The calamities of consensus page 342

 When it is time for groups to reach a decision, many turn to consensus.

 To achieve consensus, groups must cooperate and collaborate, which
ultimately will produce higher levels of camaraderie and trust.
 In addition, if everyone agrees, the prevailing wisdom says everyone will be
more committed to the decision.
 However, the need for consensus can sometimes be detrimental to group
functioning.
 If consensus is reached, does that mean the decision is the right one?
 Critics of consensus-based methods argue that any decisions ultimately
reached are inferior to decisions using other methods such as voting or
having team members provide input to their leader, who then makes the final
decision.
 Critics also argue that because of pressures to conform, groupthink is much
more likely, and decisions reached through consensus are simply those
everyone dislikes the least.

Applicable frameworks on this case:

Social identity theory: - Our tendency to personally invest in the accomplishments
of a group. Perspective that considers when and why individuals consider
themselves members of groups. E.g. sports team

Questions
1. Is consensus a good way for groups to make decisions? Why or why
not?
ANS:
Yes, consensus is the good way for the group decision making. It basically involves
an agreement that is participatory and collaborative in nature. The group members
are required to be cooperative and trust their group members to reach consensus. It
helps to develop mutual understanding among the members of the group. Moreover,
it also brings up creative ideas that help in group decision making. Consensus also
helps to increase the group productivity.

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 2. Can you think of a time when a group of which you were a part relied on
consensus? How do you think the decision turned out?
ANS:
My business partner and myself made a decision to go for consensus before
opening a new Hungry Lion outlet in Ibex. It’s was a centralised and posh residential
area, where hundreds of commuters travel by road. However, opening such an outlet
required us getting permission from Local authorities and the neighborhood watch
community.
Eventually, a consensus was used to avoid any kind of legal and social glitch. The
outcome of the consensus came out to be positive and satisfying. All the residents
and other business owners came at a conclusion that they had no issue with our
decision. They later on permitted us to open our new venture

3. Martin Luther King Jr. once proclaimed, “A genuine leader is not a

seeker of consensus but a modeler of consensus.” What do you think
he meant by that statement? Do you agree with it? Why or why not?
ANS:
We need to develop ideas and convince others of their merit as opposed to seeking
or persuading or forcing them to accept them.
A true leader is one who looks after his or her follower’s needs carefully and resolves
their concerns convincingly and judiciously. The leader does not force or urge their
followers to go by his/her decision. He directs and guides the followers in the most
organised way as possible. Moreover, the leader gives no opportunity to their
followers to go against him and protest.

4. Highlight the pros and cons of group decision making

ANS:
Pros: -
i. It brings more diversity into the decision making process
ii. Often leads to innovation and creativity
iii. Changes become easier to implement
iv. Legitimizes minority perspectives
v. Keeps hierarchy and bureaucracy in check
Cons: -
i. Many people can feel pressured to conform to a certain point of view
(Groupthink)
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 ii. Often time-consuming and tedious
iii. Ambiguity about the final say and who's in charge
iv. Not the best method for menial or time-sensitive decisions

5. How can social loafing be reduced in groups and teams?

ANS:
Social loafing, the tendency for individuals to expend less effort when working
collectively than when alone.
i. Reward individual contributions to the team: - organizations should reward
individual contributions to the team.
ii. Assign challenging work to teams: - when asks are made more difficult or
challenging social loafing reduces.
iii. Increase intrinsic involvement: - personal involvement in a task eliminates
social loafing mainly because it increases intrinsic motivation.
iv. Foster a collectivistic orientation within the group: - when teams have
collectivistic group values, this reduces social loafing and increases
cooperation.

Virgin way of holidays page 451

 According to this policy, all salaried staff are permitted to take leave whenever
they want and for as long as they want.
 Employees need no prior approval and absolutely no one is keeping track of
their holidays.
 If they feel like taking time off for a day, a week, or even a month, it is up to
them to decide— on one condition. They need to be 100 percent sure their
absence does not harm their company in any way.
 As a consequence, they have to be certain that they and their team are up-to-
date on every project.
 With companies no longer able to accurately track people’s time on the job,
why track people’s time off the job?
 It was this point exactly that convinced Richard Branson to introduce the new
vacation policy within the Virgin businesses, from entertainment and airline
companies to hotels and banking.
 Other businesses that did the same experienced a boost in productivity,
creativity, and morale. Adjusting to new developments and challenging
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 situations seems the right thing to do for leaders who strive to successfully
launch their organizations into the future.

Applicable Frameworks
Situational leadership theory (SLT) focuses on the followers. It says successful
leadership depends on selecting the right leadership style contingent on the
followers’ readiness, the extent to which followers are willing and able to accomplish
a specific task.
Path–goal theory A theory that states that it is the leader’s job to assist followers in
attaining their goals and to provide the necessary direction and/or support to ensure
that their goals are compatible with the overall objectives of the group or
organization.
Goal-setting theory assumes an individual is committed to the goal and determined
not to lower or abandon it.

Questions
1. Do you expect Virgin’s new vacation policy to work within all
organizations? Why or why not?
ANS:
No. In some companies, complete redundancy would not be possible, resulting in
employees never getting free from their work to enjoy a vacation of comfort and
relaxation. In such cases, the employees many not be able to completely shut down
their work and go on vacation.

2. Path-goal theory suggests that leaders adjust their behavior to people’s

locus of control. Considering Branson’s new policy, which locus of
control does he expect his employees to have? Why?
ANS:
Internal locus: - how strongly people believe they have control over the situations
and experiences that affect their lives. People with an internal locus of control hold
themselves accountable for making changes in their life. The individual believes he
or she can achieve the goal and wants to achieve it.

3. Some people might consider Virgin’s policy to be a sign of laissez-faire

leadership. Do you agree? Why or why not?

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 ANS:
Laissez faire leadership is also known as delegative leadership in which group
members themselves make their own decisions. In this leadership style leaders try to
provide least possible guidance or supervision. However, Virgin`s leadership style is
the supportive Leadership – in this case, the leader tries to make work more
pleasant by treating everyone equally and making the work environment friendlier.

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The Demotivation of CEO Pay - 275
 According to research from 40 countries that probed the thoughts of CEOs,
cabinet ministers, and unskilled employees, we all think leaders should be
paid less. Beyond that, we are clueless.
 Where we err can be calculated by an organization’s pay ratio, or the ratio
between CEO pay and average worker pay. In the United States, for example,
the average S&P 500 CEO is paid 354 times what the lowest-ranking
employee makes, for a ratio of 354:1 (eight times greater than in the 1950s).
Yet, U.S. participants in the study estimated that the ratio between CEOs and
unskilled workers was only 30:1! Americans are not alone in making this gross
underestimate: Participants from Germany, for instance, estimated a ratio of
around 18:1 when the actual is closer to 151:1.
 In general, people worldwide are unhappy with—and demotivated by—their
perception of inequity, even when their estimates of the ratios are far below
the reality.
 For all the countries worldwide in the study, the estimated ratios were above
the ideal ratios, meaning participants universally thought CEOs are overpaid.
 How does this affect the average worker’s motivation? It appears that the less
a person earns, the less satisfied the person is with the pay gap.

Applicable theories:
Expectancy theory: A theory that says that the strength of a tendency to act in a
certain way depends on the strength of an expectation that the act will be followed by
a given outcome and on the attractiveness of that outcome to the individual.
Equity theory: A theory that says that individuals compare their job inputs and
outcomes with those of others and then respond to eliminate any inequities.
Social-learning theory: The view that we can learn through both observation and
direct experience

QUESTIONS
1. What do you think is the ideal ratio for CEO to worker compensation?
Ans:
The ideal ratio for CEO to worker compensation should be capped at 25:1. In my
opinion, this ratio would be determined by three attributes. Firstly, the skillsets,
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experience and exposure an employee brings. Secondly, the roles and
responsibilities of the CEO versus worker. Thirdly, the standard of living, policies and
economic situation of the host country.

2. Why might the ideal vary from country to country?

Ans:
Compensation may vary from country to country because of the economic situation
of each country, organization, and global market. Each country varies in resources
and earnings making each country ideal ratio different. Another reason is the global
market as its more cost effective to produce an item in other countries than what it
cost to make in the country you live in. Each country would have varying pay scales
and means of valuing credentials, experience and business exposure. A more
meritocratic government would have a varying remuneration scale as compared to a
lax government. Also, some country such as the USA and Singapore have economic
policies in place such as minimum wage for employees and tax reliefs for white-
collar foreign talents. These would also cause a deviation in the Ideal ratio.

3. How does the executive compensation issue relate to equity theory?

Ans:
Equity theory says that individuals compare their job inputs and outcomes with those
of others and then respond to eliminate any inequities. Thus, equity theory states
that the remuneration an individual receives for his/her work has a direct influence on
their motivation. The employee would compare his salary (output) to what he had put
into it (input). When the Input: output is compared with others, to eliminate any
inequality and ideally, motivate him to continue working. Therefore, the equity theory
and the executive compensation issue relate in the sense that they each are looking
for equal distribution of responsibilities and distribution of wealth. Thus, equity theory
looks for the equality within the business in order to keep each worker happy and
working sufficiently.

4. How should we determine what is a “fair” level of pay for top

executives?
Ans:
The way employers should be paid should be determined by qualitative
measurement. For example, having a performance-based evaluation to see how the
performance of the employee is will help keep a fair set of rules. The employer

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should also conduct a different evaluation to see if the employee is satisfied working
with them. Thus, the way it is fair is if the employees see that the pay is based on
performance.
5. The study found that participants thought performance should be
essential or very important in deciding pay. What might be the positive
motivational consequences for average employees if CEO pay is tied to
performance?
Ans:
Some possible positive consequences for the average employees might be that they
would be more motivated to work harder for their boss. They will want to work harder
for a boss who is earning his/her pay based on performance. This is because they
see their boss as one who got his/her position due to hard work and performance
and this will in turn motivate employees to work harder with the goal in mind to one-
day reach that executive level along with the pay it comes with. As reflected in the
case study, workers were generally unhappy about pay inequality. If the workers now
know that their boss` pay is solely based on performance, they will be more
understanding about the differences in pay ratio.

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Atos: Zero Email Program
 The technology that gave us the smart phone, tablet, and laptop has enabled
employees to access their work from anywhere in the world. Communication
has been enhanced by the use of texts, calls, instant messages, email, and
social networking sites.
 The burden of being an anytime–anywhere worker is having a negative
impact on the health of employees, family life, and productivity.

 Employees are experiencing unmanageable workloads, the loss of face-to-

face relationships with colleagues, and the overuse of emails in managing
difficult work-related issues.

Applicable Theories:
Lewin’s three-step model

QUESTIONS
1. Consider the sources of stress in modern organizations such as Atos.
Identify individual differences that can moderate the effect of stress.
Ans:
The source of stress in modern organisation as per the given Atos case, is
expectation of employer from employee to be available even after working hour and
should access the mails and text anywhere and immediately respond. So, the
sources of stress include the loss of face-to-face relationships with colleagues, the
overuse of emails in managing difficult work-related issues.
Differences within an individual determine whether that stress will be positive or
negative. Those individual differences include:
Perception. This is what moderates the individual’s relationship to the stressor. For
instance, one person might see a potential layoff as a stressful situation, while
another person might see that same layoff as an opportunity for a nice severance
package and the opportunity to start a new business.
Job Experience. Because stress is associated with employee turnover, it would
stand to reason that those employees with a long tenure are the most stress-
resistant of the bunch.
Social Support. Co-workers, especially those who are caring or considered to be
friends, can help protect a fellow employee against the affects of stress.

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Belief in locus of control. Those who have a high internal locus of control (those
that believe they are in control of their own fate) are, unsurprisingly, not as affected
by stress as those who feel they are not in control.
Self-efficacy. Self-efficacy is an individual’s belief that he or she can complete a
task. Research shows that employees who have strong levels of self-efficacy are
more resistant to the effects of stress.
Hostility. Some employees carry around a high level of hostility as a part of their
personalities, and they’re often suspicious and distrustful of their co-workers. These
personality traits make a person more susceptible to stress.

2. Describe the symptoms of stress that may be experienced by

employees.
Ans:
Symptoms include:
drop in work performance / Poor job performance
depression
anxiety
sleeping difficulties
Headaches
High blood pressure
Indigestion
Insomnia
Irritability
Short attention span
Loss of appetite
Procrastination
Increased use of alcohol and drugs
3. Recommend two further strategies that could be introduced in Atos to
help employees manage the demands of the “always on” working
environment.
Ans:
i. A flexible “on-demand” workforce will be key to meet the demands of
organizations and businesses to remain competitive, cost effective and
innovative.
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ii. Robots (AI) will be extremely helpful in improving efficiency and accuracy,
providing more time for employees to apply their strengths, skills and talents
to add value.

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