotions like happiness, sorrow, anger, and anxiety affect the
meaning of the words used by the sender of a message. They also affect the way the
receiver looks at the message. In other words, the mental state of both the receiver and
sender of the message affect communication. If their state of mind differs, they may
interpret the same message in different ways.
Perceptions: The words or actions of people may have different connotations for
different people, depending upon their perception. For example, when one supervisor
observes his subordinate leaning back in his chair with eyes closed, he might think
that the subordinate is shirking work and is sleeping during office hours. Another
10
supervisor might feel that the subordinate is deeply engrossed in thinking about a
20
problem on hand. Therefore, communication depends to a great extent on the
perception of the receiver.
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Halo effect: Receivers tend to interpret messages based on their bias towards the
sender. If the sender is someone whom the receiver admires and respects, he/she tends
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to easily agree with the sender. On the other hand, if the sender is someone whom the
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receiver dislikes, he/she is more likely to oppose the same message and act according
to his/her will.
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Cognitive dissonance: At times when the message contradicts the beliefs and
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attitudes of the receiver, he/she tends to ignore the communication or disagree with it.
The receiver thus becomes selective in responding to, and in interpreting the message.
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This affects the effectiveness of communication. This phenomenon is called cognitive

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dissonance.
Filtering: This generally happens when the communication has to pass through a
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number of persons or levels before it reaches the ultimate receiver. The message is
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likely to get distorted at each level and may eventually lose its true meaning. This
B
leads to miscommunication.
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Besides these personal barriers to communication, certain organizational factors also

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tend to make communication ineffective. Some of these are:

Filtering: The greater the number of levels in the organizational hierarchy, the greater
the distortion of the message that is communicated. In other words, communication
proves to be more effective in organizations with a flat structure, rather than in
organizations with a vertical and tall hierarchy.
Dependency syndrome: The degree of dependency of the receiver on the sender
affects the effectiveness of communication to a great extent. For example, a
subordinate is dependent on his superior for favors and promotions and therefore,
tends to agree with and accept the information communicated by his supervisor.
Interpersonal relationship: Vertical communication is greatly affected by the
relationship between the superior (usually the communicator), and the subordinate
(usually the receiver). The vertical flow of communication is thus affected by the
rapport between the two.
Thus, effective communication in organizations is facilitated only when these barriers
are overcome.
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Part C
Answer 5
The presence of people belonging to different age groups, genders, ethnic groups and
educational backgrounds gives rise to diversity in organizations. Though managing a
diverse group of people is a challenging task for the management, capitalizing on this
diversity may bring in huge benefits to the organization. This is because diversity
enhances the competitiveness of the firm. Since people belonging to diverse cultures
come together for a common objective, the synergy obtained from the various ideas
and viewpoints of these people can help solve problems on hand. This helps
organization to be more innovative and come up with better alternatives to existing
systems and processes in the organization. Managing diversity also helps when the
organization plans to go global. This is because once an organization has effectively
managed people belonging to various cultures, it becomes easier for it to adapt to
cultures across the globe. Therefore, it is crucial for organizations to effectively
manage diversity if they are to capitalize on these advantages. Many organizations
offer family-friendly workplaces to improve employee morale and productivity. This
also helps them reduce absenteeism and attrition rates. Organizations provide
employees with a mix of family/work programs such as day-care centers, elderly care
10
centers, flextime, compressible work weeks, telecommuting, part-time employment,
20
etc., in order to cater to people belonging to diverse age groups. Similarly,
organizations also provide various incentives for good performance based on the
differing needs of its diverse group of employees.
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Organizations effectively manage diversity in these ways so as to capitalize on the
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synergy such a diverse workforce produces.
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Answer 6
C
People generally like to present themselves in a way that is socially acceptable to

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others. Also called “self presentation,” impression management refers to the process
by which people try to manage or control the opinion that others have about them.
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People generally use impression management to gain social acceptance. Employees in

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organizations use impression management strategies to either prevent demotions or

enhance their chances of promotion. Hence, they are classified as demotion-
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preventative strategies and promotion-enhancing strategies.

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Demotion-preventative strategies
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These strategies are generally used when employees want to play it safe by shifting
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the responsibility of failure to others to remain out of trouble. Demotion-preventative

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strategies generally have the following identifiable features:

• Accounts: This is observed when an employee tries to justify his/her failure to do
a task by giving excuses. Ill-health or concentration on another priority task, etc.,
are common excuses used by employees to account for a negative outcome.
• Apologies: Apologies are used when there is no proper excuse for a job failing.
Employees apologize when they want to show to their boss that they actually
regret the failure and will take care to see that the mistake is not repeated.
• Dissociation: This tactic is generally adopted when a group of employees make
an effort that fails. Each of them then tries to dissociate himself/herself from the
group and thus disown the responsibility for the failure. This form of attributing
the failure to others is called dissociation.
Promotion-enhancing strategies
As the name suggests, promotion-enhancing strategies are used when employees seek
special favors for enhancing their responsibilities, or improving their image in the
organization. Some of the common features of this strategy are:
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• Entitlements: When employees feel that they have not been given due credit for
a positive outcome, they take the help of formal or informal sources to let their
bosses know about their performance and their contribution towards the success
of the task.
• Enhancements: When the efforts of an employee in an organization result in
exceptional profits to the organization, he/she feels that he/she deserves more
than only financial incentives, say an increase in responsibilities, or a promotion
to a higher post within the organization. In such cases, the employee tries to
communicate to his superior about the efforts made by him/her and his/her
expectations anticipating a favorable result – in this case, a promotion.
• Obstacle disclosures: This strategy is employed by subordinates to convey to
their superiors, the personal and organizational obstacles they had to overcome in
order to obtain the desired outcome. The employees’ desire to inform their
superiors about these obstacles arises from the feeling that they deserve to be
rewarded more since they have successfully achieved the outcome despite all the
obstacles.
10
• Association: Employees try to create a favorable impression of themselves by
20
showing that they have good contacts and are associated with successful projects
and organizations.
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People use all these strategies to develop a positive image or perception in others
about themselves. This is because employees feel that if the organization has a
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positive image of them, it will help them get promotions or financial benefits.
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Organizations use impression management too, to project an attractive image of

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themselves to outsiders. Often, organizations use impression management to establish

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their legitimacy and credibility in the society.

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Answer 7
O
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The phenomenon that has occured in the present case is called group polarization.
Group polarization is said to occur when the choice made by the group is different
U
from that of the individuals in the group or when a group’s initial tendency is
enhanced following a group discussion. In such a case, groups tend to make risky
S
decisions which they would not have made as individuals. This tendency to make
B
risky decisions in a group is called ‘risky shift.’

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Decisions in modern organizations are made by groups and teams rather than by
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individuals. This has enhanced the importance of the phenomenon of group

polarization. Group polarization has the potential to change the final decision of the
group without actually changing the rationale behind such a decision. In the above
case, only 62% of individuals approved investment in the project, prior to the group
discussion. However post-discussion analysis resulted in an increase in the number of
people subscribing to the initial notion. This can be explained by the fact that
individuals in a group subscribe to a popular opinion which they may not have
subsribed to at an individual level. This results in making a decision that might seem
too extreme.
Persuasive arguments enhance the possibility of group polarization. Group
polarization occurs when a small group of people holding an opinion cogently
convince the rest of the group who might be in a dilemma about the decision-making
situation. Group polarization tends to gain greater significance due to the fact that the
outcome of the decision made cannot be attributed to a single individual. The
consequences of a wrong decision is the responsibility of the entire group. Therefore,
individuals are encouraged to make decisions that seem to be a risky proposition and
that which they would not have opted for as individuals.
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Part C
While group polarization has its disadvantages, it also has many potential benefits. It
proves to be extremely useful when a group has to be counseled about the negative
effects of quitting the job, smoking, diet programs etc.
Therefore, if group members favor a particular stance before the group discussion, a
discussion that follows might lead to a decision that further reinforces their stance
about the situation.
Answer 8
The ultimate motive of all organizations is to make profits. And profits can be made
only if the people in an organization are motivated to achieve this objective. Therefore
organizations are leaving no stone unturned to develop a long-lasting and motivated
workforce. In recent times, management in organizations have begun to see the
importance of ensuring a right ‘fit’ between the skills and attitudes of the employees
and nature of the job and the culture of the workplace. Therefore, they have been
designing selection procedures that ensure that the right person is chosen for the right
job.
10
The selection of an employee whose interests are in synchronization with the nature
and demands of the job is the main objective of an ideal selection procedure. This is
20
because if the employee is satisfied by the nature of the job itself, external rewards,
which are short-lived in nature, will not be required to motivate him/her.
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Organizations should ensure that the career growth that an employee expects is in
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keeping with the organizational goals. This helps the organization provide employees
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with adequate opportunities for growth, and this, in turn, helps retain them.
Organizations also need to design jobs in such a way that people enjoy what they are
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doing and find themselves doing something that is closest to their heart. Both these
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objectives can be achieved when the selection procedure in organizations is capable of

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choosing the right people for the right job.

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Answer 9
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Even though people have common needs, they are affected by these needs in different
magnitudes. Thus, their motivational drive tends to differ, depending upon their
S
position in their career life-cycle, comfort levels and abilities. Maslow’s hierarchy of
B
needs identifies and prioritizes the factors that motivate people in organizations.
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According to this theory, people have different needs and the factors that motivate
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them also vary depending on their needs. Maslow identified five levels of human
needs and placed them in a hierarchy. He classified them into physiological, safety,
social, esteem and self-actualization needs. According to Maslow, once the needs at a
particular level in the hierarchy are satisfied, they no longer motivate the individual,
and he will attempt to satisfy the next higher order of needs.
Generally, people in their first job, tend to concentrate on satisfying their
physiological needs first. This is because they are more interested in first acquiring the
bare necessities of life before looking at satisfying other needs. To ensure that, they
generally tend to look for jobs that pay more. Once their basic physiological needs are
met and they are able to satisfy their needs of hunger, thirst, sleep, etc., they try to
satisfy their next higher order of needs. Thus, it is commonly observed that in their
initial jobs, people are considerably motivated by the pay checks they receive.
On the other hand, people who are in their fourth or fifth jobs must have already met
their basic physiological, safety and social needs. These needs, therefore, no longer
motivate them. So, they concentrate on establishing an identity for themselves within
the organization, and on doing something that gives them a sense of self-actualization.
Thus, they seek jobs that give them more responsibility and power.
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Answer 10
Organizational culture may be defined as a set of values, assumptions, and norms that
guide employee behavior within an organization. It is a set of practices that has been
established, accepted and internalized over a period of time. In other words,
organizational culture is evolutionary in nature, and cannot be easily changed. Since
the members of the organization accept and emulate these values, they tend to be
bound together as a single cohesive unit working towards a common objective. While
such cohesiveness is essential in guiding employee behavior and ensuring the smooth
functioning of the organization, a strong culture has the propensity to stifle the
creativity and growth of the organization. This is because the pervasive nature of the
organization’s culture makes its members blindly follow existing practices, even if
there is an enormous mismatch between these and the external environment.
Creativity is curbed, as the employees are not encouraged to think up alternative
methods to existing practices.
To succeed in this dynamic business environment, it is imperative for every
organization to be sensitive to changes in technology. However, if the members still
10
follow existing procedures, it will fail to survive the competition from external
environment. IBM for example, lost out to HP due to its inability to adapt itself to the
20
changing external environment, reflected in the form of the changing needs of the
customer. HP, however, was able to adapt itself to these changes and thereby secure a
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competitive edge over IBM. Thus, while a strong culture at IBM resulted in its failure
to adapt to the changing needs of its customers, an adaptive organizational culture at
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HP helped it gain a competitive advantage.
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Answer 11
C
Role conflict is defined as the conflict that arises in an individual due to the
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incompatibility of enacting several roles at the same time. It is generated when an

individual finds that compliance with one role may result in non-compliance with
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another. The individual’s desire to perform all the roles perfectly gives rise to role
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conflict.
U
In the present case, the employee is expected to act in a way that goes against personal
values and principles. He now has to choose between complying with the
S
organization’s expectations of him and his personal values and principles. If he opts
B
for the former, he ends up feeling discontented because he is going against his
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principles, but if he chooses the latter, his job security is threatened. Such conflicts
Fo
create undesirable tension and frustration in the individual, resulting in stress-related

problems. Behavioral responses to such situations may be either total compliance with
organizational rules or a refusal to enact such a role.
Role conflict leads to emotional exhaustion, reduced participation in team activities,
and diminished levels of job satisfaction in the individuals. This, in turn, leads to
negative organizational consequences such as decrease in employee productivity and
loyalty towards the organization, increased employee turnover, and increased
expenditure to the organization due to health-related problems of employees.
Answer 12
From the characteristics that Reddy exhibits, it is clear that he is a Theory X manager.
Theory X was proposed by Douglas McGregor in his book, The Human Side of
Enterprise. The theory helps in understanding the simple rules for managing people
effectively in organizations. According to Theory X, an average person dislikes work
and tends to avoid it. It says that employees prefer to be directed, that threats have to
be used to get them to do work and that they should be constantly monitored. It also
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Part C
states that people are never enthusiastic about their jobs and are more concerned about
their job security. In other words, people are more concerned about their lower order
needs as described by Maslow in his needs hierarchy theory.
Most managers tend to belong to the Theory X category. They believe that employees
are lazy and need to be pushed and prodded to carry out even their basic
responsibilities. They, therefore, constantly issue instructions to their subordinates,
and monitor their performance regularly. Theory X managers prefer to control the
performance of their employees by explicitly stating how the job has to be done. They
seldom invite suggestions from subordinates and are poor listeners. They do not
encourage employee participation. Team work hardly exists in organizations headed
by such managers.
A Theory X manager does not appreciate his subordinates for doing a good job. On
the other hand, he suppresses their creativity and initiative due to an inherent fear or
insecurity of losing his position and power in the organization. Likewise, he does not
take kindly to criticism of his actions and is likely to adopt a vengeful attitude towards
critics. He is generally poor at delegation – though he tends to shift accountability on
to his subordinates when things go wrong. A manager of this type is mostly unhappy
10
with the performance of his team. Despite this, he makes no attempts to bring about
an improvement in the team’s performance. A Theory X manager tends to remain
20
aloof and detached and is more concerned about meeting deadlines and targets than
about the development of the human resource in the organization.
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So, Theory X managers are more suited for conventional and traditional organizations,
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and are generally less effective as managers in modern organizations.
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Answer 13
C
Stereotyping is the process of categorizing or grouping people on the basis of a single

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characteristic. Managers often tend to classify workers on the basis of age, gender,
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race, ethnic origin, or other characteristics. Sometimes this helps a manager to be

O
more effective. For example, if a manager of a content development firm believes that
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a strong academic background is an essential requirement for prospective research

associates, he concentrates on the academic qualifications of the candidates, and this
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helps him to filter out unwanted or incompetent applicants easily.

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Stereotyping, however, tends be counter productive in some situations. When

B
managers stereotype workers, they tend to overlook the individual differences among
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them and form rigid opinions about their subordinates. They may then tend to ignore
the actual characteristics of the individual and overlook the need of the situation.
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Stereotypes may also lead to prejudice against an individual or a group of individuals.

Once a manager forms a particular opinion about someone (due to stereotyping), it
becomes extremely difficult to change that opinion. This leads to an exaggerated or
diminished assessment of the worth of a group or an individual.
Prejudice and stereotyping do not lead to favorable organizational results specially if
the organization has a diverse workforce. For example, a manager may select a
candidate who is not suitable for a particular job only because he has a favorable
impression of the group to which the candidate belongs. In other cases, managers
under the influence of stereotyping, may develop motivational strategies for the entire
group without considering their individual differences. For example, a manager may
stereotype all workers as being motivated by monetary benefits. He might therefore,
design strategies that focus on providing monetary incentives. Such strategies may not
necessarily serve as motivators for all the workers.
Besides, due to stereotyping, managers may fail to recognize talented people in the
organization simply because he does not have a good opinion of the group to which
163
the individual belongs. Under the influence of stereotyping, the manager may also
wrongly assume that just because an individual belongs to a certain group, he will be
effective/ineffective in handling his responsibilities. This may cause demotivation in
the individual and in turn reduce his productivity level.
Thus, stereotyping sometimes leads to unfavorable organizational results like lowered
productivity, lowered employee morale and a disillusioned and underutilized
workforce.
Answer 14
The process by which an individual observes and emulates the behavior of other
individuals is termed social learning. In organizations, social learning takes place
when new employees observe the behavior of other employees and its consequences
and modify their own behavior accordingly. Individuals modify their behavior in
accordance to how they are expected to behave in the new environment to get desired
results.
Learning in organizations takes place in many forms. It may take place when an
10
employee is instructed to do something in a particular manner, or directly from the
20
personal experiences of the employee, or by the employee observing others in the
organization. Learning that takes place by observing others and by direct experience is
of
generally called social learning. People also learn not to do things in a particular way
when they see others facing negative consequences for behaving in that manner. In the
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social learning process, behavior is influenced by its eventual consequence. In other
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words, people behave in ways that they perceive might reward them positively.
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C
Social learning takes place in four phases. First, by paying attention to a particular
behavior and attempting to remember it. The second phase involves retention of the
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behavior. In the third phase, the individual attempts to imitate and practice that
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behavior. The fourth phase of social learning takes place when the organization
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rewards such behavior, thus reinforcing it in the individual.

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Social learning has many advantages. It provides people with specific cues that help
them modify their behavior and fit into the new environment well. For example, a
U
newcomer to an organization might benefit by observing the behavior of existing

S
employees as it gives him an insight into the expectations of the organization. This, in
B
turn, helps him modify his behavior in keeping with the organization. Thus, social
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learning helps in molding employees to the benefit of the organization and is an

effective learning tool.
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Answer 15
Job enrichment is a vertical expansion of jobs, and includes not only increasing the
number of tasks an employee performs but also enhancing his control over these tasks.
By enriching a job, an attempt is made to increase an employee’s freedom and
independence to plan, execute and evaluate his own work. Job enrichment is based on
the assumption that employees can be positively motivated by enhancing their sense
of participation, involvement, responsibility, accountability, and achievement.
Job enrichment aims at reducing absenteeism and turnover among employees. It also
helps enhance employee morale and motivation and thereby increase their
productivity. So, this technique has been widely implemented by employers to
enhance employee motivation and productivity levels. However, in a few cases, job
enrichment does prove to be ineffective as it does not produce the desired results. The
success of a job enrichment initiative depends, to a great extent, on the willingness of
the employees to take on new responsibilities at the workplace.
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Part C
By permitting his sales representatives to make their own decisions regarding the way
they followed up a prospective customer and the way they finalized a deal, Atul Goyal
attempted to increase the participation and accountability of his subordinates, and this
motivated them positively. They were also given adequate autonomy over their jobs,
which enhanced their participation and productivity. Thus, with effective
implementation of the job enrichment process, Goyal was successful in enhancing the
sales performance of his team.
Answer 16
A self-managed team consists of a cohesive group of employees working towards the
accomplishment of a common objective under the guidance of an effective leader. In a
SMT, members share responsibility and hold themselves mutually accountable for
their goals. SMTs have a number of features that make them effective tools for
empowering organizational members.
Members of the SMT are given the freedom to determine what, where, when and how
they are going to attain their objectives. In other words, they are given the power to
10
organize themselves. They are allowed to take calculated risks and are expected to
make their own production-related decisions, i.e. they are given decision-making
20
power. In doing so, members of the team actually develop the required skills and
competencies to manage and direct themselves, thus empowering themselves.
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SMTs can be considered as effective empowerment tools in organizations because the
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members of a SMT are given the power and the responsibility to accomplish tasks by
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themselves. They are made accountable not only for the achievement of goals but also
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for the process of achieving the same.

C
The role of the team leader is relinquished in many aspects. He now plays the role of a
coach rather than that of a supervisor. In other words, his role is transformed from that
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of decision making and giving instructions to that of guiding the team members and
nurturing leadership qualities in them. He merely advises employees on certain crucial
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aspects and reviews the end objectives rather than interfering in every aspect of task
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accomplishment. He, however, offers his knowledge and expertise as and when
required by the team members.
U
Members of a SMT, in the long run, develop leadership qualities like risk-taking,
S
being open to ideas and suggestions of team members, decision making, etc.
B
Therefore, organizations are adopting the concept of self managed teams to empower
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their workforce.
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Answer 17
Anjali Sharma’s reaction to Rahul Khanna’s gesture can be best explained with the
help of Vroom’s expectancy theory. According to Vroom’s theory of expectancy, an
employee tends to perform well only when he feels that a certain effort will lead to a
particular level of performance, which in turn will lead to specific outcome that will
satisfy his personal goals. Therefore, an employee would be motivated only when his
efforts will lead to a favorable outcome that satisfies his personal goals. Vroom
explains employee motivation based on three sets of relationships, which are as
follows:
• Effort-performance relationship – This relationship determines the expectation of
an individual that a certain effort will lead to a particular level of performance.
An employee will initiate a task only when he feels he is capable of attaining a
certain level of performance.
• Performance-outcome relationship – The individual’s perception of the
probability that a certain performance level will lead to a particular outcome
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denotes the performance-outcome relationship. The outcome might be as simple

as recognition or as high as a raise in pay or a promotion in the organizational
hierarchy.
• Rewards-valence relationship – Valence is the value that an individual attaches to
a particular outcome. In other words, it is the extent to which an outcome or a
reward is attractive to the individual. Motivation of an employee depends on the
strength of this relationship between the outcome of efforts and its valence. i.e.
the more attractive the outcome or reward, the greater would be the motivation of
the employee.
Thus, depending on the importance an individual attaches to the outcome of a certain
effort, his level of motivation varies. Therefore, it is important that managers try to
reward employee performance in a way he/she expects. In other words, the rewards
offered to employees must also satisfy their personal goals. This is because different
people are motivated in different ways. This also explains why some people do just
the bare minimum tasks that are expected of them in the job.
In this case, it is evident that Sharma was not motivated by the monetary benefits she
received in recognition of her exceptional performance. She is likely to be motivated
10
by other means like a promotion in her job, or additional responsibility or authority or
20
simply praise or recognition in public. Therefore, Khanna should have identified what
motivates Sharma and then rewarded her performance accordingly. That will bring
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about the desired results in her behavior. s
Answer 18
s
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A T-group is a small group of people who have come together with an objective of
C
understanding each other. The group generally consists of people from different
departments/units of the organization who do not know each other. The purpose is to
y
gain an insight into their own behavior and the behavior of others in the group with
nl
the intention of understanding individual behavior in groups. T-groups provide

O
participants with an opportunity to appreciate how their behavior might affect others.
They become more sensitive to others’ feelings and foster a more humane work
se
atmosphere in the organization.

U
However, in a few cases, T-groups have failed to achieve their objectives for various
S
reasons. Some of these reasons are discussed below:

B
• The success of T-groups depends on how forthcoming the participants are in

rI
offering suggestions for organizational improvement. However, few

Fo
organizations encourage employee participation; in some organizations,

employees who initiate such participation are also punished. Therefore, T-groups
fail in organizations that do not encourage employees to voice their opinions.
• As T-groups comprise members belonging to different departments who do not
have to interact during their routine operations, having them to work in a team
may seem a useless exercise.
• The work schedules, deadlines, goals and objectives to be accomplished by the T-
groups are different from those that are to be achieved by them in the real
organizational setup. Therefore, application of the learning from T-groups is not
always possible.
• T-groups may result in raising questions about the participants’ behavioral
patterns. This might result in straining interpersonal relationships at the
workplace.
• The participants of T-groups are nominated by team leaders. Very often, the
members may not actually be interested in the activity. Such forcible participation
defeats the very objective of organizational learning. Besides, constant support
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Part C
and encouragement from the team leader is also essential for the success of such
activities. This requires that the leaders be trained adequately to guide their
members.
The above problems deter organizations from implementing T-groups effectively.
Answer 19
Managers often encounter decision making situations where they may not have
enough time to gather sufficient information that is required to make a rational
decision. There are many instances when managers might have to make a choice
between various options based on their prior experiences, or sometimes even based on
their intuition. Such decisions have also been successful in many situations. In such
cases, managers are said to operate under conditions of bounded rationality.
When individuals tend to make decisions by imagining a simplified version of the
problem situation, without considering all the possible alternatives, they are said to act
under the conditions of bounded rationality. This is a common tendency among
decision-makers who are pressed for time. In the absence of complete information, it
10
becomes difficult for the human mind to formulate and solve problems with complete
rationality.
20
Rational and logical decision-making becomes difficult under the following
circumstances:
•
of
Time and information crisis – The decision-maker finds it difficult to make a
s
rational decision when he lacks information about the decision-making situation,
s
as well as the time required to collect and analyze the necessary data to make an
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informed decision.
C
• Lack of clarity – When the decision-maker lacks information about the situation,
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the problem remains unclear and ambiguous. Since he is not completely informed
nl
about the complexity of the problem and about all the possible alternatives to
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solve it, he fails to make an informed and rational decision.

• Inability to visualize consequences – When the decision-maker is unable to
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visualize the consequences and repercussions of selecting a particular course of

U
action, he resorts to making decisions based on past experience under bounded

rationality.
S
B
• Inability to prioritize – When the alternatives to solve a particular problem are too
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many, and the criteria of evaluating them unclear, managers find it difficult to
rank and prioritize the various options available. Under these circumstances, they
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fail to make rational decisions.

• Changing criteria – Due to the dynamic nature of the business environment, the
criteria of evaluating the various options available to solve a problem keeps
changing. The constant change in the criteria of evaluation prevents decision-
makers from making rational decisions.
Due to the above discussed factors, managers often have to make irrational or illogical
decision based on past experiences or mere hunches. In doing so, they are also prone
to personal biases which might lead them to make wrong decisions. In other words,
the human factor creeps into the decision making process.
Decisions made under bounded rationality are generally based on a list of tried and
tested alternatives that are most likely to occur. The decision-maker evaluates all the
available alternative courses of action until he arrives at an alternative which,
according to him, meets the acceptable level of performance. In other words, the
decision-maker chooses that alternative which is good enough and which is the first
option, that is, the first acceptable alternative. He doesn’t probe further, thereby
limiting his chances of assessing all possible alternatives to solve the problem.
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In the given situation, Nikhil Khanna lacked the necessary information to make an
informed decision. Besides, the decision was time-sensitive and had to be made
immediately to meet the requirements of customers. Therefore, he had to make a
satisficing decision which would or would not lead to the desired outcome. However,
this was the best option available to Khanna as he had to make a quick decision that
was both satisfactory and capable of solving the crisis.
Answer 20
Politicking in organizations comes into play when certain individuals tend to use their
power and influence to pursue their own interests which may or may not be beneficial
to the organizations. Individuals deploy various tactics to influence others to do what
they perceive as the ‘right’ thing to do.
The legitimacy of political behavior of individuals in organizations depends on how
well he/she understands the political character and structure of the organization. An
awareness of the business environment, and the interpersonal skills necessary to be
politically competitive, along with an ability to maintain a balance between the
10
interests of the group and his/her own interests allows an individual to exhibit
legitimate political behavior in an organization.
20
Based on its legitimacy, political behaviors in organizations may be classified as
good, bad, and neutral politicking. When an individual attempts to educate, persuade,
of
or involve others in constructive discussions about the work he wants them to do, he is
said to exhibit a legitimate political behavior. When politicking is based on a fact-
s s
finding exercise, involving all the members of the group, it helps make the members
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aware of its hidden consequences and is therefore, considered as good political

behavior. Legitimate political issues could include decisions on issues like
C
marketability of a new product, customer satisfaction, and the impact of a particular

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effort on the overall business.

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At the other extreme is what is called ‘bad’ politicking. This refers to unpleasant
O
attempts to influence others such as deliberately misleading the group to do something

unethical, attempting to bribe the group, or even using the threat of likely negative
se
consequences in case of nonconformity. Other tactics such as personal attacks,

U
delaying activities so as to benefit one’s own interests, undermining the importance of

a crucial factor, conspiring against an individual or a group, etc., also constitute bad
S
political behavior. Committing to do something that one has no intention of doing, or

B
committing not to do something that he/she intends to do are other examples of bad
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politicking. Machiavellianism is a good example of bad political behavior which

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proposes that the means justify the end. As long as the ultimate result is achieved,
those involved in bad politics do not worry about the means of achieving it.
Apart from good and bad politicking, there also exists a set of behaviors that do not
seem to belong to either category. As its legitimacy is still questionable, such behavior
is termed as ‘neutral’ political behavior. Tactics such as cajoling group members
towards accomplishing an objective, or contrastingly, ridiculing a behavior, etc.,
belong to this category. Lobbying and thereby convincing others to accept a
responsibility is also termed as ‘neutral-politicking.’
Thus, depending upon the legitimacy of politicking in organizations, political
behavior in organizations is termed differently.
Answer 21
The term whistle blowing refers to someone disclosing the misconduct of an
organization that poses a serious threat to the society or that violates the law. The
whistle blower is generally a member of the organization, and information about the
misconduct is generally given to outsiders who are, by virtue of their profession,
responsible to protect the law.
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Part C
In this case, Aniketh Basu wanted to protect the health of the general public by
making public the inadequate measures taken by his company to abide by the laws of
environmental protection. But later he decided against doing so as he was
apprehensive about the implications of such an act. Although whistle blowing is no
longer believed to be a taboo in today’s organizations, whistle blowers still face a
number of problems from their employers. Some of the most common problems faced
by whistle blowers are as follows:
• The organization may initiate legal proceedings against whistle blowers. In such
cases the law does not provide enough protection to whistle blowers. This might
be because of its restricted interference into the internal processes of
organizations. Besides, the whistle blower may not even be able to pay the
charges for legal proceedings.
• The whistle blowers are deprived of opportunities for promotion within the
organizational hierarchy. In fact, there are cases where they are demoted from a
managerial position to an entry-level position.
• They also have to face other issues like social isolation from the group.
10
• They find it extremely difficult to find jobs elsewhere because of their tarnished
images in the previous organization.
20
These probable consequences of whistle blowing prevent employees from voicing
their concerns to the authorities concerned.
of
Aniketh Basu, in this case might proceed with bringing out the issue in public by
s
taking the following measures:
s
la
• He must ensure that he is actually approaching the right person in the right
C
manner before disclosing the issue. He must also consider the consequences of
each course of action before blowing the whistle.
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nl
• As a whistle blower, he must maintain a list of important and relevant facts

pertaining to the organization’s misconduct.
O
• Basu must identify and approach support groups, social workers dealing with
se
environmental protection, or non-governmental organizations which might offer

U
support to him when legal proceedings are on.

•
S
He must also attempt to identify other members within the organization in whom
B
he can confidently confide and who will help and support him in blowing the
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whistle.
•
Fo
Basu must consult a legal expert to ensure the strength of his case before
proceeding further.
• After blowing the whistle, Basu must be extremely conscious of his behavior at
the workplace. He must avoid even the slightest deviation from expected
employee behavior to avoid getting dragged into controversial disciplinary
proceedings.
Answer 22
Often people exhibit a tendency to reduce their effort when working in a group. This
is called social loafing. It is observed that people perform better at complex tasks, yet
worse on simple tasks when in a group. There exists an inverse relationship between
the size of the group and the performance outcome of the individual members of the
group. In other words, as the size of the group increases, the effort put in by individual
members of the group decreases.
Social loafing arises due a number of individual and organizational factors. Some of
them are discussed below:
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• As the size of the group increases, the members feel unwanted or neglected. This
demotivates them, and consequently they do not contribute to the problem-
solving exercise.
• Social loafing increases when members begin to feel that their personal
contribution cannot be explicitly determined and hence performance evaluation is
not possible. This generally happens in large groups where the performance of
individual players cannot be evaluated explicitly.
• Individuals tend to hold back their contribution towards organizational objectives
when they feel that they are neither going to be punished for poor performance
nor rewarded for exceptional performance. In other words, members do not
perform optimally when they perceive that they receive neither the credit nor the
blame for their output.
• Individual differences among team members may also cause social loafing. When
the relationship between group members is strained, they do not cooperate with
each other resulting in poor performance.
As social loafing leads to reduced employee productivity, organizations must make
10
efforts to minimize it. The following are a few measures that can be taken to prevent
social loafing:
20
• The size of the group should be as small as possible. The smaller the size of the
of
group, the lower the probability of social loafing.
• The members should be aware that the performance of each individual in the
s
group can be measured and evaluated. An awareness that each of them is being
s
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monitored closely ensures that they put in their optimal efforts in their jobs.
C
• The performance of each of the members must be evaluated, and they must be
rewarded appropriately. Low performers must also be punished accordingly.
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These act as motivators that drive performance.

nl
•
O
Involvement of members may be encouraged by enhancing the task significance

(task significance is the importance of the task and the degree to which the job
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makes an impact on the lives or work of other people) of employees. Once the
employees feel the extent to which their job affects them and the environment,
U
they are motivated to perform better. This motivation helps reduce instances of
S
social loafing.
B
• Offer interesting and challenging job profiles to employees that motivate them to
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perform well. Jobs that are challenging enhance their achievement drive and lead
Fo
to better performance.
• Instances of social loafing are found to be lower in highly cohesive groups.
Therefore by ensuring that the group is closely knit and highly cohesive,
organizations can contain social loafing.
Thus organizations can benefit by reducing the instances of social loafing and thereby
enhancing the overall performance of the teams.
Answer 23
Rumors are unofficial bits of information that spread quickly throughout the
organization. Rumors generally arise due to ambiguity or interest in a particular
organizational situation. They generally thrive during times of anxiety and uncertainty
about matters concerning the members of an organization. They also spread fast when
the information is of interest to its members. When the information is passed on
through different levels in an organization, it might be misinterpreted or distorted due
to differing perceptions of different individuals. Further, gaps may exist in the
information and in order to fill in these gaps, people tend to add their own input to the
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Part C
information thereby distorting it and giving rise to rumors. Rumors might produce
undesirable organizational consequences such as a demotivated and a demoralized
workforce, reduced productivity levels, and high employee turnover. Therefore,
organizations must manage rumors effectively in order to minimize its negative
consequences.
As a middle-level manager, Ketan Malhotra must not comment on the rumor as long
as he is unsure of the accuracy of the information. He must seek information from the
top management regarding the accuracy of the rumor. He must also attempt to seek
suggestions from his subordinates regarding effective ways to contain the rumors.
This involvement of employees might reduce their anxiety and might also prompt
them to come up with effective suggestions to manage the rumor. Malhotra must also
assure the employees that the management is keen on addressing their concerns and is
making sincere efforts in this direction. The organization itself must initiate the
following actions to manage the rumor:
• The credibility of the organization plays a key role in managing a rumor. During
times of uncertainty, it is the credibility of the organization that helps assure its
employees. Therefore, the management must not give any information that may
10
not be true. If baseless information is communicated to the members, the
organization might lose its credibility and it would be extremely difficult to tackle
20
rumors that might arise in future.
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• Openness in communication is important in controlling rumors. However, this
transparency must not lead to increased levels of anxiety. Therefore, the
s
management must be judicious about the extent to which the organizational
s
communication is open.
la
• When information passes down the hierarchy, people tend to add their own
C
versions to the original story and distort the original information by various
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means such as interpretation, filtration and elaboration. Organizations must leave

nl
no such scope for rumors. Therefore, any information that passes down the
O
hierarchy must be complete and explicit, with no gaps in the message.

•
se
Organizations must recognize any probable source of anxiety or uncertainty well

in advance. This helps them to identify and solve the consequent problems before
U
they become too difficult to handle.

S
Therefore, organizations must strive to manage rumors to create effective channels of

B
communication and to maintain a motivated workforce.

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Answer 24
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When discussions between the two parties involved in a conflict fail to reach a
mutually accepted agreement, a third party is invited to solve the problem. In this
case, a legal body instituted by the state government acts as a third party negotiator.
The Arbitration and Conciliation Advisory Board has the options of acting as a
mediator, arbitrator, conciliator, or a consultant.
If the Board persuades both parties to arrive at a mutually accepted solution by
reasoning the behavior and demands of both parties, it is said to act as a mediator
between the two parties. In some cases, the mediator may also suggest other
alternatives to solve the dispute. Mediators are most effective in solving labor-
management problems. However, they must be invited at the very initial stages of the
conflict. Otherwise, they fail to deliver the desired results. Besides the mediator must
be extremely persuasive and be perceived as unbiased and reliable by both parties
involved in the conflict.
Arbitration is treated as one of the most successful negotiation processes in terms of
arriving at a settlement. This is because the arbitration process is voluntarily chosen
171
by both the conflicting parties, and the judgement that results from it has to be abided
without question. In other words, the arbitrator imposes decisions on the parties. This
settlement, however, may or may not be accepted by both the parties involved, which
might result in a recurrence of the conflict situation at a later date.
A conciliator is someone who is accepted and trusted by both the conflicting parties.
As a relationship of trust prevails, the conciliator finds it easy to find a mutually
acceptable solution to the problem on hand. He thus forms an effective
communication link between the two parties.
The Board can play the role of a consultant who, in simple terms, is a skilled person
employing simple and logical management techniques to solve disputes between two
or more parties. A consultant attempts to create a friendly atmosphere that fosters a
positive attitude among the conflicting members, thereby enhancing their
interpersonal relationships. He creates a participative atmosphere by encouraging
employee suggestions to solve the problem. He facilitates the parties to come up with
their own solutions rather than merely imposing his decision to solve the problem.
Thus the negotiator may play the role of mediator, arbitrator, conciliator, or a
10
consultant as and how is demanded by the conflicting situation and the parties
20
involved in the conflict.
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Answer 25 s
In order to contain employee turnover and reach a state of high employee retention in
s
the organization, Abhinaya Iyer could adopt the technique of force-field analysis
la
propounded by Kurt Lewin. The force-field analysis technique involves the

C
identification of all the forces that drive towards obtaining a desired goal and also
those forces that hinder its attainment. The objective is to minimize the effect of the
y
restraining forces while maximizing the impact of the factors that actually aid the
nl
accomplishment of the established goals.

O
In this case, the following steps might facilitate the organization in ensuring high
se
employee retention-
• Clarify the end objective. Ensure that you identify the correct problem that needs
U
to be solved. In this case, as already identified by Iyer, it is the reduction of

S
employee turnover. In other words, the objective is to enhance the retention rate
B
of the production department.

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• Brainstorm a list of all the factors that affect employee turnover at the
Fo
department. These might be both facilitating as well as restraining forces. Iyer

might benefit by inviting employee participation in this process as they are in a
better position to actually analyze the situation.
• Now divide the list of forces into two categories viz., those that facilitate
accomplishment of a high retention level, and those that hinder its
accomplishment. The drivers for change may be factors like enhanced employee
motivation, reduced acquisition costs, etc. On the other hand, forces that hinder
attainment of a high retention rate may include poor quality of work life,
bureaucratic organizational structure, minimal scope for growth in the
organization, and low pay scales. Then analyze these forces to assess the degree
to which they affect employee turnover.
• Make a list of all those forces that can be controlled by the organization. For
example, one of the drivers for achieving a high retention rate is enhanced
employee motivation. Likewise one of the forces that hinder the attainment of a
high retention rate would be poor quality of work life. Organizations can improve
the quality of work life by adopting a number of measures. Such forces that can
be influenced by the organization have to be identified.
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Part C
• Also sketch action plans to control the identified forces. In other words, decide
how to go about enhancing the impact of the drivers that facilitate the
accomplishment of the objective and reducing the effect of those forces that
hinder its accomplishment.
Thus, Kurt Lewin’s force field analysis can help retain employees in the production
department.
Answer 26
Parallel learning structures are informal groups within organizations that are formed in
addition to the formal hierarchical structure to solve organizational problems. Parallel
structures coexist with the formal structures and solve those problems that cannot be
addressed by the formal structure alone.
Parallel learning structures generally consist of a steering committee comprising
members of the top management, and a number of working groups comprising people
from a cross-section of the organization. The working groups may include idea
10
groups, action groups, implementation groups, or simply groups with different
purposes. Thus in parallel structures, members belonging to different departments and
20
levels in the organization come together to exchange information relating to
improvement of existing organizational practices, and to find innovative means of
of
solving problems. s
The initial phase of development of a parallel learning structure is concerned with the
s
definition of its purpose and scope. The steering committee and the various work
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groups are then formed with specific objectives assigned to each of them. The
C
strategies to attain these objectives are explicitly identified and communicated to the
organizational members. Working norms and procedures are then framed, and
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facilitators are assigned to the work groups to accomplish their objectives. The
nl
strategies are implemented and the learning thereof is diffused throughout the
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organizational system.
se
Parallel learning structures are believed to be the foundation of OD in organizations as

they have been predominantly used as developmental interventions in a number of
U
organizations. Parallel structures are mostly implemented in large bureaucratic

S
organizations where an organization-wide change has to implemented. They help

B
overcome the initial resistance to change, break the barriers to communication,

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facilitate an informal exchange of information, and nurture creativity among its

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members. They are especially beneficial when the change involves a total shift in the
organizational culture and practices. The informal nature of these structures enhance
employee participation towards problem-solving. As parallel structures focus on
information-sharing among its members, they can be used as effective tools of
organizational learning. These structures facilitate distribution of the organization’s
collective expertise to the right people in a timely and efficient manner.
Parallel structures thus create a shared sense of purpose among its members.
Answer 27
Process consultation is an OD intervention that involves a skilled third-party who
helps individuals and groups in organizations to understand human and social
processes, and to help them to solve their own problems. In the present case, an
external consultant is invited to solve the rising conflicts between the management
and the workers. The intervention is basically initiated by the client (Fads) and
involves the consultant in resolving the issues. The process consultation intervention
generally has the following stages:
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• The consultant asks relevant questions to organizational members belonging to

various levels. The responses to these questions provide the consultant useful
cues to solve the problem. The consultant attempts to understand the interpersonal
processes that might have led to the conflict situation.
• Feedback of observations is communicated to the individuals and groups after
gathering and analyzing the data.
• An attempt is made by the consultant to counsel both parties regarding expected
behaviors that might help them resolve the conflict. The consultant also suggests
a few areas of improvement to both the parties that might help them implement
the intervention successfully.
• The consultant then offers a list of suggestions pertaining to probable changes in
the existing structures and processes of the organization which includes issues
like group membership, communication pattern between the various levels in the
organization, and the leadership styles that might affect the prevailing
interpersonal relationships.
Thus the process consultant helps the organization in identifying the problem,
10
collecting relevant information, analyzing the various alternatives, and proposing a
feasible solution to solve the problem. The consultant, however, must ensure that he
20
does not enhance the dependence of the organization on his skills and expertise. He
therefore must -
•
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Merely facilitate the organization to solve its own problems, without imposing his
s
opinions on the client.
s
•
la
Make the organization aware of the organizational processes, their implications,

and the ways in which they can be modified. The organization must be involved
C
in the entire intervention, beginning from diagnosis of the problem, to framing a

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possible solution.
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• Pass on the skills that facilitate the problem-solving process to the client
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organization. During this process, the consultant should ensure that he doesn’t
make the client dependent on him. Instead, he must merely facilitate the transition
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by enhancing the capacity of the organization to solve its own problems.

U
• Listen to the various alternatives proposed by the client to solve the problem and
S
provide accurate feedback in terms of consequences of each alternative. He/she

B
must however leave the decision-making role to the client itself.

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Thus an organizational problem can be effectively solved by the concerted efforts of

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the organizational members and the external consultant by means of process

consultation.
Answer 28
Matrix structure is a modern organizational design which combines the features of a
project design with those of a functional one. Therefore, matrix organizations exhibit
pooling and sharing of resources as in functional departmentalization, and
coordination among specialties to achieve on-time completion of tasks and meeting of
budgetary targets as in product specialization. Matrix designs are popularly used in
sectors characterized by a high degree of specialization along with an emphasis on
projects and other specific goals such as R&D organizations, consultancies,
advertising agencies, hospitals, universities, etc.
In the present case, by introducing a matrix structure, the hospital may benefit by
enhanced coordination between its diverse complex functions. Such a structure also
enables the organization to allocate functional specialists among different departments
in an effective manner. Matrix structures enable organizations to make optimum
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Part C
utilization of employee skills, ensure that knowledge is available to employees in all

the departments and projects, facilitate quick response to changes in customer
demands and project requirements, and help organizations reduce costs and improve
performance.
However, the matrix structure is not devoid of weaknesses. The structure violates the
principle of unity of command, due to which the employees report to two (or more)
bosses. This could give rise to conflicts between the managers. These conflicts, if
allowed to continue without resolution, can demotivate employees, reduce their
loyalty and preclude them from identifying themselves with the organization. The
matrix design is also criticized for the confusion it creates and the amount of stress it
places on individuals. Reporting to more than one superior leads to role conflict and
ambiguity among employees, which can increase their work-stress. As the superior
changes from one project to another, superior-subordinate relationships also gets
weakened. As the matrix structure embodies two structures, it often leads to
duplication of activities resulting in an increase in costs.
The success of the structure, thus depends on how effectively managers overcome the
deficiencies and leverage its positive aspects. Therefore Bhattachrya, in this case, will
10
benefit by conducting a comprehensive cost-benefit analysis of implementing the plan
for an organizational restructuring.
20
Answer 29
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In the above case, Meghna Patel is said to experience cognitive dissonance. Cognitive
s s
dissonace is the incompatibility that an individual may perceive between two or more
la
of his attitudes, or between his behavior and his attitudes. The cognitive dissonance
C
theory was proposed by Leon Festinger in the late 1950s to explain the relationship
between attitudes and behavior. He proposed that individuals are uncomfortable with
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any form of inconsistency and try to reduce the dissonance and discomfort that results
nl
from such inconsistencies. They seek to obtain a stable state where there is least
O
dissonance. However, no individual can completely eliminate dissonance.

se
According to Festinger, an individual’s desire to reduce dissonance depends on the

importance of the elements that cause the dissonance, the degree to which the
U
individual can influence these elements, and the consequences that the individual is
S
likely to face as a result of such dissonance. An individual will make little effort to
B
reduce dissonance if the elements that are responsible for the dissonance are not
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important to him.
Fo
In this case, Meghna has to strike a balance between her personal values and the
instructions given by her superior. If she obeys the instructions of her superior, she
will have to go against her ethics. On the other hand, if she sticks to her personal
values, she might have to face serious consequences and may even lose her job.
According to the theory of cognitive dissonance, Patel might deal with dissonance in
the following ways:
• She might stick to her personal ethical values, and refuse to manipulate the
financial figures while projecting the status of the company to the members
concerned.
• Alternatively, she might, out of fear of losing her job, or of damaging the
impression her superior has about her, act according to his instructions.
• Otherwise, Patel might even change her attitude towards the ethical values she
upholds. She might justify her actions by assuming that such a behavior is
common and that such values are no longer adhered to in the current business
environment.
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• Patel might also begin to believe that the rewards of conforming to the expected
behavior exceed the costs she might have to bear for adhering to her basic values.
An individual’s desire to reduce dissonance also depends on the extent of control he
has over the elements causing dissonance. If an individual believes that these elements
are not in his control, he will try to justify his behavior.
Thus, the effort made by an individual to reduce dissonance depends on the
significance of the elements that lead to dissonance, the ability of the individual to
control these elements, and the rewards that are likely from making such an effort.
The greater the dissonance, the higher the pressure on the individual to overcome the
dissonance.
Answer 30
In this case, Armaan Dev was Sheetal Deshpande’s superior. Deshpande knew that
she should obey his instructions as he would be evaluating her performance.
Deshpande was aware that whatever rewards she would receive depended on how Dev
appraised her. Deshpande hence accepted to stay back to help him prepare the report
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even though she had no formal obligation to do so. Thus, Dev exerted a ‘reward’
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power over Deshpande.
Reward power has its source in a person’s ability to control the resources used to
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reward others. Reward power is based on B’s belief that A has the ability to grant
rewards to B. Reward power is diametrically opposite to coercive power. Coercive
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power arises from the ability to inflict punishment or withdraw a reward. Reward
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power, however, arises from the ability to give a reward or eliminate a negative factor
from a person’s work sphere. People comply with the wishes and directives of
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managers because compliance brings about positive benefits. Thus, managers will
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have power over their employees if they can give rewards that are valued by the
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employees. The most important feature of reward power is that the power is
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dependent on the recipient. What the manager perceives as a reward may not hold any
value for the employee, and vice versa. In such a situation, the manager will not hold
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any reward power. For instance, a manager may offer his subordinate a promotion
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with increased responsibility, but the subordinate may not value it since the promotion
is accompanied by a change of location, which is not convenient to him. In this case,
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the manager will not have reward power. But if the subordinate considers the
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promotion rewarding, then the manager is said to have reward power. Sometimes,
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managers may not have the authority to dispense rewards, but as long as their
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subordinates believe that they do, they possess reward power.

Potential rewards that are valued in the organizational context include pay increases,
promotions, favorable work assignments, new equipment, praise, feedback, and
recognition. Reward power gives managers the power to offer positive reinforcement
to employees which encourages repetition of positive behavior in them.
Therefore, in this case, Dev was able to influence Deshpande because of her belief
that displaying positive behavior might bring her appropriate rewards. Hence, Dev
exerted a reward power over Deshpande.
Answer 31
Conflicts are common in organizations. They can be resolved easily provided
employees follow certain guidelines. Employees should attempt to resolve conflicts at
the earliest. They should not wait till the conflict assumes larger proportions. If
conflicts are not resolved in their initial stages, at later stages they disturb employees
emotionally, reduce employee productivity, consume more time in their resolution and
affect organizational profitability.
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Part C
Employees should learn to address the issue at hand rather than trying to find fault
with other employees. They should not form rigid opinions about their colleagues
based on one particular interaction with them during a project. Sometimes an
employee ‘X’ may declare that he cannot work with employee ‘Y’ because Y gave a
lot of trouble in project ‘ABC’ where they worked together. But avoidance of
interaction between conflicting individuals cannot be a permanent solution to the
problem. If projects require skills of both employees and they are not willing to work
together, management will face problems in coordination. Therefore, management has
to encourage employees in conflict to confront each other, discuss the factors that led
to the conflict and find out a solution.
Employees should be encouraged to think from the perspective of their colleagues.
This will help them understand their co-workers and their interests better. When
employees understand each other and respect each other’s opinions and attitudes,
there is less scope for conflicts to arise.
If the employees find it difficult to resolve a conflict by themselves, organizations
may employ a neutral third party to facilitate conflict resolution. In this approach,
conflicts can be resolved in two steps. In the first step, a brainstorming session is
10
conducted and employees are encouraged to suggest all the possible solutions they can
think of. All the solutions are listed on a board or white sheet and displayed to be
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viewed by all the parties. In the second step, all the suggested solutions are evaluated
and the best one or a combination of solutions is selected.
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Before allocating time for resolving a conflict, management should consider the
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importance of the issue of the conflict. They may try to quantify the impact of the
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conflict on the organization. For example, the number of people affected by the
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conflict, and the amount of loss of productivity that may result if the conflict remains
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unresolved may be worked out. If many people are affected by the conflict or the
organization suffers loss because of it, the conflict should be resolved immediately.
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Further, if the conflicts involve major legal issues or ethical dilemmas, special care
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needs to be taken to resolve these conflicts. But minor issues, which simply irritate a
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few employees for a short period of time and do not have any effect on employee
productivity and organizational performance, can be discounted.
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Answer 32
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Sometimes, in organizations, the rival party (say, a workers’ union) may describe how
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unsatisfactory the previous agreement was, and demand for a complete change in the
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agreement. This is generally an attempt to attack the confidence of the manager at the
negotiation table and reduce his power to negotiate for better terms. The union
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representatives may also express their concern about the deteriorating relationship
between employees and employers and the need to enhance it. The management
should not get carried away by these discussions because the union representatives are
trying to combine the non-negotiation issues with those for negotiation and confuse
the management. The negotiating manager should make it clear to the union
representatives that they need to stick to the agenda of the negotiation. However, if the
issues are important, the manager may agree to discuss them but ensure that they are
not considered as part of the negotiation process.
The union representatives are likely to present a long list of demands at the
negotiation table. The management has to ask them to cut the list by including only
the issues of primary importance to the union. But sometimes, the union
representatives may refuse to do so and state that all the issues are important to them.
In such cases, the management may accept the list as it is but should counter it with its
own list consisting of issues they consider to be of priority. Then the issues in both the
lists may be compared and discussed one after the other. In this way, primary issues
that are valued by both parties can be settled first and secondary issues can then be
taken up for discussion.
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Sometimes, the union representatives may present some demands at the end of the
negotiation process. Generally, they use this tactic to get the management to agree to
their demands quickly as they would be in a hurry to wind up the meeting. But the
management should be very careful in giving its assent to such demands. If the
management refuses to discuss these demands, the disagreement on this issue could
nullify all the earlier efforts put into the negotiation. Therefore, the negotiating
managers should agree to discuss the issue but explain to the union representatives
that they need time to discuss it because they have to consider the effect of the new
demands on the issues that have been finalized so far.
At the end of the meeting, union representatives generally read out the concessions
made by the management. The negotiating managers have to be very attentive because
the concessions read out could be more than what had actually been agreed upon
during discussions and could be skillfully introduced into the final document by the
union representatives. Hence, it is important that managers note down the concessions
made as soon as a particular issue is settled. This will help them in overcoming
manipulations by union representatives at a later stage of the negotiations and prevent
further conflicts.
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Answer 33
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Communication is the fundamental requirement of any organization. The
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communication process model of an organization promotes understanding among
employees and enhances the level of trust in the organization. It ensures that
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information flows in the desired direction and facilitates coordination among the
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various processes of the organization. Management should continuously assess the

model to ensure that communication flows freely in all directions. In case they
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observe any interruption in the flow of communication, they should immediately take
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steps to restore the flow of communication. Organizations should strive to improve

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the communication skills of managers. Managers should not only teach effective
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communication behavior to employees but should also practise it themselves. This

would encourage subordinates to adopt the same behavior.
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Let’s describe the Managerial Communication Climate (MCC) model, a model that
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was adopted by FedEx. The MCC model at FedEx aims to give rise to a
communication climate which is composed of two components – information
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openness and interactive supportiveness. Information openness constitutes three sub-

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components – information adequacy, information flow and managerial information

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sharing practices. Interactive supportiveness, too, comprises eleven sub-components.

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The sub-components of interactive supportiveness are the various managerial skills

that are essential for fostering an effective communication climate in any
organization.
The MCC model requires organizational leaders to be good communicators who can
make their employees feel comfortable, valued and supported. They need to listen
actively and empathize with employees. They need to check messages for accuracy.
They have to ensure that the messages convey the intended meaning. They should be
able to express their emotions in the right manner. They should encourage their
employees not only to communicate but also to provide feedback. They too should
provide feedback pertaining to the information they receive. Managers should master
the skills of managing conflicts in organizations. They need to place special emphasis
on effective and constructive feedback from employees in the organization.
The MCC model at FedEx has the following characteristics:
Openness of communication: All the information is disseminated freely throughout
the organization. It ensures that each employee obtains the specific information he
needs to perform his job well.
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Part C
Elimination of barriers: Both horizontal communication (between employees at the

same level) and vertical communication (between employees at different levels)
channels are likely to face barriers that restrict the flow of information. The MCC
model enables the management to act fast so that it can identify the source of
obstruction, and eliminate it to facilitate smooth flow of information.
Type of information shared: The information related to job, employees,
organizational operations as well as information of strategic importance is shared
throughout the organization. The functioning of overall communication system of the
organization depends on micro communication systems (at department and unit
levels) that constitute it. This necessitates each manager to encourage information
sharing in his department.
Emphasis on people element: The model places emphasis on the ways in which
employees communicate with each other. It does not attempt to know what is being
communicated by one employee to another, thus ensuring employee privacy and
encouraging employee interaction.
Regardless of their busy work schedules and tight deadlines, at FedEx, managers are
10
required to allot a certain amount of time to participate in meetings with their teams.
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Despite the difficulty they face in taking out time for such meetings, managers abide
by the company’s policy and conduct meetings of short duration. Managers are
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assessed periodically for their communication skills as well as other skills. The top
management distributes questionnaires to the employees throughout the organization
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to assess the effectiveness of the MCC model, and managers’ effectiveness in
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implementing the model. Employees give ratings for the MCC model. They rate their
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respective managers on their interpersonal skills and information-sharing practices.

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Based on the results of the assessment, managers are trained to upgrade their
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communication skills. The top management also takes necessary steps to improve
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communication in the organization.

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Answer 34
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Organizations need to inform employees about the vision, mission and objectives of
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the organization. This is essential to motivate employees and secure their commitment
towards organizational objectives. Committed employees give more time and energy
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to achieve organizational goals. In the absence of commitment from employees,

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organizations cannot survive in a competitive world.

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The barriers to communication in organizations are:

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Imbalance in the flow of communication

Employees expect to be informed about certain organizational matters. However, they
are often flooded with information. The number of channels of communication in
organizations have also increased. Employees receive information through company
bulletin boards, in-house magazines, circulars, notice boards, formal meetings,
informal chats, etc. Thus, employees often experience an information overload. They
are unable to separate unimportant information from the important and choose to
ignore most of the information. Reengineering and organizational restructuring have
eliminated the middle management which used to filter information that flowed to
lower level employees.
Ineffectiveness of modern means of communication
People communicate through phone, voice mail and e-mail, but these are not as
effective as face-to-face communication. In direct communication, a person can
observe the body language of the other person, his facial expressions and voice. He
can better analyze that person and customize his responses accordingly. Negotiations
become easier and agreements can be arrived at quickly.
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Some organizations conduct face-to-face meetings but fail to achieve desired results.
This is primarily because of lack of proper agenda; lack of participation of key people;
and lack of focus in the discussions. Advanced means of communication such as
telecommunication enable ‘employees on the move’ to stay connected with their
office. But such devices may be used by some employees to mislead their managers
regarding the progress of a particular project.
Isolation of employees due to online training and development programs
Online training and development programs are on the rise. This deprives employees of
their social needs to interact with each other and share their experiences. Technology
is isolating employees, and minimizing the possibilities of knowledge-sharing.
Poor listening skills of the management
Managers generally speak well but have poor listening skills. They are being trained
to improve their communication skills. They must be able to effectively communicate
their vision of organizational development to employees in order to secure their
commitment towards the task.
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Changes in work and work environment
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Concepts like teams, telecommuting, outsourcing and virtual organizations are
gaining popularity. While some organizations have successfully used these concepts
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to improve their productivity and profitability, some have failed miserably.
Telecommuting failed because employees as well as management personnel were not
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adequately trained in online communication. Teams failed because team leaders could
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not communicate to their members, the goals and objectives of the team and what was
expected from them to accomplish the goals. Organizations also suffered from the
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absence of proper communication facilities within and between teams. This resulted in
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poor coordination, wrong decisions and low productivity.

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With people becoming increasingly mobile in the search for better opportunities,
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workforce diversity has increased at work places. However, most organizations do not
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have appropriate training programs to meet such challenges. Therefore, managers find
it difficult to communicate effectively with a diverse workforce.
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Mergers and other changes primarily fail because of the management’s failure to
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communicate its plans and expectations to the employees. Unless leaders inform
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employees about their plans and strategies, employees cannot contribute to the success
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of the programs.
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Answer 35
The communication problems that supervisors are likely to face and the possible ways
in which they can be tackled are discussed below:
Fear of punishment may cause employees to withhold information relating to low
productivity. They may also try to hide the mistakes they have committed. They
hesitate to clarify doubts they had when the supervisor gave instructions. If employees
start working without having a clear idea of what they are expected to do, the quality
of work would be adversely affected.
To deal with such problems supervisors should promote upward communication.
They should encourage employees to approach them whenever they have a problem.
They should listen to employees’ problems and empathize with them. Supervisors can
remove fear from employees’ minds by developing a good rapport with them. They
should appreciate employees when they do a good job. When employees approach
supervisors with personal problems, they should express their sympathy and if
possible, suggest solutions.
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Part C
Employees often complain that supervisors use technical jargon in their instructions,
which they are unable to follow. Supervisors should therefore minimize the use of
such jargon. They should also give instructions slowly so that employees understand
what they say. They should repeat important and complex instructions to prevent
employees from missing out on any vital information. At the same time, supervisors
should avoid repeating every statement of theirs, as this would tend to annoy
employees and cause them to disregard further instructions given by the supervisors.
As far as possible, supervisors should avoid explaining several assignments at the
same time since some of the employees may find it difficult to remember all the
instructions. This would have an adverse effect on work.
Often, employees are not able to meet the expectations of supervisors because they do
not have the basic information pertaining to their work. Therefore, supervisors must
inform employees when, where and how they should get the required inputs, when
they should complete their assignment and how frequently they should report their
progress. Sometimes, employees feel that they are inadequately informed about
developments in the organization. Such issues can be addressed by supervisors. They
should inform employees of changes like increase in production targets, changes in
10
production lay-out and expansion (or downsizing) of workforce. But information
relating to the company’s sales and profits, achievements in R&D, number of patents
20
filed, etc. may be selectively communicated by supervisors.
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Answer 36 s
Managements often concentrate on the organizational aspects and ignore the
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employee aspects. They focus on restructuring the organization, redesigning

organizational processes and information systems. They forget that employees need to
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be informed about changes, educated and trained to accept and participate in them.
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Employees are vital to the success of any change. If they resist change, organizations
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cannot succeed in implementing changes.

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Employees must acquire new skills and capabilities as well as change their attitudes
and mindset if organizational changes are to be successful. If the management fails to
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allocate time and funds for training employees in these skills and capabilities, it
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cannot hope to reap benefits from the change, even if it may have taken care of all
other aspects.
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Managers often assume that employees will acquire new skills on their own. They
believe that employees’ resistance to change will gradually disappear. Resistance, in
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its initial stages, cannot be observed clearly because employees do not express it
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verbally. If the management does not deal with resistance in the initial stages, it will
assume larger proportions and the change may have to be abandoned. The
management should always anticipate resistance to change and take necessary steps to
overcome it.
Managements sometimes forget about the primary objectives of change and
concentrate on aspects like team-building exercises. Undue emphasis on such aspects
mislead employees. They focus on learning the new methods and processes and
developing specific skills but do not apply them to achieve the change goals.
Sometimes, managements conduct training programs for employees but restrict the
scope of training. For instance, the programs train employees in the skills required to
use new machines but do not counsel them or lay to rest their fears of being laid off.
Generally, information percolates from the top to the bottom and this process does not
occur as frequently as desired by employees. Consequently, the flow of information
through the organization is affected and this in turn slows down the process of change.
Managements should therefore encourage two-way communication and impose
minimum restrictions on the and quantity of information exchanged.
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Middle managements and other stakeholders like customers and suppliers should also
be involved in the process of change. This would enable the management to obtain
multiple perspectives on its initiatives as well as suggestions for improvement.
In some organizations, top management does not come forward to explain changes to
employees. In the absence of visibility of the top management, employees will not be
committed to the process of change. Top management support is vital for the success
of changes introduced in an organization. It should actively guide and support new
initiatives, motivate employees, address their concerns and encourage them to
participate in the process of change without apprehension.
Answer 37
Organizations often face problems while making the transition from traditional work
culture to team culture. The problems at Aditi Manufacturers Ltd started after the
concept of teamwork was introduced. This does not imply that teamwork caused the
problems. The concept of teams, if implemented properly, can increase organizational
10
productivity and efficiency. Rather than doing away with the team culture the
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management of Aditi should try to identify the factors that led to decline in
performance and work out a solution.
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If the management of Aditi had introduced teamwork simply because other
organizations had adopted it, then it was a wrong move. The management should
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analyze the nature of work in the organization. If it finds that the nature of work is not
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conducive to the team culture, Aditi should revert to its traditional work culture.
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However, if the management finds that employees can work in teams, it can continue
with the team culture albeit, with some modifications to suit the company’s work
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environment.
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Teamwork does not mean employees are not bound by any rules and regulations.
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Disciplinary rules remain in force. If employees act contrary to the interests of the
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company, they are liable to be subjected to disciplinary action. After introduction of

teamwork, the management may initiate a new social contract with the employees,
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which specifies the company’s goals and each individual’s role in their achievement.
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The contract may also specify the behavior expected from an employee in his
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interaction with customers, colleagues, superiors and subordinates. The process of

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resolving conflicts can also be standardized.

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Without a proper communication system teams cannot deliver expected results. The
management has to ensure that teams have access to necessary information. They
should be encouraged to communicate freely with each other.
Employees often tend to resist changes at the workplace. Therefore, the management
must explain to them why teamwork was introduced and how it benefits both the
organization and its employees. Employees should be involved in defining their own
roles and responsibilities. This will ensure their commitment and cooperation.
Specific and measurable targets should be set for each team and the role of each
member should be specified. The management should encourage healthy competition
between and within teams to improve performance of employees.
Moreover, the management should give some time to employees so that they may
adapt themselves to the change. In order to secure the long-term benefits of teamwork,
the management should deal patiently with problems that may arise during its
implementation.
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Part C
Answer 38
There is no universally accepted fool-proof method to identify and develop potential
leaders. However, Ashok Dwivedi may adopt the following ways to screen the
employees and identify potential candidates to succeed him.
• Ashok should look for an employee who displays the true characteristics of a
leader. For example, the employee should be good at persuading and influencing
his colleagues to do things the way he believes is right. He should come forward
to take up responsibilities though it would mean more risk for him. He should
have a thirst for excellence. He should do his job perfectly and expect the same
from others. He should be emotionally stable.
• Ashok should study the track record of employees through their appraisal files.
The right employee should have completed his projects successfully. He should
have some unique skills and expertise which differentiate him from the rest of
employees. He should have followers who are willing to accept him as leader.
•
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Ashok should select the candidate who satisfies the above criteria. But he should
not forget to get an opinion about the selected candidate from his superiors, peers
20
and subordinates so as to ensure that the candidate chosen will make a true leader.
• The selected candidate should be sent for a training and development program.
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The development program should not attempt to teach the future leader what to
learn but should teach how to learn on his own from his experience. Leaders
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should have a knowledge about a variety of issues ranging from local problems to
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global concerns. Therefore, the candidate should be encouraged to learn about

different cultures, economies, societies, human psychology, technology, and so
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on.
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• Leaders are often faced with new problems and challenges. Therefore, the
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selected candidate should be trained to use his own skills as well as those of his
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followers to solve problems and convert challenges into opportunities.

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• Ashok should ensure that the development programs do not dictate to the future
leader on what approach he should use to solve a problem. Instead, the programs
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should equip him with problem solving skills. He should be encouraged to use his
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creativity to design new techniques and approaches to solve problems. He should

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be taught about different leadership styles but should not be forced to adopt one.
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He should be encouraged to maintain and develop his own individual style.

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Answer 39
Organizations should design jobs in a way that allow employees to use a variety of
skills. An employee should be given a complete job rather than a piece of work. The
tasks given should be important, and he should be given autonomy to decide on how
to do the job. The employee should be given regular feedback on his performance to
enable him to improve his performance. Apart from designing good jobs and
encouraging individual employees, organizations should also promote team culture.
Specific, measurable, and attainable goals and objectives should be established for the
teams to provide a clear focus to the team members. Team leaders should be
encouraged to adopt a participative style of leadership. They should not try to be
authoritative because that suppresses the creativity of team members. Team members
should have reasonable freedom to interact with each other, share information, discuss
various issues and take decisions.
Team members should be open to new and seemingly impractical ideas and to
criticism from each other, and should be committed to achieving excellence. If a
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majority of the team members agree on a particular issue and only a few oppose it, the
minority view should not be rejected outright but should also be heard and the
rationale behind it considered. Team meetings should be conducted regularly. Team
members should review the team objectives and strategies and make modifications, if
required, in these meetings. They should trust each other and cooperate in
implementing the strategies. Support from team members and the top management is
crucial for promoting innovation and implementing innovative ideas in organizations.
Moreover, in innovative organizations, there is free flow of communication in the
form of in-house newsletters and weekly review meetings. Cross-functional teams are
also common and facilitate interdepartmental communication and coordination.
Sometimes conflicts may arise between departments. The cross-functional teams then
use conflict resolution methods to try and sort things out.
Innovative organizations encourage employee participation and involvement in
decision making processes. Further, they encourage workforce diversity. Employees
from different backgrounds possess different skills and express different perspectives,
attitudes, views and opinions. The resulting disagreements are solved by open
10
discussions.
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Answer 40
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Organizations should not discourage the generation of ideas, whatever be their source.
Discouraging the generation of ideas from personnel belonging to the lower levels in
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the organization will undermine their creativity and reduce the scope for innovation in
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the organization. Organizations can create an idea-friendly workplace by

systematically evaluating ideas contributed by employees.
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In order to analyze the ideas, management in organizations may make use of a tool
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called PMI. This tool was developed by Edward de Bono in 1992 to analyze ideas,
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where P stands for plus, M for minus and I for interesting. One of the managers in the
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organization should be designated as an ‘idea facilitator’ whose responsibility is to

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facilitate the generation of ideas.

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The use of PMI as a thinking tool involves the initial generation of ideas from all the
participants of the meeting, followed by the analysis of every idea with regard to its
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positive, negative and interesting aspects. The idea facilitator writes down the ideas on
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a white board to be noted by everyone in the room. Below every idea, the participants
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are required to note down the positive (plus) attributes, negative (minus) attributes and
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the interesting aspects in the form of three columns named P, M and I. The facilitator
asks the participants to describe the positive (plus) aspects they can think of pertaining
to the idea and note them in the column P. Similarly, the participants are required to
note down the negative and interesting aspects of the idea in the columns M and I
respectively. To get the right responses from the participants, the facilitator gives
them hints on the direction in which they need to think. After the responses of all the
participants have been obtained, the ideas are evaluated to determine whether any of
them have practical value. Ideas that are of practical value to the organization are
implemented.
Answer 41
Organizations can address the need for recognition in employees in several ways.
These may be in the form of promotions, increments, personal or written praise,
praising the employee in front of other employees, sending across a note of
appreciation or a thank-you note for excellent performance, sending e-mail messages
of praise, offering surprise gifts, etc.
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Part C
The employee recognition program of the Taj Group of Hotels, STARS, aims to
identify, recognize and reward those employees who excel in their work. STARS is
actively promoted across the group’s chain of 62 hotels worldwide and among its
18,000 employees, of whom 15,000 are from India.
STARS has five different levels. Though employees do not receive any cash awards,
they gain recognition by the levels they attain through the points they accumulate for
their acts of kindness or hospitality. ‘Level 1’ is known as the ‘Silver Grade’. To reach
this level, employees have to accumulate 120 points in three months. To attain ‘Level
2’, known as the ‘Gold Grade,’ employees have to accumulate 130 points within three
months of attaining the silver grade. To reach ‘Level 3’, called the ‘Platinum Grade’,
employees have to accumulate 250 points within six months of attaining the gold
grade. To attain ‘Level 4’, employees have to accumulate 510 or more points, but
below 760 points and become eligible to be a part of the Chief Operating Officer’s
club. ‘Level 5’ which is the highest level in STARS, is attained when 760 or more
points are accumulated, making the employee eligible to be a part of the MD’s club.
Points are granted on the basis of parameters like integrity, honesty, kindness, respect
to customers, environmental awareness, teamwork, coordination, cooperation,
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excellence in work, new initiatives, trustworthiness, courage and conviction.
Employee suggestions that bring benefits to the organization fetch significant points.
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Employee suggestions originating from each hotel are examined by the General
Manager, HR Manager and Training Manager of the hotel. The suggestions can also
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be posted on the web, which is constantly monitored.
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Employees can also earn points through appreciation by customers, compliments from
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colleagues and various suggestion schemes. Employees are awarded ‘20 default
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points’ if the review committee does not give feedback to the employee within two
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days of his/her offering a suggestion for the betterment of the organization.

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STARS helps employees work together as a team and appreciate fellow employees for
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their acts of kindness and excellence. It enhances their motivation levels and leads to
increased customer satisfaction.
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On the basis of the number of points accumulated, employees receive a star that can
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be pinned on to their coat. When a certain number of points are collected, employees
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receive gift hampers, cash vouchers or a vacation at a Taj Hotel of their choice in
India. The winners of STARS are felicitated at a function held in Taj, Mumbai. The
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winners’ photographs are displayed on a big screen at the function and they receive
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awards given by the MD of the Taj Group. This awards ceremony significantly boosts
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their morale.
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STARS has not only been successful as an HR initiative, but has also brought many
strategic benefits to the group as well. The service standards at all hotels of the group
improved significantly because the employees felt that their good work was being
acknowledged and appreciated. This resulted in repeat customers for Taj hotels.
Because of STARS, the Group won the ‘Hermes Award 2002’ for ‘best innovation in
HR’ in the hospitality industry.
Thus, employee recognition goes a long way in motivating employees to improve
their performance further and contribute to the growth of the organization.
Answer 42
Team accomplishments may be defined as the results achieved by teams with the
active contribution of its members. To determine the accomplishments of each team in
the organization, the management at Zeta should clearly establish the results to be
achieved by each team. This helps the teams focus on obtaining results. However, the
management should take care not to dictate to team members on how to achieve
results since this would curtail the creativity and freedom of team members and
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demotivate them. But, the management can always suggest ways in which to achieve
results and extend their support to them. The management should avoid monitoring
the activities of team members constantly. Instead, they should monitor the results.
Following are some of the methods to determine team accomplishments:
• The management should express the relationship between the team and its
different customers in the form of a diagram. The diagram makes it clear to team
members, who are the internal and external customers they need to serve, and the
types of products and services customers expect from them. Therefore, team
members will have no ambiguity about the results they have to achieve. Thus,
designing of a customer diagram helps to determine the desired output of the
team.
• The team’s goals should be aligned with that of the organization. The goals
should be objective and quantifiable. The quantifiable nature of the goals will
allow the management to assess the extent to which they have been achieved by
the team.
• The management should prioritize the organizational goals. It should then
10
identify the goals that are important and relevant to the various teams. For
example, increasing the organization’s sales and profitability can be the goal of a
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sales team. But the same goal should not be set for the production team as well
because the production team has no control over the sales and profits of the
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organization. The management should also ensure that the team has control over
the goals set for it. Clarity of goals helps the management compare the actual
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output with the desired output and thus acts as a measure to determine team
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accomplishment.
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• The management should identify all the activities involved in a certain work
process to provide a value-added product or service to the customer. The work
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process should be expressed in the form of a diagram. The diagram should clearly
indicate the kind of activity each team performs in order to produce the final
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output for the customer. This is referred to as work process mapping. It helps in
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measuring team performance.

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Answer 43
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Knowledge workers (or highly skilled employees):

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• Have clear goals in their life and work hard to achieve them.
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• Strive to realize their full potential.

• Want to lead a meaningful life.
• Are motivated by intrinsic factors rather than extrinsic ones
• Try to control destiny rather than being led by it.
Organizations can motivate knowledge workers by providing them with the following:
• Challenging work: This satisfies the desire of knowledge workers to realize their
full potential.
• Minimum supervision: Knowledge workers are self-driven and, therefore, do
not require close supervision. Moreover, close supervision prevents knowledge
workers from concentrating on their work and kills their creativity.
• Higher responsibilities: Knowledge workers try to control their destiny. They
try to overpower circumstances and bring them under their control. If they are
given responsibilities, they will fulfill them successfully by turning even difficult
situations in their favor.
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Part C
• Adequate organizational resources: Scarcity of organizational resources

prevents work from progressing further and irritates and affects the thinking
processes of knowledge workers. Therefore, organizations should ensure that an
adequate amount of resources are made available to knowledge workers in order
to be able to tap their potential.
• Autonomy: Knowledge workers should be allowed the freedom to take decisions
related to their work without having to consult superiors. This satisfies their self-
esteem needs and motivates them to enhance their performance.
In addition to equipping knowledge workers with these factors, the management
should recognize and appreciate their good work. Further, the organization should
clearly communicate to knowledge workers, the results expected of them. The
outcomes should be expressed in objective and quantitative terms. Once knowledge
workers achieve them, they should be rewarded appropriately with a promotion, more
power and autonomy.
Organizations are constantly finding new and unique ways to tap the talent of
employees and improve the efficiency of work processes. If an organization fails to
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provide opportunities for career growth, knowledge workers are likely to leave it in
search of an organization which provides those opportunities. In order to retain and
20
motivate knowledge workers, it is essential for organizations to treat them as a
precious resource and address their higher order needs of self-esteem and self-
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actualization. s
Answer 44
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Abhay has to play new roles and learn new skills in order to be a successful manager.
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Some of the new roles that Abhay will have to play are:
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Interpersonal Roles
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The interpersonal roles include the role of a figurehead and those of leadership and
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liaison. In the figurehead role, Abhay will have to perform certain symbolic duties as
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the head of his team. For example, if the CEO of the company visits his department,
Abhay has to take him on a guided tour of the department and brief him on the
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department activities. In the leadership role, Abhay has to hire, train, motivate and
ensure discipline among employees in the department to facilitate the accomplishment
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of departmental objectives. In the liaison role, Abhay needs to interact with other
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managers in the organization and with people outside the organization.

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Informational Roles
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Informational roles include those of monitor, disseminator and spokesperson. In his

role of a monitor, Abhay has to constantly keep track of and obtain knowledge about
competitors’ strategies and developments in the industry. In the disseminator role,
Abhay needs to keep subordinates informed about various organizational aspects. In
the role of a spokesperson, Abhay has to represent his department at interdepartmental
meetings, and meetings with the press, suppliers and clients.
Decision Roles
Decision roles include roles of entrepreneur, disturbance-handler, resource-allocator
and negotiator. In his role as entrepreneur, Abhay has to initiate new projects and
monitor the progress of existing ones. As a disturbance-handler, Abhay has to find
solutions to problems and resolve conflicts that may arise among the employees in the
department. As a resource-allocator, Abhay has to allocate adequate resources to his
subordinates to enable them to perform their work. And in the role of a negotiator,
Abhay has to negotiate with the top management and with managers from other
departments in the organization and obtain a fair share of the organizational resources
for his department.
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Answer 45
Akio Morita, the cofounder of Sony, is an example of an effective leader. He was
brave and creative and did not hesitate to break traditional rules to realize his vision.
Along with his friend, Masaru Ibuka, he established a company called ‘Tokyo Tsushin
Kogyo KK’ which manufactured tape recorders. Within a short period of time, the
company obtained a large share of the Japanese market. But Mokita refused to be
content with this. He wanted his company to be an international company. So, he went
to the US, Germany and other European countries to find a market for his products.
When he observed that people in the West were unable to pronounce the name of his
company, he immediately decided to change it. Though many people within and
outside the company opposed the move, he went ahead and changed the company’s
name to ‘Sony’, a name that could be easily pronounced by all people.
Some US companies asked Morita to market his product under their brand name. But
Morita refused to do so although his Japanese colleagues strongly opposed his
decision. Because of Morita’s emphasis on quality, his company’s products were
readily accepted in the international market.
10
Later he adopted the direct marketing method for some of Sony’s products. This was
20
unusual for Japanese companies and many people criticized his decision. But he went
ahead and succeeded. Morita was the person who changed people’s opinion about the
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capability of Japanese companies to manufacture high quality products.
Morita once again broke the rules when he set up Sony Corporation of America in
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1963 and shifted his family to New York. It was due to his efforts that Sony became
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the first Japanese company to be listed on the New York Stock Exchange. He
developed and maintained a strong network with people across different countries.
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Morita ensured that Sony always led its competitors in technology.

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Thus, it was Morita’s self-confidence, perseverance, knowledge and creativity which

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made him a successful leader.

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Answer 46
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A work group comprises a group of people at the work place, interaction among
whom takes place primarily for the purpose of sharing information. Decisions in work
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groups are aimed at helping each member of the group perform within his or her area
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of responsibility. A work team, on the other hand, is a group of people at the work
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place, whose performance is based on the synergy resulting from the performances of
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the individual members such that the output of the team is greater than the summation
of the individual efforts of each member of the team.
Following are a few suggestions to solve the work group problems at Neha
Manufacturers:
Emphasis on group and task: The members of the group should give primary
importance to the interests of the group and the task at hand. Whenever a decision has
to be made, all the members should be involved. If any conflict arises during
discussions, individuals should try to resolve them amicably. For this, the group
members need to concentrate on resolving the issues of conflict rather than try to
blame each other. They should ensure that the conflicts do not prolong to the extent
that the task remains unaccomplished.
Unambiguous communication: While assigning tasks to a group, the management
should give clear guidelines to avoid ambiguity among group members. Clear
guidelines minimize the chances of errors in the final output. In a group, there is a
possibility that each member understands a given instruction in a different way. This
prevents members from working in a coordinated manner. Therefore, it is worthwhile
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Part C
for managements to obtain feedback from all group members after giving instructions
to ensure that each member has understood the instructions correctly. Group members
should also do the same when they try to communicate with each other. Each time
they revise their goals and objectives, they should write them on a board and display it
in a place where it can be seen by all group members.
Encouraging quiet members to participate: In a group, there may be a person who
does not voice his views or contribute to discussions. The other members should not
let the skills and expertise of that person remain unutilized. They should encourage
that person to express his views and appreciate him each time he does so. This helps
the group have 100% participation in all meetings and decisions.
Subduing dominating members: There may be a member in the group who always
tries to dominate the rest of the members. This member coerces other members to
support his opinions and suggestions. He talks for a long time and interrupts others
when they are expressing their views. Such domination in work groups should be
discouraged by the other members. To do this, they can request the dominating
member to cut short his speech and allow others to express their views. Each time he
10
tries to dominate others, he should be reminded that all the members share an equal
right to express themselves.
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Answer 47
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Ratnam should call the group members for a meeting and suggest that they take the
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following measures to avoid hurting the feelings of other group members and to
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maintain group cohesiveness. In order to modify their behavior, he can also conduct a
training program covering the following aspects:
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Constructive criticism: The group members need not hesitate to point out each others’
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mistakes. But the members should also attempt to suggest what their colleague can do
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to rectify his mistake. If one of the members presents reports in a poorly formatted
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way, the other members should take time to teach him how to put them in the proper
format. Once he learns the skill and presents reports in the correct format, the other
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members should not forget to appreciate him for his good work.
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Dealing with failure: If any of the members fails to accomplish a task, the other
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members should not isolate him. The group members should together try to explore
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the reasons for the failure and think of ways to eliminate the factors that have led to
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the failure. The unsuccessful member should also be involved in these discussions and
other members should encourage him to contribute his or views. To prove its trust in
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the member, the group may reassign the task to him for completion. It motivates the
member to strive hard to accomplish the task.
Dealing with conflicts: When several group members are involved in discussions,
there is bound to be a difference in opinion among them. Differences of opinion may
often lead to conflicts. Although conflicts are inevitable, bitterness among members
can be avoided by dealing with conflicts carefully. Sometimes, the group may be
divided into smaller sub-groups with each sub-group being firm on its own stand.
None of the sub-groups may be willing to accept the view of the other sub-group on
certain issues. This results in a deadlock. In such cases, the sub-groups should be
encouraged to take up the viewpoint of another sub-group and to debate about it with
the other sub-groups to make them accept this viewpoint. This will help the members
understand each other’s views better. They will be able to find a solution which serves
the interests of all the sub-groups.
It is also necessary that the group first understands the importance of the issue which
has given rise to the conflict. If the issue is critical, then the group can devote time to
resolve the conflict first. If the issue is a minor one, the members should discuss it
189
only for a limited period of time and if it still remains unresolved, they should drop
the matter and go on to the next issue. Further, when a group tries to find a solution to
a given problem, the members should not stop at the first solution they come up with
but instead, should explore all the possible solutions and select the best among them.
Answer 48
Managers need to take the following steps to improve the productivity and
performance of employees:
Select the right employee: The manager should be very careful in hiring employees.
He should ensure that employees’ skills and abilities match the job requirements. He
should cross check with the references provided by the employee to ensure that he has
not quit the previous job because of unacceptable behavior or mediocre performance.
To succeed in the competitive world, it is not enough if the manager is highly skilled
and qualified, his employees should be equally talented.
Avoid monitoring employees excessively: The manager should give proper training
and support to employees when they join the organization. Once the employees
10
acquire the necessary skills, the manager should assign them the task they are to
perform, and give them the freedom to develop and execute action plans to
20
accomplish the task. A manager’s constant interference in the work of senior
employees, and his insistence that they perform the task strictly according to his
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instructions may tend to demotivate them and make them doubt their own capabilities.
Some employees, however, may like to be constantly guided in their work. It is the
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manager’s responsibility to discourage this dependence so that the employees learn to
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work without constant supervision. The manager should encourage the employees to
take their own decisions and implement them even though they may be wrong
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initially. If they go wrong, the manager should explain to them where they went
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wrong and suggest the right way to do the job.

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Motivate employees with the right rewards: A manager can never motivate an
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employee to accomplish a job unless he gives the employee what he desires. Money is
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generally the most important motivating factor for employees. Therefore, the manager
should focus on giving them monetary benefits. He should ensure that employees are
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compensated adequately for their work. Employees are not motivated by fixed wages
or a steady income. Therefore, the manager should design the compensation system in
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such a way that the amount of money received by the employees is directly
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proportional to their productivity or organizational profitability. This will motivate

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them to perform better. The manager should also focus on non-monetary techniques of
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motivation such as appreciating employees for good work done by them, seeking their
opinion on organizational issues, and treating them in a way that makes them feel
respected and needed.
Encourage positive behavior in employees: A manager should encourage desirable
behavior on the part of the employees by rewarding them whenever they exhibit such
behavior. For example, if the firm has been able to save a certain sum of money due to
the careful practices of the employees, the manager should distribute a part of the
money among the employees in order to encourage repetition of such behavior.
However, if a manager, due to personal vengeance, deprives some employee of his
share of incentive, it would result in the employee attempting to intentionally waste
organizational resources, lowering employee productivity, and resulting in problems
for the manager.
In addition to this, the manager should avoid ordering employees around and should
observe tact in issuing instructions. He should listen to employees’ problems and try
to solve them. As far as possible, the manager should avoid criticizing employees
because it has a negative impact on employee behavior. He should appreciate an
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Part C
employee for completing a job and suggest how errors, if any, could have been
avoided.
Answer 49
The quality of a product or service should be viewed from the customer’s perspective.
A product is said to be of superior quality if it satisfies customers better than similar
products produced by other organizations. To give an example – let us assume that
company X sells a color TV for Rs 7,000 while company Y sells a color TV with the
same features for Rs 10,000. Customer A buys a CTV from X and customer B buys
one from Y. If the TV that customer A buys begins to give him problems within a
year of purchase, he will obviously not buy a TV from company X again. Not only
that, he will also discourage his friends and relatives from buying a TV from X. On
the other hand, if the TV that customer B buys from Company Y works well and
doesn’t give any problem for several years, B will recommend the same brand to all
those planning to buy a TV. Since no one will be prepared to buy a TV that works for
only one or two years, they will opt only for brand Y and will not mind paying a little
extra to get the desired quality. In the long-term, therefore, company Y’s sales will
10
increase. However, companies should take care that the cost of maintaining high
quality does not increase disproportionately since customers will not be willing to
20
spend arbitrary sums of money to derive a meager additional benefit in terms of
quality.
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So, organizations attempt to find ways to obtain the desired quality without having to
spend too much on it in terms of resources. In this search for solutions, managements
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realized that workers on the shopfloor and frontline were the ones who could
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contribute good ideas to improve quality and reduce cost of production. To motivate
employees to provide suggestions, managements began to reduce their control over
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them, seek their involvement in decision making, and encourage them to think
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creatively. Thus, organizations implemented the concept of quality circles. Quality

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circles comprise employees from different departments who meet regularly to discuss
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ways to improve the quality of products and processes at the workplace. The members
of these groups are trained in problem analysis, decision-making, and implementing
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and evaluating change. Instead of having to report their problems to the management
and wait to obtain solutions, members of quality circles find and implement solutions
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themselves. These employees are empowered, and their ideas and suggestions are
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valued. Thus, the emphasis on quality of products and services in organizations has, in
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a way, led to improvement in the quality of work life of employees.

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Answer 50
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Following are some of the steps that can be taken by a team leader to improve the
quality of work delivered by his team:
Involve team members in problem-solving: Whenever a team leader comes across a
problem, he should ensure that all the team members are involved in tackling the
problem. He should explain the problem to them, and invite suggestions from each
member. If any member provides a good suggestion, the team leader should express
appreciation for that member but reward the entire team in order to maintain the team
spirit. The team leader should also ensure that he presents a unique problem each time
to his team members. The constant change in focus and the variation in the manner of
tackling each problem will keep the team members on constant alert as well as bring
in the desired flexibility in them. The entire exercise should be aimed at enabling the
team members to be able to gradually solve the problems themselves without the
guidance of the team leader.
The leader should initially present his team members with small problems which have
simple solutions. Once they succeed in solving these problems, he should give them
191
more complex problems to solve. If they face a difficulty in solving these problems,
he should suggest the approach to be adopted to solve these problems.
Create right atmosphere to encourage participation: The leader should encourage
team members to speak out. No member should be allowed to make fun of other
members’ ideas and suggestions. No idea should be considered silly as a seemingly
crazy idea may have a brilliant thought hidden in it. If explored, it could give rise to a
practically applicable solution to a problem.
Encourage information-sharing: The team leader should encourage his team members
to exchange useful information and skills. If any member knows certain skills or
techniques he should be encouraged to share his knowledge and skills and play the
role of a coach to other team members. If a member has never played the role of a
coach, he should be trained to acquire new skills and techniques.
Use of statistical control techniques: Statistical control techniques should be used to
measure the output of the team and the results should be displayed in the form of
graphs during meetings. This helps team members to clearly understand how much
they have achieved and how much more they need to achieve.
10
Focus on customer: The effectiveness of a team is determined by the quality of the
20
product it gives to its customer and the level of customer satisfaction achieved. The
team members should be encouraged to communicate with their immediate customer.
Further, whenever a leader assigns a project to his team, he should clearly specify to
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his team members, its objectives, the statistical measures that would be used to
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evaluate its progress, and the criteria for determining its completion. This will help the
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team track their progress and rectify any errors that may arise.
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Reduce guidance and control: The leader should gradually minimize the guidance he
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offers to his team members and delegate as many responsibilities as possible to them.
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He should perform only the roles of protector and liaison person. As protector, he
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should protect the team from being reprimanded by managers for trying out
innovative solutions. In the liaison role, he should communicate to them all the
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organizational information required to take decisions.

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Answer 51
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It was observed by analysts that the companies which distributed stock options
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B
equally among the executives and non-executives gave higher shareholder returns
compared to those which gave a significant portion of their stock options to top
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executives. Therefore, shareholders expressed dissatisfaction with companies offering

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larger number of stock options to senior management and the CEO. Employees and
the general public also expressed dissatisfaction with the high compensation packages
offered to CEOs and top management.
In most industries, the CEO compensation soared to astronomical heights by the end
th
of the 20 century. It was felt that the top management was becoming richer and
richer at the expense of the workforce. The CEO of GE, Jack Welch, was offered $
80,000 per month and an apartment in Manhattan along with facilities such as free
satellite television service and 24 hours access to corporate jet as a part of retirement
package. When the public criticized the expensive package, Welch voluntarily agreed
to it being reduced. In a similar case, the CEO of Cisco, John Chambers, reduced his
basic salary from $ 323,319 to $ 1 and returned $ 14 million worth stock options to
the company in 2001.
Generally, the pay package for top executives is decided by compensation committees
and top management. It is commonly observed that none of the members of these
committees has knowledge of human resource management. This is probably one of
the reasons for the design of inequitable compensation packages. The committees
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Part C
blindly use some benchmark studies of other companies in their industry to determine
the pay package for executives. They often fail to differentiate between small and
large companies and high-performing and poor-performing companies. They also fail
to take into consideration the economy of the country while deciding the pay package
for top executives. However, the growing resentment of employees and dissatisfaction
of shareholders has led organizations to invite human resource executives to play a
lead role in designing executive compensation packages.
The HR executives have to ensure that compensation of executives is based on their
performance with respect to key performance indicators (KPI). Some of the KPI are:
customer satisfaction, market share, sales growth, profitability and patents filed.
While designing the package, the HR executives should ensure that the package
doesn’t affect returns of shareholders.
Many organizations are also taking the help of external consultants who specialize in
executive compensation. The compensation packages of top executives of these
organizations are designed by leading consultants who work in close collaboration
with human resources division and the compensation committee set up for the
10
purpose. All the three bodies work together to develop a compensation package that
rewards performance. However, it has to be ensured that the rewards are proportionate
20
to performance. For example, Paychex, an outsourcing services provider, developed a
very effective compensation package for its employees. The package included
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components like basic pay, bonus and stock options, with more emphasis on basic
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pay. The CEO of Paychex, B Thomas Golisano and top three executives who receive
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high salaries, forgo stock options and allow them to be distributed among lower level
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employees. The compensation package at Paychex served the interests of

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shareholders, top management and employees. Golisano was named as the most
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valuable CEO by Forbes magazine in 2002.

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Answer 52
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A company passes through several stages in its life cycle. Each stage requires a
different style of leadership. During the initial stages of a company soon after it is
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established, a visionary leader is required. The leader should have a clear vision as
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well as the determination to realize his vision. He should be able to foresee the future
B
of the industry and prepare his company to face future challenges. He should be
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willing to take risks to enable the company to progress forward rapidly. He should
welcome change and innovation.
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The second stage in the life cycle of a company is the growth stage. In this stage, the
leader should be aggressive. He should grab every opportunity he comes across to
help the company increase its market share and profits. He should respond swiftly to
competitors’ moves and changes in market conditions and make quick decisions. But,
at the same time, he should consider the short-term and long-term effects of the
decisions on the organization.
With further growth in size and market share, the company requires a leader who can
build and develop an effective team. As part of team building activities, the leader
should delegate greater responsibilities to his team members, train them in multiple
skills and provide them with necessary support to carry out their responsibilities.
As the company reaches maturity stage, the leader should explore new markets and
expand the company’s operations. The leader should be able to locate new markets
which the company can penetrate and achieve success. Moreover, the leader should be
able to identify companies with which the company can enter into partnership deals,
formulate appropriate strategies, and implement them to attain success.
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In the next stage of the life cycle, the company requires a leader who is also an
effective administrator. At this stage, the leader is required to delegate tasks to his
subordinates, and directly supervise the performance of these tasks. He has to set
definite rules and conditions that all employees in the organization should follow. The
leader also has to ensure that they work in coordination and achieve the desired goals
and objectives.
However, it is not necessary that a new leader be hired each time the company enters a
new stage in its life cycle. Instead, the leader should adapt his leadership style to suit
the requirements of the company as it passes from one stage to another.
Hence, Paragon is not right in its policy of changing its leader every two years.
Though a change in leadership style is necessary, it can be brought about by the same
leader adapting and modifying his leadership style to suit the requirements of the new
situation.
Answer 53
Leaders should take the following steps to encourage thinking in organizations:
10
• Communicate ideas clearly: A leader should have clarity of own thoughts and
20
ideas so that he can communicate them clearly to his employees. The leader
should also communicate the underlying assumptions of his ideas to the
of
employees. This would enable the employees to have a clear understanding of the
leader’s expectations and the role they are required to play to meet his
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expectations.
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• Encourage deep and purposeful thinking: Whenever a problem occurs in the

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organization, the leader should explain the problem to employees and initiate the
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thinking process. He should first direct employees to think about the possible
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reasons that led to the problem. He should discourage employees from making
superficial observations. Employees who present their views after considering
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multiple aspects of a problem should be encouraged. After they explore the

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reasons, the leader should initiate the process of generating alternative solutions
to the problem. Even unconventional and seemingly irrational solutions should be
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welcomed. After the employees have presented their solutions, the leader should
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begin the process of selecting an appropriate solution. Such a systematic process

B
would help employees develop quality solutions.

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• Never stop thinking: When employees believe that they have obtained a solution
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to their problem, they stop thinking. In such situations, the leader should
encourage them to consider new aspects of the problem. He should ensure that the
employees have made use of all available data to arrive at the solution. The
employees should consider the solutions used by other organizations in similar
situations and attempt to find a solution more effective than theirs. In some cases,
neither the leader nor the employees may be able to come up with a solution. The
leader should then attempt to redefine the problem from a different perspective,
restructure the underlying assumptions and try to find a suitable solution.
• Enhance the thinking abilities of employees: A leader should enhance the
thinking abilities of employees by posing questions to them and channelizing
their thinking in the desired direction. When employees contribute their ideas, the
leader should listen to them patiently, evaluate them, focus on the ones which are
applicable to the given situation, refine them and implement them. A leader
should exclude from his group those individuals who lack the required skills to
perform group tasks, are unwilling to learn, and are not committed to the goals
and objectives of the group.
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Part C
• Delegate decision-making power to lower levels: If a leader tries to find

solutions to even minor problems and makes all the decisions himself, he will
have little time for strategic decisions and critical organizational issues.
Therefore, as far as possible, a leader should allow lower level employees to
solve their own problems and make necessary decisions. Once, the lower level
employees are able to come up with a solution to the problem by themselves, not
only is their confidence strengthened but they are also able to resolve similar
problems in future. This will speed up the decision-making process in the
organization.
• Encourage employees to think together: When employees from different
backgrounds think collaboratively they are likely to develop a better solution than
one arrived at by individual thinking. This happens because an individual’s
thinking abilities will be limited to his knowledge and experience. Collaborative
thinking greatly enhances the quality of thinking because it involves the
participation of members belonging to different backgrounds. Therefore, a leader
should encourage collaborative thinking in the organization.
10
Answer 54
20
If leaders were born and could not be developed, there would not have been so many
successful organizations in the world. A person cannot be developed into a leader in a
day or two by a personality development center. But gradual training acquired over
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the years can help an average person develop into a leader. The way a person is
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brought up in his childhood, his schooling, personal experiences and the training he
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receives play a major role in shaping his leadership skills.
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As a child, the support and motivation received from family members and teachers
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helps an individual develop intellectual and interpersonal skills required to become a

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leader. As the individual grows up, the responsibilities that are entrusted to him by
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family members help develop his self-confidence. This encourages the individual to
seek and take up more responsibilities and work hard to carry them out successfully.
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He should be trained to take risks, accept challenges, establish future goals and
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develop long-term plans. He should learn to visualize the future, establish a vision and
develop a plan to realize that vision. He should be able to motivate his followers to
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adopt the vision and commit themselves to achieve it.

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A person desirous of being a leader has to learn the art of persuading people to do
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what he wants. To persuade people, he can adopt any of the three approaches
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suggested below.
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• A leader should maintain integrity of character giving no one the scope to point
out any drawback in him. He should be a role model for followers and use his
position to persuade people. For example, Bill Gates, the CEO of Microsoft
practised what he preached. Since Gates himself was a tireless worker, he
expected his employees to work like him. He demanded hard work and complete
dedication from his employees. He respected his employees for their unique skills
and acknowledged the work done by them. He was always willing to listen to his
employees’ ideas and suggestions.
• A leader can use supporting facts and logic to persuade people to believe what he
tells them. For example, Akio Morita, the co-founder of Sony corporation, used
logic and research-based facts to persuade people. Under his leadership, Sony
produced magnetic tapes in 1950. But there were no takers and almost every one
in the organization opined that the product could not be sold in the market. After
considerable research, Morita found that Japanese courts could be their potential
customers as they were facing an acute shortage of stenographers. Morita’s logic
proved right and Sony was able to sell twenty machines to the Supreme Court of
Japan. Sony also marketed the tapes to schools in Japan.
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• A leader can use emotions to persuade followers. For example, leaders of terrorist
and religious groups use emotions to influence their followers.
Last but not least, a leader should acquire good communication skills. He should be
able to articulate his vision in a simple and comprehensible manner. Only then can
leaders motivate people to work towards their vision. Therefore, a person who
acquires the skills like communication, persuasion and vision formulation, can
develop into a good leader. Bill Gates is a great visionary and is able to communicate
his vision clearly to his employees.
Among the leaders mentioned above, Morita was born in a business family but Bill
Gates was born in a middle class family. Gates acquired leadership skills through
education in college, observation in the organizations he worked for and his own
experience. Therefore, it can rightly be said that a person need not be born as a leader.
He can develop into a leader by acquiring the required skills.
Answer 55
10
Harita rewarded employees for their stay in the company and rewarded those who
were loyal to the company. However, now-a-days, due to intense competition and
20
restructuring by companies, many organizations are downsizing their workforce.
Employees do not know how long they will work in a particular organization. Either
of
the employer or the employee may terminate the employment contract at any time.
Employees are also on the constant lookout for new opportunities. Any employee who
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receives an attractive offer from a competitor may quit the job. Therefore, employees
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are no longer keen on or interested in a reward system that recognizes the duration of
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their service in a company. They desire performance recognition rather than long-term
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service recognition. This was the reason for employees at Harita being discontented
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with the company’s reward system.

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Harita should take the following measures if it plans to introduce a new recognition
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program for employees in the company:

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• Invite suggestions from employees: The recognition program should be

welcomed by employees, if it has to be successful. Therefore, Pillai should take
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suggestions from the employees before designing the program. He can do this by
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asking them to suggest various ways in which high performing employees can be
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recognized. They should also be encouraged to suggest performance criteria and

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methods to measure individual or team performance. All the views and opinions
given by employees should be duly considered while designing the recognition
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program.
• Consider organizational resources: Recognition of the good work done by an
employee should be in the form of a gift, a prize or a trophy because after a
certain point, employees fail to get motivated if the management merely conveys
words of appreciation as recognition of superior performance. Further, while
deciding upon the gift, prize or trophy, the HR department should ensure that its
cost does not exceed the budget allocated for recognition programs. It should also
ensure that the gift is not so trivial that it fails to generate interest among the
employees.
• Make the event memorable for employees: The high performing employee
should be appreciated or given a trophy by his superior or one of the top
management members during an annual function or any function attended by all
the employees. If the manager conveys to all those present what the employee has
achieved and appreciates him for his contribution to the profitability of the
organization, it would be even more motivating.
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Part C
• Review recognition program: The recognition program should be reviewed

continuously and should be changed in accordance with change in organizational
goals, environmental conditions and profitability of the organization.
Moreover, employees should be constantly reminded of the recognition program
through in-house newsletters, handbooks and the company intranet.
Answer 56
‘Flexible work’ indicates the different work styles and employment practices followed
in some companies. It encompasses all types of employment practices other than
conventional ‘9am-to-5pm’ jobs. Flexible work options (FWOs) enable employees to
strike a balance between their professional and personal lives, since it allows them to
spend more time with their families. At the same time, FWOs make the employers
more competitive. FWOs include flexibility in working location, flexibility in timings
and flexibility in contract.
Flexibility in location: Employees can work from home or from any other place they
10
find convenient. Flexibility in location also allows employees to work while they are
on the move by using laptops, palmtops, etc.
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Flexibility in time: Employees can come to office at any time provided they complete
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the fixed number of hours they require to work per working day.
Flexibility in contract: Employees need not work permanently for a particular
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company. They can serve the organization for a particular period (specified in the
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contract or based on mutual understanding) or till they complete the job they had
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undertaken.
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Some of the companies in India which are offering flexible work options (FWO) are
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HP India, Procter & Gamble India, ICICI and GE. The facilities offered by these
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companies to their employees as part of flexible work options are explained below:
HP India allows its employees to start their day within two hours from 8 am on a
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regular 8-hour working day. The company allows job sharing whereby any two
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employees can work for 20-40 hours per week on one job. Employees can even work
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half-a-day in office and the other half from any location. Employees also have the
B
option of switching from flexible work schedule to the regular work schedule
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whenever they want.

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P&G India began to offer FWOs in 1999, as a part of adopting the new culture
‘Stretch, Innovation, and Speed (SIS).’ The company offered FWOs under the
Flexible Work Arrangement (FWA) Scheme. This enabled it to retain highly talented
employees. This also made India the best among Asian countries as a global source of
talent for P&G. Initially, the company started offering its employees flexitime options.
Employees who wished to avail themselves of the flextime options, discussed with
their managers which part of the day they would have to work for, and accordingly,
put in 8.5 hours in a working day. A three-month sabbatical leave was also offered to
employees who had been employed by the company for at least 5 years. P&G
introduced the ‘work from home’ option in late 2001. This option allows employees to
work from home once in a week. P&G also allows its employees to work half-a-day,
but pays them accordingly.
ICICI is one of the few Indian companies, which offers flextime as well as ‘work from
home’ option to its employees. In 2001, 8% of ICICI employees availed of these
options. It also implemented flexi-hours in the companies formed as a result of joint
ventures with other companies, and its subsidiaries.
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GE Capital International Services introduced FWOs in its human resources and credit
departments in early 2001. Employing people in part-time and contractual jobs, helps
the company save cost in terms of providing professional, medical, provident fund and
other benefits to the employees.
Westside, a chain of retail stores in India, also offers FWOs to its employees.
Westside employs people on a contractual basis. These people work for the store only
during the peak business season. This allows the company to lessen its financial
burden.
Answer 57
According to the personality-job fit theory proposed by John Holland, a person whose
personality matches the requirements of the job is satisfied with the job and is thus
less likely to quit the job. Based on his research, Holland categorized the personalities
of people into six types – Artistic, Realistic, Conventional, Investigative, Social and
Enterprising. He also described the characteristics of the people having these
personalities and the jobs they best fit into.
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Artistic people are highly creative. They do not like to be restricted by rigid structures,
20
rules and regulations. They are sensitive and emotional. They are least concerned
about practicability of their thoughts and imaginations. Generally they do well as
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musicians, writers, interior decorators, jewellery designers and so on. On the contrary,
realistic people are highly practical. In whatever they think and do, they consider
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practicability first. They are generally shy in nature and try to conform to the rules and
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regulations of the group to which they belong. They are comfortable in jobs that
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require specific skills, physical strength and a certain amount of coordination. People
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having such a personality are well suited to be farmers, assembly line workers, drill
press operators and mechanics.
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Conventional people are very efficient but highly rigid. Once they conform to certain
rules and regulations, it is difficult to change their mindset. They do not believe in
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imagination and always consider practicability in whatever they think and do. They
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perform well only in situations where there is no ambiguity involved. They are well
suited to jobs like bank tellers, office clerks and accountants where duties and
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responsibilities are well defined. Investigative people have good analytical skills.
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They are independent in nature and are eager to acquire knowledge and learn new
B
things. They fare well as journalists, economists and researchers. Social people mingle
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with new people easily and make friends quickly. They are willing to listen to others’
problems and offer necessary advice and help. They like to take up jobs that allow
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them to interact with others. They perform well in professions like social work,
teaching and counseling. Enterprising people are aggressive, confident and ambitious.
They are good at influencing others and gaining power from it. They can become
good lawyers, entrepreneurs and politicians.
The reason for such high turnover at APZ Bank was probably its failure to select
people with the right personality for the job of bank teller. APZ bank should have
recruited people having a conventional personality for the job of bank teller but
instead, it recruited people with an enterprising personality. These people were
dissatisfied with the job and quit it within a few months. APZ bank should conduct a
personality test to know whether an applicant is suitable for the job. This will enable
the bank to obtain the right candidates and reduce employee turnover.
Answer 58
Larsen & Toubro is a leading engineering and construction conglomerate in India. The
economic reforms introduced by the Indian government in the 1990s posed a serious
threat to L&T’s existence. The import duties on engineering and construction
198
Part C
equipment were reduced from 85% to less than 5%. This made the imported
equipment cheaper leading to a sharp increase in its demand. L&T’s business was
seriously affected by this change. The operating profit margins of the company fell
down from 14% to 10%. The capacity of the large plants that it had built over the
years was underutilized. The other businesses in which the company made huge
investments also performed poorly and this worsened the situation. L&T approached
Boston Consulting Group (BCG) which advised the company to focus on global
markets.
L&T was new to the field of international business. To cater to global clients, L&T
had to improve its production processes and the quality of its products and services.
L&T had to complete the project within 10 to 12 months of the order being placed by
the client. However, L&T took more than two years to complete each project.
Moreover, it was not familiar with the legal issues in foreign countries. Therefore, it
decided to supply only construction equipment in foreign countries and not to
undertake construction projects till the necessary changes were made in the
organization.
10
L&T recognized that it had to change its human resources practices to motivate
employees to improve their performance. The salaries of employees at L&T were very
20
less compared to the industry average. Moreover, the company paid equal amount of
bonus to all employees irrespective of their individual performance because L&T
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always placed emphasis on team work hardly recognizing individual performance.
The company did not make any efforts to train and develop employees and thus, there
s
was an exodus of employees from the company. During the period between 1989 and
s
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2002, the company lost about 1000 employees. In August 2000, L&T hired a new
Chief of Human Resources – Yogi Sriram who was vice president, HR in Dabur
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industries.
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He initiated a change program in L&T. He introduced performance-based

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compensation packages and emphasized individual performance. Employees resisted

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the change because the organization had always emphasized teamwork. They argued
that the new HR policies would destroy team culture and affect organizational
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performance. There was a debate among the HR heads of various divisions of L&T on
U
this issue. Sriram convinced them that team work was ideal for accomplishing long-
term objectives but if individual performance was ignored, talented people would
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leave the organization thereby affecting its current performance. He also established
B
performance criteria for conducting performance appraisal of employees. He

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conducted management leadership program to develop leaders for the future.

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All these efforts resulted in a positive attitude among employees. It helped the
company improve its performance and qualify for constructing turnkey projects for
overseas clients. By 2002, 14% of the company’s total revenue came from
international business.
Answer 59
Johnson & Johnson (J&J), a leading international pharmaceutical and health care
company, has always laid special emphasis on providing proper care to its employees.
It introduced Health and Wellness Program (HWP) for its employees in 1995. J&J’s
HWP included an employee assistance program, disability management program,
ergonomics injury prevention program and the safe fleet program.
Employee assistance program: Under this program, J&J helped employees to
maintain a balance between their personal and professional lives. The employees were
offered flexibility in deciding their work timings and in a few cases, they were also
allowed to work from home. J&J hired professionals who assisted employees as well
as their family members to solve issues related to work, family or interpersonal
199
problems including anxiety, behavioral changes, disease prevention, divorce, death,

education, health, parenting, financial and legal concerns, lifestyle management,
marriage and so on.
Disability management program: Under this plan, an employee was entitled to
disability insurance claim, if he/she was either partially or fully, temporarily or
permanently disabled during the course of his/her work. In such cases, all financial
expenditure was borne by the company.
Ergonomics injury prevention program: J&J was among the very few companies to
have taken adequate measures to minimize the occurrence of musculoskeletal
problems among its employees, before the US Occupational Safety and Health
Administration (OSHA) framed rules and regulations for ergonomics. (OSHA’s
objective is to safeguard the lives and protect the health of US workers and prevent
the occurrence of accidents and injuries at the workplace.) J&J introduced a voluntary
program, ‘JOBFIT’ for its employees in the US and Puerto Rico to prevent
musculoskeletal problems. The program focused on maintaining fitness levels of
employees and provided them with an opportunity to participate in physical exercises
(for physical conditioning), yoga and meditation (for mental conditioning) and stress
10
management sessions. JOBFIT primarily aimed at new recruits, employees who were
transferred to the US and Puerto Rico, employees in high-risk jobs, and those who had
20
come back to the job after a temporary disability. Once the program was implemented,
it was found that employees in six out of seven J&J’s facilities were able to do their
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jobs better and the company reported fewer cases of insurance claims, injury,
sickness, stress or absence from work.
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Safe fleet program: Safe fleet teams were formed in each country by selecting 7 to 8
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people from different departments of the company. The safe fleet team was
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responsible for implementing several measures like training new drivers, reducing
cases of high-risk driving and hiring field safety coordinators. Drivers were educated
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regarding the causes of accidents, the preventive strategies to be undertaken and

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advantages of safe driving. The drivers were also trained to keep their vehicles in
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good running condition as per the vehicle maintenance plan, which was also a part of
the safe fleet program.
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By implementing the Health and Wellness Program, J&J enjoyed substantial financial
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benefits to the tune of $8.5 million in the form of annual savings in medical care costs
S
of employees. Most of the savings were realized in the third and fourth year of the
B
implementation of the HWP. The company saved $225 per employee annually due to
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the decrease in the number of hospital admissions, cases of mental health problems
and outpatient services. J&J also benefited from increased employee productivity,
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lower benefit plan costs and reduced absenteeism.
Answer 60
No, it is not true that all successful leaders exhibit the same behavior. GE had a series
of successful CEOs including Reg Jones, Jack Welch and the current CEO, Jeffrey
Immelt. But none of them exhibited identical behavior or adopted a similar style of
leadership. Even though both Reg Jones and Jack Welch were successful CEOs, they
differed greatly in their leadership style. Despite Reg Jones being a successful leader,
Jack Welch never tried to imitate Jones’ leadership style. Moreover, Jones had not laid
off as many people as Welch did within a few years of his tenure. Jones concentrated
on expanding the GE empire. But Welch divested all the businesses which he felt
were not performing upto his expectations. Despite all this, Jack Welch was a very
successful leader. The next CEO, Immelt too did not imitate his predecessor, Jack
Welch’s style. This clearly shows that in order to be a leader, it is not necessary for an
individual to acquire the competencies of his predecessor. Instead, he should be able
to apply his own knowledge and discretion and achieve the desired outcome.
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Part C
Moreover, it is not easy to learn a behavior; some behaviors are especially difficult to
acquire. For example, assertiveness, dedication, focus, agility, empathy are some
qualities which are difficult to acquire by training. On the other hand, interpersonal
and communication skills can be easily learned by individuals with some effort.
Therefore, managers while trying to train their subordinates to take up leadership
positions, should identify what an employee possesses and what he lacks. If the
employee lacks the necessary skills and knowledge, he can be given some time to
learn them. If the employee lacks important skills, the manager should observe
whether the competencies he possesses can make up for the skills he lacks. For
example, if an employee lacks aggressiveness but makes up for it by being articulate
and tactful, he will be able to convince people easily to agree to his point of view and
he can be considered for leadership position. If the employee lacks both skills and
competencies, he cannot be considered for a leadership position.
Many managers try to identify the weaknesses of their subordinates and help them
deal with them believing that it would lead to success. But this leads to wastage of
time. Instead, managers should try to build upon the strengths of their subordinates so
10
that their weaknesses are compensated for. For example, if an employee has good
networking and communication skills but lacks in negotiating skills, the organization
20
need not spend valuable time in training him in negotiating skills. Instead he can be
trained to use networking effectively to obtain requisite information for the
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organization and use it in negotiations to achieve success.
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Answer 61
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C
If I were in Jain’s position, I would try to convince Ashutosh Dev to allow the use of
personality tests to recruit employees. Personality tests help identify people with the
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right personality for the job. In the absence of personality tests, it would be difficult
nl
for the HR department to determine the right fit between employee personality and the
O
job. When a person’s natural abilities match the type of work he does, he is able to
perform to his optimum capability. Therefore, individual performance increases,
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resulting in high organizational performance. On the other hand, if there is a mismatch

U
between an individual’s personality and the nature of his job, he will not be able to
carryout his duties effectively and his productivity will be below average. The more
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misfits in an organization, the lesser its productivity and profitability.

B
In general, there are vast differences in productivity and performance of employees in

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an organization. The productivity of employees in an organization can be depicted in

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the form of a bell-shaped curve. In any organization, 16% of employees have

maximum productivity. This is followed by people who fall into the area between
84% to 50% and have an above average productivity, and those who fall in the area
between 50% to 17% and have a below average productivity. Around 2/3 of the
employees in an organization fall into these areas which indicate the standard
deviation in employee performance.
It is estimated that the standard deviation is 19% for unskilled workers. This implies
that the productivity of a high performing worker in an organization is 19% more than
the average productivity and that of a low-performing worker is 19% below the
average productivity. For skilled employees, the standard deviation is 32% and it is
48% for managerial personnel. If productivity differences are expressed in terms of
rupees, it amounts to crores of rupees annually for a corporate firm. In case of skilled
personnel and managerial personnel, the losses that accrue to the organization due to
low productivity can be astronomically high.
The use of advanced personality tests helps organizations minimize this standard
deviation and increase organizational performance.
201
Answer 62
Companies which give more importance to the attitude of people while hiring them,
will be more successful than those which emphasize knowledge and experience
because knowledge and skills can be imparted to people by training them for a few
months. But attitude is difficult to acquire by training. For example, a person aspiring
for the job of customer service representative should be willing to listen to people,
understand their problems and resolve them. Though a person may have worked in a
similar position in another firm, his experience guarantees that he acquired the skills
but not the required attitude. A person who does not have the right attitude will be
dissatisfied with his job and will fail to serve customers properly. Not only will this
affect repeat business, but in the long-term, it will damage the image of the
organization as well. On the other hand, a person who has the right attitude will be
content with his job and offer superior service to customers. He will help the
organization retain existing customers, attract new customers and succeed.
Southwest Airlines, one of the most successful companies in the world, hires people
who have the right attitude. The company once rejected the application of a pilot
despite his having excellent flying skills and the experience of working for another
10
major airline, simply because the pilot did not have the right attitude that suited the
20
culture at Southwest. It so happened that just before the interview, the pilot had
behaved rudely with the company’s receptionist. This showed that the pilot had no
respect for others and since Southwest’s culture emphasized respect for people, the
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pilot did not fit the role. Applicants often got rejected for saying ‘I’ too many times
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during the interview since this showed that the person was not fit for the teamwork
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culture at Southwest.
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Answer 63
C
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Southwest Airlines is the fourth largest airline company in the US. The company has
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always been profitable even during the times of slowdown in the economy. Southwest
adopts an informal culture. Employees do not have to wear uniform. They can wear
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whatever they are comfortable in. The founder and CEO of Southwest, Herb Kelleher,
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encouraged employees to have fun and humor at workplace. He believed that fun does
not affect the quality of work but motivates employees to perform better. Southwest
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frequently arranges parties for employees, celebrates various occasions and distributes
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awards for outstanding employees.

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The fun-loving culture of Southwest is termed as ‘Southwest Spirit,’ and is promoted

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extensively through annual reports, company newsletters and pictures.

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Southwest hires people who are team players, philanthropic and have a good sense of
humor. Applicants are interviewed in an informal setting. They are asked to sit in a
group and introduce themselves to others. They are asked to tell how they have used
humor to ease the tension in the atmosphere while they were in college or in previous
organizations where they worked. Southwest takes special interest in educating its
new recruits regarding the culture of the company. Employees from different levels of
the organization are selected to form a ‘culture committee’. The committee
communicates the mission, vision, philosophy, values and norms of the organization
to the new recruits. The committee conducts get togethers wherein employees
exchange their opinions regarding what made the company successful.
Southwest conducts a program called “Walk-A-Mile” which encourages employees of
one department to work for a day in another department. The company also forms
cross-functional groups as part of one of its “Mind the Gap” program. The program
helps employees to interact with people with whom they would have otherwise never
interacted, understand each others’ activities and the difficulties involved. This
enhances teamwork and cooperation in the organization and often results in innovative
ideas.
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Part C
Answer 64
Kurt Lewin’s theory and for that matter, most of the change theories assume that one
type of change is implemented at a time and that the change process has a clear
starting and end point. But, in reality, these assumptions do not hold true. In
organizations, especially in large corporate firms, owing to their size, complexity and
technology, managers face many problems in implementing change. In these
organizations, many types of changes have to be implemented at a time and it is
difficult to determine their starting and end points.
When several types of changes need to be initiated simultaneously in organizations, it
is referred to as multidimensional change. It is very complex and puts pressure on
managers. Often, the change initiatives differ in their importance, nature,
characteristics and direction, making it difficult for managers to coordinate them.
The rapid changes taking place in the external environment in political, economic,
social, technical, legal and ethical aspects makes multidimensional change necessary
in organizations. Some change initiatives may be independent of each other while
10
some may be dependent on other change initiatives. In case of dependent change
initiatives, the implementation of one affects the implementation of another. Such
20
change initiatives pose more problems than independent change initiatives.
Sometimes, an artificial multidimensional change situation is created in organizations.
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For instance, after the top management decides to implement a certain change in the
s
organizational process, it communicates its plans to the middle management which in
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turn communicates them to front-line management. A lot of vital information is lost as
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the message passes down through various levels of hierarchy. Further, a considerable
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amount of time may have elapsed since the initiation of the change process by the top
management till the time when the employees understand the change process and its
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objectives.
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Ultimately, when the employees begin to adapt to change, they face many difficulties.
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The front-line management and middle management give positive feedback about the
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change process to impress the top management. Therefore, the top management
perceives that the change process is complete while in reality, the process is only half-
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way through.
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Encouraged with the feedback provided by the middle management, the top
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management begins another change initiative. The middle management then directs
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the employees to focus on the more recent change initiative. In this way, while the
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employees are trying to cope with one change initiative, the top management
implements another, thereby making it difficult for the employees to cope with the
change initiatives.
The simultaneous implementation of many change initiatives thus gives rise to an
artificial multidimensional change situation. While the top management assumes that
the previous change initiatives are complete, the middle management is still in the
process of implementing them.
Such a situation can be avoided if members of the top management visit the actual
workplace and monitor the progress of change programs instead of depending on
written reports. They can understand the problems faced by employees in adapting to
change and suggest some solutions. The middle management should also be honest in
its reporting.
Answer 65
Managers often believe that informal networks are just a result of personal
relationships between people and that managers cannot do anything to influence the
203
growth or survival of these networks. However, in reality, they can bring about
changes in the organization structure, culture and management practices to develop
these networks. During recruitment, they should attempt to hire people who not only
possess high level of skills, expertise and talent but who can also work in
collaboration with others. The applicants may be asked to narrate critical incidents
which describe their achievements and the extent to which they attribute their success
to others. The individuals who mention the people who helped them in being
successful should be given more importance than those who discount others.
If management has to make a choice between selecting one employee for the entire
project or two or more employees from different departments on the project. In
making its choice, it should take into consideration the long-term benefits to the
organization. Sometimes, the first option may be profitable for the organization since
every employee is involved singly in a different project. However, because of the
benefits offered by teamwork in the form of better interpersonal relations, knowledge-
sharing, etc, management should choose the second option. Even after they return to
their respective departments after the completion of the project, they will continue to
exchange information, i.e, they form an informal group. The employees in the group
will automatically enter into an informal network. If an employee in this network
10
faces a problem in his subsequent projects and requires professional advice and help,
20
he will be able to access other employees belonging to this network. They, in turn,
will be able to provide the required information to the first employee by contacting
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their own acquaintances. Thus, informal networks facilitate employees to resolve their
problems and complete their projects faster. In the absence of such networks, the
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organization will have lost many hours of productivity as the employee tries to locate
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a person with requisite knowledge to help him with the problem.
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Further, the managers should encourage employees within the unit to interact with
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each other. Wherever possible, they should encourage employees to work in teams
rather than in isolation. Employees in the same department who perform the same or
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related activities tend to form good teams and collaborate with each other better than
employees from different departments or units. Once employees get used to working
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together in collaboration, they can team up easily even with employees belonging to
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other departments, if necessary. In modern organizations, team work is crucial for

organizational success. Organizations where employees are not used to work in teams,
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are paying millions of dollars to consultancies to train their employees to work in

teams. By promoting team work among the employees, managers can avoid the huge
S
costs associated with team-building activities in future. Teamwork facilitates speedier

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dissemination of information compared to people just working together in a

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department/organization. Employees working in teams will be valuable members of

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informal networks.
Sometimes the rigidity in organizational structure, restrictions on upward
communication, boundaries between departments and functions affect the informal
structures as well. For instance, an employee (A) in an organization (XYZ)
approached a friend (B) in his informal network to solve a certain technical problem
and B suggested that the concerned expert (D) was in A’s organization but working in
another department. But if the personal conflict between the heads of the two
departments prevents flow of communication between the two departments, A will be
forced to find an alternative source of expertise. This will reduce the effectiveness of
an otherwise valuable informal network. Hence management should take steps to
reduce constraints and promote interdepartmental and interunit collaboration and
contribute to the growth of informal networks.
Answer 66
Learning is fast when it is interactive and experience-based. Organizations should
therefore facilitate interactive and experiential learning in their training programs.
Trainers should not try to impart too many concepts to employees because after a
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Part C
point of time, employees stop absorbing the concepts. Instead, the trainer should
explain the concept first and then create a situation where the learner can practically
implement the concept. The trainer can use simple methods like case studies, role
play and simulation to help employees apply the concepts they have learnt. For
example, in order to explain the importance of interpersonal skills to the trainee
employees using the case study method, the trainer distributes a case study among
them which describes a manager’s failure to win the confidence of his superiors and
subordinates due to lack of interpersonal skills. The trainees are then asked to suggest
what the manager should do to improve his credibility. In role play, the trainer
narrates a situation describing a problem faced by a manager and asks each trainee to
describe how he would deal with the problem, if he was the manager. In simulation,
the trainer describes a problem faced by an organization and assigns different roles to
trainees. The trainees are then asked to discuss among themselves and come up with a
solution to the problem.
The above methods encourage employees to apply the theoretical concepts to find a
solution to a given problem. Once the solution has been found, the trainer should give
feedback to the employees which will help them know their shortcomings. If the
10
trainees find it difficult to solve the problem with the knowledge they have acquired,
20
they can pose questions to the trainer. The trainer can then help them find a solution
using the concepts they have already learnt or educate them with more concepts. Thus,
of
experiential learning increases interaction between the employees and trainer and
stimulates employees to learn more. In such cases, learning is permanent and
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employees will not forget what they have learnt after returning to their workplace but
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will also be able to impart the skills and knowledge to other employees.
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Employees also learn to behave in a certain way without having undergone any formal
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training. This kind of learning is called informal learning. It takes place in two ways –
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associative learning and instrumental learning.

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Associative learning: If an individual begins to respond in a similar way to two

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different types of stimuli over a period of time, it is referred to as associative learning.

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Suppose, in an organization coffee is served once in the morning and once in the
evening. During this time, the employees chat with other employees and are often
U
away from their workplaces. After a new manager assumes charge, suppose he comes
to meet employees during coffee time and admonishes those who are away from their
S
workplace. The employees begin to associate coffee time with the manager’s visits
B
and learn to remain at their workplaces during this time to avoid being scolded by the
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manager.
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Instrumental learning: In this form of learning, an individual behaves in a particular

way because behaving in that way in the past resulted in positive consequences like
reward and recognition. Suppose, an employee canceled his leave and completed an
important project to help the organization deliver a product to the customer on time. If
his manager applauds him before all the other employees and presents him with a gift
cheque and a free holiday trip to a tourist place, then the employee will come forward
to make more such sacrifices in future.
Answer 67
Parallel learning structure is a techno-structural intervention which seeks to bring
about necessary changes in the structure of the organization and the technology it uses
in order to improve the efficiency of the organization. It consists of a steering
committee and working groups. The steering committee provides the necessary
direction and control to the working groups. The groups consist of employees from
different levels of organizational hierarchy. The chain of command that is followed in
a formal organization is not maintained in the parallel learning structure. All the
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members are given equal status irrespective of their position in the formal
organization in order to create an atmosphere conducive to collaborative thinking and
problem-solving. Parallel structures may be temporary or permanent depending on the
requirements of the organization.
The OD consultant did not consider the teams and task force structure at Alka as a
parallel learning structure because teams and task forces follow the norms and values
of the formal organization and are generally controlled by managers. Parallel learning
structures, however, create their own norms and procedures to facilitate creativity and
innovation and are led by a steering committee. Semi-autonomous teams have the
power to make decisions and deal with production processes and product
improvement. But the parallel structures are concerned with finding innovative
solutions to given problems.
In order to have a parallel learning structure in Alka, a steering committee consisting
of members of the top management must be formed. The organization also has to
encourage employees from various departments to form small working groups. The
members of working groups may belong to different hierarchical levels and vary in
their education, experience, skills and expertise. The working groups should collect
10
data from the system, analyze it to diagnose the problems faced by the organization,
discuss the problems and each member should suggest a solution based on his
20
perspective. The members would then consider all the suggestions and choose the
optimal solution that suits the situation best. The solution will then be presented to the
of
steering committee which will review it, suggest necessary changes and give its
approval. The solution may often consist of several change initiatives to be introduced
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in the organization. However, since the committee consists of top management
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members, it has the power and authority to implement the change initiatives in the
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organization. The committee assigns tasks and responsibilities to idea groups, action
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groups and other groups that assist it. As the change initiatives are implemented in the
organization, the working groups will require to monitor the progress of the change
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process constantly and take necessary steps to correct deviations and speed up the
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change process.
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Answer 68
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The various issues that arise when an organization plans to enter into a contract with
an OD consultant are: entry and contracting, defining the client system, mutual trust
S
between the client and the consultant, the nature of the client’s expertise, diagnosis
B
and selection of the appropriate intervention, the depth of the intervention, the risk of
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being influenced by the client’s culture, the ability of the consultant to act as a model,
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the possibility of the consultant team being viewed as a microcosm, ongoing action
research and its effect on the OD process, the dependency issue and terminating the
consultant-client relationship, ethical standards in OD, and implications of OD
process for the client. Some of them are explained below:
Entry and contracting: At this stage, a representative from the organization visits the
consultant, explains the problems faced by his organization and seeks his help. In this
case, it was the HR manager of Deepseas who played the role of the representative.
Often, the consultant may ask the representative to meet him again and provide him
with more details about the problems so as to obtain a clear picture of the
organizational situation. If the problems are more serious and acute, the OD
consultant may like to visit the organization himself and closely examine the activities
and processes in the organization. The consultant and his assistant may also take
interviews of employees at various levels. After diagnosing the problem and
identifying the causative factors, the consultant suggests the type of OD intervention
that needs to be implemented in the organization. He discusses with the top
management how to implement the intervention, how to involve the employees in its
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Part C
implementation, how to overcome resistance if employees refuse to participate in the

process, how to obtain the support of key people and have them influence other
employees favorably and other such issues.
In this phase, the OD consultant tries to settle the consultation fee and the period of
time for which he would offer his services to the client organization.
Defining the client system: Initially, the consultant considers only the representative
from the organization who comes to visit him as his client. Once the consultant enters
into a contract with the client and visits the organization, he begins to view the entire
organization as his client. The top management members are considered as the key
client.
Mutual trust between client and consultant: The client and consultant should avoid
involving themselves in any such activities which will have a negative impact on their
relationship. Sometimes, the employees may express their true opinions and views
about the managers but they do not want their names to be revealed. The consultant
has to maintain confidentiality in such matters. The key client (senior management)
wants to ensure that subordinates do not develop a negative attitude towards the
10
management because of the intervention. Such fears are true especially when an
20
intervention involves delayering and depriving some employees of their power. The
consultant needs to tackle such situations with utmost care. If small failures occur in
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the initial stages of implementation, the management should not get impatient and
blame the consultant. Mutual cooperation between the management of the
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organization and the consultant will help strengthen their relationship which is
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essential for the success of any OD program.

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Answer 69
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If an executive is going to visit a consultant for the first time, he should possess some
knowledge about organization development, the nature of OD and the consultant’s
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role in implementation of OD interventions. He should also understand the problem

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being faced by his organization and the complexities involved in it. This would enable
the executive to select the right OD consultant. The executive should pose five
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questions to the consultant and depending on his responses, the former can determine
whether he should enter into a contract with the latter or continue his search for the
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right OD consultant.
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The five questions that the executive needs to ask the consultant are:
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1. Will you please tell me something about organization development?

2. As a consultant, what role would you play in solving the problems facing our
organization?
3. Will you work with the people of the entire organization or a select few?
4. How long will you work with us?
5. Will the OD intervention implemented by you involve both people and systems?
The responses to these questions depend on the nature of OD consultant. Some
consultants have a systemic relationship orientation while some have human relations
orientation.
Consultants having a systemic relationship orientation believe that they cannot
contribute to the development of an organization simply using seminars, workshops or
T-groups. They like to study the actual problem faced by the organization and help
employees find the reasons for the problem, generate alternative solutions and choose
one that best suits them. They design customized intervention to solve their problem
rather than choosing one from the available interventions. They emphasize on open
communication and problem-solving.
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HR oriented consultants emphasize interpersonal relationships above everything. They

select the teams or departments where a problem is actually identified and try to use
their interpersonal skills to resolve the problems and maintain peace in the
organization.
Consultants having a systemic relationship orientation do not intervene in the system
as far as possible. They teach problem-solving techniques and give the necessary
training to employees to deal with problems. Then they expect employees to derive
the solution themselves. If the employees find any difficulty in the process, these
consultants do the needful.
HR oriented consultants participate in the problem-solving process and help
employees find the right solution to the given problem.
Consultants having a systemic relationship orientation attempt to interact with all the
people in the organization. For them, the whole organization constitutes their client
system.
HR oriented consultants consider only a small group of people who participate in the
intervention as their client. They interact only with these people throughout the
10
intervention. They fail to realize that the implementation of an intervention or a
change program in one part of the organization has an impact on the entire
20
organization.
Consultants having a systemic relationship orientation work with the client for several
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years though the degree of interaction and involvement with the client system may not
remain the same throughout the years.
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HR oriented consultants work with the client system for only a limited period of time.
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Once they implement the intervention, they part with the organization.
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Consultants having a systemic relationship orientation try to find solutions which

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enhance interaction between employees and the system. They focus on techniques like
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job enrichment and job rotation which enable employees to know more about the
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system.
HR oriented consultants emphasize only on improving relations between people. They
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often use team interventions which improve cooperation between team members.
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Hence, if the responses of the consultant to the questions posed by the executive
S
indicate that he is a HR oriented consultant then the executive should look for another
B
consultant. However, if the responses indicate that he is a consultant having a

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systemic relationship orientation, the executive can go ahead and enter into a contract
with him because consultants having a systemic relationship orientation are concerned
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about the entire organization, empower employees to solve problems themselves,

work with the organization for longer period of time and help it deal with any
problems resulting from an intervention implemented by them.
Answer 70
Virtual teams enable organizations to leverage the competencies and skills of people
irrespective of their geographic location. Many leading global companies like
Motorola, Microsoft, Philips and Oracle have adopted the concept of virtual teams.
The advancement in information and communication technology enables members of
virtual teams to communicate with each other and with customers. But due to factors
like work pressure and discomfort in using advanced equipment, team members fail to
communicate with each other as effectively as they would in a physical environment.
This can seriously affect coordination in work and communication with customers.
Therefore, organizations should not just install advanced communication equipment
but encourage employees to use it. Working in isolation tends to depress and
demotivate some people.
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Part C
An OD practitioner has to motivate members of virtual teams and help them function
effectively. To achieve this, the OD practitioner also needs to learn to use latest
technology equipment to communicate with members spread across various countries.
The OD practitioner should communicate with the members of virtual teams regularly
and seek their ideas to improve the way the team works. The team members should be
allowed to post their ideas on the company intranet or send it through e-mail to the
practitioner. If the idea is good, the OD practitioner should immediately communicate
it to all the members of the team. Then the practitioner should invite the team
members for online discussions about the implementation of the idea. After all the
members agree on the method of implementation, the practitioner should assign the
responsibility of implementation to them. He may divide the tasks among them and
ask them periodically about the progress they have made. Mutual trust plays an
important role in online OD intervention. Both the team members and the OD
practitioner should be honest in their interactions and communication and strive to
maintain mutual trust.
OD practitioner may conduct team building exercises like Role Analysis Technique
online for virtual teams to improve their effectiveness in the following manner:
10
Each member of the team will be asked to describe his duties and responsibilities and
his contribution to the achievement of organizational goals and mail this information
20
to all the team members as well as the practitioner. It is essential for team members to
inform the practitioner so that he is updated about the activities of the team members.
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The team members will suggest some other responsibilities to the focal role
incumbent. Each member will ensure that he communicates his opinions to all the
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other members of the team and the OD practitioner. The communication among the
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members will continue till they reach consensus on the definition of the focal role. If
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necessary, the practitioner will offer necessary help

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Similarly, the focal role incumbent will explain what kind of cooperation he expects
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from other members of the team. Then all the team members express the behavior
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they expect from the focal role incumbent. The focal role incumbent may make some
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suggestions and subsequently, the entire team discusses and finalizes the duties and
responsibilities of focal role.
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The focal role incumbent prepares a written description of his role, called role profile
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and mails it to all the members of the virtual team and the OD practitioner for future
reference.
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While redesigning the OD techniques and processes for virtual teams, OD

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practitioners should ensure that all the members are involved in key decisions.
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Answer 71
It is difficult to change organizational culture because it gets imbibed in the actions
and thinking of the employees. Changing the culture of the organization would require
changing the behavior and mindset of all these people. Culture is formed often
without conscious intent or knowledge. Hence, it is difficult to change the culture.
Carly Fiorina, the CEO of HP, had to face stiff resistance from employees when she
attempted to change the compensation system and transform the culture at HP. To
encourage innovation and product development, Fiorina increased the focus on
‘breakthrough’ projects. She started an incentive program that paid researchers for
every patent filed. Earlier, they concentrated on making improvements to existing
products as their bonuses were linked with the number of new products developed
rather than the impact of their inventions. She demanded regular updates on key units
and based the bonus given to the employees on HP’s performance vis-a-vis its
competitors. Thus, in spite of HP reporting a profit in the first half of the financial
year 2001 for the first time in 39 years, the employees did not get their bonus. Her
change initiatives attracted a lot of criticism among analysts.
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In his efforts to change the culture at CBT, Sanjay Chopra should not try to change
the values held by the employees at CBT chemicals. Values are the fundamental
principles and standards such as integrity or respect which cannot be changed easily.
Chopra should therefore, attempt to change people’s beliefs that influence their
behavior. People form certain beliefs during training, by observing the employees
working in the organization, through their experiences, and by reading. The beliefs
held by people change only when they see new evidence that proves that what they
believe is wrong. Hence Chopra should focus on gathering such information which
can be used to prove that the existing beliefs of employees are wrong and invalid. For
example, if employees believe that they cannot work without a leader to guide them,
Chopra should describe with examples how self-managed teams are working
successfully without leaders in various organizations. He should encourage Verma to
communicate the available new evidence and emphasize the need for employees to
change their beliefs.
Changing the culture is possible only when people who are part of the culture become
aware that their unconscious assumptions and thinking patterns are wrong. Chopra
should ask Verma to conduct an all-employee meeting. In the meeting, Verma should
10
ask his employees to describe the beliefs that shaped the course of the company in the
20
past five years and new beliefs that are needed to take the organization forward. The
new beliefs listed by the employees should become an agenda for attitude change
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among all leaders of CBT.
Bringing a new set of beliefs and practices into the culture can be difficult even when
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they are consistent with the core of the culture. It is even more difficult to bring in
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practices that are contrary to the existing culture. Therefore, Chopra and Verma will
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have a tough time changing the culture of the organization from a conservative culture
to a risk taking culture.
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Chopra should ask Verma to take the following steps to transform the culture of CBT:
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• Communicate constantly how new practices would lead to improvement in

employee as well as organizational performance
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• Explain why employees should put an end to the old culture

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• Ensure that new recruits believe in the new norms and values
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• Promote only those employees who adhere to the new values and norms
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• Encourage employees aged above 55 years to take VRS and discourage people
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supporting the new culture from leaving the organization.
Answer 72
The reasons for the differences in perception of the client and consultant, and the
measures that can be taken by them to resolve these differences are discussed below:
Client’s failure to disclose complete information: The top management often gives
only partial information to the consultant. For example, if the consultant asks the
management to provide him with information about the union-management relations
in the organization for the past ten years, the management may provide the consultant
with information that shows the management in a good light. If the current problems
in the organization are the result of management’s actions in the past, then the
consultant will have a tough time identifying the causes of current problems with the
partial information that he has. He may have to depend on his intuition and
imagination to identify the reasons for the problems. In such a situation, the solution
he suggests will be inaccurate. Hence, the client should not hide any information from
the consultant if he expects the consultant to make effective recommendations.
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Part C
Inhibitions of client and consultant: In the beginning of the project itself, the client
and consultant should communicate their views to each other clearly. If the client has
any objections to the consultant’s views and opinions about organizational problems,
he should make it clear to the consultant. The consultant should, in turn, be able to
justify his views and make the client view the problem from his perspective.
Sometimes, the consultant may find that he does not have the required expertise to
deal with the particular problem faced by the client organization. The consultant
should communicate this to the client as soon as he realizes his incompetence and
withdraw from the contract rather than giving inaccurate recommendations to the
problem and worsening the situation.
Failure to review progress: The client and consultant should meet regularly to
discuss the developments in the organization after the consultancy assignment is
signed. If the client does not perceive any positive developments in the organization,
he is free to ask the consultant about this. Sometimes, employee resistance slows
down the work of the consultant, despite his best efforts. But if the consultant is not
able to show any progress for a prolonged time, the client needs to consider the issue
seriously. The client has the right to cancel the contract if he finds that the consultant
10
is unable to serve the organization’s requirements. Periodic review meetings help
client and consultant discuss and solve various problems before they pose a serious
20
threat to the change initiatives.
Failure of the client to do the groundwork: The client organization should take
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measures to ensure that its employees are mentally prepared to receive the OD
consultant. The management of the organization should communicate to its employees
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the problems faced by the organization and the need for help from an external
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consultant for resolving them. By doing this, the management of the client
organization can ensure that its employees have a positive rather than a hostile attitude
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towards the consultant. If such efforts are not undertaken by the client organization,
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the consultant may have to spend too much time trying to change the negative attitude
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of the employees and establish good relations with them.

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Coercive efforts: Sometimes the client organizations, especially large public sector
organizations, attempt to dictate to the consultant what he should recommend. In
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contrast, it may also happen that sometimes the consultant may, based on his previous
U
experience, recommend a particular approach as appropriate, and may force the client
organization to accept the recommendations, although the client feels they are not
S
suitable in the given context. It is important that both the client as well as the
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consultant give primary importance to organizational requirements above personal

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interests.
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Answer 73
Action research is a process of systematically collecting data from the organization
and planning and implementing suitable action based on the data. Action research
forms an important component of most of the interventions of OD. Hence, action
research may be considered as the foundation of the organization development
process. Action research involves four main activities – diagnosing the problem,
designing a plan to solve the problem, implementing the plan, and evaluating the
effectiveness of the plan. Moreover, the approach requires participants to gather data
continuously and discuss it in response to the feedback given by the consultant.
Though the management may design a highly effective plan to introduce change in an
organization, it may still face several problems in the implementation phase. Action
research seeks to address these problems in a systematic way, and successfully
achieve the desired change. In the process, employees get the opportunity to learn new
things, enhance their knowledge and apply it in the future when the need arises.
Action research requires organizations to give its employees training to participate in
211
the problem-solving process. Though action research requires organizations to invest a

lot of time and money, it does yield long-term benefits. As employees at different
levels of the organization participate in action research, they express different
perspectives on each problem and help in finding an effective solution to the problem.
As employees collect data, obtain feedback and conduct discussions frequently, there
is improved scope for learning and knowledge-sharing across the organization. As the
people responsible for implementing change are involved in the data collection,
problem identification and planning stages, the process of implementation is relatively
smooth. Employees obtain expertise in testing the solutions they develop,
documentation and analysis of the results, and in using the lessons learnt from
failures/successes to develop better solutions. The employees are therefore well-
equipped to solve whatever problems arise in the future.
Although the basic process of action research has not changed, organizations are
beginning to implement spin-offs derived from action research. While action research
emphasizes various features like collaboration, systematic data collection and learning
by doing, its spin-offs (collaborative inquiry, action science and action learning)
emphasize only one of these features at a time.
10
In collaborative inquiry, employees come forward voluntarily to investigate the
20
reasons for the problem they identified. In action science, data is collected
systematically and solutions are tested for their validity. In action learning, people
of
learn by doing. They form small groups and try to work out a solution for problems on
their own. The consultant does not support them by collecting data, analyzing it and
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explaining the results to them. This approach was used in Fokker Aircraft, a leading
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supplier of advanced components to the aerospace industry, as a part of its

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organizational change program.

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Answer 74
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The organizational environment shapes the attitudes and work behavior of employees.
Khanna learned certain behaviors after he joined Mithila. But because of the
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competitive environment, Mithila had to change its organizational structure and

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policies. This required employees also to adapt to the change. But Khanna found it
S
difficult to change his behavior. Chowdary needs to take the following steps to modify
B
Khanna’s behavior and improve performance:

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Pose a few questions: Chowdary should meet Khanna and ask him a few questions to
Fo
know the extent of the latter’s knowledge about Mithila. These questions may include
– What is the current agenda of Mithila? What are the barriers faced by Mithila in its
attempts to improve its performance? Has the organization succeeded in implementing
change? What had Khanna done in the past six months to contribute to the
organization’s growth?
The responses to the above questions will help Chowdary understand Khanna’s
opinion of the change, the reasons for his poor performance and his expectations from
the organization. But in order to get true responses from Khanna, Chowdary needs to
make the following efforts to win his confidence:
• Listen carefully: Chowdary should allow Khanna to speak his mind. He should
not interfere when Khanna is talking.
• Repeat what Khanna says: In order to convey his sincerity in addressing
Khanna’s concerns, Chowdary should repeat what Khanna has told him. This will
not only help Chowdary in confirming that he is understanding Khanna correctly
but will also assure Khanna of his genuine concern for the latter.
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Part C
• Empathize with Khanna: After listening to Khanna’s problems, Chowdary should

express his sympathy and reassure him by recounting how he has helped people
facing similar problems in the past.
Confront: Chowdary needs to confront Khanna if the latter appears to put personal
interests above organizational interests, passes blame to others, or refuses to
acknowledge that a change in his behavior is desired. Chowdary should clearly point
out to Khanna the negative aspects in his behavior and make it clear to him that he
needs to improve on those aspects. Khanna may be shocked, show anger or refuse to
accept it, when the negative aspects in his behavior are pointed out. Chowdary should
be careful to allow Khanna to defend himself but should not allow him to leave the
meeting place without committing himself to take some specific action to eliminate
the negative aspects of his behavior.
For every defensive statement made by Khanna, Chowdary should be able to explain
with evidence that Khanna is wrong. This is possible only if Chowdary makes a
careful observation of Khanna’s behavior throughout the meeting. For example, if
Khanna claims that he has a positive attitude, Chowdary can repeat some pessimistic
10
statements used by Khanna during their conversation to show that his attitude can
certainly become more positive. Of course, Chowdary should be tactful in his
20
conversation with Khanna so as not to antagonize the latter.
Arrange another meeting: After having obtained a verbal commitment from Khanna
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in the first meeting, Chowdary should now ask Khanna to develop an action plan to
achieve the desired change in his behavior, and assure him that the required support
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for this would be provided by the management.
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Answer 75
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The following measures can help OD practitioners deal effectively with organizational
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politics:
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Achieve expert power: Power accrues automatically to knowledgeable and skilled

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people. Doctors, computer professionals, tax accountants, industrial psychologists and

other such professionals acquire power as a result of the specialized knowledge they
U
possess. Similarly, OD practitioners can also acquire expert power by achieving a

high level of competence. They should continuously improve their communication,
S
coaching, counseling and problem-solving skills. They should attempt to resolve

B
many problematic situations in a complete manner so that they master these skills. In
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order to have expert power, an OD consultant should also be considered as honest and
Fo
trustworthy. By being honest in his interactions with people, an OD consultant will

win their confidence and trust and thereby wield expert power over them.
Design result-oriented OD programs: OD practitioners should design and implement
OD programs in such a way that they help organizations achieve their goals. They
should be able to help organizations address strategic issues, solve long-standing
problems which could not be dealt by even the senior managers in the organization,
and overcome all the barriers that prevent the implementation of solutions.
Focus on goals of top executives: Although it is important for OD practitioners to
address the needs of people at all levels of the organization, they should give special
attention to the needs of the top management because this will ensure the support of
the top management in implementation of the OD program. Obtaining the support of
the top management will also ensure that the OD program does not face any political
hurdle, and the likelihood of its success increases. Also, OD practitioners should
ensure that they gain support from different political groups in the organization. This
will prevent the OD program from being politically influenced by any prominent
group in the organization.
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Avoid win-lose and lose-lose solutions: OD practitioners should also acquire

expertise in conflict resolution techniques. They should resolve conflicts among the
members of the organization in such a way that no one perceives that he is the loser.
To the extent possible, OD practitioners should attempt to find win-win solutions and
enhance social relationships among employees.
Never give secondary importance to the management’s goals: Some OD
practitioners tend to forget that they are hired by the management to solve their
problems, and instead, attempt to educate the management about the values,
philosophy and methodology of OD. OD practitioners should remember that
management did not invite them to get trained in OD skills but to seek their help in
solving an organizational problem.
Do not provide solutions, only help find solutions: If the management approaches an
OD practitioner with a problem, the OD practitioner should not attempt to provide a
solution to the problem. This will be a violation of the professional ethics of OD
practitioners. They should only help the management use appropriate problem-solving
processes and find the best possible solution to the problem. At the most, they can
10
suggest possible alternative solutions but should never influence them in choosing the
20
solution. An OD consultant should help the client to be able to independently solve
the problem if it recurs in future.
Answer 76
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In order to have a holistic perspective, OD practitioners should try to keep themselves
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informed in the following areas:

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• Social justice: OD practitioners encourage clients to find alternative solutions to

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problems. If the client comes up with a solution that undermines the principle of
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social justice, the OD practitioner should raise the issue with the client, and
suggest that a different solution should be found. Suppose a multinational
O
organization in the US is finding it difficult to manage its diverse workforce. One

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of the managers may suggest that the organization should avoid recruiting people
from different cultures. Though this may help the management avoid cultural
U
problems, it is not a fair solution, and moreover, the organization will be violating
S
the Equal Employment Opportunity law by doing this. OD practitioners should,

B
therefore, discourage clients from considering such discriminatory and

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controversial solutions.
•
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Environmental protection: OD practitioners help their clients to find cost-cutting

solutions. In their attempt to cut costs, the management of the client organization
may consider reducing expenditure on pollution-treatment equipment. At this
juncture, the OD practitioner should explain to the client the environment laws in
the country, the penalty for violation, the loss of image to the organization due to
its polluting activities and the impact of such actions on its sales. OD practitioners
should also discourage the client’s attempts to save costs by setting up polluting
plants in developing countries and taking undue advantage of the loopholes in the
environmental protection laws in such countries.
• Recognition of cultural differences: OD practitioners should be very careful
when they are working with international clients. Many OD practitioners who
believed that they had done everything right in implementation of their
intervention, realize too late that they were grossly incorrect and have to begin the
process from scratch. This may have happened because they assumed that they
could apply the same technique across widely varying cultures. OD practitioners
should recognize that cultural differences cannot be ignored and should be given
due consideration before undertaking any intervention. For example, techniques
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Part C
like TQM and Kaizen cannot be implemented in US-based organizations without

some modifications. This is because people in the West do not like lengthy
discussions and incremental improvements which are the major characteristics of
these techniques.
• People orientation: OD practitioners should respect people, their beliefs and
values. Employees have the knowledge, skills and experience to contribute to the
development of their organization. But their knowledge and expertise may be
limited to their area of specialization. For example, employees in the production
department will be able to suggest ways to reduce scrap and improve
productivity. They may not understand the importance of cooperating with
marketing personnel to market the products in a better way, or of adapting
themselves to the changes in the external environment, or of solving problems in
a systematic way. If OD practitioners can combine their knowledge of problem-
solving processes and change processes with the business knowledge of the
employees, they can help build great organizations.
10
Answer 77
20
The various factors that need to be considered by an organization while designing OD
interventions are:
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Employees’ willingness to change: Unless employees are willing to change, the OD
s
consultant cannot design an intervention to solve the problem identified in the
s
organization. He needs to motivate the employees and create dissatisfaction in them
la
against the present state, so that they respond positively to change. The management
C
too has to allocate sufficient time and enough resources to implement change in the
organization. Once the employees and management are prepared for change, the
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consultant can implement the problem-solving intervention in the organization.

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Employees’ ability to implement change: There should be at least a few employees at

different levels in the organization who have the ability to motivate other employees
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to accept change, and who can lead the change process. They should be able to
U
influence power groups and obtain political support for the change process. They
should be able to maintain the enthusiasm of employees till the change has been
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implemented. If at any level, there are no employees who possess these leadership
B
skills, then the consultant will have to select some of them, and give them the
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necessary training before beginning the process of intervention.

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Cultural differences: OD practitioners should always design an intervention in such a

way that it accommodates the differences in culture among the organizational
members. The culture of the place in which an organization is located influences the
values and beliefs of a majority of the employees in the organization. While
implementing interventions designed for one country in another one, the OD
practitioner should modify the interventions to suit the culture of the latter country.
Skills of the OD practitioner: Every OD practitioner cannot excel in all types of OD
interventions. Sometimes he may lack the skills and expertise to implement a specific
intervention to solve a particular problem in a client organization. In such a situation,
the OD practitioner should consider an alternative effective intervention, or seek the
help of another consultant who specializes in that type of intervention.
Apart from this, OD practitioners should design interventions which can address
strategic issues (e.g. mergers and acquisitions), technostructural issues (e.g.
organization design), human resources issues (e.g. reward system) and human process
issues (e.g. conflict resolution).
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Answer 78
Rakhi should look for the following characteristics while selecting the person to
manage the international operations of her company:
Extensive knowledge: The person must have extensive knowledge about business,
industry and the latest technology in the market. He must also have in-depth
knowledge of market conditions. A global manager needs to constantly track the
activities and strategies of existing and emerging competitors. This will enable him to
manage domestic and international operations successfully.
Analytical skills: A global manager must have a high level of conceptual skills. He
must have the ability to view a particular situation not only from a specialist point of
view, but also from a holistic or systems view. The systems view enables him to
understand the mission, vision and strategy of the organization and their impact on
organizational design, culture and people policies. He should be able to utilize his
specialized skills to identify the components and sub-components of complicated
problems so that they can be resolved easily. Some problems and conflicts cannot be
10
resolved, however hard one may try. In such cases, a global manager’s ability to
appreciate contradictory ideas, beliefs and values will help him manage the conflict
20
and be successful in his role.
Agility: A good global manager is characterized by a high amount of flexibility. He
of
should be able to change continuously to adapt to changes in the domestic and global
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business environment. He should not have pre-set notions or depend on structured
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decision making methods to take decisions. He should determine the decision making
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or problem solving process depending on the situation.

C
Cross-cultural skills: The employee should be open to new cultures and to acquiring
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a new range of skills and abilities to be able to work with people from these cultures.
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He should be self-confident and emotionally stable. Though he may have his own
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philosophies and beliefs about life, he should be willing to listen to others’ views,
understand them, and change his own views according to the work situation, if
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necessary.
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Decision-making: The employee should be able to make decisions even if he is not

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able to obtain all the information needed to make a perfect decision. He should
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consider uncertainty as an opportunity to learn new things and should not be

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uncomfortable when faced with uncertainty. He should be confident about his

decisions and judgement skills. Even if there is pressure in terms of time, he should
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not make hasty decisions without analyzing the available information. He should
record the consequences of his decisions, and attempt to learn from his successes and
failures so as to prepare himself for future challenges.
Answer 79
In the past, there was high degree of departmentalization in organizations. If employee
(A) at one level of hierarchy in one department wanted to communicate with a
employee (B) at the same level in another department, the message had to go up the
chain of command in A’s department and then down the chain of command in B’s
department. Again B’s feedback or response had to follow the same path. Now, with
companies following a flat organization structure, the chain of command has been
shortened considerably. The barriers to communication between departments are
being reduced. Cross-functional teams are being formed to increase interdepartmental
communication. Many layers of hierarchy have been removed so that managers are
closer to employees, work processes and customers. Managers no longer command
and extract work from employees but actively work with them to accomplish
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Part C
organizational goals. Managers and employees now work as a team. Employees are
given a great deal of authority and responsibility. They are allowed to participate in
decision-making processes. Earlier, all the members of the team had to be physically
close to each other to facilitate better communication among them. Modern day
advances in technology enable even employees located at distant places to work as a
virtual team.
Managers have to coordinate and manage team members whom they do not see. The
emergence of virtual teams for work has been accompanied by factors like the shorter
life cycles of products (e.g. IT solutions), constantly changing tastes and preferences
of customers, and increasing competition in global markets. Virtual teams enable
organizations to leverage the skills and abilities of individuals from different parts of
the world without incurring high costs of transporting individuals from one country to
another. For example, Motorola uses virtual teams where members from various
countries work together on complex projects. Leading multinational companies like
Philips, Oracle, Daimler Chrysler and Ericsson also employ virtual teams. The
members of these teams perform various functions like product designing, product
development, and product testing from their respective locations. At Microsoft,
product development engineers work in the US, while product test engineers work
10
from various countries across the world. The teams at Texas Instruments also work
20
from its offices located in different parts of the world.
According to Peter Drucker, “Structure is an instrument to achieve objectives.” Thus,
of
in such work set-ups, though the members of the virtual teams do not see each other
and work independently, managers need to determine some basic structure in order to
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coordinate the work of team members and accomplish the desired organizational goals
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and objectives. The structure of virtual teams depends largely on the organizational
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objectives and the nature of the work.

C
Also, organizations should consider factors like the differences among cultures of
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team members, their skill levels and socializing needs while designing virtual teams.
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The structure of these teams should facilitate continuous communication among the
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members, help them learn and adopt a common culture, and attempt to create a sense
of bonding in them.
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Another concept that is becoming increasingly popular in the business environment is

U
that of virtual organizations or Networked Virtual Organizations (NVOs).

Organizations like Wal-Mart Stores and Cisco systems have successfully adopted the
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NVO business model. A virtual organization is a temporary organization formed by

B
collaboration between two or more entities (including suppliers, customers, and

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sometimes competitors) to produce a specific product or service. Once the product or

service is delivered, the organization dissolves. Virtual organizations have only a few
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permanent members with unique skills called the core group. The core group includes
professionals, technicians and managers. Virtual organizations outsource most of their
manufacturing and customer service responsibilities to sub-contractors. They have
temporary or part-time workers to cope with the workload at peak times.
In virtual organizations, members do not share a physical work space. They may work
from home or any place of their convenience. They exchange information through the
Internet or high technology communication devices. Thus, virtual organizations are
able to reduce costs (of investing on real estate and a permanent work force), improve
productivity and profitability.
Answer 80
Empowerment is a process of authorizing employees to exercise power. It is not a
process in which a manager assigns a few responsibilities to his subordinates
whenever he gets overburdened. Before simply following the trend, managers should
question themselves on the issues – who should be empowered, and what should be
217
the objectives of empowerment. The organization’s vision can be used as a guide to

answer these questions. Empowerment requires people to think differently, discuss
their ideas with team members, defend their ideas, review others’ suggestions, and
make decisions. To be able to perform these new responsibilities, employees need to
learn new skills like communication skills, analytical skills and conflict resolution
skills. Therefore, organizations should provide employees with the training required
before empowering them.
Without trust between the management and employees, empowerment cannot take
place. Both parties should be able to predict each other’s actions in a given situation.
The management should encourage employees to give suggestions and should
implement them. They should involve them in making decisions and share profits
with them. Employee should not misuse this power to serve their personal interests.
Only then will trust develop between the management and employees.
As a part of empowerment programs, organizations link employee incentives to
business performance and profits achieved by them. For example, Honeywell
designed a performance incentive plan for its employees in which employees received
10
additional incentives depending on the performance of the organization. It was
observed that performance-based pay dramatically changed the way of thinking of
20
employees. In the company, when the performance-based incentive plan was
explained to workers, they introspected on their actions while performing their work
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and came up with new ideas to save power and reduce losses for the company.
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British Petroleum (BP) is one of the companies that realized that true empowerment
s
can result only when the organization’s goals, the employees’ roles in their jobs and
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the people they can approach if they have any queries, are clearly defined and
C
communicated to them. BP has invested heavily in communicating with employees,

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and sought to increase the flow of knowledge across the organization. Before making
nl
decisions, managers at BP always invite the opinions and suggestions of employees.

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The company’s intranet enables employees to keep themselves updated with the latest
company information. To facilitate empowerment, BP has adopted a flat
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organizational structure. The employees of its 92 business units can communicate

directly with the executives in the headquarters.
U
Dana Corporation, an Ohio-based manufacturer of components for automobile

S
companies, implements several programs to facilitate and encourage employee

B
participation in business processes. Dana allocates about 40 hours for employee

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education and training every year. It encourages employees to give two ideas per
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month, reviews them regularly and tries to implement 80% of them. It has adopted a
decentralized structure to facilitate transfer of power and responsibilities to
employees. It offers employee stock options to its employees and its retirement
program is designed such that it encourages employees to stay with the company for
long, and grow with it.
Answer 81
Organizations today are striving to provide their workforce with an environment that
is free from inhibiting rules, and which stimulates their productivity. In such an
attempt, companies like PeopleSoft have adopted various measures like
telecommuting to enhance productivity and maintain a low level of employee
turnover. Telecommuting, also known as teleworking, involves accomplishment of
all, or part of an employee’s tasks from home through computer links to the office.
Telecommuting offers a number of advantages to both the employees as well as the
employer. Organizations implement telecommuting as a viable cost-cutting strategy
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Part C
since it cuts costs by reducing the amount of office space required. Telecommuting
attracts talented people who prefer to work from their homes. Companies also use
telecommuting as a retention tool, to retain efficient and talented workers, thus
maintaining the quality of output.
The employees find telecommuting beneficial as it makes it easier for them to strike a
balance between their personal and professional lives. It also helps reduce work-
related stress, thereby creating a healthy and motivated workforce. Further, employee
morale is enhanced as a result of telecommuting as this kind of work arrangement
indicates the employer’s trust in the employee. This, in turn, increases their job
satisfaction, ultimately leading to enhanced productivity levels.
However, not all organizations are willing to offer this facility to their employees.
Some employers are not convinced of the efficiency of this work alternative as there is
no concrete evidence of the benefits of telecommuting. It is difficult to maintain
contact with telecommuters and to support them when they encounter problems in
their work. Employers also find it hard to keep track of the productivity of
telecommuting employees and to decide upon the compensation to be given to them.
10
Employees too, in some cases, are not happy with this system as they feel isolated and
are deprived of the interaction and stimulation that are derived in a real work
20
environment. Telecommuting could also lead to burnout in some cases since the
employees do not have fixed hours of work and tend to overwork. This proves
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counterproductive to the organization and the employees themselves. Thus,
organizations must ensure that a proper study of the benefits of implementing
s
telecommuting is done before offering this option to its employees.
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Answer 82
C
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In order to compete in the rapidly-changing business environment, organizations are

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establishing operations at locations beyond the geographical boundaries of their home

countries. By doing so, they inevitably face the challenges of managing a diverse
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workforce in a multicultural environment. Conducting operations in a multicultural

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environment causes organizations and its workforce to encounter various barriers to

cultural adaptation. A few of these barriers are -
U
• Parochialism – Cultural parochialism tends to arise when an individual believes

S
that the practices in his/her home country are better than those in the host nation.
B
This happens when he/she takes a narrow or restricted view on a certain issue,
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based on the limited knowledge he/she has by virtue of his cultural background.
This poses serious problems as such a belief can impede the progress of an
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organization working in an international environment.

• Ethnocentrism – When an individual judges a new culture based on the
similarities between the new culture and his/her own organizational culture, the
individual is considered to be making use of the self-reference criterion. The
tendency of the individual to evaluate other cultures on the basis of how different
or how similar they are to the culture in his/her own home country is known as
ethnocentrism and makes it difficult for the individuals to understand and
empathize with employees in the host nation, thereby rendering cultural
adaptation difficult.
• Cultural distance – The extent of difference or variation between the social
systems of the expatriate and the host nation is called culture distance. The
greater the culture distance between the two nations, the greater would be the
difficulty in cultural adaptation.
• Culture shock – When an expatriate experiences dramatic differences in
language, mannerisms, practices, values, customs, perceptions, and cultural
219
orientations of people belonging to his home country and those of the host nation,
he is said to undergo a culture shock. This might affect the individual mentally
and emotionally, thereby hindering his cultural adaptation.
Organizations must, therefore, take necessary steps to ensure a smooth cultural
adaptation. Some of these measures are -
• Careful selection of employees – A careful selection of employees who fit in well
with the new culture goes a long way in cultural adaptation. Employees selected
for foreign assignments must have a willingness to experience a new
organizational culture, possess adequate knowledge about the culture of the host
nation, be able to understand and communicate in the new language, etc.
Selection of suitable candidates will ensure the success of foreign assignments.
• Compatible assignments – Organizations should ensure that the assignments
handled by the expatriates in the host country are similar to those they have
handled in the home country. This will help the expatriates to easily adapt to the
new culture as they already have experience and knowledge of handling such
assignments.
10
• Predeparture training – Organizations offer training to employees in language,
business practices and mannerisms of the host country, to help them to adapt to
20
the new environment. This also helps the expatriates to create a favorable
impression among the people in the host nation and ensure their easy acceptance.
•
of
Orientation and support – Organizational support is vital for employees to
s
overcome cultural barriers and to facilitate smooth cultural adaptation. Employees
s
are offered adequate facilities to help them adapt to the new culture through
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provision of proper accommodation, transport, mentors, etc. They are also given
C
opportunities that challenge their abilities, thereby motivating them.

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• Preparation for reentry – A reverse culture shock is said to take place when the
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expatriates return to their home country after serving in the host country for a
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substantial period of time. Organizations must support this readjustment by

formulating repatriation policies which ensure that they are given equally
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challenging opportunities and prospects for growth.

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By taking the above measures, organizations can improve their performance in the
global arena and ensure effective cultural adaptation of its employees in a
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multicultural environment.
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Answer 83
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Informal transmission of information within organizations takes place through

grapevines. Grapevines arise out of the social interactions that occur among the
members of an organization. Information passing along this informal network is
undocumented, and, therefore, vulnerable to distortion depending upon the different
ways in which people interpret the message.
When effectively managed, grapevines have many advantages. Grapevines humanize
the organization by creating a sense of belonging among its members. It is also a great
means of relieving stress among the employees as it helps people express their
concerns, feelings, emotions and apprehensions about the various organizational
systems and procedures. Grapevines help to create strong social bonds among
employees, thereby encouraging teamwork and employee participation. Grapevines
are, therefore, effective indicators of the morale, health, trends and productivity of
employees.
If organizations are able to integrate this effective informal communication channel
with the formal network of communication, they can benefit enormously. Researches
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Part C
indicate that nearly 75% of the information carried by grapevines, is accurate.

Therefore, the management can learn and understand the employee perception of the
various organizational procedures and systems, which would otherwise not be known.
Research also shows that supervisors who heed to grapevines generally have 50%
more credible information than those who do not. Grapevines can be used as an
effective tool for transmitting information among the organizational members as they
are fast. Therefore, the desired information can be easily transmitted throughout the
organization within a short span of time. Besides, employees feel that the information
that passes through the grapevine is reliable and accurate.
When managed effectively, grapevines help to minimize the negative consequences of
rumors within organizations. This is possible when the management treats this
informal network as an open channel of communication, and uses it to transmit
important and complete information to its members. Participants of the grapevine play
a key role in information transmission. Thus, maintaining a good rapport with the
grapevine members goes a long way in knowing employee perceptions, which in turn
acts as an effective feedback mechanism.
Thus, grapevines when managed properly, can act as an effective supplement to the
10
formal channels of communication.
20
Answer 84
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Mentoring is a deliberate association of a more skilled or more experienced person
s
(mentor) with a relatively less skilled or less experienced person (protégé), in order to
s
develop specific competencies in the protégé.
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C
Organizations use mentoring programs to develop a culture of continuous learning.

Such programs are aimed at inculcating values and behavior that are considered
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important for the organization. Mentoring programs reflect the commitment of the
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organization towards the overall development of its workforce. This, in turn, helps
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organizations attract, recruit, place and retain the best talent in the industry. Mentoring
enhances interaction among the different levels in the organizational hierarchy,
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thereby encouraging teamwork. Organizations also benefit by such programs as

U
employees are trained in their respective domains by people within the organization
itself, without having to involve external personnel for the purpose. Besides, these
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programs enhance the motivational levels of the mentors as it gives them a sense of
B
achievement and job satisfaction. Thus, mentoring programs provide a competitive

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edge to organizations by developing and enhancing the social system at the

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workplace, thereby ensuring the long-term health of the organization.

Mentors play a vital role in realizing the benefits of mentoring. While acting as a role
model for their protégés, mentors play a variety of other roles, which are discussed
below:
• Coach – As a coach, a mentor trains his protégé in all the skills and expertise that
the job or profession of the protégé demands.
• Counselor – A mentor acts as a counselor for his protégé by offering moral and
psychological support as and when required. This helps boost the confidence and
morale of the protégé.
• Sponsor – As a sponsor, a mentor helps his protégé to get challenging offers and
assignments, and also sponsors and recommends his name for organizational
rewards such as incentives, promotion, etc.
Thus, a mentor plays a multifaceted role developing an organizational culture that
promotes continuous learning, thereby enhancing employee competencies, which
create a competitive advantage for the organization over others in the industry.
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Answer 85
One of the major ethical issues in organizations is that of employee privacy.
Organizations feel a need to control employee behavior by monitoring various aspects
of their jobs. However, these measures sometimes cease to be justifiable as they
invade the privacy of employees. Technological developments have made it possible
for organizations to monitor what employees are doing on their computer terminals,
track their telephonic conversations, trace the messages sent and received by
employees through their e-mails and instant messengers, etc. While employers argue
that this kind of surveillance is essential to control employee behavior, keep track of
their activities, and to detect company thefts, etc., these arguments are sometimes
contested in the court of law.
Organizations, must therefore, adopt preventive measures to avoid litigation. To begin
with, they must inform their prospective employees beforehand about the kinds of
restrictions that will be imposed on them and their performance. Employee privacy
issues should be documented and communicated to all the employees of the
organization. Organizations must also justify such actions by giving the reasons for
imposing these restrictions. Once employees are convinced about the rules, they
10
generally abide by them. Also, employers must keep in mind the best interests of both
20
the organization and its members before imposing any kind of restriction over
employee behavior.
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Thus, by taking certain preventive measures, organizations can effectively manage
issues concerning employee privacy at the workplace.
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Answer 86
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C
Sometimes, under the influence of certain psychological dynamics, decision-makers

tend to hold on to a decision, despite knowing that it is wrong and will lead to an
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unfavorable outcome. This phenomenon is known as escalation of commitment.

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Escalation of commitment takes place under the following circumstances -

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• Certain characteristics of the project like the expected returns, short-term profits,
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amount of investment, etc., seem unfavorable, and may cause the decision-maker
U
to desist from taking a bold decision. Instead, the decision maker may choose to
take a sub-optimal or less risky decision.
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• Certain psychological elements also contribute towards making a wrong decision.

B
This happens when the ego of the decision-maker prevents him from admitting
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that he made a wrong decision. Instead, he tends to take more than a reasonable
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risk in an attempt to prove that he was right. He therefore, tries to defend his
decision by ignoring information which suggests that it was wrong.
• In certain cases, the decision-maker succumbs to peer pressure and takes a
decision despite knowing that it is wrong. Further, in order to save face, he
continues to remain committed to the wrong decision.
• Organizational factors like ineffective communication, resistance to change, and
dysfunctional conflicts and politics within organizations tend to escalate
commitment towards the wrong course of action.
Thus, complex human dynamics play a role in keeping managers committed to a
decision, which they know is wrong and detrimental to the organization.
Answer 87
Organizations stand to benefit considerably if they encourage employee participation
in crucial decision-making processes. Therefore, modern organizations are taking
measures to involve employees in organizational decision-making. Effective
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Part C
employee participation is influenced by both the work environment as well as the

employees themselves. For effective employee participation, fulfillment of the
following conditions is essential -
• Sufficient time – Organizations can derive maximum benefit from employee
participation, only if the employees are allowed to involve themselves in the
process for a substantial period of time. If time is a limiting factor, employee
participation should not be sought for making a decision.
• Cost-benefit analysis – Employee participation in decision-making should not
affect the routine processes in organizations. A careful cost-benefit analysis has to
be carried out to study the advantages and disadvantages of employee
participation. Only if the benefits exceed the costs, should employee participation
be encouraged.
• Employees’ area of interest – Active and effective participation by employees can
be ensured only if the decision made pertains to the daily tasks and
responsibilities of the employees. In other words, employees show interest only
when the decision made affects their routine job in the organization.
10
• Employee aptitude – Employee participation results in the desired outcome only
20
if the employees possess the requisite aptitude and ability to make such decisions.
They must possess adequate knowledge and intelligence to make decisions.
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Besides, the decisions made should be within the employee’s sphere of authority.
s
• Absence of apprehensions – In a participative decision-making process, various
s
apprehensions might prevail among both the superiors and the subordinates.
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While the subordinates fear that voicing their opinions may invite the disapproval
C
of their superiors, the superiors possess an inherent apprehension that their

authority and power could be threatened by involving their subordinates in
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nl
decision-making. The apprehensions of both parties must be addressed in order to

make the participation process effective.
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Once these prerequisites are fulfilled, the benefits of employee participation can be
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reaped in real terms.

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Answer 88
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B
Employee behavior in organizations is a function of consequences. In other words, a

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behavior that results in desirable or pleasant consequences tends to repeat itself, and
behavior that results in unpleasant consequences is less likely to be repeated. When a
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particular behavior is repeated as a result of it being followed by a pleasant

consequence, it is said to be reinforced. Reinforcement can be used as an effective
tool to control employee behavior in organizations.
In the present case, the employees are not performing to the desired standards, which
is resulting in a loss of productivity and deterioration in the quality of output.
Therefore, their behavior must be modified to enhance productivity of the
organization. In this case, positive reinforcement may be used for the purpose.
Positive reinforcement could be in the form of a reward or any other desirable
consequence that follows a certain behavior. Positive reinforcement motivates people
to maintain or enhance the frequency of occurrence of desirable behavior.
For example, in this case, employees who perform well may be praised, or monetarily
rewarded, which might encourage them to repeat the behavior, and the other
employees to emulate such behavior. Employees exhibiting desirable behavior may
also be promoted to higher positions, in appreciation of their efforts. This motivates
them to continue behaving in the same way, thereby enhancing the quality of output.
Thus, employees may be made to behave in a particular manner by rewarding them
223
when they repeat it. However, managers must find out how attractive the rewards are
to the employees. Only those rewards that are attractive to employees succeed in
motivating them to perform. Thus, employee behavior may be controlled or modified
by positively reinforcing desirable behaviors exhibited by them, thereby improving
the quality of output and productivity of employees.
Answer 89
The concept of a learning organization has gained increasing relevance in the present
competitive and dynamic business environment. The survival of organizations in the
present-day business environment depends on how fast and readily they accept and
adapt to changes in the external environment. Although there is no single, widely-
accepted definition of a learning organization, it is considered to exhibit the following
characteristics -
• Competence – In a learning organization, it is assumed that each individual
member of the organization is capable of performing to his/her level of
competence, with minimum supervision from his/her supervisors. In other words,
10
a flat structure, minimal supervision and checks are important features of a
learning organization. Such organizations emphasize effective training and an
20
internalization of organizational values and culture at the very early stages of an
individual joining an organization, so that the employee’s behavior is shaped in a
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way that accomplishment of organizational goals becomes easier.
• Urge and willingness to learn – Competence without curiosity and willingness to
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learn is meaningless. A learning organization provides adequate learning
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opportunities to employees, and employees in such organizations demonstrate an

urge to constantly enhance their skills. Curiosity in employees has the potential to
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develop new ways of solving organizational problems. The employees are,

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therefore, encouraged to question existing organizational systems and procedures,

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which in turn, stimulates them to discover novel and profitable ways of

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performing routine tasks.

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• Tolerance – One of the most important features of a learning organization is its

willingness to tolerate mistakes and errors. Employees, in their search for new
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alternatives to existing practices and customs, tend to make mistakes which might
cost the organization substantially in terms of financial investment, and time and
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other resources spent on the experiment. However, learning organizations not

B
only encourage employees to try out innovative means of solving problems and
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celebrate the success of such ventures, but also exhibit a reasonable degree of
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tolerance to failure as well.

• Trust – Employees in learning organizations enjoy the trust of their colleagues
and are, therefore, motivated to experiment constantly, thereby resulting in
successful ventures that might bring in considerable revenue to the organization.
• Open culture – Learning organizations promote an open culture where
information is shared among all the members of the organization. This facilitates
collaboration among a cross section of people, thereby creating a positive synergy
within the organization.
• Adaptation – A learning organization constantly interacts with the external
environment and is aware of all the new developments in its domain of operation.
It also encourages and facilitates easy adaptation to all relevant developments in
order to remain competitive.
Thus a learning organization is held together by shared values and norms, and by
people who are committed towards a common goal of constant learning and
adaptation.
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Part C
Answer 90
Like Theory X and Theory Y proposed by Douglas McGregor, Theory Z propounded
by William Ouchi makes a few assumptions about workers in an organization. Theory
Z assumes that workers are generally self-motivated and possess an inherent drive for
achievement and self-actualization. They tend to build strong interpersonal
relationships with all the members of the organization. They value the organizational
culture and collaboratively strive towards the achievement of organizational goals.
Employees exhibit a high need for support from management and are loyal towards
the organization. They tend to value family and personal life as much as the values,
traditions and norms of the organization.
Therefore, organizations that subscribe to Theory Z tend to exhibit the following
characteristics -
• Organizations offer a long-term employment option to their employees. They
provide extensive training, and invest in the all-round development of their
employees with the expectation of developing and maintaining a loyal and skilled
workforce.
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• Employees are promoted on the basis of their performance and contribution
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towards achievement of organizational goals.
• Theory Z organizations emphasize on creating generalists rather than specialists.
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These organizations, therefore, practice job rotation and provide cross-functional
training to the members of the organization. Such training programs are aimed at
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familiarizing the organizational members with all the processes in the
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organization.
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• Mutual trust exists between the employers and employees in these organizations.
While the management has complete faith in its employees and believes that they
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would perform to the best of their abilities, the employees trust the top
management to provide them with necessary support for the achievement of
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common objectives.
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• Decisions in these organizations are made in a participative manner and involve

employees from all levels. Employees are encouraged to give suggestions
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regarding various decision-making situations. The active participation of

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employees motivates them, and creates in them a sense of belonging towards the
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organization. However, the accountability of the decision lies with the manager or
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the ultimate decision-making authority.

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Thus, Theory Z organizations promote a stable environment that encourages a high

quality of output and fulfills the employees’ needs for affiliation, achievement,
independence and mutual trust.
Answer 91
An informal organization is a network of all personal and social interactions among
the people in it. An informal organization plays a significant role in the organizational
dynamics and offers various benefits, some of which are discussed below -
• Informal organizations help develop a sense of belonging among its members
through the various social and personal interactions among them. These
interactions motivate them to perform better and thereby enhance employee
productivity.
• Due to the flexibility and ability to produce spontaneous responses to a problem,
which is generally not possible in a rigid formal structure, decisions can be made
quickly in informal organizations. This, in turn, enhances the effectiveness of the
organizational system.
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• The workload of managers decreases substantially once they manage to obtain the
cooperation of the members of the informal organization. A cooperative approach
between the managers and members of the informal organization reduces the
need for frequent supervision and monitoring.
• Informal organizations give rise to a sense of security and stability among the
members, which in turn, enhances their job satisfaction. This also leads to
lowering the attrition rate in the organization.
• Informal organizations provide an effective outlet for employee concerns and
apprehensions. The various social interactions among members reduce anxiety
and stress levels among them.
Although informal organizations possess many advantages, they also have certain
dysfunctional aspects, which are as follows -
• When members of an informal organization give importance to their personal
values or benefits, undermining the norms of the informal group, conflicts may
arise between members. This might affect the motivational levels of employees,
10
thereby reducing their productivity.
20
• Informal organizations tend to be conservative and offer stiff resistance to any
change in the organization. Even if a change is enforced upon them, they are seen
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to stick with the status quo. This may sometimes prove detrimental to the growth
of the organization.
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• Members of an informal organization sometimes experience role conflicts due to
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the diverse and contradicting expectations of the formal and informal structures.
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This results in lowering their productivity levels. Therefore, in order to reduce the
dysfunctional consequences of an informal organization, an integration between
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the values of the formal and the informal structures becomes inevitable.
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• Members of an informal organization are expected to conform to certain fixed

norms of the group. These norms may at times conflict with their personal values
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and beliefs. However, if the members choose not to abide by those norms, the
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group imposes sanctions against them. This may lead to isolation of these
individuals which, in turn, might affect their motivation and productivity levels
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and ultimately prove dysfunctional for organizational effectiveness.

B
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Therefore, while informal organizations might lead to an increase in organizational

effectiveness, they also possess the ability to thwart organizational activities.
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Managements must, therefore, strive to integrate the formal and informal

organizations to derive maximum benefit from the informal organization.
Answer 92
Leadership can be defined as a process of influencing the behavior of others so that
they concentrate their efforts on achieving a common objective. In today’s global
economy, managers face the challenging task of overcoming cultural differences in
transnational organizations. To be successful leaders, managers must adopt various
leadership approaches to suit the varied cultural backgrounds of the workforce in
these organizations. Therefore, differences in managerial styles in organizations
across different cultures are bound to exist. There are many factors that lead to this
difference in leadership styles, some of which are discussed below -
• Personal values – The personal values of managers have a great impact on factors
like how they perceive a problem-solving situation, their outlook towards the
various alternatives that exist while solving the problem, the decisions they make,
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Part C
etc. Besides, other factors like the perception of subordinates in terms of how
they accept the authority of the manager, their commitment towards achieving the
common objectives of the organization, etc., also determine how successful the
manager is as a leader. Therefore, the personal values of both the manager and the
subordinates affect the leadership style of managers across different cultures.
• Background of managers – The manner in which a manager leads his
subordinates is to a great extent influenced by his background in terms of
education, family values, etc. For example, while an educational qualification
from a prestigious institution may help an individual climb the career ladder
faster in countries which value educational qualifications, in other countries,
performance at the workplace is the criteria for earning promotional
opportunities. Family values also play an important role in determining the style
of leadership a manager might adopt. For instance, if a manager has been brought
up in India, where the culture is to treat elders with respect and obey their orders,
he tends to be an authoritative leader, who takes all decisions on his own.
Likewise, he expects respect and obedience from his subordinates. Thus, the
background of the managers influences the way he leads his subordinates.
10
• Interpersonal skills – It has been observed that the interpersonal skills of a
manager have a great impact on his leadership style. His interpersonal skills
20
affect various aspects of his leadership and management style, such as the extent
of employee participation he encourages, his concern for bureaucratic rules and
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employee welfare, the extent to which he cooperates with others in the
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organization, the decision-making approach he adopts, etc. These skills vary
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according to the cultural backdrop of the organization. Thus managers are seen to
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differ in their interpersonal skills across cultures.

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• Competency of managers – The competency of a manager also determines his

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leadership style. As organizations are going global, there is a growing need for
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managers to possess a knowledge of the business environment from a global

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perspective, awareness of various cultures across the globe, ability to create a

synergy across various cultures, and to adapt to a new culture, etc. A manager’s
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sensitivity towards cultural differences, motivation, and leadership will help him
gain these competencies. These skills and competencies of managers affect their
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leadership style across cultures.

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Answer 93
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The trait theory of leadership proposed that leaders are born, and not made. People
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subscribing to this notion believed that some individuals are born with leadership
traits. They are ‘natural leaders’ and possess the ability to become leaders, whatever
the situation might be. Thus, leadership was thought of as a quality that is inborn and
which cannot be developed. However, there was no substantial evidence to prove a
‘cause-effect’ relationship between leadership traits and successful leadership. This
gave rise to a modern approach to leadership, which proposed that leadership is an art
that can be developed by effective training and by learning from experience. The
various factors that affect leadership skills are early family experiences, education
levels, presence of role models and mentors during the early stages of life, etc.
A supporting family and a motivating environment, is the first requirement in the
development of leadership skills. An individual who aspires to become a leader must
possess the drive to accept challenges, and to take risks and responsibilities. This
drive to accept challenges can be developed by aspiring individuals. Another
important requirement is the ability to visualize the end objective for which he is
striving. An effective leader must have clarity of thought and also a clear plan on how
to achieve the end objective.
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To become a leader, an individual must possess the ability to persuade and influence
people’s behavior to concentrate their efforts towards the achievement of that end
objective. He must be able to effectively communicate his vision and plan of action to
his followers. Once he is able to effectively communicate his thoughts and plans to his
followers, he becomes successful as a leader.
All the above qualities can be learnt and developed over time. Therefore, leaders can
be made if they imbibe the qualities of effective leadership.
Answer 94
The behavior of members in groups and their performance, to a large extent, is
influenced by the structure of the group. The various structural variables of a group
that determine the behavior of its individual members are as follows -
• Leadership – The leader of the group, generally called the manager, supervisor,
etc., who is formally appointed to lead the group, plays an important role in
determining the success of the group. His personal values, beliefs, norms, etc.,
have a great impact on the behavior of the group as the members try to emulate
10
and follow those values and norms. Thus, leaders greatly influence member
behavior in groups.
20
• Role – Role is a pattern of expected employee behavior that is determined by
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virtue of his/her position in the organization. Behavior of individuals in a group is
affected by the role he/she plays in the organization. Depending upon the role
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expectations associated with the employee’s position in the organization, his/her
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behavior changes.
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• Norms – Norms are accepted standards of behavior in a group that are shared by
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its members. They determine and predict how an employee should behave under
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a particular circumstance. Norms may or may not be formalized or documented.

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However, a majority of these norms are informal. Though informal, these norms
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are expected to be followed by its members. Only then will they be accepted as
members of the group. These norms may pertain to the expected standards of
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behavior in the group, appearance of the group members, or allocation of

resources among them. Thus group norms help predict and control employee
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behavior.
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• Status – Status is the social position or rank held by a few members of the group.
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Status may also be acquired by an individual on the basis of his age, skill,
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experience, etc. The criteria of status is generally decided by the members

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themselves. Individuals in a group tend to behave in a way that is expected of

anyone occupying that position in the group. In other words, employee behavior
in groups is largely dependent on the position he/she occupies within the group.
• Size – Though a five or seven member group is what is recommended, the size of
an ideal group depends on the nature of the tasks being done. For example, tasks
involving collection of large amounts of data might require a larger group size
when compared to tasks relating to analyzing that data. However, very large
groups should be avoided in order to minimize incidence of social loafing,
(tendency of individuals to expend less effort when performing as a group than
when contributing individually), domination by a few members of the group,
development of too many subgroups, excessive time taken to arrive at decisions,
and reduced individual participation by a few employees. Thus, behavior of
individual members of the group is influenced by the size of the group.
• Composition – Groups are generally successful when its composition is
heterogeneous, rather than homogeneous. In heterogenous groups, the presence of
people from diverse backgrounds in terms of age, gender, personality, skill sets,
knowledge, abilities etc., tends to produce a synergy of ideas which help the
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Part C
group to perform more effectively than a homogeneous group. However,

heterogeneity may sometimes lead to conflict among individuals or groups of
individuals. This generally happens when cultural, racial or nationality
differences exist among the members. In such cases, a homogeneous group tends
to perform better than a heterogeneous one. This is because groups which have a
diverse composition take time in learning and assimilating the values and culture
of other members of the group. Employee turnover and conflict within the group
increase in such cases. Thus, employee behavior within groups is affected by its
composition.
• Cohesiveness – Cohesiveness is the degree to which members in a group are
motivated to stay in the group. It depends on the degree of social interaction
among the group members. The more the interaction among the members, the
greater the cohesiveness of the group. The cohesiveness of a group depends on
the performance norms in the group and has a positive impact on the productivity
of employees. In other words, productivity of employees increases with an
increase in its cohesiveness.
Thus, these seven structural variables determine individual employee behavior in
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groups.
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Answer 95
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The three essential skills that managers must possess are technical, conceptual, and
human. Managers must possess these skills to successfully achieve organizational
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goals and objectives.
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Technical skills refer to the abilities of a manager to use tools, techniques or

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specialized knowledge and expertise. Consider professions like accountancy,

personnel, operations research, etc., which require a high level of technical expertise.
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Managers generally learn these skills through management education and while on the
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job. Technical skills provide managers with adequate confidence for making decisions
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and also help them to earn respect and support from subordinates.
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The human skills that managers must possess include the ability to work with a group
of people. These also include the the ability to understand and empathize with peers
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and to motivate them to work towards organizational objectives. Communication

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plays an important role in all managerial activities as managers are expected to get
B
work done by their subordinates. Good interpersonal skills and an ability to

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effectively manage conflicts go a long way in determining the success of a manager.

Therefore, it is a widely accepted fact that technical expertise alone is not enough to
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become an efficient manager. It has to be adequately supplemented with human skills.

Conceptual skills are necessary for managers to analyze and diagnose complex
business situations that help them in various problem-solving and decision-making
situations. Conceptual skills comprise the ability to identify probable problem
situations, the various alternative approaches to solve them, and the ability to select
the best alternative. Mere technical and human skills, do not help in effective
management of organizations. Conceptual skills which help managers solve problems
in a logical and rational way are also required to successfully manage organizations.
It is universally accepted that a successful manager has to essentially possess the
above competencies.
Answer 96
A Cross functional team (CFT) comprises a group of people from a variety of
functions or disciplines drawn from across the organization, whose concerted efforts
are required to accomplish a common objective. The team may be a permanent or a
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temporary one. CFTs are generally employed in organizations that operate in a highly
dynamic environment, and which are sensitive to the constantly changing needs of
customers. Thus, CFTs are more effective in organizations which operate in fast-
changing markets.
Apart from the various advantages that can be derived from teamwork, CFTs also
have the following benefits -
• Adequately empowered CFTs generally solve organizational problems faster than
the traditional problem-solving techniques.
• As a CFT consists of people belonging to different disciplines in an organization,
solving organizational problems becomes easier. This is because these problems
are tackled by people with a variety of skill-sets, knowledge domains and
experiences.
• Creativity in solving problems is enhanced due to the synergy created by people
with differing perceptions. These differing perceptions help explore numerous
alternatives to solve organizational problems.
•
10
Effective organizational learning occurs in CFTs as people learn about the
activities of other departments, of which they had no knowledge previously. They
20
also learn how to work along with people with different values, working styles
and belonging to different cultural backgrounds.
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• CFTs increase employee motivation as they enhance their participation in solving
organizational problems. Members feel a sense of belonging and achievement,
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which enhances their morale.
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With a potential to provide these benefits, cross functional teams can give
C
organizations a competitive edge over competitors.

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Answer 97
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Differences in perception of individuals arise due to the principle of perceptual

selectivity. Perceptual selectivity causes individuals to select only a few stimuli from
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the various stimuli they are exposed to at any given point of time. There are a number
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of factors that determine how and why individuals select only a few stimuli at a given
point of time. These factors may be external or internal. The external factors that
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affect perceptual selectivity are:

B
•
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Intensity – When an individual is exposed to a very intense stimuli, he tends to

pay more attention towards that stimuli than to one of lesser intensity. For
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example, an individual is more likely to respond to a loud noise or a strong odor.

• Size – Size is closely related to the principle of intensity. Accordingly, a large
object tends to attract more attention than a small object.
• Contrast – Stimuli that is different from the background and that is not generally
expected is more easily perceived.
• Repetition – Response to a particular stimuli is likely to increase with the number
of times it is repeated. This principle is used by supervisors while giving
instructions to subordinates.
• Motion – The perception of an individual of objects that are in motion is greater
than towards objects that are stationary.
• Novelty and familiarity – New events in a familiar environment or a familiar
event in a new environment are likely to gain more attention from the perceiver.
Apart from the above external factors, there are internal factors that also affect
perceptual selectivity. People tend to respond to stimuli based on their learning,
motivation, and personality.
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Part C
Thus, a set of internal and external factors affect the perceptual selectivity in
individuals and thereby their perception.
Answer 98
The perceptual error in this case is called the ‘halo effect.’ Halo effect is the tendency
of an individual to judge another person based on a single striking characteristic. Halo
effect is very similar to stereotyping. While in stereotyping, an individual is judged
based on one’s perception regarding the group to which the individual belongs, it is a
single trait that forms the basis of perception in the case of halo effect.
Halo effect in general is a rater error. In other words, this error occurs when one tries
to rate or evaluate the behavior of another individual. People tend to commit this error
when they try to make the process of perception or evaluation simpler and more
manageable. People tend to draw wrong conclusions about a person, based on a
particular trait like intelligence, appearance, dependability, etc. This may lead to
inaccurate perceptions about people at times. In the above situation, Eshwar Dayal is
prone to halo effect as he takes a positive view of all the actions of one of his team
10
members, only because of his educational background. Dayal’s perception of the team
member overlooked the fact that the latter’s actions may or may not contribute to
20
improve organizational performance. Just because he belonged to a reputed
institution, it does not necessarily follow that every action of his would result in a
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positive outcome. Such biased judgment might influence the perceiver into arriving at
wrong conclusions. Hence, halo effect has to be avoided because of its negative
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consequences.
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Halo effect in organizations is more likely to take place during performance

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appraisals. The appraiser has the propensity to judge his subordinate’s behavior or
performance based on a single attribute like his educational background, experience,
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interpersonal relations, etc. He might rate him more positively or more negatively than
what is justifiable. This error in perception generally tends to peak under conditions of
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uncertainty as regards certain traits which are yet to be identified in the individual.
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When certain traits are less commonly observed or have moral implications halo
effect tends to surface.
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Although halo effect poses serious implications in the study of organizational

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behavior, not much research has been carried out to study the impact of this error.
B
Therefore, tackling perceptual errors like stereotyping and halo effect is a challenging
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task for managers.

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Answer 99
Span of control in an organization indicates the number of subordinates reporting to a
manager. In other words, span of control determines the size of the organization’s
workgroups. Also termed span of management, it represents the number of levels and
managers in the organizational structure. The services of managers must be optimally
utilized since maintaining managerial staff is expensive. The span of control,
therefore, is indicative of how effectively managerial personnel are utilized.
While a low span of control has the advantage of allowing close monitoring of
employees, since the number of subordinates is less, it could prove to be
counterproductive as employees might be micromanaged. Micromanagement
demotivates employees as they tend to be disturbed by the constant supervision and
interference of their superiors, thereby reducing employee autonomy at work. Besides,
the large number of hierarchical levels makes vertical communication in organizations
difficult. It also slows down the decision-making processes in organizations as
communication has to pass through a number of levels in the hierarchy.
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These problems can be avoided by increasing the span of control of managers or, in
other words, by increasing the number of employees reporting to each manager. This
results in flattening the organizational structure. Widening the span of control helps
organizations to reduce management costs. Wide spans of control reduce the number
of levels in the organizational hierarchy, thereby facilitating communication between
the various levels in the organization. This also facilitates faster decision-making in
organizations. Further, a wide span of control not only increases organizational
flexibility in various processes, but also empowers employees, thereby enhancing
their motivational levels. However, the wider the span of control, the greater will be
the difficulty in managing employees. Therefore, it is imperative to strike an effective
balance between costs of management and effectiveness of control.
There are various factors that can help determine the ideal span of control in
organizations. Some of these factors are discussed below -
• Factors like degree of job specialization and extent of interdependence among the
various members in the organization determine the extent of coordination that is
required among the various work groups. This extent of coordination required
10
among various work groups affects the span of control in an organization.
• Depending upon similarity of various tasks within a specific unit, the span of
20
control varies.
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• If there is a greater need for autonomy of employees in an organization, it is
advisable to have wider spans of control and vice versa. Therefore, employees’
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need for autonomy also determines the ideal span of control.
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• The need for effective communication among various levels of the organizational
C
structure also helps determine the span of control. Depending upon the extent to
which subordinates must interact with their supervisors, the span of control
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varies.
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Thus, there is no specific or ideal number of subordinates who ought to work under a
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manager. The span of control varies according to the various factors discussed above.
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Answer 100
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Yes, the OD practitioner was right in suggesting that both parties should confront the
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B
situation. Rising inter-group conflicts such as the one described above can be solved
using a third-party peace-making intervention. In such cases, an external consultant,
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generally an OD consultant is invited to resolve the conflict.

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The consultant first diagnoses the problem situation to find out the issue that led to the
conflict between the two groups, the issues that aggravated the conflict situation, the
actions of the two conflicting parties that led to the problem, and the consequences of
the conflict. Third-party intervention includes a confrontation of the two conflicting
parties, their acceptance that a conflict exists between them, and that it is affecting the
functions of the individual departments and the organization as a whole. A productive
confrontation process can be achieved only if the following conditions are satisfied:
• Both the conflicting parties must be motivated to arrive at a positive solution to
the conflict situation.
• The two parties must be equally powerful. In other words, no party should be able
to overpower the other.
• Both parties must resolve the conflict in a concerted and synchronized manner.
• Both parties must have sufficient time to understand each other so that they can
identify and overcome their negative feelings and appreciate the positive aspects
of the other party.
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Part C
• All the conditions that support the resolution of the problem situation such as
norms, procedures, processes etc. must be adopted to solve the conflict.
• Effective communication must exist between the conflicting parties throughout
the confrontation process.
• The organization must impose reasonable pressure on the two parties to arrive at
a solution to the problem.
Thus, implementing third-party peacemaking interventions, provided the above-
specified pre-requisites are satisfied, can effectively solve inter-group conflicts.
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Part D: Model Question Papers with Suggested Answers
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20
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The model question paper consists of three parts – A, B, and C, Part A is intended to test
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the conceptual understanding of the students. It contains 30 multiple-choice questions

C
carrying one point each. Part B consists of cases and carries 50 points. Part C consists of
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applied theory questions, carrying 20 points. Students should note that ICMR reserves the
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right to change the format of the question paper without notice. The faculty members of
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ICMR with a view to assisting the students have prepared the answers. These answers
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should not be regarded as the only possible answers.

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Model Question Paper I
Time: 3 Hours Total Points: 100
Part A: Basic Concepts (30 points)

Answer all the questions. Each question carries one point.
1. Which of the following models of c. Cognitive learning theory

OB is based on welfare programs d. Law of Effect
and benefits for employees?
a. Collegial model 7. Work councils is a form of
b. Supportive model a. Self-managing teams
c. Custodial model b. Quality emphasis
10
d. Autocratic model c. Industrial democracy
20
2. What do the terms perfectionist, d. Middle management committees
self-realized, resigned, arrogant
8. Pooled, sequential and reciprocal –
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vindictive, self-effacing represent?
all represent types of
a. Types of attitudes
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a. Bargaining
b. Types of personality
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b. Outcomes
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c. Types of values
c. Interdependence
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d. Types of behavior
d. Conflict resolution techniques
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3. What is the study of body

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movements known as? 9. Power in an informal organization is

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a. Kinesics attached to
b. Paralanguage a. Person
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c. Postures b. Position
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d. Gestures c. Authority
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4. Which among these is a situation d. Status

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specific trait?
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10. The phenomenon in which the desire

a. Self-concept for unanimity of decision
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b. Self-esteem overpowers the need to appraise

c. Self-awareness alternative courses of action is
d. Self-efficacy known as________________.
5. Which of the following scientists a. Group think
associated job satisfiers with job b. Halo effect
content and job dissatisfiers with job c. Politics
context?
d. Irrationality
a. Abraham Maslow
b. Frederick Herzberg 11. Which of the following involves the
c. Clayton Alderfer use of direct threats or force upon
d. Victor Vroom people showing resistance?
a. Co-optation
6. Edward Tolman popularized the b. Manipulation
a. Social learning theory c. Facilitation
b. Controlled learning theory d. Coercion
12. Which of the following is not a 18. The self-perceived competence and
structural intervention? self-image of people is called
a. Self-managed teams ___________.
b. Quality circles a. Self-esteem
c. Force field analysis b. Conscientiousness
c. Extraversion
d. MBO
d. Agreeableness
13. What is an individual’s
understanding of supposed behavior 19. Which of the following disciplines
deals with the study and application
in a particular role known as?
of knowledge about the behavior of
a. Role identity individuals and groups within
b. Role expectation organizations?
c. Role perception a. Organizational behavior
d. Role conflict b. Organizational psychology
c. Organization theory
14. Which of the following theories
10
d. Organization development
forms the basis for the synthesis of
20
the career stage model? 20. _______ is the process by which
a. Cognitive dissonance theory individuals select, organize and
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interpret stimuli into a meaningful
b. Adult life stage theory
and coherent picture of the
c. Socialization process
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environment in which they live.
s
d. Continuum from immaturity to a. Conception
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maturity b. Perception
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15. Which of the following was c. Cognition

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developed to represent a d. Confrontation

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behavioristic approach to the

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21. Perceived objects are separated from

management of human resources for
their general background by the
performance improvement?
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perceiver. What kind of perceptual

a. Social Learning Theory organization is this?
U
b. Law of Effect a. Figure-ground

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c. O.B. Mod process b. Closure

B
d. Exchange theory c. Continuity

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d. Proximity
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16. In which technique of conflict

resolution, management uses its 22. Which of the following factors can
formal authority to resolve the lead to conflicts?
conflict and then communicates its i. Organizational changes
desires to the parties involved? ii. Personality clashes
a. Smoothing iii. Threat to status
b. Authoritative command iv. Perceptual differences
c. Avoidance
a. i, ii and iv
d. Superordinate goals
b. i, iii and iv
17. A temporary group that exists only c. i, ii, iii and iv
till the problem is solved is called a d. ii, iii and iv
a. Task force
23. Every organization has a general
b. Short-term team policy or a set of guidelines, which
c. Contingent team determines the organization’s
d. Functional team behavior towards its employees and
238
Part D
customers. What is this general 27. Which of the following determines

policy or set of guidelines known personality?
as? a. Heredity
a. Organizational philosophy b. Environment
b. Rules c. Situation
c. Norms d. All the above
d. Values
28. On what concepts is Vroom’s model
24. Which of the following is not a based on?
decisional role played by managers? a. Growth, relatedness, existence
a. Disseminator b. Lower-order needs, higher-order
b. Disturbance handler needs
c. Entrepreneur c. Valence, instrumentality,
d. Resource allocator expectancy
d. Achievement, power and affection
25. What is the relatively permanent
29. Negative reinforcement is a form of
10
change that occurs in a person’s
beliefs and attitude due to time and a. Punishment
20
experience known as? b. Demotivation
a. Maturation c. Social blackmail
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d. Respondent conditioning
b. Personality
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c. Learning 30. Which of the following is a formal
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approach that seeks direct
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d. Attitude
participation of all employees in
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26. Open door policy is a tool used to problem solving, group decision
making and usage of statistical
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promote
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techniques?
a. Upward communication a. TQM
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b. Downward communication b. Consultative management

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c. Horizontal communication c. Industrial democracy

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d. Vertical communication d. Self managing teams

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B
Part B: Caselets (50 points)

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Each case carries 25 points.

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Caselet 1
The HR Manager, Rakesh Mishra (Mishra), had just had an hour long discussion with
Vandana Mathur (Mathur). The discussion left Mishra in a troubled state of mind.
Mathur had just resigned. Mathur was one of the most efficient employees of the
company and Mishra could not stop her from leaving the organization. This had now
become a common phenomenon at PeopleSource, a 4-year old call centre. The
company was experiencing an attrition rate that was as high as 40%. This was a
serious cause of concern to the top management since the training costs were very
high.
As Mishra was still brooding over the matter, the phone rang. The caller was Rajiv
Ghosh (Ghosh), the Chairman and Managing Director of PeopleSource. Ghosh
informed Mishra that there would be a meeting later that day to discuss the rising
attrition rate. The meeting would address employee related problems. Mishra
wondered if it was already too late to hold such a meeting.
239
Ashutosh Sen (Sen), the representative of the call centre agents was also present for
the meeting. The meeting commenced with Ghosh drawing attention to the serious
issues facing the organization including the rising attrition rate. Ghosh then asked
Mishra to present the information he had gathered from employee feedback. The
company obtained employee feedback on a quarterly basis to assess the effectiveness
of the organization’s people policies in creating a happier and satisfied work force and
a better organizational culture. The information presented by Mishra was expected to
be supplemented by inputs from Sen.
Mishra started his presentation by stating the problems being faced by the company
on the HR front. “While the industry average is about 25%-30%, the company faces
an attrition rate of 40%. Absenteeism has also become a major cause for concern and
has been affecting the productivity of the organization. Growing employee
dissatisfaction also needs to be contained. All this is despite the fact that the company
has been constantly increasing its spend on employee retention.” At this point, Ghosh
said, “It is indeed a serious challenge for the top management. But has there been any
attempt to find out the cause of these problems, Mishra?”
“Well,” Mishra responded, “we have found that firstly, despite our excellent induction
10
and training programs, the odd timings of work have a negative impact on the
20
performance of the employees. We cannot undermine the counterproductive effect of
changing the employees’ physiological clock. The timings tend to interfere with their
of
personal lives too. Secondly, employees are dissatisfied with the lack of growth
opportunities in the company. The third reason, revealed by our exit interviews, is that
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quite a few people leave the company to pursue higher studies.”
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Sen supported Mishra’s observations saying, “Since there are limitations to

professional growth in this industry, people leave the company when they get better
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offers in terms of salary or promotions. Some people find the job monotonous and not
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challenging enough.” He went on to say, “The other factor is the pressure experienced
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on the job. The excessive monitoring of our performance affects our efficiency. Most
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of the customers we handle are irate and communicating to them within the fixed time
becomes difficult. Pressure builds because we know that if we exceed the stipulated
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time limit for a call it reflects adversely on our performance. To add to all these, the
long shifts without adequate breaks makes it extremely stressful for the individual.”
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“That covers most of the important challenges the company faces now,” concluded
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Mishra.
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Ghosh said, “We need to understand that people are our most important assets and we
have to retain them to enhance the profitability of the company. So, let’s discuss ways
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to contain employee turnover in the company and thereby enhance our productivity.”
The discussion that followed led to the identification of various ways to help control
employee turnover and increase profitability of the company. Based on the discussion,
the organization took the following strategic initiatives:
• It introduced psychometric tests to select candidates with the right mental
framework. The candidates who would be able to handle the stress and monotony
of the job and work at nights were selected. This helped the company reduce
turnover that was earlier caused by cultural misfits.
• A better induction program was introduced. External experts were brought in to
train newcomers to adapt to the working hours. The program also taught them to
deal with the physiological problems associated with stress at the workplace.
• PeopleSource shifted its focus from an outcome-orientated culture towards a
more people-oriented one. It ensured this shift by introducing a more people-
friendly work atmosphere and better organizational climate facilitated by a
conducive physical layout which enabled employees to perform more efficiently.
240
Part D
• Employees were trained to deal with difficult and irate customers in a productive
manner. It was found that people in the age group of 25-30 tend to be better at
dealing with difficult people. It was decided that a greater percentage of people
selected would belong to this age group.
• A ‘de-stressor’ room with exercise and games equipment and was created on the
premises. Employees were encouraged to work off stress through exercise and
games.
• PeopleSource introduced a boarding/housing scheme providing accommodation
to its employees. Water and electricity charges were paid for by the company.
• PeopleSource’s Education Policy was introduced subsequently. The company
entered into agreements with the country’s top management institutions to
provide management education to its employees. The scheme also included
scholarships for extraordinary performance in educational pursuits.
• As promotional opportunities could not be enhanced significantly, PeopleSource
decided to give more incentives in the form of bonuses to reward exemplary
performance.
10
These initiatives helped motivate employees, enhanced their productivity and
20
increased the organizational profitability. These programs also helped PeopleSource
reduce the annual attrition to 16% within a span of just one year. Soon PeopleSource
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developed into one of the best business process outsourcing units in the country.
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1. Discuss how the organizational culture at PeopleSource shifted its focus from an
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outcome-oriented one to a people-oriented one. Highlight the impact of this shift

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on the productivity and profitability of PeopleSource.

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2. Citing the example of PeopleSource, discuss the importance of organizational

nl
climate in fostering a culture that enhances employee productivity.

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Caselet 2
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Motorola Space System Technology group replaced its traditional workgroups with
U
modern self-managing teams. This has helped Motorola reduce manufacturing defects
S
by thirty times, cycle time by 25%, and work space needs by more than 50%. After
B
the implementation of SMTs, there was an enhancement in the productivity of

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customer support executives which led to an increase in sales of the company by 26%.
Benefits of implementing the concept of SMTs were also observed in many other
Fo
companies. Tennessee Eastman experienced a 70% gain in productivity after the

deployment of SMTs in the organization. In Asea Brown Boveri (ABB) and 3M, it
was observed that implementation of self-managed teams led to the creation of
workplaces that stimulate employee performance by motivating them to perform
better. Other leading companies like GE and Xerox have also benefitted by deploying
self managed teams, in terms of enhanced productivity and profitability.
However, there are a few organizations which have utterly failed to derive any
benefits by implementing SMTs. These organizations which have had disappointing
results due to the introduction of SMTs in their workplaces have reported high
absenteeism and turnover rates compared to organizations working with traditional
work teams. Members of these teams did not experience an increase in their level of
job satisfaction. However, there is no clear and specific reason available for these
adverse results.
The undesirable effects of SMTs have resulted in organizations rethinking about its
consequences. It has also been observed that the term itself is losing its importance in
the present business scenario.
241
However, it is believed that SMTs should be deployed after proper research on its
applicability in the organizational context. Although organizations experience a few
difficulties while implementing self-managed teams, once they establish such teams,
they tend to derive more benefits than expected. Besides, in today’s organizations,
SMTs exist with a different name. They are now called agile teams.
Therefore, self-managed teams are still relevant in organizations with a slight
modification in terminology or a few functions. A careful study of the business
context and the organizational preparedness determines the success of self managed
teams.
1. Various organizational examples of self-managed teams discussed in the case
bring out the fact that organizations derive a competitive advantage by
implementing SMTs. Discuss the various benefits that organizations can reap by
effective implementation of self-managed teams.
2. In the light of the organizations that have experienced undesirable outcomes by
introducing SMTs, discuss the various measures that must be taken by
10
organizations before deploying SMTs.
20
Part C: Applied Theory (20 points)
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All questions carry equal points.
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1. “Strong organizational cultures are often shaped by strong values and strong
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leaders.” Substantiate this statement giving organizational examples.

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2. The dipping sales figures in Analog Technologies was a serious cause for concern
in the sales department. Nitish Kapoor, the sales manager, called for an
y
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emergency meeting of all the key personnel in the department. Presenting the
sales figures of the past three years, Kapoor sought suggestions to overcome the
O
problem. After a brainstorming session, Kapoor nominated Shalini Reddy and

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Pavan Kumar, two dynamic sales representatives of the company, to come up

with their own solutions to improve the sales figures. While Kumar resorted to
U
the traditional problem-solving techniques and used decision support systems to

analyze the data he had collected, Reddy came up with a solution that Kapoor felt
S
was ‘out-of-the-box,’ and not based on facts and experience. However, her
B
proposal seemed a better option. Eventually, Kapoor decided to go ahead with

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Reddy’s idea. In the given situation, the same problem was perceived in two
Fo
contrasting ways by two different people. This could be because of the difference
in the levels of creativity between Reddy and Kumar. What do you think are the
factors that determine creativity among individuals? Can creativity be taught and
developed?
3. There is an increasing emphasis on culture among organizations. The top
management in organizations is approaching external consultants to obtain their
help in improving the organizational culture and paving the way for success.
What is the role played by culture in improving organizational performance?
How can leaders leverage culture to improve organizational performance?
242
Model Question Paper II

1. The collegial model of OB is an 6. The job performance at operational

extension of and professional levels is greatly
influenced by
a. Supportive model
b. Superlative model a. Human skills
b. Conceptual skills
c. Autocratic model
c. Technical skills
d. Custodial model
10
d. Design skills
2. What is Instrumental learning also
20
7. Role ambiguity and role conflict
known as? lead to which of the following types
of conflict?
of
a. Operant conditioning
b. Social learning a. Interpersonal conflict
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c. Classical conditioning b. Inter group conflict
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d. Scientific learning c. Intra personal conflict

d. All the above
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3. The process of skilled personnel

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developing others’ skills, who in 8. Which of the following aspects

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turn pass on the skills to some more plays a role in the phenomenon
known as ‘Social loafing’?
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people is called
a. Training multiplier effect a. Group size
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b. Ripple effect b. Job enrichment

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c. Glass ceiling effect c. Group training

d. Job expansion
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d. Social facilitation effect

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9. Which of the following defines how

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4. Aggressive involvement in chronic, jobs are formally divided, grouped

incessant struggle to achieve more in and coordinated?
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less time, even against opposition

a. Organizational behavior
from other people is the
characteristic of people belonging to b. Organizational structure
c. Organizational complexity
a. Type A personality
d. Job sharing
b. Type B personality
c. Locus of control 10. Which of the following statements is
false regarding coalitions?
d. Type X personality
a. Coalitions try to maximize the group
5. Which of the following play(s) an size
important role in determining b. Formation of coalitions is dependent
perceptual selectivity? on the degree of interdependence
a. Motivation c. Formation of coalition is influenced
b. Learning by actual tasks performed by the
workers
c. Personality
d. Coalitions aim to represent as many
d. All of these interests as possible
11. Which of the following refers to form of equations by Keith Davis.

creating a picture of the desired Which of the following is not a right
future? equation?
a. Visioning a. Knowledge x Skill = Ability
b. Strategy b. Attitude x Ability = Motivation
c. Mission c. Ability x Motivation = Potential
d. Facilitation Performance
d. Human performance x Resources =
12. The process of choosing among the
alternatives is known as Organizational performance
a. Decision making 18. Which of the following statements
b. Cognition describe high self-monitors?
c. Perceptual selectivity i. They are capable of changing their
d. Rationalization behavior according to the situation
ii. They behave in the same way with
13. The Equity theory of motivation can
be classified as a their boss, subordinates, clients and
10
suppliers
a. Process theory
iii. They cannot disguise their true
20
b. Content theory
feelings
c. Contemporary theory
iv. They can play multiple and even
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d. Classical theory
contradictory roles
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14. When the data is obtained from
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subordinates and then the decision is a. i and ii
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made by the leader, the leadership b. ii and iii

C
style is known as c. iii and iv

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a. Group II d. i and iv
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b. Consultive II
19. What is the ability to analyze
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c. Autocratic II
complex situations rationally, and
d. Autocratic I
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process and interpret available

15. The authority to make decisions in information known as?
U
one’s area of operations without a. Technical skill

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having to get approval from anyone b. Supervisory skill

B
else is known as
c. Human skill
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a. Empowerment d. Conceptual skill

Fo
b. Participation
c. Power 20. In which of the following processes
d. Polarization do individuals take note of the
stimulus received from the
16. Which one of the following models environment or record it mentally?
of decision making advocates that a. Cognition
the decision-maker is perfectly and
completely rational in all aspects? b. Registration
a. Social model c. Interpretation
b. Economic rationality model d. Feedback
c. Simons bounded rationality model 21. According to the principle of
d. Judgmental heuristics and biases _______, the words and actions of
model people have different meanings in
17. The influence of various factors on different situations.
the performance of productive a. Perceptual defense
organizations was illustrated in the b. Perceptual context
244
Part D
c. Perceptual constancy a. Classical management approach

d. Perceptual contingency b. Scientific management approach
c. Industrial engineering approach
22. The stages of conflict occur in the
following sequence: d. Bureaucratic approach
___________________. 26. Which of the following does not
a. Potential opposition, cognition and influence individual differences?
personalization, intentions, behavior, a. Power distance
and outcomes
b. Cultural distance
b. Potential opposition, behavior,
c. Individualism
intentions, cognition and
personalization, and outcomes d. Cross cultural re-entry
c. Intentions, incompatibility, 27. The exploration stage, establishment
cognition and personalization, stage, maintenance stage, and
behavior, and outcomes decline stage belong to
d. Cognition and personalization, a. Continuum model of personality
intentions, behavior, potential b. Model for career stages
10
opposition, and outcomes
c. Three component model
20
23. Which of the following statements is d. S-O-B-C model
true about formalization?
28. Closure, continuity and proximity
of
a. It does not involve the form the basis for which form of
documentation of expected perceptual organization?
s
employee behavior
s
a. Figure ground
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b. It involves the documentation of

expected employee behavior b. Perceptual grouping
C
c. It is a procedure by which c. Perceptual context

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newcomers to the organization are d. Perceptual constancy

nl
introduced to the organizational

O
culture 29. Conceptual skills are more essential

d. It refers to the orientation received at
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by the employees during the a. Managerial level

induction program
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b. Operational level
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24. Name the father of scientific c. Professional level

B
management. d. Shopfloor level

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a. Fredrick W. Taylor
30. Inter group conflicts are caused by
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b. Henry Fayol
differences in
c. Prof. Elton Mayo
d. Keith Davis a. Perceptions
b. Group loyalties
25. Which of the following is the c. Competition for resources
traditional approach to design work
in most organizations? d. All the above

Caselet 1
Vimal Mittal (Mittal), a bright, young and ambitious MBA graduate from a top
business school in the country was in search of a challenging career opportunity. After
245
a brief hunt, he accepted the job of a territory sales manager in Access Pvt. Ltd
(Access). The job seemed challenging and he also saw in it adequate opportunities to
prove himself. The pay was also quite alluring as compared to other offers he received
at that time. At Access, Mittal had a large team of sales representatives to manage and
the responsibility of reviving the team’s performance, which had been deteriorating
over the previous three years.
Mittal spent some time studying the organization, the department and the people in his
team to understand the systems and procedures followed and the reasons for the
dismal performance of the team. He tried to discover the strengths and weaknesses of
each member in the team. Once this initial study was done, Mittal on his own
developed an action plan for restructuring the organization, as he considered it
necessary to improve the performance and productivity of his team.
After announcing the restructuring of the organization, Mittal fired one of the
employees for non-performance. He did not consult his team members on any matter.
They were compelled to abide by, and conform with whatever he decided even if the
decision was likely to have a detrimental effect on the organization. New rules and
regulations were simply imposed upon the team members. This resulted in a lot of
10
resentment among them. They refused to abide by the rules laid down by Mittal, even
20
when they felt that these would help improve the productivity and profitability of the
organization.
of
The top management was also not convinced about his action plan for restructuring
the organization. It wanted some time to review his proposal. Although it was not
s
openly stated, the top management began to perceive Mittal as the sole cause for the
s
escalating problems with the workforce and the falling productivity levels. This
la
resulted in further friction between the management and Mittal. The delay caused by
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the top management in implementing Mittal’s proposals also made his subordinates
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question his credibility. There were also a couple of rumors being spread in the
nl
organization about the manner in which Mittal handled his team. Added to all this,
the members of other teams in the organization began to compare their own
O
productivity levels with that of Mittal’s team. The poor productivity of Mittal’s team
se
began to adversely affect the productivity of other teams in the organization. Mittal
was also disturbed by anonymous complaints made against him that alleged that he
U
was mismanaging his team and that it had resulted in adversely affecting the team’s
S
performance and lowering their morale. Due to having to concentrate on preventing

B
the spread of these rumours, Mittal could not devote attention to the lowering levels of
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productivity and plummeting profits in the organization. Finally, he quit the job out of
sheer frustration.
Fo

1. “Mittal’s efforts to reorganize the organization failed miserably mainly due to his
inability to develop a strong power base in the organization.” Substantiate this
statement by explaining how Mittal could have developed a strong and positive
power base for himself in the organization.
2. Briefly discuss the various bases of power. Identify Vimal Mittal’s source of
power.
Caselet 2
Amiar Enterprises was involved in the real-estate and transportation businesses.
Amiar Travels and Amiar Real Estates were well known names throughout India.
Seeing the business prospects for call centers, the general manager, Mohan Ayyar,
suggested to the MD, Viswanath Sharma that he should also set up a call center.
Sharma liked the proposal and assigned Ayyar the responsibility of selecting the right
location for a call center. Ayyar consulted some experts in the industry who suggested
246
Part D
that Hyderabad would be an ideal location. Soon Amiar’s call center was set up in
Hyderabad with a capacity of 500 seats. Sharma hired Suresh Gulati, a senior
professional working with a leading multinational company, to head the Amiar Call
Center. A recruitment drive was then undertaken and about 200 agents and 10 team
leaders, 2 service delivery leaders, and one head of department were hired. The agents
were trained in English language skills.
However, trouble began as soon as Amiar began soliciting clients. As call centers
were a new line of business in India, the lack of a track record prompted international
clients to go in for a detailed and prolonged studies of the Indian partner. Many US
clients insisted on a strict inspection of the facilities offered, such as work-areas,
cafeterias and even restrooms. The clients expected to be shown detailed Service
Level Agreements (SLAs). SLAs contain the measurable parameters for a call center
such as Average Speed of Answer (number of rings before a call was answered),
Average Talk Time (time taken to address one query) etc. Amiar could not manage to
provide convincing reports and as a result, lost out on international clients.
Seeing that the company had failed to obtain international clients, Gulati decided to
try for Indian clients instead, and immediately obtained a positive response. After a
10
year of working with Indian clients accompanied by an upgradation of its processes
and facilities to suit international standards, Amiar once again tried to attract business
20
from international clients. This time, Amiar was able to easily bag business from a
leading international firm, Star Insurance.
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The agents in the call center worked in eight-and-a-half hour shifts during which they
s
attended to calls from customers across the world. Employees were continuously put
s
to test since the call center had stringent accuracy standards which the call center
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agents were expected to meet. Those unable to meet these standards were fired. So, all
C
call center agents made extra efforts to be accurate in their tasks. The constant effort
y
to excel increased the stress levels in the agents, causing a deterioration in their health.
nl
Just when Gulati was beginning to feel satisfied with the way work was progressing at
O
the call center, he was faced with another problem. The company began to record a
high employee turnover in the range of 40-45%. 10-15% of the staff quit the company
se
within the first two months. Even though attrition rates were very high in call centers
U
worldwide, Gulati did not expect the same trend to emerge in India, since
unemployment levels in the country were much higher than in the rest of the world.
S
B
Agent performance is the deciding factor in the success of any call center. Companies
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had recognized agents as one of the most important and influential points of contact
between the business and the customer. However, it was this very set of people whom
Fo
Amiar was finding extremely difficult to retain.

1. Why do you think Amiar has a high turnover rate? Explain the possible reasons.
2. Most organizations believe that high turnover affects profitability. But some
experts believe that in the call center business, turnover is ‘celebrated.’ Though
the above statements appear to be contradictory, each is true in its own way.
Explain how.

1. “The Confederation of British Industry estimates that businesses incurred a loss

of £10.2 billion in 1998 through lost productivity caused by stress.” Discuss what
organizations can do to tackle employee problems associated with stress.
247
2. After implementing the concept of self-managed teams many companies such as

Kodak, 3M, General Motors and Texas Instruments have witnessed increased
productivity, improved quality, reduced costs and increased profits. Can you give
an example of how the concept of self-managed teams was implemented in any
reputed company? Also discuss the obstacles, if any, faced by the company and
the benefits accrued from successful implementation of the concept.
3. Ramnath, one of the software engineers working with INO Solutions, had
excellent knowledge in his field, and had received the award for ‘best software
engineer’ in the third year of his joining the company. However, Ramnath lacked
interpersonal skills and always worked in isolation without interacting with any
of his colleagues. The only times when he interacted with people were – first,
when he had to listen to the requirements of the customers and note the
specifications of the product that was desired by them, and second, when he had
to explain to the customers the usage of the application designed by him. Even
during these few interactions, Ramnath was ill-tempered and got easily irritated.
Due to his poor interpersonal skills, he was not considered for managerial
positions in the organization. Suggest how Ramnath can improve his
10
interpersonal skills in order to increase his chances of being considered for
promotion in the next appraisal.
20
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248
Model Question Paper III

1. Which one of the following 6. A leader who is concerned about the

behavioral scientists conducted the subordinates needs is known as
Hawthorne experiments? a. Achievement-oriented leader
a. Douglas McGregor b. Supportive leader
b. William Ouchi c. Participative leader
c. Prof. Elton Mayo d. Directive leader
10
d. Frederick Herzberg
7. Which of the following are the two
20
2. The artificial barrier based on methods that allow managers to
attitudinal or organizational bias that keep a check on conflict levels?
of
prevents qualified women from a. Collaboration & competition
moving up to senior management
s
positions is termed as b. Cooperation and stimulation
s
c. Stimulation and resolution
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a. Law of effect
d. Cognition and personalization
C
b. Glass ceiling effect

c. Seeding strategy 8. Teams consisting of a group of
y
nl
d. Group polarization employees from the same

department, who meet for a few
O
3. Employees who return to their home hours each week to discuss ways of
country after a long job assignment
se
improving quality, efficiency and

in a foreign country suffer from a
work environment are known as
U
reverse cultural shock because of

a. Cross cultural interaction a. Cross functional teams
S
b. Self-managed teams
B
b. Cross cultural reentry

c. Problem-solving teams
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c. Cultural contingency
d. Culture shock d. Quality teams
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4. Which of the following describes the 9. The amount of participative

extent to which a person identifies decision-making is greater in
psychologically with his or her job? organizations with
a. Organizational commitment a. Dual chain of command
b. Job involvement b. High departmentalization
c. Job satisfaction c. Low centralization
d. Job enrichment d. High work specialization
5. The principles of closure, continuity, 10. Which of the following statements is
proximity or similarity fall under the not true regarding organizational
process of culture?
a. Perceptual mapping
a. Organization has a uniform culture
b. Perceptual grouping
b. A dominant culture shows the core
c. Perceptual constancy values that are shared by most of the
d. Perceptual defense organizational members
c. A strong culture is generally 16. Many managers ask for

developed by strong leader participation, but whenever a
d. Culture plays a boundary defining subordinate makes a suggestion,
role they are put down. Which of the
following terms describes this
11. Name the strategy that is based on
tendency of managers?
the assumptions that accepted
standards form the basis for a. Short-term participation
behavior and change occurs through b. Representative participation
a re-education process. c. Pseudo participation
a. Unlearning d. Informal participation
b. Normative-re-educative
17. What was the objective of the bank
c. Empirical-rational wiring observation room
d. Power-coercive experiment?
a. To study the effect of changes in the
12. Which of the following styles of
intensity of illumination on the
leadership emphasizes efficiency in
10
productivity of workers
operations by arranging conditions
b. To find out the impact of amenities
20
of work in such a way that human
like hot meals, short breaks and
elements interfere to a minimum
shorter working hours on employee
of
degree? productivity
a. Impoverished management
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c. To understand the power of an
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b. Organization man management informal group and peer pressure on
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c. Authority-compliance worker productivity

C
d. Team management d. To determine the maximum output

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that can be produced by a given

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13. What is the process that groups jobs group of employees

to bring coordination among
O
organizational tasks? 18. In the exploration stage of an

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individual’s career, which of the

a. Fragmentation
following characteristics is exhibited
U
b. Formalization by an individual?
c. Departmentalization
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a. The individual makes attempts to

B
d. Centralization understand himself and his

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personality, and tries out various

14. Which of the following statements is
roles in his career
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true with respect to a work team?

b. He attempts to develop good
a. Responsibility is collective relationships with his co-workers.
b. The team products are individual c. The individual displays peak
work products productivity
c. Team members have individual d. He attempts to convince himself that
goals he took the right decisions
d. Teams can be of any size
19. Which of the following models
15. A person’s motivation to transform assumes that pushing, directing and
perception of self into reality is persuading employees is the only
known as way to extract work from them?
a. Self efficacy a. Autocratic
b. Self image b. Custodial
c. Self actualization c. Collegial
d. Self awareness d. Supportive
250
Part D
20. Perceptual selectivity depends on iii. The orientation received by

external attention factors and employees during the induction
internal set factors. Which of the program
following are internal set factors? iv. The intensity of the organizational
a. Intensity, personality and familiarity culture
b. Size, familiarity and learning a. Only i
c. Learning, motivation and b. Only ii and iii
personality
c. Only i and iii
d. Learning, repetition and motivation
d. Only iv
21. Employees primarily use two
strategies to manage their 24. What is the vertical expansion of
impression – demotion-preventative jobs called?
strategy and promotion-enhancing a. Job rotation
strategy. Which of the following are b. Job enrichment
characteristics of promotion- c. Job enlargement
enhancing strategies?
10
d. Job sharing
i. Accounts
20
ii. Apologies 25. Which of the following is not a
provision under alternative work
iii. Obstacle disclosures
of
schedule?
iv. Entitlements
a. Flextime
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a. i, ii and iii
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b. Telecommuting
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b. ii and iv c. Job sharing

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c. iii and iv d. Wellness program

d. ii, iii and iv
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26. The process of influencing others to

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22. Which of the following methods is direct their efforts towards the
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used to resolve conflicts in the achievement of specific goals is

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technique of ‘smoothing’? known as

a. Management uses formal authority a. Directing
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to resolve the conflict and b. Counseling

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communicates its desire to the

c. Leadership
B
conflicting parties
d. Coordinating
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b. A shared goal is created for the

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conflicting parties such that 27. Affective commitment, continuance

cooperation between the conflicting commitment and normative
parties becomes a prerequisite for its commitments are the three
attainment dimensions of
c. The conflict is suppressed by a. Model of career stages
bringing pressure on the conflicting b. Organizational commitment
parties to withdraw from the conflict c. Cognitive dissonance theory
d. Differences between the conflicting d. Ego-defensive function
parties are played down and their
common interests are emphasized 28. Classical behaviorists attributed
learning to the association or
23. The degree of sharedness of connection between
organizational core values depends a. Stimulus and response
on b. Response and consequence
i. Formalization c. Stimulus organic response
ii. An effective reward system d. Behavior and consequence
251
29. Which of the following is measured 30. Which of the following terms is
along the three dimensions of level, synonymous with negotiating?
strength and generality?
a. Bargaining
a. Self esteem b. Counseling
b. Self image c. Conciliation
c. Self efficacy
d. Arbitration
d. Self concept

Caselet 1
Southwest Airlines (SA) is a classic example of an organization that has thrived
10
successfully in this highly dynamic and competitive environment, by developing and
sustaining a positive work culture. The mission of its “People Department,” the name
20
given to its personnel department, was to provide adequate resources and services to
its people to help them support the growth and profitability of the company. SA aimed
of
at achieving this by recognizing the fact that the competitive advantage of the
company lay in its people and in preserving the values and culture of the company.
s s
The culture at SA was called Southwest Spirit, which formed an integral factor of its
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success. The company had set up a culture committee which consisted of team leaders
C
from different levels of the organization to promote and sustain the organizational
culture. The committee once organized a program called ‘cultural exchanges,’ which
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let people interact with each other and share their experiences in the organization.
Around 1000 to 2000 people attended this program. Another activity was ‘Back to
O
Basics’ in which about 65% of the employees of the company gathered together at one
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place to listen to stories and incidents narrated by senior and experienced members of
the organizations as to what had made the organization successful. ‘Walk-a-Mile’ was
U
yet another program that was designed to foster the culture of the company. In this
S
program, employees were encouraged to take a day off and make themselves familiar
B
with activities taking place in other departments of the company. Employees also
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participated in activities that were previously new to them, thereby learning on the
job. In the ‘Mind the Gap’ program, employees learnt the routine organizational
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activities by organizing themselves into cross-functional groups. Members of each

group had to then interact with other members and learn about their functions, and the
activities they performed. Adequate incentives and rewards were also given to
increase participation. Thus, SA conducted a series of programs to acquaint its
employees with his culture, and help them socialize.
SA also had in place an effective selection procedure that sustained its culture by
selecting only those candidates who fitted perfectly into the organizational culture. It
is the company’s belief that most skills can be honed by training employees on a
regular basis. However, the attitude of a person can seldom be changed. Therefore, the
attitude of candidates was a crucial criterion while screening them for various
positions. SA emphasized selection of candidates who had a great sense of humor,
were altruistic, and good team players. Candidates were tested on these attributes and
only those who had a perfect cultural fit were selected. Thus, the company follows an
elaborate screening process. Reports of the company suggest that only 4% of around
90,000 people who apply for a position in the company are selected each year. Thus,
the selection process at SA plays an important role in sustaining its culture.
252
Part D
The homogenous workforce at SA, and its effective socialization process have gone a
long way in maintaining a culture that not only motivates employees’ performance but
also helps maintain a low employee turnover.
1. Discuss in brief the important characteristics of an organizational socialization
process and explain how the socialization process at Southwest Airlines helps
maintain its organizational culture.
2. Southwest Airlines emphasizes selecting only those candidates who fit into the
organizational culture perfectly. Discuss how the selection process at SA helps it
sustain its basic values and the organizational culture.
Caselet 2
AMT Manufacturers (AMT), a Delhi-based electronic devices manufacturing
company, wanted to acquire Ease Basics Ltd. (Ease), a company that manufactured
accessories for the machines produced by AMT. Ease was a major supplier of these
parts to various other companies in India as well. Of all the suppliers who supplied
10
parts and accessories to AMT, Ease was the best. Only 0.025% of the total products
20
manufactured by Ease were defective. AMT wanted to acquire Ease so as to obtain a
constant and reliable supply of quality parts for its machines. The top management of
of
AMT sent a team of managers to put forward an acquisition proposal to the founder of
Ease, Rakesh Tripathi. Tripathi initially turned down the proposal. But when AMT
s
offered Tripathi, an amount of Rs 20 crores and shares of AMT worth Rs 10 crore.
s
Tripathi said he needed a week’s time to consider it.
la
After a week, Tripathi responded that he was ready to sell his plant only if AMT was
C
ready to pay Rs 50 crores in cash for the purchase of Ease, offer Tripathi shares of
y
AMT worth Rs 30 crore and include him in the board of directors. Additionally, if at
nl
any point in the future, AMT wants to sell Ease, it should be sold only to him. AMT
O
responded that the price Ease was demanding for selling the company was too high,
and the other demands were also difficult to meet. However, both parties agreed to
se
negotiate over the issue. The negotiations started and the team of negotiators from
AMT consisted of its human resources manager, marketing manager, production
U
manager and financial manager (who played the lead role). Tripathi was the only
S
negotiator from Ease. AMT’s team clarified that it could increase the total payment to
B
Rs 40 crores and give the first right to buy Ease to Tripathi in case of a future sale.
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Tripathi did not agree. The negotiating team then proposed a down payment of Rs 70
crore but also specified that in such a case, no other demands would be accepted later.
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Tripathi did not agree to this as well. The team then proposed to pay Tripathi an
amount of Rs 65 crore, shares of AMT worth Rs 10 crore and to give Tripathi the first
right of buy. But Tripathi remained adamant in his stance and refused to sell his
company unless all his demands were met. AMT’s team clarified that all his demands
could not be met and withdrew from the negotiations. After ten days, Tripathi called
AMT’s financial manager and requested him to renew the negotiations. During the
fresh round of negotiations, Tripathi agreed for the last offer made by AMT’s team
and AMT succeeded in acquiring Ease.
A month after the acquisition, AMT had to start negotiations with the union leaders as
the period of the last contract signed with them had ended. The negotiating team
consisted of the same managers who had facilitated the acquisition of Ease. The union
leaders placed a long list of demands before the management. They asked for wage
increments, increase in bonus, recruitment of more workers to decrease the work load
and so on. There were several rounds of negotiations between the union leaders and
the negotiating team. The issues were negotiated and finalized one after another.
Finally, the management team asked workers to work for nine hours in exchange for
an increase in their wages. In the previous contract, an agreement was made to
253
decrease the number of working hours to eight. The proposed increase in wages was
quite high in the new proposal and it was economically advantageous to the workers
to accept it. For every extra hour of work, AMT proposed to make extra payment to
employees. But the union did not agree. The negotiating team was surprised and
signed the contract without persuading them to work for additional hours. Instead, the
company hired contract labor to do the extra work.
1. What differences did you observe in the negotiations conducted by management
with unions and other companies? Was the strategy adopted by AMT’s team
appropriate?
2. “It is not just the negotiation process alone that is important but the pre-
negotiation and post-negotiation periods are also crucial.” Explain the statement.

10
1. In today’s corporate scenario, innovation is a key factor that gives an organization
20
competitive advantage over the others. However, companies face a number of
obstacles to innovation and they find it difficult to minimize the risks and
of
maximize the opportunities associated with innovation. Discuss the various
obstacles to innovation that hinder constant growth of an organization.
s s
2. Rama Narayana, the head of production department, Pasupati Steel Plant,
la
observed a significant decline in productivity over a few months. When he was on

C
his rounds, he randomly questioned the employees about their work and the
organization. From the responses he obtained, Narayana observed that the
y
employees lacked the enthusiasm and the zeal to work and seemed to be
nl
demotivated. What are the various factors that are responsible for demotivating
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employees?
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3. A person may be a member of several groups. In each group, he needs to play a

different role as determined by the group. What are the various factors that
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influence the role of an individual in a group?

S
B
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254
Model Question Paper I
Suggested Answers
Part A: Basic Concepts
1. c 2. b 3. a 4. d 5. b 6. c 7. c 8. c 9. a 10. a
11. d 12. c 13. c 14. b 15. c 16. b 17. a 18. a 19. a 20. b
21. a 22. c 23. a 24. a 25. c 26. a 27. d 28. c 29. c 30. a
10
Caselet 1
20
1. PeopleSource was a typical call center organization that emphasized ultimate
of
outcomes – productivity and profitability of the organization. In its efforts to
constantly enhance employee productivity, it implemented various measures that, in
s
fact, proved counterproductive. A call center agent was supposed to attend to a
s
specific number of customer calls/queries. A specific time period was given to deal
la
with each customer. The number of calls attended to, and the time taken to solve each
C
customer query were crucial factors to determine the performance of each employee.
y
The employees were subjected to odd working hours and long shifts without adequate
nl
breaks. The work timings affected their personal lives. Besides, the kind of work they
O
were involved in also limited their career development opportunities in the company.
These factors resulted in high absenteeism and high turnover.
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Various initiatives were taken by the management following the consensus obtained
U
in a meeting convened to discuss these issues. These included:

S
• A new selection procedure was introduced, which used psychometric tests. This
B
was done to ensure selection of candidates with the right attitude and who would
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fit in to the organization and thus help contain employee turnover.

Fo
• The induction program was also modified. External experts were hired to train
new recruits. The newcomers were trained on various issues like how to deal with
difficult and irate customers, how to manage work pressure, and the
psychological and physiological problems associated with stress at the workplace,
etc.
• The management then concentrated its efforts on creating a better work climate
by modifying the physical layout of the organization. The new layout was
conducive to efficient and optimal performance.
• The management found that people belonging to the age group of 25-30 were
more competent and efficient in handling difficult customers. Hence, a larger
number of people from this age group were recruited.
• To cope with stress at the workplace, a special room, called the de-stressor zone,
was created within the office premises. The room was provided with equipment
for games and exercises, and could be used by employees whenever they felt
stressed out.
• PeopleSource provided non-local employees with accommodation and paid their

water and electricity bills.
• With a view to encourage its employees to pursue higher education, the
organization introduced an “Education Policy”. The company entered into
contracts with reputed educational institutions to offer discounts/scholarships to
employees. This not only enhanced the skills of the employees, but also helped
the company retain people who wanted to pursue their studies.
• In an attempt to compensate for limited professional opportunities within the
organization, the management decided to give more incentives in the form of
bonuses to exceptional performers.
The introduction of these developments within PeopleSource not only escalated the
company’s productivity and profitability, but also went a long way in enhancing
employee morale. This gradual shift from a completely outcome-oriented organization
to a people-oriented organization helped PeopleSource bring down the attrition rate to
a reasonable 16%, within a span of just one year.
2. Organizational climate consists of a set of quantifiable elements of the work
10
environment that are based on the collective perceptions of the people belonging to an
20
organization. These perceptions influence their motivation and behavior. In other
words, the organizational climate represents the shared perceptions that employees
of
have regarding their work environment, and their likes and dislikes about their job and
the organization. The quantifiable elements of organizational climate include the job
s
itself, the role played by the employee, the leader, the workgroup of which the
s
employee is a member, and the organization itself. Organizational climate has a
la
tremendous impact on employee morale and motivation, and directs their behavior
C
and productivity in a desired manner.

y
In the case of PeopleSource, evidently most of the employee-related problems in the

nl
organization, viz., absenteeism, a dissatisfied workforce, and high employee turnover,

could be attributed to the non-conducive work environment in the organization. The
O
odd timings of work and the absence of adequate training to enable employees to cope
se
with these timings resulted in high levels of stress among the employees. This led to
increased absenteeism. Monotonous and non-challenging job profiles made jobs
U
uninteresting and left employees dissatisfied. The lack of career growth opportunities
S
resulted in high employee turnover. The unreasonable and unwarranted control and
B
monitoring of the employees’ performance caused them to desist from putting in their
optimal efforts in their job. This kind of non-conducive organizational climate led to
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serious employee-related problems.

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However, a number of initiatives were undertaken by the management to cope with

employee-related problems. The introduction of an improved induction program and
training sessions for newcomers helped employees to fit into the organization better.
The modification of the physical layout of the organization enhanced the productivity
of employees. The creation of a “de-stressor” zone in the organization enabled
employees to cope with stress. The provision of accommodation to employees and the
introduction of a new education policy led to enhanced employee satisfaction.
Thus, the provision of a better and conducive work climate not only resulted in better
employee productivity but also helped in reducing the attrition rate. The creation of a
positive organizational climate thus fosters better employee productivity.
Caselet 2
1. A self-managed team is a selected group of members who possess the required
skills, and are given the required autonomy and authority to direct and manage
themselves. SMTs enhance the overall effectiveness of organizations and are used by
256
Part D
organizations to compete in the extremely dynamic business environment. These

teams have the responsibility of managing themselves and members exhibit a high
degree of collaboration while working as a team to achieve a common objective. The
members of the team themselves decide who is to do what, when and where. They are
given the autonomy to plan and schedule their work without much interference from
the leader. They are also given the authority to make production-related decisions.
Research indicates that effective implementation of self-managed teams brings in
favorable organizational results. Some of the advantages of SMTs are discussed below
• Members of the SMTs are given adequate autonomy and authority in their job.
This enhances their morale thereby increasing employee productivity. This also
increases their job satisfaction.
• Members of the team are given authority to make certain production-related
decisions and flexibility to plan and schedule their work. This enhances their
participation in organizational processes, thereby empowering them. Thus SMTs
can also be used as an empowerment tool.
• SMTs nurture team work and increase communication and interdependence
10
among employees. This also fosters a sense of belongingness among the team
members.
20
Apart from the above benefits to individual members of the team, SMTs also benefit
the organization in the following ways -
•
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Creation of SMTs reduces organizational costs of management as people are
s
made to manage themselves.
s
•
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Effective communication is facilitated as the organizational hierarchy is flattened.

C
• As the number of hierarchical levels in the organization are reduced, decision

making becomes faster and more effective.
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nl
• The competence of the organization is enhanced due to increased employee

participation. The organization also tends to become more flexible and adaptive
O
to environmental changes, which is essential for the very survival of the

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organization.
U
Thus effective deployment of self managed teams benefits both the team members as
well as the organization. The implementation of SMTs provides organizations with a
S
competitive advantage over others.

B
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2. Although self-managed teams offer a variety of advantages to both the organization

as well as the team members, there have been instances when SMTs have failed to
Fo
produce desired results. The main reason for such failures could be the resistance
offered by managers as well as subordinates. While the employees fear the additional
responsibilities and accountability that would be imposed on them, managers on the
other hand are apprehensive about losing their power and authority. The
organizational culture also plays an important role in determining the success of
SMTs. Various factors like the values and norms of the organization affect the success
of SMTs. For example, it has been found that SMTs are more successfully
implemented in individualistic cultures (where emphasis is laid on individual
performance) than in a collectivistic one (where team effort is encouraged). Therefore
organizations must adopt a disciplined methodology while implementing SMTs. Some
of the measures that can be taken by the organizations while introducing SMTs are -
• Preparedness – The success of an SMT to a great extent depends on the
preparedness of both employees as well as the management. While the employees
must be mentally prepared to accept new responsibilities and the accountability
that follows, managers must be willing to share their power and authority.
Managers must also develop leadership qualities like the ability and willingness
257
to take risks, being open to suggestions, and the ability to make effective
decisions. These qualities of a manager help in making SMTs successful.
• Training – Employees and managers must be trained to accept the new roles to be
played in the new organizational structure. The skills and competencies that are
required in the new scenario must be developed through effective training
sessions.
• New role of supervisors – Supervisors should be mentally prepared to play the
role of a coach rather than only that of a supervisor. In other words, their role in
decision making and instructing employees towards achievement of
organizational goals must be transformed to that of guiding the team members
and enhancing their decision making skills.
• Management support – Effective execution of SMTs is possible only if there
exists a serious effort on the part of the management towards its implementation.
The organization has to develop a well planned strategy to achieve the goals of
the SMT. The management must also play a key role in guiding the team when it
fails to achieve the requirements of the goal.
10
Thus, effective implementation of self-managed teams requires the concerted efforts
of both management as well as employees in an organization.
20
of
s s
Answer 1
la
C
The founders and leaders of an organization greatly influence its culture. The culture
of most organizations is directly or indirectly affected by the value systems,
y
nl
assumptions and actions of the top management. The strength of an organization’s

culture depends on how intensely these values are upheld by its managers and
O
imbibed by the organizational members. This can be substantiated by citing two

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contrasting examples of Infosys and Enron.

Infosys is known for its strong leadership and value-based corporate culture, while
U
Enron was notorious for its weak and unethical culture. A study of the corporate
S
culture that prevailed in these two organizations, and the role of the leaders of these
B
companies in sustaining their cultures, reveals the importance of strong leaders and
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values in developing a strong organizational culture.

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Enron was established in 1985 by Kenneth Lay. It marketed electricity and natural
gas, and delivered energy and other physical commodities. It extended its operations
into providing financial and risk management services to customers throughout the
USA. Enron was built on the values of integrity, honesty and sincerity, and believed
in treating every member of the organization with equal respect. Anyone who
transgressed these values was to be penalized, and disciplinary action taken against
them. However, these values were eroded over a short period of time. Lay appointed
Jeffery K. Skilling as the next CEO. This marked the end of values and ethics for
Enron. Skilling changed the organizational culture to one of risk-taking, deal-making
and ‘thinking outside the box’.
The prime motive of the company was to close deals and make profits without giving
any consideration to the values previously upheld by the company. The company
indulged in overstating its earnings in order to attract investments from customers.
The off-balance-sheet partnership deals (a deal which is not recorded in the balance-
sheet of the company; a side deal) which were encouraged by the management to
boost the value of stock and make huge earnings, broke all the laws of business.
258
Part D
Nobody in the organization could ever question the actions of Skilling. Even Arthur
Anderson testified to the correctness of the financial statements of Enron and rated it
high in terms of investment returns.
In contrast, Infosys, a software giant in India, is an example of a company whose
founder, Narayana Murthy, played an important role not only in creating a strong and
ethical culture at Infosys, but also in maintaining it. The culture and value system at
Infosys, founded in 1981, emphasizes a clear conscience which guides the company
towards attainment of its objectives. Murthy developed a climate of confidence, peace
of mind and enthusiasm within the organization. Murthy and his people are known to
have upheld the organization’s value systems, even during the most testing periods.
He never compromised on the values of the organization to achieve short-term gains.
Corporate governance was given due importance, and fairness towards all the
stakeholders of the company was ensured. The philosophy of corporate governance at
Infosys is a belief that “it is better to lose a billion dollars than to act in ways that
make one lose a night’s sleep.” Such was the commitment of the top management
towards the organization’s value system and culture. The management believed in
taking proactive measures during times when the company was under-performing.
The company’s proactiveness in this regard was reflected in its action of informing the
10
stakeholders of the reasons for the company’s under-performance. This inspired trust
20
and faith in the management, leading the general public to continue to invest in the
company. Today, Infosys is one of the leading software giants at the international
of
level. The entire credit goes to the organizational culture nurtured and developed by
the strong values and strong leaders of the company.
s
The examples of these two companies clearly bring out the importance of values and
s
leaders in creating and maintaining a strong organizational culture.
la
A culture which lacked values and ethical standards was nurtured and developed by
C
the top management at Enron. The savings of lower level employees were reinvested
y
in the company. When the employees lost their jobs as a consequence of the downfall
nl
of the company, they not only lost their pension but also the investment made in the
O
company from money sourced from their retirement benefits. The inability of the top
management and the leaders to maintain a strong and ethical organizational culture led
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to the downfall of Enron.

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Answer 2
S
B
Decision-making is a very crucial managerial function. Decision-makers employ

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various techniques to solve organizational problems. Advancements in technology

have resulted in easier analysis of the immense data collected to make an informed
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decision. However, research indicates no substantial improvement in the effectiveness

of the decisions made after implementing these quantitative techniques. Managers also
tend to make decisions based on their experience and intuition, that result in
innovative ways of problem-solving. This is where the creativity of the individual
comes into play. Different people have different levels of creativity.
Creativity is a complex and subtle process and can be explained as a function of three
elements – knowledge, imagination, and evaluation. A creative individual or
organization not only possesses complete knowledge of the problematic situation but
also has the ability to generate new ideas, patterns, or combinations of alternatives
towards solving such problems. A creative organization is one which has the capacity
to assess and evaluate the available alternatives and generate ideas which are easy to
implement and also successful in effectively solving the problem at hand.
Feldman identified two major dimensions of creativity that help in understanding the
creative process in individuals. These are:
• Divergent thinking – Divergent thinking is in contrast to the conventional concept
of convergent thinking. In convergent thinking, responses are influenced by the
259
knowledge and rational logic of the individual whereas divergent thinking refers
to an individual’s ability to develop innovative, but relevant responses to given
questions or problems. Ideas generated by divergent thinking are generally novel
and sometimes appear irrational.
• Cognitive complexity – Fred Luthans describes cognitive complexity as a
person’s use of and preference for elaborate, intricate, and complex stimuli and
thinking patterns. Individuals who possess cognitive complexity, are said to be
creative as they demonstrate a broad range of interests and are more effective in
solving philosophical and abstract problems. In other words, the greater the
cognitive complexity displayed by an individual, the more creative he is.
Therefore, individuals with divergent thinking and a high level of cognitive
complexity tend to be more creative, thus helping organizations to develop innovative
means of solving problems. It should, however, be noted that creativity does not
necessarily mean intelligence. It can be nurtured and developed by using various
techniques of enhancing creativity. Organizations introduce and implement these
techniques to help managers make more creative decisions. Techniques such as
guided imagery, journal keeping, self-hypnosis and lateral styles of thinking have
10
proved to be effective tools in enhancing creativity among decision-makers in
organizations. Encouraging creativity in organizations is also found to enhance
20
employee motivation, satisfaction, and their participation in teamwork.
of
Of late, this recognition of the importance of creativity has led managers in modern
organizations to recruit creativity experts so as to utilize their talent to gain a
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competitive edge over their rivals.
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Answer 3
C
In an organization having a strong organizational culture, all employees irrespective

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of their position in the organizational hierarchy, share common values, and are
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committed to preserve them. Suppose, the culture of a mail order organization

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advocates that employees should ensure high levels of customer service whatever they
might be required to do to achieve it. A customer orders a product from the
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organization and it is dispatched for delivery to the customer in the company’s truck.
U
But suppose, just before making the delivery, the delivery boy finds that the package
is spoilt and the product has developed a crack. The boy will not just deliver the
S
product leaving it to the customer to complain to the company and get the product
B
replaced. Instead, he will inform the warehouse about the defective piece. The
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company then takes requisite measures to ensure that the product is delivered to the
Fo
customer at the earliest.

Therefore, culture helps employees understand what is valued by their organization,
influences their behavior, boosts their morale, and promotes coordination among
them. But unlike rules and regulations, culture does not specify what exactly an
employee is supposed to do when he comes across a problem. It simply provides the
direction in which he should think to find a solution. It empowers employees, and
enables them to take better decisions, which imply improved productivity and reduced
reworking. This leads to significant improvement in organizational performance.
A leader must take the following steps in order to leverage organizational culture to
improve organizational performance:
• Hire employees who fit into the culture. Even if the candidate does not possess all
the skills required to meet the requirements of the job, he should be hired if he fits
into the culture since skills can be imparted to an individual easily, but changing
his values is difficult.
• Educate new employees about organizational values and behavior to enable them
to perform their role effectively. The process of socialization should be conducted
260
Part D
in such a way that it facilitates faster acculturation of new employees so that the
distinction between new employees and senior employees does not last long. New
employees should not hesitate to approach senior employees to clarify their
doubts. A mutual understanding should be established between both sets of
employees and they should find it convenient to work together.
• The reward system in the organization should be so designed that a person whose
behavior deviates from the expectations of organizational culture should be
immediately made conscious of it. For example, if there are more than two
instances in which a customer service representative shouts at a customer, the
name of the customer service representative may be made public by displaying it
on the company’s intranet. The employee may also be deprived of the monthly
allowance given to others. In contrast, an employee who is complimented by a
customer for delivering excellent service should be immediately praised by the
manager and suitably rewarded.
10
20
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261
Model Question Paper II
Suggested Answers
1. a 2. a 3. a 4. a 5. d 6. c 7. c 8. a 9. b 10. a
11. a 12. a 13. c 14. c 15. a 16. b 17. b 18. d 19. d 20. b
21. b 22. a 23. b 24. a 25. b 26. d 27. b 28. b 29. a 30. d
10
Caselet 1
20
1. Development of a strong and positive power base is essential before an individual
attempts to implement any strategic decision in an organization. However, in this case,
of
Vimal Mittal tried to gain power by coercing his subordinates. This led to frustration
among them and ultimately spoilt his relationship with them. Instead, if Mittal had
s
tried to first create and develop a strong and positive power base by developing good
s
la
interpersonal relationships not only with his subordinates, but with people of other
departments as well, he could have capitalized on this power to obtain the cooperation
C
of his team members in all his decisions.

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Mittal could have used the opportunities provided by everyday situations and
nl
incidents to develop a positive power base for himself. As manager, Mittal could have
O
enhanced his power over his subordinates by merely being sensitive to their problems.
He could have met the person having a problem, explored what his problem was,
se
whether it could be solved by him, etc. However, he made no such attempts.

U
Mittal should have also identified the various problems faced by his company,
S
prioritized them, and judged whether he could solve the problem with the power he
B
possessed. Instead, as the case describes, Mittal first tried to solve a problem which he
perceived as important without ensuring that he held the necessary power to continue
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with his plans. Mittal should have also attempted to implement the changes in a
Fo
gradual and phased manner. This would have enhanced his position and power in the
organization.
Thus, if Mittal had worked towards developing a strong and positive power base for
himself, he could have gained wider acceptance and support of the subordinates and it
would have gone a long way in helping him implement his developmental strategies.
2. The influence of an individual or group of individuals over others is explained on
the basis of different sources or bases of power. There are five widely accepted bases
of power – coercive, reward, legitimate, expert and referent.
An individual is said to have coercive power if he has the tendency to threaten the job
security of another in the organization. This results in people behaving in a particular
manner due to fear of being punished by the person having coercive power. People
with a coercive leader tend to work under the constant threat of punishment,
reprimands, demotion or termination. An individual who exerts coercive power over
others is generally perceived as someone who intends to harm them physically or
psychologically. Thus, coercive power is a negative source of power and may tend to
be dysfunctional in the long run.
Part D
Reward power is the power to reward people. In an organization, when employees

believe that the manager has the power to reward favorable behavior, they tend to
conform to the performance standards desired by the manager. The rewards that are
most valued by employees may be monetary rewards, appreciation, promotions,
incentives, etc. Reward power, however, is dependent on the recipient. What the
manager perceives as a reward may not be of much value to the employee, and vice
versa.
Legitimate power arises by virtue of an individual’s position in the organizational
hierarchy. Although it includes both the power to reward as well as the power to
punish, legitimate power is broader in scope than reward or coercive powers. It is
similar to authority. Employees generally tend to easily obey those having legitimate
power. Employees are obliged to accept this type of power because of their deference
to the organizational position with which this power is associated.
Expert power is derived from the expertise an individual possesses in a particular
field, which makes him respected by the rest of the group. Those possessing expert
power are perceived to have a deep knowledge in their respective fields and are
considered indispensable to the organization on account of their specialized
10
knowledge.
20
If a group admires a particular quality of an individual and identifies itself with the
individual, then the individual is known to have a referent power over the group.
of
Referent power may not depend on the position of the person in the organizational
hierarchy. Referent power is quite similar to charismatic leadership, and the followers
s
not only admire those individuals but also try to emulate their qualities and behavior.
s
In the given case, Vimal Mittal had coercive power over his subordinates. Coercive
la
power being negative in character, not only led to frustration among the subordinates
C
but also damaged his relationship with them.

y
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Caselet 2
O
1. The possible reasons for a high turnover in Amiar, or for that matter in any call
se
center, are:
U
In a eight-and-a-half hour shift, the agents have to attend to calls for seven-and-a-half
hours. Agents have to continuously attend to calls and are closely supervised by their
S
team leaders. They are required to be patient with customers even if they are abused
B
for no mistake of theirs. The work is highly stressful and monotonous with frequent
rI
night shifts. A typical call center agent could be described as being ‘overworked,
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underpaid, stressed-out and thoroughly bored.’ The agents also develop an identity
crisis because of the ‘dual personality’ they have to adopt. They have to take on
European/American names or abbreviate their own names and develop foreign accents
in order to pose as ‘locals.’ The odd timings of work also affect employees’ health.
Their biological systems are disturbed and this leads to various health disorders. Job
security is another major problem, with agents being fired frequently for not being
able to adhere to the stringent accuracy standards.
The industry does not offer the employees any scope for innovation and creativity or
growth opportunities to keep them motivated. The scope for growth is also very
limited. For instance, Amiar is a 313-seat call center, where there are 300 agents, 10
team leaders, 2 service delivery leaders, one head of department and one head of
business. Thus, going up the hierarchy is almost impossible for the agents.
Another major reason for the high turnover in call centers is their recruitment
practices. Generally, call centers recruit young people below 25 from upper middle
class families who are exposed to western culture, who have had their education in the
English medium and who have completed their graduation. But people with such
263
backgrounds generally have much higher aspirations in life. While they are initially
excited to work in the excellent environment offered by a multinational company, they
are not willing to make a career of it. They get bored with the monotonous work and
leave the company within a few months.
2. A consistently high attrition rate affects not only a call center’s profits but also
customer service and satisfaction. This is because a new agent normally takes a few
months to become proficient at his job. Thus, call centers lose opportunities for
providing higher levels of customer service on account of high employee turnover.
However, some organizations like Bank of Montreal are not perturbed by the high
turnover of agents at their call center. They believe that it is natural and part of the
culture of the call center industry. While recruiting call center agents, they do not try
to look for candidates who will permanently stay at the call center. Bank of Montreal
recognizes that many of the candidates have high ambitions and are likely to use the
call center as a spring board to their dream careers. During the training program, new
employees are assured that the company will help them fulfill their personal goals.
Employees are given high quality training in sales and service of MasterCards, and
negotiation and communication skills. After working for a few years at the call center,
10
agents can apply for various positions in the Bank of Montreal. Bank of Montreal also
believes that the positive attitudes that the new agents bring with them pose fresh
20
challenges for the training personnel, forcing the company to raise its standards and
improve the quality of its training programs.
of
Therefore, viewed from different perspectives, both the statements can be said to be
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true.
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Answer 1
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There has been an increasing awareness in modern organizations about the impact of
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work-related stress on employee productivity. Organizations have realized that stress

is taking a toll on employee performance and has to be contained if organizational
U
goals are to be met. Therefore, they are taking various measures to effectively manage
S
stress at the workplace. The most commonly employed techniques and practices are
B
discussed below –
rI
1. Job-redesign – Organizations try to identify the reasons (if any), present in the
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design/nature of the job that contribute to stress. They do this by analyzing the
job to determine if is exists any role conflict or ambiguity, if the employee is
overloaded, whether his skills are underutilized, etc. They then attempt to enrich
the job so as to enhance productivity and to make it more interesting.
2. Appropriate selection and placement procedures – In order to minimize role
conflict and a cultural mismatch between the employee and the organization,
managements are making substantial efforts to select the right people for the right
jobs. Once the candidates are selected, the managements ensure that they are
placed in jobs whose profile matches their qualification and abilities, so that the
job results in minimum stress for the individual.
3. Employee training – Organizations today ensure that their employees are given
constant training and that there is constant enhancement in their skills so that they
are equipped with the skills necessary to perform their roles effectively. This
helps in reducing stress levels in employees.
4. Team-building – Various team-building activities are initiated by organizations
with a view to increasing cooperation among the members. This, in turn, helps
reduce stress levels caused due to rigid and impersonal work environments.
264
Part D
5. Day care facilities – Employees in organizations sometimes find it difficult to

strike a balance between personal and professional lives. Their preoccupation
with family problems could affect their productivity in the organization.
Therefore, organizations today attempt to share the responsibilities of their
employees to some extent by providing day-care facilities for their children and
elderly parents and relatives. This effort has helped reduce stress levels in
employees, thereby enhancing their productivity.
Apart from these measures, organizations have also successfully implemented other
techniques like establishing an open communication system within the organization,
setting up employee assistance programs, mentoring, wellness programs, personal
time-off, flextime, etc. All these initiatives help organizations to effectively deal with
employee-related concerns, solve their personal and professional problems, provide
professional guidance to them, and ensure their physical and mental wellness. These
are of utmost importance in ensuring the maximum productivity of the employees.
These measures have enhanced the employee-employer relationship and have helped
develop the mutual trust that is necessary for the success of any organization.
10
20
Answer 2
To ensure customer satisfaction through improved quality of its products and services
of
Texas Instruments (Malaysia) adopted the concept of self-managed work teams.
s
Before implementing the concept, the management of Texas Instruments attempted to
s
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create an environment conducive for effective teamwork. Managers began to

empower employees and ease rigid rules and regulations in force. The teams set up
C
were — process management team, quality steering team and self-managed work
y
teams. They worked on maintenance and improvement. They tried to fix existing
nl
problems, prevent new problems from occurring and improve the quality of products
O
and services.
se
As a part of the self-managed team process, Texas Instruments also implemented a

Japanese concept called Total Productive Maintenance (TPM). The TPM concept held
U
that workers should not merely operate machines but should also be involved in the
S
maintenance of the machines. Therefore, workers at Texas Instruments were trained to

B
maintain machine. In the past, workers used to stop work even if a minor problem
rI
arose in a machine. They used to wait for maintenance personnel to come and fix the
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problem. This often caused delay in completion of the work. After workers were
trained to maintain machines they were able to fix the problem immediately. This
reduced delays.
Gradually, workers began to handle matters of daily administration and management
(attendance maintenance, production set up, controlling scrap, monitoring cycle time,
safety, etc.), which had earlier been performed by supervisors. Workers were also
trained in quality control techniques, team building activities, daily management,
analysis and communication skills.
In the course of transition from traditional management culture to self-managed
teams, Texas Instruments faced resistance from supervisors and middle managers.
They tried to retain control in their hands and were reluctant to empower workers. The
management took strict measures against them, and this caused exodus of several
talented personnel.
By introducing self-managed teams, Texas Instruments saved about US $50 million,
cut down production cycle time to half and reduced part-per-million defects ten times.
265
Answer 3
The following steps may be taken by Ramnath to improve his interpersonal skills:
• Avoid making statements that hurt people: Ramnath should remember that his
customers come from a non-technical background. As they do not understand
technical terms, Ramnath should try to avoid technical terms and use common
language to explain the usage of his package. Sometimes, a customer may give
some specification or suggest some solution that sounds completely silly. Even if
Ramnath knows it is not practicable, he should not make fun of the
customers/colleagues but should try to explain to them that it could not be done
because of technical problems and another approach could be used instead.
• Listen empathetically: Though the customers may lack technical skills, Ramnath
should not ignore their suggestions. It is likely that they may sometimes give
really useful suggestions because of the knowledge and experience they have
gained over the years. Even if their suggestion is not acceptable, Ramnath should
try not to make them feel ignored. He should tell them that he understood what
they suggested and would consider it later but he had another idea which would
10
work better in the given situation.
20
• Admit mistakes: Even knowledgeable and experienced people can sometimes
make mistakes. If Ramnath realizes that he is wrong in something he did, he
of
should quickly admit his mistake. His willingness to admit having made a
mistake will increase his credibility.
s s
• Make positive statements: It is possible that the clients do not listen to
la
instructions carefully and use the wrong procedure to run the installation and
C
ultimately complain when the application does not work. Even if Ramnath
understands that they have made an error which caused the problem, he should
y
not ridicule them but explain to them the reason for the problem and rectify it.
nl
• Control emotions: Ramnath should try to control his feelings. He should maintain
O
a stable, pleasant, positive and enthusiastic demeanour throughout. He should be

se
able to exploit his feelings to influence others in a favorable way. Even if he is

scolded by the top management for a decline in productivity, he should be able to
U
sport a cheerful expression and let it not reflect on his subordinates.

S
By practising the above techniques, Ramnath would be able to improve his relations
B
with colleagues, customers and superiors and will be able to enhance his chances for
rI
promotion to managerial positions.

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266
Model Question Paper III
Suggested Answers
1. c 2. b 3. b 4. b 5. b 6. b 7. c 8. c 9. c 10. a
11. b 12. c 13. c 14. a 15. c 16. c 17. c 18. a 19. a 20. c
21. c 22. d 23. b 24. b 25. d 26. c 27. b 28. a 29. c 30. a
10
Caselet 1
20
1. Socialization is a formal procedure through which newcomers to an organization
are familiarized with the customs and practices of the new environment. It is a process
of
which helps employees adjust to the workplace, thereby reducing role conflicts, and
s
enhancing job satisfaction and commitment towards the organization. Some of the
s
characteristics of organizational socialization process are:
la
• Socialization helps bring about favorable changes in employee behavior that

C
facilitates accomplishment of organizational objectives.

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• Socialization, though normally conducted during the induction program,

nl
continues through an extended period so that the organizational values are

O
internalized by all the employees.

se
• The process determines how well an incumbent to the organization fits into its
culture.
U
Socialization process thus aims at minimizing deviations from expected employee

S
behavior, thereby ensuring effective achievement of organizational goals and

B
objectives.
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The socialization process at SA helps sustain its strong organizational values and
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culture by introducing the employees to the organizational culture and encouraging

them to internalize its values. Its various programs like ‘cultural exchanges’, ‘Back to
Basics,’ ‘Walk-a-Mile,’ ‘Mind the Gap’ etc., aim at reinforcing the core values of SA.
The company has also set up a special team called the culture committee to preserve
the organizational culture. Various measures taken by the organization at regular
intervals helped the spread of its culture across the organization.
Thus, the socialization programs at Southwest Airlines played a crucial role in
molding employee behavior and creating a homogenous workforce. This, in turn,
helped SA maintain its organizational culture, which in the long run helped it gain a
competitive advantage over others in the industry.
2. The selection process in an organization plays a crucial role in maintaining its
culture. The core values and norms of an organization must be accepted and
internalized by its members. This helps sustain a strong organizational culture. It
requires a perfect cultural fit between the employees of the organization and the
organizational culture. It ensures that there exist no deviations between the expected
and existing employee behaviors. Therefore organizations prefer employees whose
personal values, behavior and goals favor, or are suited for the achievement of its own
goals and objectives. It is towards achieving this objective that organizations establish
selection procedures that filter out candidates whose values do not synchronize with
those of the organization.
For example, the culture at Southwest Airlines, values such attributes as a good sense
of humor, a deep concern for others, and the ability to work in a team. Hence the
selection process at SA is designed on these criteria and the elaborate processes aim at
selecting only those candidates who possess the specified characteristics. Thus, the
selection procedure at SA helps sustain the organizational culture by minimizing any
deviations from expected employee behavior.
Caselet 2
1. In its negotiations with Tripathi, AMT’s team tried to present several alternative
proposals to be considered. When Tripathi did not agree, the team walked out of the
negotiations. But it did not walk out of negotiations even though the unions did not
agree to its proposal. This is because employees and employers are mutually
interdependent. They cannot exist without each other. Therefore, AMT’s management
tried to find a way out instead of halting the negotiation process and creating tension
10
in the organization. Moreover, organizations consider the financial aspects of an issue
20
before making any decision but unions often give importance to emotional aspects
along with financial factors in their decisions. That is why unions did not want to
of
work for an extra hour even though it would be beneficial to them financially. They
refused to give up the privileges they had obtained in the previous deal they had with
s
the management, that is, to work for fewer hours. The decision could also have been
s
taken because of the workers’ desire to utilize their free time in a better way (such as
la
pursuing personal interests, spending more time with family, taking a part-time job in
C
another firm or enhancing their intellectual skills).

The negotiation team did the right thing by not coercing the union to agree to its
y
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proposal. Otherwise, this could have resulted in a strike or lockout thereby adversely
affecting production. All the issues were negotiated except that of one additional hour
O
of work. Even if the union had agreed to the condition, the management would have
se
made extra payment for that. By using contract labor, the management could benefit
by paying the normal wages. Therefore, management did not insist on its demand and
U
readily signed the negotiation contract. By doing so, it satisfied the workers and
created a positive attitude towards the management by accepting their demand, and
S
benefited the organization by employing cheaper labor.

B
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2. The pre-negotiation period should be used by negotiators to consider all the issues
that are likely to come up in the negotiating process. The negotiating team should
Fo
analyze their needs as well as the needs of the opposite party and prioritize issues
according to their importance. The team should identify the issues that are of equal
concern to both the parties and present them for discussion in the first round at the
negotiation table. It should develop and keep ready attractive alternative proposals in
case the proposal put forth by it at the first instance is rejected by the opposite party.
The team should also be able to predict the demands that could be made by the
opposite party and the demands that the former would accept so as to obtain a win-
win solution.
The post-negotiation period is also important because negotiation does not end with
both parties signing an agreement. They need to be committed to the agreement and
take steps to implement it. If any of the parties violates any terms of the agreement, it
will again lead to conflict between the parties. A negotiation process can be said to be
completed successfully only when both parties comply with the agreement and do not
get into conflict again on the same issues which have been already negotiated.
Therefore, both parties should ensure that they implement the terms of the negotiation
correctly so that their valuable time does not get wasted in conflicts and negotiations,
and can be invested in strategic issues.
268
Part D
Answer 1
A company’s ability to innovate determines its future to a great extent. Constant
innovation within an organization is essential to ensure its continuous growth and
development. However, a number of factors hinder creativity and innovation in
organizations. Some of them are discussed below -
• At times, employees hesitate to share their innovation with others because of the
apprehension that the credit for their ideas might be taken by someone else.
• People refuse to share their knowledge and skills with others in the organization
as they feel that once others learn their skills, their position in the organization
will be under threat. This tendency among employees curbs innovation within the
organization.
10
• Organizations run the risk of wasting time, energy, resources and manpower over
20
an idea that might eventually lead to no organizational benefits. This might
happen when companies invest in a project whose objectives are not in sync with
of
the objectives of the organization. Therefore, they end up either concentrating
resources on irrelevant experiments or lose opportunities for valuable
s
innovations, which in turn, results in revenue losses for the organization.
s
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• Organizations might also tend to overestimate or underestimate the value of

C
certain innovations. They often invest heavily in a venture expecting to generate

unrealistic profits from it. However, the venture may turn out to be a failure. This
y
might lead to wastage of financial and other resources of the organization.

nl
Despite these problems innovation definitely creates a competitive advantage for the
O
company, over rivals in the corporate scenario. Hence, it is essential for organizations
se
to nurture and develop a culture that encourages and motivates creativity and
innovation amongst its employees.
U
S
Answer 2
B
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The various factors that demotivate employees are:

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• Organizational factors
• Manager’s behavior
• Individual factors
Organizational factors
Some of the organizational factors that demotivate employees, include a poor
appraisal system, informal communication, mismatch between employee skills and
job roles and type of organizational culture.
Poor appraisal system: Many times, despite making sincere efforts to accomplish the
task assigned to them, employees may fail to complete the task due to other
contingent factors. Often, the appraisal system in organizations is so designed that
employees are rewarded only if they produce the desired output. Otherwise, the
management fails to recognize the efforts put in by them. This results in demotivating
the employee.
Informal communication: Sometimes information spread over the grapevine may
tend to demotivate employees. For example, the employees come to know over the
269
grapevine that their organization has suffered losses and that the coming appraisal
system may not yield any significant increment in salary. Such a kind of informal
communication tends to demotivate employees especially when the information
spread is harmful to employee interests.
Inappropriate job roles: Employees may be assigned jobs that require skills they are
not equipped with. This leads to frustration in employees and promotes resentment
among them.
Organizational culture: Lack of transparency in the organizational culture may also
demotivate employees. Due to the flawed organizational culture, employees may not
be able to obtain the help and support of superiors, peers and subordinates in the
organization even at times when they are badly needed.
Organizational politics: Organizational politics play a significant role in
demotivating employees. Some individuals in the organization may intentionally
harass other employees or create hurdles to their performing well. These persons may
use all possible strategies to prevent the performance of other employees from being
noticed by their superiors.
10
Manager’s behavior
20
• Some managers constantly criticize their employees. They point out even minor
of
and insignificant errors, and blame the employees for their incapability to prevent
them from occurring. Some even try to shift the entire blame on to the employee
s
even though they themselves may also be partly responsible for the mistake.
s
la
• Some managers may fail to recognize the good work done by employees. Even if
C
they find that an employee has performed well, their ego prevents them from
appreciating him/her. Such behavior on the part of the manager tends to
y
demotivate the employee.

nl
•
O
Many managers do not make any attempt to counsel and guide employees who
may be affected by family problems, or who are unable to cope with the work
se
environment and organizational culture. The lack of mentoring abilities in the

manager may also tend to demotivate employees working under him.
U
• Some managers find it difficult to manage their emotions and vent their
S
frustrations on the employees. They expect the employees to behave in

B
accordance with their mood swings, this again leads to the employees getting
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demotivated.
Fo
Apart from this, individual factors like personal problems, family problems, stress and
burnout, also play a role in demotivating employees.
Answer 3
The various factors that influence the role of an individual in a group are:
• Nature of the group: The behavior of an individual, and consequently, the
techniques used by him differ according to the role he is required to play. As a
member of an organization, an individual attempts to achieve his work goals. If
he is a manager, he will use various techniques to improve the performance of his
workgroup. He shows appreciation for employees whose performance is above
average, and warns those whose performance is below average. He coaches the
employees to exhibit desired behavior in the organization. He may also use
techniques like co-option and manipulation, to influence employees to change
their behavior. But he does not use such techniques to influence his family
members.
270
Part D
In his role as an employee, an individual will demand an improvement in the

work environment and the quality of work conditions. As the head of a family, he
tries to provide quality education to his children and a comfortable life to his
family. As a member of a social service group, he will collect funds for the poor
and the disabled and work to improve their lives.
• Situational and personal factors: The task assigned to an individual, his position
in the group, and the leadership style of the group leader will also determine the
role of an individual in a group. If an individual is assigned the task of marketing
the organization’s products, he will try to apply his communication skills and
people skills. If he is assigned the task of designing a new product, he will use his
technical skills. However, if the leader of the group happens to be autocratic in
his leadership style, the members of the group will never attempt to do anything
on their own. The personality, attitudes, beliefs and values of an individual, and
his capabilities also influence his role. A person who believes that he should help
people in need will always share the work burden of other members of the group.
• Role expectations: Each group expects its members to perform certain tasks and
behave in a particular manner. But only a few groups maintain written
10
descriptions of the tasks, duties and obligations expected of each of their
20
members. These descriptions define the tasks that have to be carried out by
individuals, reporting relationships, responsibilities, and the skills they need to
of
have to perform their roles. But even if the role expectations are clearly written, if
the individual does not understand them properly, he will fail to perform his role
s
successfully.
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271

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Introduction

ICFAI Center for Management Research

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

Ref. No. IOBWB – 032K4 04

Part A – Multiple Choice Questions 3

Part C – Applied Theory 141

Part D – Model Question Papers 237

Behavior – Significance of Human Relations and Organizational Behavior:

Organizational Behavior: Hawthorne Studies; Theory X and Theory Y; Theory Z.

Chapter 3: Understanding People and Organizations

Uniqueness of Human Beings – Human Limitations – Influence of Internal and

Environment; Cognition Vs Environment – Understanding Behavior: Learning – Why

and Motivation – The Social Aspect of Organizations.

Chapter 4: Diversity and Ethics

Concept and Nature of Diversity – Managing Diversity in Organizations: Creation of

Family-Friendly Workplaces; Providing Diversity Training to Employees; Developing

Mentoring Programs for Employees – Individual and Organizational Approaches to

Meaning and Significance of Perception – Sensation vs Perception – Subprocesses of

Perception – Perceptual Selectivity: External Attention Factors; Internal Set Factors –

Context; Perceptual Defense – Social Perception: Attribution; Stereotyping; The Halo

Effect – Impression Management: The Process of Impression Management; Impression

Chapter 10: Learning

Significance of Learning – The Theoretical Process of Learning: Behavioristic

Theories; Cognitive Theories; Social Learning Theory – Principles of Learning: Law

Nature of Informal Organizations – Benefits and Problems of Informal Organizations –

Informal Communication: Essential Features of the Grapevine; Factors Responsible for

Difference between a Grapevine and a Rumor – Managing Informal Organizations.

Part IV: The Organization System

Chapter 17: Foundations of Organization Structure

Specialization; Departmentalization; Chain of Command; Span of Control;

Centralization/Decentralization; Formalization – Types of Organizational Designs:

Simple Structure; Bureaucratic Structure; Matrix Structure – Organizational Designs

and Employee Behavior

Chapter 18: Decision Making

Foundations of Organization Development; The OD Process – Client-Consultant

Chapter 23: Organization Development Interventions

Meaning of OD Interventions – Types of OD Interventions: Sensitivity Training;

Analysis; Intergroup Team-Building Interventions; Third-Party Peacemaking

Interventions; Structural Interventions.

Strengths of Organizational Development – The Future of OD: Leadership and Values;

Knowledge about OD; OD Training; Interdisciplinary Nature of OD; Diffusion of OD

Techniques; Integrative Practice; Rediscovering and Recording History – Possible

Changes in OD Processes and Practice.

2. Which of the following frameworks 8. Which of the following models

b. Authority c. Cognitive theorists

4. ‘Motivating people in organizational major role in determining the

settings to develop team work that behavior of individuals as well as

overall performance of the

5. The study of which discipline helps

b. Gender c. Technological factor

c. Age d. Cultural factor

22. Which of the following forms a

dominance of one group over the a. Cultural distance

others on the basis of criteria like

d. All the above

23. An individual’s response to a culture

language, country, customs and

25. Which of the following processes c. Daniel Levinson

28. The degree to which people believe

that they are masters of their own

a. Self-image 35. Curiosity, manipulation, activity and

b. Locus of control affections can be categorized as