Review of Book

On
ORGANIZATIONAL BEHAVIOUR

In Partial Fulfilment of
BBA Course

Session 2020-2023
Submitted to:- University of Rajasthan
Submitted by:- Sachin Bhati
BBA PART – III
Maharishi Arvind Institute of Science &
Management, Jaipur
 ABOUT THE BOOK

Authors: Stephen P. Robbins, Timothy Judge, Neharika Vohra

Edition: Fifteen Edition
Publisher: Pearson Education
Price: ₹ 285.00
About the Authors:
Timothy A. Judge (Ph.D., University of Illinois at Urbana-Champaign)
Academic Positions: Franklin D. Schurz Chair, Department of Management, Mendoza
College of Business, University of Notre Dame; Matherly-McKethan Eminent Scholar in
Management and many more.
Research: Dr. Judge's primary research interests are in (1) personality, moods, and emotions;
(2) job attitudes; (3) leadership and influence behaviors, and (4) careers
Books Published: H. G. Heneman III. IA Judge, and J. D. Kammever-Mueller. Staffing
Organisations, 7th ed. (Madison, WI Mendota House/Irwin, 2011.

Stephen P. Robbins (Ph.D. University of Arizona)

Academic Positions: Professor, San Diego State University, Southern Illinois University at
Edwardsville, University of Baltimore, Concordia University in Montreal, and University of
Nebraska at Omaha.
Research: Research interests have focused on conflict, power, and politics in organizations,
behavioral decision making, and the development of effective interpersonal skills.
Books Published: World’s best-selling author of textbooks in both management and
organizational behavior. His books have sold more than 5 million copies and have been
translated into 20 languages; editions have been adapted for Canada, Australia, South Africa,
and India.

Neharika Vohra
Within a month of passing the order to set up the university, the state government has
appointed Neharika Vohra, Professor of Organisational Behaviour at IIM Ahmedabad as its first
Vice-Chancellor. She has been a faculty at IIM Ahmedabad for last two decades. She was also
the head of IIMA's 'Centre for Innovation, Incubation and Entrepreneurship' (CIIE) that was set
up in association with the Government of India and the Gujarat Government to fund and
promote the start-up ecosystem in the country.

CONTENTS

Sr. No. Chapter Name Page No.

1 What is Organizational Behavior? 01

2 Diversity in Organizations 04

3 Attitudes and Job Satisfaction 05

4 Emotions and Moods 07

5 Personality and Values 09

6 Perception and Individual Decision Making 12

7 Motivation Concepts 14

8 Motivation: From Concepts to Applications 16

9 Foundation of Group Behaviour 18

10 Understanding Work Teams 20

11 Communication 22

12 Leadership 24

13 Power and Politics 26

14 Conflict and Negotiation 28

15 Foundations of Organization Structure 31

16 Organizational Culture 32

17 Human Resource Policies and Practices 34

18 Organizational Change and Stress Management 35

19 Summary 36

20 My Opinion 37
 Chapter 1
What is Organizational Behaviour?

Organizational Behavior is the academic study of how people interact within groups and how
their behavior affects the organization’s performance. And its principles are applied primarily
in attempts to make businesses operate more effectively.

Being a good manager requires strong interpersonal skills, as communication is crucial, as one

must manage different types of resources: people, money, and time in order to achieve specific
goals.

A Manager’s Four Main Functions

Planning function refers to setting goals, creating strategies, and preparation of plans that
make different activities work coherently and effectively.
Organizing function concerns tasks identification and division, assignment of tasks to
individuals, setting reporting and decision- making systems.
Leading function relates to motivating workers and directing others’ actions, choosing
communication canals and solving conflicts.
Controlling function refers to controlling others’ work outcomes and checking whether
everything is being done as planned; and when necessary, undertaking corrective actions.

Management Roles
ROLE DESCRIPTION
Interpersonal Roles which involve ceremonial/symbolic duties
Figurehead Symbolic head, needs to perform duties of social/legal nature
Leader Motivates and directs employees
Liaison Maintains a network of outside contacts
Informational Collection and dissemination of information
Monitor Receives information, serves as nerve center of internal and external
information
Disseminator Transmits information from outsiders to the organization’s members
Spokesperson Transmits information about the organization to outside parties
Decisional Refers to making choices
Entrepreneur Analyses the organization and its environment for opportunities and initiates
projects to bring about change
Disturbance Undertakes corrective actions in case of problems
handler
Resource allocator Makes or approves important organizational decisions
Negotiator Represents the organization in negotiations

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They can be divided into 3 main categories: interpersonal roles, informational roles and
decisional roles. The concept was developed by Henry Mintzberg and is called Mintzberg’s
Managerial Roles.

Management Skills
There are 3 types of management skills developed by Robert Katz: Technical skills (application
of specialized knowledge, know-how, e.g., think of mechanical engineer, vet,
pharmacist), human skills (easiness to work in a team, understand others’ behaviors and
motives, stimulate others’ actions, ability to communicate and get along with
people), conceptual skills (mental capability to analyze problems, manage complexity of an
issue, decide on solutions and evaluation of possibilities).

Effective or successful managers?

It was investigated in Luthans’ Study of Managerial Activities that effective managers spend
most of their time on communication activities (44%) and on human resource management
activities (26%). In contrast, successful managers spend almost half of their working time on
networking activities (48%) and communication activities (28%). It is understandable that
average managers work most of the time on traditional management (32%) and on
communication activities (29%).

Defining Organisation Behavior (OB)

“A field of study that investigates the impact that individuals, groups, and structures have on
behavior within organizations, for the purpose of applying such knowledge toward improving
an organization’s effectiveness” (Robbins, Judge “Organisational Behavior”).
It is important to remember that OB deals with 3 levels of behaviors: individuals, groups and
structures. Knowledge about those 3 types of behaviors is necessary to apply actions which
make the whole organization function successfully.

How to study Organisation Behavior? Evidence-Based Management (EBM)

In OB systematic study and evidence-based management is combined with intuition. Behavior
can be predicted. If it is examined on the continuous basis, one is able to forecast how people
can act in particular circumstances (that is why systematic study of people’s actions are
necessary). Systematic study involves examining causes and effects, just like in science – this is
done to make general law-like conclusions based on gathered data. What is closely related to
systematic study is evidence-based management (EBM). EBM implies making managerial
decision after consideration of scientific facts, data, conclusions, laws. Managers who apply
EBM act like scientists – when they face a problem, they search for scientific information which
can give them possible problem solutions, then they apply the most relevant knowledge in
order to solve an issue. Of course, intuition is inseparable from decision-making process.
Nevertheless, importance of systematic study and thus EBM cannot be questioned.

What major behavioral disciplines contribute to Organizational Behavior?

o Psychology (studies behavior of individual)
o Social psychology (studies behavior of individual within a group)

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o Sociology (studies groups, societies, organizational systems, how individual acts in relation
to a society)
o Anthropology (studies societies, groups, cultures, organizational systems)

Absolutes in Organizational Behavior

Organizational Behavior concepts, however law-like they can be, must take into account
situational factors. Under different conditions different individuals act differently. That is why
there only a few absolutes in OB. Because people are different and complex, one needs to
consider OB in a contingency framework.

Challenges and Opportunities for Organizational Behavior:

 Responding to Economic Pressures
 Responding to globalization
 Managing workforce diversity
 Improving Customer Service
 Improving People Skills
 Stimulating Innovation and change
 Coping with “Temporariness”
 Working in Networked Organizations
 Helping Employees Balance Work-Life Conflicts
 Creating a Positive Work Environment
 Improving Ethical Behavior

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 Chapter 2
Diversity in Organizations

Diversity is the degree of difference in identifying features among the member of the
organization. Effective Diversity management increases an organization access to the widest
possible pool of skill, ability, and ideas. Diversity is about how individual characteristics like
age, gender, race, ethnicity, and ability can influence employee performance.
Organizational Level Organizational Level Organizational Level
Structure Human resource Productivity
 Demographic Characteristics of workforce
Culture management Survival
Change practices
 Levels of Diversity
 Discrimination
 Biographical Characteristics
 Age
 Sex
 Disability

Other Biographical Characteristics:

 Tenure
 Religion
 Sexual Orientation and Gender Identity

Ability: It is an individual’s current capacity to perform the various task in a job. The mental or
physical power or skill that makes it possible to do something is called ability.
Factors of Ability:
1. Intellectual Abilities
2. Physical Abilities

The Role of Disability:

The importance of ability at work obviously creates problems when we attempt to formulate
workplace policies that recognize diversity in terms of disability status. As we have noted,
recognizing that individual have different ability that can be taken into account when making
hiring decision is not problematic. However, it is discriminatory to make blanket assumptions
about people on the basis of a disability. It is also possible to make accommodations for
disabilities.
Implementing Diversity Management Strategies:
 Attracting, Selecting, Developing, and Retaining Diverse Employee
 Diversity in Group
 Effective Diversity Programs

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 Chapter 3
Attitudes and Job Satisfaction

Attitudes: Attitudes are evaluations, judgments, opinions about people/objects/states/events.

There are 3 main components of attitudes:

 Cognitive
 Affective
 Behavioral
Cognitive refers to just describing things how we see them, e.g. “I have a job”. Affective is
related to emotions and feelings, e.g. when one says: “I am so happy with my job”. Behavioral
refers to intentions, actions, e.g. when one says “I will never resign from my job” or “I am
looking for another job”. All components are related, cognitive and affective aspects of
attitudes are inseparable. As one sees attitudes and behaviors are connected, certain attitude
leads always/sometimes/often/never to certain behavior.

Major Job Attitudes

 Job satisfaction: a positive feeling about one’s job according to an evaluation of its
characteristics.
 Job involvement (level of identification with the job, caring for and participation in it and
considering it as important for “self”).
 Psychological empowerment – it expresses the belief in the level of one’s influence on his
work setting, abilities, his work importance and locus of control. 
 Organizational commitment (employee’s identification with the company’s goals, corporate
culture, strategy, mission, values, vision and willingness to preserve his belonging to the
organization)
 Affective – emotional connection with the company and its values
 Continuance – perceived financial benefit resulting from staying rather leaving a
firm/company
 Normative – feeling obliged to stay in a company because of moral/ethical matters 

Job Satisfaction
Job satisfaction can be measured in two ways-
 Single global rating method (survey participants answer one question: How satisfied are you
with your job?)
 Summary of job facets (makes an employee evaluate each element of a job), possible facets
can be salary, communication with co- workers and with supervisor, number of days off,
etc.

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The first, “one-question” method is fast and inexpensive. The second one (summary of job
facets) is more accurate, allows the identification of the core problems and makes it easier to
create possible solutions.
 
What makes employees satisfied with their job?
 The fact that they enjoy their work
 Interesting jobs that provide training, variety, independence and control
 Most people prefer challenging over easy and various over routine
In general, most of the time is the nature of job that makes one satisfied with work. However,
also personality is an important factor influencing job satisfaction. It is essential to have positive
core self-evaluations (which are one’s evaluations of his possibilities, abilities, and strengths).
 Once a person achieves a level of payment that allows for him comfortable living, the
relationship between pay and job satisfaction does not exist any longer.
 
There are 4 responses to dissatisfaction:
1. Exit – behavior indicating the will to leave the organization
2. Voice – results in actively and constructively trying to change dissatisfying conditions
3. Loyalty – waiting passively hoping for situation improvement
4. Neglect – doing nothing, letting the conditions worsen
 
Relationships between job satisfaction variables:
 Job satisfaction and job performance  strong positive relation -> more satisfied workers are
more productive
 Moderate relation between job satisfaction and organizational citizenship behavior -> more
satisfied workers more probable that they engage in OCB
 Satisfied workers enhance customer satisfaction and loyalty
 Satisfied workers are less likely to miss work (moderate relation)
 Satisfied workers are less likely to quit (strong relation)
 Job dissatisfaction is much likely to cause workplace deviance
 Managers usually overestimate job satisfaction but do not actually measure it.

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 Chapter 4
Emotions and Moods

Affects: Also referred to as the experience of different feelings, can be divided into emotions and
moods.

Emotions:
Are more intense and have a contextual stimulus (they are caused by a person, situation,
action, event); they usually last for seconds/minutes. Emotions: most of researches have agreed
that there are 6 basic emotions: happiness-surprise-fear-sadness-anger-disgust.

Moods:
Are less intense and lack situational stimulus. Are usually not felt towards people and last
longer than emotions. Moods are more cognitive while emotions are more behavioral (can lead
us to action). Moods and emotions can influence each other. Emotion, if it is deep and lasting,
and turn into mood. Moods can be of negative or positive affect.

Sources of Emotions/Moods:
 Personality – people have tendencies to experience some moods/emotions/ Moreover,
people also differ in how intense they experience emotions. This last concept is called affect
intensity
 Time – worst moods early in the week, best moods late in the week. Most positive emotions
at mid-point between waking and sleeping, negative emotions highest in the morning and
later average
 Weather – weather has little influence on mood. What happens on the cultural level in the
society is illusory correlation (people think that nicer whether makes them feel better) – it
occurs when people associate some events when in reality there’s no link between them
 Stress – stress negatively influence moods/emotions
 Social life – social activities make people experience positive emotions and also people
experiencing positive emotions seek social activities
 Sleep – poor sleep equals negative emotions (at work reduces job satisfaction).
 Exercise – sport increase positive moods
 Age – negative emotions occur less and less with age. With age, we are more emotionally
wise

Emotional labour:
Emotional labour is a form of emotional regulation in which workers are expected to display
certain emotions as part of their job, and to promote organizational goals. The intended effects
of these emotional displays are on other, targeted people, who can be clients, customers,
subordinates or co-workers. What happens sometimes is emotional dissonance (showing one

7
emotion while experiencing another), it is often a difference between felt emotion and
displayed emotion (displayed emotions/regulations are organizationally required and claimed
as appropriate in a particular job).
 
Employees can show displayed emotions by:
1. Surface acting - "painting on" affective displays, or faking; Surface acting involves an
employee's presenting emotions on his or her "surface" without actually feeling them. Is
more stressful than deep acting
2. Deep acting - attempt to change one’s inner feeling to match emotion expressions that an
organization requires (that is displayed emotions).

Affective Events Theory:

Model developed to identify how emotions and moods influence job performance and job
satisfaction. The model increases understanding of links between employees and their
emotional reaction to things that happen to them at work.
Look at the appendix for the model.

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 Chapter 5
Personality and Values

Nature of personality: Before going deeper into the subject, we define the term personality as
one’s total sum of behaviors, reactions, and interactions with others. In organizations, HRM
departments use personality tests to measure and forecast the behavior of prospective employee.

The common method of measuring personality is self-report survey – one evaluates himself on
different variables. The other means of personality measurement is the observer-rating survey,
which is a more independent assessment – a person observes and rates personality of another
person (employee, prospective employee, etc.). Claimed to be more successful in the context of
organizations.

Models which organize traits

There are two main models which recognize and organize traits:
 The Myers- Briggs Type Indicator
 Big Five Model
 
The Myers- Briggs Type Indicator- the most common personality-assessment tool. It’s a test
which consists of 100 questions related to behaviors, feelings, and attitudes in different
situations. After doing the test, a person can be classified to the following groups:
 Extroverted or introverted – extraverted types are gregarious, social, assertive, outgoing
 Sensing or intuitive – sensing types like routine, are practical-oriented, pay attention to
details
 Thinking or feeling – thinking types are logical and analytical when facing problems
 Judging or perceiving – judging types like the ordered, structured world, need for control
Disadvantages of the model: a person must be classified either to one type or another –cannot
be in-between the types, and do not reflect job performance.
 
Big Five Model personality-assessment tool which recognizes five aspects:
 Extraversion: reflect one’s level of comfort with relationships
 Agreeableness -> describing someone who is warm, cooperative, easily reaches
compromises and is trusting.
 Conscientiousness -> describing someone who is organized, determined, responsible and
reliable.
 Emotional stability -> handling stress measure. Negative emotional stability relates to
people who get angry/nervous/upset easily, irritated quickly, feel insecure, and lack
confidence.

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 Openness to experience -> describes curiosity of world or some of its aspects, creativity,
interest in innovations, novelties.
Nature of values: Basic convictions that a specified mode of conduct or end state of existence is
personally or socially preferable to an opposite or converse mode of conduct or end to end state
of existence.
The most basic categorization of values recognizes terminal and instrumental values and is used
in Rokech Value Survey (RVS). RVS is made of two sets of values: terminal values are desirable
goals and instrumental values that represent behaviors/modes which help to achieve the
terminal values (terminal goals). People in the similar occupations have similar RVS values.
Moreover, it is necessary to mention generational values. Researches have made the following
division:
 Veterans -> begin of the workforce in 1950s and 1960s; rather loyal, belief in authority,
order, hardworking, pragmatic, traditionalists.
 Boomers -> born after the WWII; workforce from mid-1960s until mid-1980s; career-
oriented, making-money attitude, distrust/dislike of authority.
 Xers -> entered workforce from 1985 until 2000; people with team-sprit at work, who value
relationships, bonds, balance their work with private life, question authority, do not like
rules.
 Nexters -> on the work market since 2000; people to whom financial success is important,
they are technology-oriented at work, confident, value both self and relationships, team
spirit combined with work autonomy.
Disadvantages of the division above: does not apply in all cultures, little research – relying on
intuition, inexact categories.

Matching individual’s values and personality to the workplace

1. Person-job fit -> recognizes 6 personality types and makes a match between particular
personality fit and occupation and its environment. A successful match guarantees high job
satisfaction and lower probability to resign from the job. The possible personality types in
person-job fit theory are: realistic, investigative, artistic, social, conventional, enterprising.

2. Person-organization fit -> this theory claims that people are attracted to and chosen by
organizations that correspond to their values and beliefs. If it is not the case, a person will
leave the organization. A fit between one’s values and corporate culture and values
guarantees job satisfaction, organizational commitment and low probability of leaving the
firm.

10
 Chapter 6
Perception and
Individual Decision Making

Perception is a process by which individuals organize and interpret their sensory impression in
order to give meaning to their environment. Perception varies from person to person. Different
people perceive different thing about the same situation and one might change one’s perspective.

Factors that Influence Perception: -

A number of factors operate to shape and sometimes distort perception. Factors are external
and internal factors are as follows:
 External Factors: - Some of the external factors that influence perception are: size,
intensity, position, contrast, repetition.
 Internal factors: -Some of the internal factors that influence perception are: motivation,
interest, need

Specific Application of Shortcuts in Organizations: -

People in organizations are always judging each other. Managers must appraise their
employees’ performance. In many cases, our judgments have important consequences for the
organization. The most obvious applications are:
 Employment interview
 Performance Expectation
 Performance Evaluation

Decision Making in Organizations:

Decision making refers to making choices among alternative courses of action-which may also
include inaction. Individual throughout organizations use the information they gather to make a
wide range of decisions.

The Rational Model, Bounded Rationality, and Intuition: -

 Rational Decision-Making Model: -A decision-making model that describe how individual
should behave in order to maximize some outcome.
 Bounded Rationality: - A process of making decisions by constructing simplified models that
extract the essential features from problems without capturing all their complexity.
 Intuitive Decision Making: - An unconscious process creates out of distilled experience.

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Common Biases and Errors in Decision Making: -
 Overconfidence Bias
 Anchoring Bias
 Confirmation Bias
 Availability Bias
 Randomness Error

Influences on Decision Making:

a) Individual Differences
b) Organizational Constraints

 Individual Differences: -
Decision making in practice is characterized by bounded rationality, common biases and errors,
and the use of intuition. In addition, individual differences create deviation from the rational
model. Some of individual differences are: Personality, Gender, Mental ability, and Cultural
differences.

 Organizational Constraints: -
Organizations can constrain decision makers, creating deviations, performance evaluation,
reward system, formal regulations.

12
 Chapter 7
Motivation Concepts

One defines motivation as a reason for engaging in a particular behavior towards attaining a
goal. It relates to 3 key concepts: direction, intensity and persistence of human behavior.
Intensity=how much one tries, direction= it leads to the desired outcome, persistence=how long
one tries.

Early theories of motivation

Hierarchy of needs – Maslow pyramid
1st level -> Psychological – hunger, thirst, shelter, sex
2nd level -> Safety – security, protection
3rd level -> Social – friendship, belonging
4th level -> Esteem – respect, status, recognition
5th level -> Self-actualization – self- fulfilment 
Lower order needs (psychological, safety) must be first satisfied so high-order needs (the rest)
can be attained. One cannot move from satisfying psychological needs directly to social,
because safety needs were not satisfied. Higher-order needs are often satisfied internally
(within the person), lower-order needs are satisfied externally (pay, tenure) Later, Maslow’s
theory of needs was elaborated to ERG theory. This theory proposes only 3 core needs –
existence, relatedness and growth.
 
Theories X (Negative) and Y (Positive):
This theory is based on manager’s assumptions of their employees. Theory X is full of
assumptions such as: employees are lazy, dislike their work, everything is somebody’s fault,
employees’ interest in job is restricted to just being paid, employee cannot be trusted. Theory Y
is based on assumptions such as: employees may be ambitious, motivated, can handle work
autonomy, can be given authority and be empowered. In terms of Maslow hierarchy, higher-
order needs dominate individuals in theory Y, lower-needs dominate in theory X.

Two-factor theory (motivation-hygiene theory):

Theory developed by F. Herzberg. His studies proved that certain factors cause job satisfaction
and a separate set of factors cause job dissatisfaction. Hygiene factors are: status, job security,
salary, fringe benefits – if these factors are present, a worker won’t be dissatisfied. If they are
absent, workers will be dissatisfied. There are as well motivation factors: challenging work,
recognition, responsibility, and empowerment. These factors give positive satisfaction. Despite
many criticisms, this theory is widely known by managers.

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McClelland’s Theory of Needs
It focuses on 3 needs: need for achievement (nAch), need for power (nPow) and need for
affiliation (nAff). These needs are subconscious. Researches focus mainly on nAch and the
relationship between nAch and job performance. Critique: the theory has less practical
approach than others and applying and measuring concept in practice is expensive and time-
consuming.

Contemporary Theories of Motivation

Cognitive Evaluation Theory:
Theory which addresses the effects of social contexts on intrinsic motivation. It states that if we
think we will be able to complete the task, we will be intrinsically motivated to complete the
task, requiring no further external motivation. And if we are extrinsically awarded for behavior
which was previously intrinsically rewarding, then the general motivation level drops. Examples
of extrinsic rewards: bonus, salary, verbal praise.

Goal-setting Theory:
This theory claims that providing specific, challenging and interesting goals, while giving
constant feedback, results in better outcome. Acceptance of a goal, however hard it can be to
achieve, results in higher effort to achieve it.
goals. MBO may not work due to unrealistic expectation, lack of commitment or the
inability/unwillingness to reward according to goal accomplishment.

Self-efficacy Theory:
Developed by Albert Bandura. It is based on one’s confidence that he/she can perform/achieve
a goal. The higher one’s belief in succeeding (that is the higher one’s self-efficacy), the higher
one’s motivation and response to feedback. There are four methods of enhancing self-efficacy:
enactive mastery-relevant experience with the task/job, vicarious modeling- gaining confidence
by watching others performing the task, verbal persuasion-someone persuades you that you
can succeed, and the enhancement of positive emotional responses by the reduction of stress
reactions (arousal). Training programs use enactive mastery. The Galatea effect means
communicating expectations directly to employees and self-fulfilling of this expectation.

Equity Theory:
This theory argues that employees compare their efforts and their outcomes with those of
other employees, in case of inequities they act. There are four ways one can compare his inputs
and outputs with those of co- worker: self-inside, self-outside, other-inside, other-outside. The
moderating variables of comparison are gender, length of tenure, level in the organization and
amount of education/professionalism. Same gender prefers references from the same gender.
If one spots inequity, he can make the following decisions:
 Change the input
 Change the output
 Choose a different referent
 Distort perception of self
 Distort perception of others

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 Leave the field (e.g., leave the job)

Chapter 8
Motivation: From
Concepts to Applications

Motivating Potential Score (MPS) – index that estimates the job’s motivating potential. It is
calculated as: 

MPS = ((skill variety + task identity + task significance)/3) x autonomy x feedback

Motivating jobs needs to high at least on one of the three dimensions that create
meaningfulness and, on both autonomy, and feedback. However, it is better to add the above
characteristics to improve motivation, rather than using this complex model.

Job Redesign

Job rotation (employee is performing different tasks at different times, tasks shift, employee
moves from one job to another which requires the same skills level). Reduce boredom, increase
motivation, increase flexibility as employees have more skills. But it increases training costs,
creates disruptions, reduce productivity.

Job enlargement (employee is performing more different and various tasks, his work is
becoming more diverse and it horizontally widened) The application of job enlargement is not
always successful, as employees may dislike the job even more.

Job enrichment (vertical widening of one’s job, adding activities from different expertise fields,
e.g., controlling, leading, planning, implementing, one has more responsibilities and
independence). Reduces absenteeism, turnover costs, increase satisfaction, but doesn’t work
very well in productivity.

Alternative work arrangements

Flextime – flexible time work
Job sharing – two or more workers share a 40-hour week job
Telecommuting – working from home

Ability and opportunity

Performance may be calculated as = (ability x motivation x opportunity to perform).
Opportunity to perform means absence of barriers that may limit the performance of an
employee

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Employee involvement programs
Participative management – joint decision making between employees are their supervisors

Representative participation – representation of employees who participate in organizational

decision making instead of all workers participating in decision making, in form of works
councils and board representatives.

Quality circles – volunteer group composed of workers who meet to talk about workplace
improvement, and make presentations to management with their ideas, especially relating to
quality of output in order to improve the performance of the organization, and motivate and
enrich the work of employees.

Rewards as Motivators

What to pay? Pay structure -> process of establishing pay level to balance internal and external
equity. Pay more: better qualified, motivated and longer loyalty, but leads to very high cost.
How to pay? More and more organizations use variable-pay programs – refers to compensation
that is received in addition to the base pay. The amount received may be linked directly to
individual, team, division and/or organization performance, and is determined (typically) by a
variety of measures important to the organization.

Piece-rate pay – employees is paid stable price for each unit of completed production.
Limitation: not feasible and realistic for many jobs.

Merit-based pay – pay plan that is performance-related. It provides bonuses for workers who
perform their jobs better, according to measurable criteria. Limitation: only valid upon the
performance evaluation on which it is based; dependent on the pay raise pool, resisted by
(trade) unions.

Bonuses – pay plan rewarding employees for latest performance (not past)

Skill-based pay - employees are paid on the basis of the number of job skills they have or have
acquired or number of jobs they can perform. Limitation: the organization may pay the
employees for acquiring skills which are not immediately needed.

Profit-sharing plan - various incentive plans introduced by businesses that provide direct (cash)
or indirect (stock) payments to employees that depend on company's profitability in addition to
employees' regular salary and bonuses

Gainsharing - program that returns cost savings to the employees, usually as a lump-sum
bonus. It is a productivity measure, as opposed to profit-sharing which is a profitability measure

Employee stock ownership plan – plan in which employees can buy company’s stock for below-
market prices as benefits.

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 Chapter 9
Foundation of Group Behaviour

A Group is defined as two or more individuals, interacting and interdependent, who have come
together to achieve particular objectives. A group is the largest set of two or more individuals
who are jointly characterized by a network of relevant communication, a shared sense of
collective identity.

Significance of Group Behavior: -

As a manager, it is important to understand the behavior of the group. Therefore, let us learn
the significant of the group behavior as discussed below: -
 Group Goals
 Group Function
 Social Function

Stages of Group Development: - There are five stage model of group.

 Forming stage: - The first stage in group development, characterized by much uncertainty.
 Storming stage: - The second stage in group development, characterized by intragroup
conflict.
 Norming stage: - The third stage in group development, characterized by close relationship
and cohesiveness.
 Performing stage: - The fourth stage in group development, during which the group is fully
functional.
 Adjourning stage: - The final stage in group development for temporary groups,
characterized by concern with wrapping up activities rather than task performance.

Group Properties: -
 Roles: - A set of expected behavior patterns attributed to someone occupying a given
position in a social unit. Different groups impose different role requirement on individuals
such as: - Role Perception, Role Expectations, and Role Conflict.
 Norms: - Acceptable standards of behavior within a group that are shared by the group’s
members. Norms enables a group to accomplish its group. Norms enables a group to
survive in the face of threat and competition from other groups. They protect the group and
its member from outside pressure.
 Status: - A socially defined position or rank given to group member by others. For example,
a top management team has a very high status as it not only sets organizational goals but
also determines how the organization to achieve them has.

17
 Size: - Group size is important determinant of group’s structure. Size of the group is
determined by the number of members who constitute a group. The size of group
influences group’s overall behavior. In case size of group is large, it affects the productivity,
commitment of group member towards groups, which is called loafing.
 Cohesiveness: - The degree to which group members are attracted to each other and are
motivated to stay in the group.
 Diversity: - The extent to which members of a group are similar to or different from, one
another.

Group Decision Making: -

Group decision making is a situation faced when individual collectively make a choice from the
alternatives before them. The decision is then no longer attributable to any single individual
who is a member of the group.

Group Decision Making Techniques: -

The most common form of group decision making takes place in interacting groups. Members
meet face to face and rely on both verbal and nonverbal interaction to communication. Some
problems arise in interaction, some techniques can reduce problems inherent in the traditional
interacting group they are: -
 Brainstorming.
 Nominal Group Techniques.
 Electronic Meetings

18
 Chapter 10
Understanding Work Teams

Teams have become an effective and efficient way to make use of employees’ talents. It was
found out that teams have more flexibility and sensitivity to changing circumstances as well as
benefitting from additional motivational factors.

What are the differences between groups and teams?

Work team: the output (result) is greater than sum of individual inputs

Work Group Work Team

Goal Share information Collective performance
Synergy Neutral (sometimes negative) Positive
Accountability Individual Individual and Mutual
Skills Random and varied Complementary

Types of teams
Problem- solving teams -> 5-12 employees from the same department meet on a weekly basis
to discuss issues such as quality, efficiency, opportunities and working conditions. They share
information on how things can be improved. They usually cannot make decisions.
 
Self-managed work teams -> teams that can solve problems and implement solutions as well as
take accountability for their results. Such teams count 10-15 employees who perform very
similar/interdependent jobs. Team members take some duties, tasks from their supervisors.
Nevertheless, there is not clear evidence of the effectiveness of self-managed teams. It happens
that members of those teams are more absent at work and have higher turnover statistics.
 
Cross-functional teams -> teams composed of employees who are comparable in a hierarchy,
but are from different departments and their common goal is to accomplish a task. It is a good
method for information exchange between different work areas. They are effective in idea
generation, problem solving and controlling complex assignments. However, they are time-
consuming (to build trust and teamwork)
 
Virtual teams -> teams that use ICT to have a contact with physically unreachable members in
order to accomplish a common goal. To the main challenges of these teams belong: less direct
interactions between members (least social method), face-to-face discussion advantages
cannot be transferred; members report less satisfaction with group interactions.

19
What are the characteristics of effective teams?
1. Context components:
- Adequate resources -> teams rely on resources the organization is willing to give them. Not
enough resources limit teams’ effectiveness. Resources can include information, equipment,
staffing, assistance and support.
- Leadership and structure -> team members must agree on who is doing what. It requires
leadership and team structure to create a fit between individuals’ skills and work tasks. In self-
managed teams, the manager is limited to outside management, while team members perform
many inside management duties.
 
2. Composition components:
Abilities of members -> effective teams need members that have technical skills, problem-
solving skills and decision-making skills, and/or lastly interpersonal skills. The balance between
these three skill components must be kept. Skills can be learnt throughout the working process.
There are a few relations between team members’ abilities and team performance. In case of
thought-demanding tasks, high-ability teams perform better. They are also more flexible. In
case of easier tasks, low-ability teams stay on track of the tasks, while high-ability teams are
easily distracted. It needs to be remembered that matching team ability with task matters.
Finally, the leader’s abilities matter.
 
3. Work design components -> It improve members’ motivation and teams’ effectiveness. They
motivate because they increase degree of responsibility and make work more interesting.
 
4. Team processes components -> because of social loafing, the group effectiveness is less than
the sum of individual members’ effectiveness.
- Common plan and purpose: showing reflexivity
- Specific goals -> effective teams have SMART objectives/goals
- Team efficacy -> effective teams believe in themselves, have high team-efficacy. However,
managers should provide teams with training, because the higher team members’ abilities and
belief in them, the higher team’s confidence.
- Mental models -> effective teams have similar mental models, which are knowledge and
beliefs about how tasks and work are accomplished successfully.
- Conflict levels -> not every conflict is bad. The most dysfunctional conflict type is relationship
conflict. On the contrary, positive conflict example may be task conflict. In general, teams
without conflicts can suffer from lethargy; conflict reduces probability of groupthink. Conflicts
(on the acceptable level) have the ability to improve team’s effectiveness.
- Social loafing -> effective team is composed of people that avoid social loafing and feel
accountable for the task outcome individually and as a team.

help us predict turnover, turnover

will be greater among those with
20
dissimilar backgrounds bc it
decreases communication and
increases
conflict (diversity hurts orgs!!?),
BUT cultural diversity can be an
asset to
tasks that require a variety of
viewpoints but they also struggle
to work
together, takes time for differences
to settle/not be a problem
■ size of teams - most agree that
keeping teams small is a key to
improving
group effectiveness, 5 to 9, too
many members declines
cohesiveness,
21
mutual accountability, and
communication
■ member flexibility/member
preferences - not every employee
is a team
player, many employees will select
themselves out of team
participation,
high performing teams are likely to
be composed of people who prefer
working as part of a group
○ PROCESS
■ common purpose - effective
teams begin by analyzing the
team’s mission,
developing goals to achieve the
mission, and creating strategies for
22
achieving the goals, common
purpose becomes a GPS to provide
direction/guidance, effective teams
show reflexivity by reflecting
on/adjusting their master plan
when necessary
■ specific goals - successful teams
translate their common purpose
into
specific, measurable, and realistic
performance goals, specific goals
facilitate clear communication and
help teams focus on getting results
■ team efficacy - effective teams
have confidence in themselves,
believe
they can succeed
23
■ Mental models - effective teams
share organized mental
representations
of the key elements within a
team’s environment that team
members
share, shared ideas of how to do
things
■ conflict levels - conflict has a
complex relationship with team
performance, relationship conflicts
are almost always dysfunctional
vs.
task conflicts stimulate
discussion/promote critical
assessment of

24
problems and options and can lead
to better team decisions
■ social loafing - individuals can
engage in social loafing and coast
on the
group’s effort, effective teams
undermine this by making member
individually and jointly
accountable for the team’s
purpose, goals, and
approach
● Potential group effectiveness +
process gains - process losses =
actual group
effectiveness
Turning individuals into team
players
25
● Selecting: hiring team players
○ Be sure candidates can fulfill
their team roles as well as
technical requirements
○ Personal traits appear to make
some people better candidates for
working in
diverse teams
● Training
Why have teams become so
popular
● Teams are a way to optimize
employee talents
○ Teams are more flexible and
responsive to changing events than
traditional

26
departments or other forms of
permanent groupings
○ they can quickly assemble,
deploy, refocus, and disband
○ They are an effective means for
management to democratize
organizations,
facilitate employee participation in
operating decisions, and increase
employee
involvement

Chapter 11
Communication

Effective and successful communication in a workplace is very important. Problems with

communication are the number one cause of conflicts. Recently, communication skills were

27
discovered to be the most important skill of a job applicant. Communication is the spread of
information as well as understanding the meaning of the information received/given.

Communication functions
In the OB context there are several functions that communication fulfills. Those functions
are: control, emotional expression, motivation and information. First of all, communication aims
at controlling one’s behavior – think of e.g., an employee required to report work progresses.
Moreover, communication enhances motivation – all motivational techniques require
communication. Furthermore, communication as an emotional expression helps in social
interactions to express our feelings, moods, emotions, and attitudes.
 
Communication process
To understand communication, one needs to be familiar with the so-called communication
process in which the two objects are central – sender and receiver. However, for the
communication to be effective between a message sender and receiver the following phases
take place.
 As soon as there is a message ready to be sent, sender encodes the message.
 The message is transmitted through a chosen channel.
 The communication process can be more difficult because of the noise (anything that makes
message more difficult to be understood, received)
 The communication can end with the receiver receiving and encoding the message
(understanding the meaning) or with the feedback given from receiver to message source,
which is sender. 
A sender can choose either informal or formal channels to transmit the message. Formal
channels are set up by the organization and refer to transmitting work-related messages.
Informal channels are spontaneous and are the response to individual needs.

Communication Barriers
Whatever communication form we choose, we should prepare for facing communication
barriers. These barriers include: -

1. Filtering – sender manipulates the information so the receiver takes it as more favorable.
Telling what others want to hear. It happens more often in case of status differences and in
organizations with higher hierarchical ladders.
2. Selective Perception – we select and interpret information we are exposed to. Not
everything that sender is transmitting, is received by receiver because the receiver picks the
information he values, is interested in, etc.
3. Information Overload – we cannot process each and every information that is sent to us.
We are not capable of that (imagine processing each ad you are exposed to every day). And
thus, we select, pick and ignore some information.
4. Emotions – the way we feel, influences the way we interpret information.
5. Language – slag, professional jargon, dialects

Formal communication networks:

28
1. Formal small-group networks- Three possible networks are: chain, wheel and all channel.
The communication in chain is strictly operating in a chain of command
2. The Grapevine- organization’s informal communication network. The fact that it is not
formal, does not refer to meaningfulness of messages communicated. This network has 3
main features: it is not controlled, it is seen as very trustworthy source of information, it is
often used for the vested-interest of individuals.
3. Electronic communications – E-mails, Networking software: Facebook, Myspace, LinkedIn
should be used for “high-value items only”, not as a daily tool.

Chapter 12
Leadership

First of all, the difference between management and leadership has to be explained.
Management, according to John Kotter, means coping with complexity. Leadership, however,

29
means coping with change. Robert House has different view on this. He thinks that
management’s job is to execute strategies set by leaders, as well as to control, take care of HR
and be busy with everyday problems.

The book defines leadership as ability to motivate, encourage a group to achieve set goals,
vision or strategy. The role of the leader may be assigned (formal) or deduced by a person from
the position he/she occupies in the organization. Managers are not equal to leaders.
Nevertheless, management needs both: effective management and effective leadership.
 
There are a few theories on leadership:

Trait theories on leadership

Theories based on the concept of distinguishing leaders from non-leaders on the basis of
person’s individual qualities and characteristics. These theories claim that leaders are born, not
made.
Researches have had difficulties with determining the number and naming the traits that make
a person a good leader. Then, the development of Big Five personality model made it easier for
researches. It has become noticeable that many traits attributed to leaders fall into one or
many categories of the Big Five. So, accordingly:

 Extraversion is claimed to be the most important trait of leader emergence, not necessarily
of leader’s effectiveness. Social people are the better leaders than unsocial. Moreover,
leaders that are too assertive are less effective.
 Conscientiousness and openness to experience also show strong, positive correlation to
leadership.
 Agreeableness and emotional stability are not highly related to leadership. 

Another trait, not included in the above Big Five model, is EI (emotional intelligence). What is
decisive in case of EI’s importance to leadership is EI’s core value: empathy. Effective leaders
are empathic leaders (leaders that can read other’s feelings, reactions, are good listeners).
Nevertheless, there is more research on other traits, other than EI, and their corrections to
leadership.
Summing up, person’s traits help to predict his/her leadership behaviors. Nevertheless, one has
to careful with linking traits with effective leadership, because traits are better predictor of
leaders’ emergence rather than effectiveness.

Behavioral theories
Theories based on assumptions that certain behaviors distinguish leaders from non-leaders. The
limitation of this theory can be proved by theory’s main assumption that people can be trained
to be leaders, what is obviously not complete truth. So, theories proposed that leadership can
be taught.

Ohio State Studies

30
Ohio State Studies developed 2 dimensions of leadership behavior:
 Initiating structure - task-oriented behaviors that facilitate goal accomplishment. Extent, to
which a leader defines leader and group member roles, initiates action, organizes group
activities and defines how tasks are to be accomplished by the group.
 Consideration – people-oriented behaviors. Extent to which a leader exhibits concern for
the welfare of the members of the group. This factor is oriented towards interpersonal
relationships, mutual trust and friendship

Leaders high in consideration make their followers more job-satisfied, motivated and more
respectful.
Leaders high in initiating structure make their followers perform better in groups.

University of Michigan Studies

Also developed 2 dimensions of leadership behavior
 Employee- oriented leaders: focus on interpersonal relations, have personal interest in
employees’ needs and recognize differences between group members. Associated with
higher group productivity, greater job satisfaction.
 Production oriented leaders: focus on task-related and technical issues. Associated with
lower group productivity and job satisfaction. 

Blake and Mouton developed a managerial grid (leadership grid), a 9-by-9 matrix representing
two variables; concern for people and concern for production. It represents both University of
Michigan studies on employee and production-oriented leaders and Ohio State studies on
initiating structure and consideration. The managerial grid is a good tool for conceptualizing
leadership. Leader that scores 9.9 on the grid are the most effective ones. 
Trait theories and behavioral theories should be combined for maximum effectiveness.
However, they both lack some situational factors.

Contingency theory
This theory states that the leader's ability to lead is contingent upon various situational factors,
including the leader's preferred style, the capabilities and behaviors of followers and also
various other situational factors.
 

Chapter 13
Power and Politics

What is power?

31
Power refers to the potential of the influence that a person/party can exert on another
person/party so that it acts in a way that the influencer wants. It can exist, but not be used. It is
based on a dependency variable.
 
Relationship between power and leadership
Leaders use power as a mean to achieve goals. Power just needs dependability, while
leadership requires goals compatibility between leader’s and his/her followers’ goals.

Bases of power
Formal power: Based on one’s position in an organization.
Coercive power: power dependent on fear. A person acts in a way because he/she fears of
outcomes of incompliance. This power bases on threat of application e.g. sanction, restrictions,
pain, dismissal and so on.
Reward power: can be gained from one's capacity to reward compliance. People comply with
directives, orders because compliance generates positive benefits. There are those who reward
and those who see it as valuable. It is the opposite of coercive power.
Legitimate power: a formal power one gains by holding a particular position in an organization,
includes both coercive and reward power. In OB context, it is probably the most common.
 
Personal power:
Power originating from a person’s characteristics.
Expert power: power that is based on unique skills or know-how/knowledge.
Referent power: individual power based on a high level of identification with, admiration of, or
respect for the powerholder (e.g., power of celebrities)
 
Personal bases of power are most effective. They relate positively to satisfaction, organizational
commitment and performance. Coercive power causes less satisfaction and less commitment.
 
Dependency: Relation between A and B - The greater B depends on A, the greater power A has
over B.
Dependency is inversely proportional to the alternative resources e.g. among the famous
people, fame is no longer a power. In the business context, an example of suppliers can be
given - many suppliers are better than one.
What creates dependency? It is the resources’…
 Importance
 Scarcity
 Impossibility of substitutes
Power tactics
Power tactics are ways in which a person uses power in specific situations.

There are 9 different influence tactics:

 Legitimacy  Consultation
 Rational Persuasion  Exchange
 Inspirational Appeal  Personal appeals

32
 Ingratiation – using flattery, praise  Coalitions
 Pressure
Research has proved that rational persuasion, inspirational appeal and consultation are the
most effective. Pressure is probably the least effective. Combination of many may be helpful.
The effectiveness of those tactics depends on the influence’s direction e.g. rational persuasion
works only in upward influence. Moreover, the order of tactics matter. It’s better to start with
“softer”. Using just one soft tactic works better than using just one hard tactic and the best way
of all is to combine many soft tactics.

Politics: Power in action

Organizational Politics
 Political behavior is used to describe “activities that are not required as part of a person’s
formal role in the organization but that influence or attempt to influence, the distribution of
advantages and disadvantages within the organization”. This definition includes decision-
making process as the’ distribution of advantages and disadvantages.
 There are 2 dimensions of political behavior: legitimate political behavior (normal day-to-
day politics, e.g. complain to supervisor, form coalitions) and illegitimate political
behavior (political actions, decision which violate rules, are abusive e.g. sabotage). 

The reality of politics: organizations are politics-loaded because of competition for scarce,

limited resources as well as disagreement between different parties in many issues. Politics
exists because there is a lot ambiguity in interpreting facts and some people
use politicking (using influence to support facts aiming at achieving their interests).
 
Causes and consequences of political behavior:
Factor encouraging political behavior can be individual or organizational.
 Individual factors: some traits, qualities are connected with political behavior. These traits
are high self-monitoring, internal locus of control, High Machiavellian personality,
organizational investment, perceived job alternatives, expectations of success.
 Organizational factors: factors resulting from organizational culture and internal, working
environment. Certain cultures do promote political activity. Organizational factors that
promote political behaviors are: resource reallocation, promotion opportunities, low trust,
role ambiguity, vague evaluation system, zero-sum reward practices (win/lose approach),
democratic decision-making, high-performance pressures, self-serving senior managers.
 

Chapter 14
Conflict and Negotiation

33
Conflict is the process initiated when one party perceived as about to be, or being negatively
affected by another party on something that the first party cares about.

School of thoughts on conflict:

Traditional school of conflict assumes that conflict must be avoided at all costs and that it
causes group’s functioning deterioration. The conflict is perceived as dysfunctional, bad,
violent.
Human relations school of conflict assumes that conflict is a natural response and should be
accepted as such. Still, the theory argues it cannot be avoided and sometimes can be functional.
Interactionist school of conflict argues that minimum level of conflict benefits group’s
performance. Conflict is viewed as helpful to avoid group’s stagnation, apathy. Conflict is
something necessary.
 
The theory distinguished between functional and dysfunctional conflicts. Functional conflicts
help the group, while dysfunctional worsen its operation.
It also distinguishes between task, relationship and process conflicts. Relationship conflicts are
usually dysfunctional. Low levels of process conflicts as well as low/moderate levels of task
conflicts are functional.

The conflict process

Stage 1 - Potential opposition or incompatibility
Three categories of conditions that can lead to a potential conflict:
 Communication (misunderstandings, a lot of noise in communication channel, jargon,
different connotations of words, etc.)
 Structure (assignment size, specialization, rewards, dependence between members, etc.)
 Personal variables (personality, emotions, values, etc.)
 
Stage 2 – Cognition and personalization
Two possibilities: felt conflict or perceived conflict.
At this stage, at least one party is aware of the conflict’s existence. This is the phase when
conflict issues tend to be defined and parties think how to react. Moreover, emotions play a
role in how we perceive the conflict situation. Negative emotions tend to worsen the situation,
while positive emotions encourage agreement.

Stage 3 – Intentions
Conflict-handling intentions: competing, collaborating, compromising, avoiding and
accommodating.
 Competing - assertive and uncooperative –parties want to satisfy their interests
 Collaborating - assertive and cooperative –parties want to reach agreement that satisfies
everyone
 Compromising – moderate level of assertiveness and cooperativeness – parties are willing
to resign from some of their postulates/potential benefits

34
 Avoiding – unassertive and uncooperative – withdrawal or suppression
 Accommodating – unassertive and cooperative – readiness to take another party’s interest
as superior and place them above own concerns.
 
Stage 4 – Behavior
Party’s behavior and other’s reactions. Conflict becomes visible. One should pay attention to
conflict-intensity continuum – the higher the conflict level, the more intense the reaction. High
level of conflicts usually implies dysfunctional outcomes. There are however conflict
management techniques which can minimize or stimulate the conflict level to reach the
required conflict degree.
 Conflict-resolution techniques: problem- solving, compromise, resources expansion,
superordinate goals, smoothing, avoidance, authoritative command, altering the human
variable and altering the structural variables.
 Conflict-stimulation techniques: communication, outsiders’ appearance, organizational
restructure, devil’s advocate appointment.
 
Stage 5 – Outcomes
Functional outcomes – eliminates groupthink, enhance creativity and decision-making quality,
increase productivity. Cultural diversity acts in favor of functional conflicts. Functional conflicts
can be created – rewarding people who go against the mainstream with their ideas, programs
that encourage dissention, systems of managers’ evaluation, assigning devil’s advocates.
Successful organizations reward dissenters and punish conflict avoiders.
Dysfunctional outcomes – decrease in group’s cohesiveness, group’s performance, lower
satisfaction, commitment.

Negotiation: Bargaining strategies

Distributive bargaining
The different parties are trying to divide something up-distribute something, creation of
win//lose situation. The parties assume that there is not enough to go around, and they cannot
"expand the fixed pie," so the more one side gets, the less the other side gets. In OB context,
the best example is wage negotiation.
 
The process of distributive bargaining involves 2 negotiators. Each of them has his target (most
acceptable situation) and resistance point (the least acceptable situation) as well as aspiration
range (area between these 2 points where negotiation can take place).

Integrative bargaining
The parties are trying to make more of something. Creation of win/win solutions. It is
preferable to the distributive bargaining because it builds relations.
There must be some conditions for integrative bargaining to succeed: parties involved in
negotiations need to be flexible, open, sensitive about others’ needs and value information-
sharing.
 Teams bargain more in integrative style than individuals
 When more issues are under negotiation, more likely win/win situation will appear

35
 Compromise does not almost imply win/win outcomes because it reduces need for
integrative bargaining
 
The negotiation process:
1) Preparation and planning -> ‘doing homework’, results in BATNA (best alternative to a
negotiated agreement) – the least acceptable situation
2) Definition of ground rules
3) Clarification and justification
4) Bargaining and problem solving
5) Closure and implementation

What individual differences influence a negotiation’s effectiveness?

 Personality traits – lack of strong evidence, but some of them indicate that certain traits of
The Big Five are connected to negotiation processes Agreeable and extraverted negotiators
do not perform well in distributive bargaining. Also, intelligence seems to influence
bargaining.
 Moods/emotions – yes, depends on the bargaining type. In distributive bargaining, angry
negotiators perform better. In integrative bargaining positive moods/emotions have
positive influence.
 Gender – women and men negotiate similarly, but gender affects negotiation’s outcomes.
Men are supposedly slightly better negotiators than women. Women are exposed to
stereotype threat, if they do not confirm they are blamed for breaking gender stereotype.
Women may also more influenced by their own attitudes and actions.
 
Third-party negotiations
 Mediator – A neutral party who assists in negotiations and conflict resolution, the process
being known as mediation
 Arbitrator - legal technique for the resolution of disputes outside the courts, wherein the
parties to a dispute refer it to one or more persons, by whose decision they agree to be
bound. Arbitrator has authority to dictate the agreement.
 Conciliator - parties to a dispute agree to utilize the services of a conciliator, who then
meets with the parties separately in an attempt to resolve their differences (serves as
informal communication link between parties)
 Consultant – is a trained in conflict management third party who tries to assist creative
problem solving by communication and proper analysis.

Chapter 15
Foundation of Organization Structure

36
Organizational Structure:

It is defined as how activities such as task allocation, coordination, and supervision are directed
toward the achievement of organizational aims. Organizational structure affects organizational
action and provides the foundation on which standard operating procedures and routines rest.

Elements of Organization Structure: -

 Work specialization business leaders must consider the job tasks and specific duties
associated with given positions. Dividing work tasks among different jobs and assigning
them to definite levels, is the role of work specialization elements.

 Departmentalization departments are often a group of workers with the same overall
functions. They are often broken down by broad categories such as functional, product,
geographical, process and customer. Common departments include accounting,
manufacturing, customer service and sales.

 Chain of command the unbroken line of authority that extends from the top of the
organization to the lowest echelon and clarifies who reports to whom.

 Span of control is the organizational design element that considers the capacity of any
manager. There are limits to the number of people one person can oversee and supervise

 Centralization and decentralization are organizational design elements deciding the degree
which decision-making is made at one central level or at various levels by employees.

 Formalization the degree to which jobs within an organization are standardized.

Common Organizational Designs: -

 Simple structure is defined as a design with low departmentalization, wide spans of control,
centralized authority, and little formalization. 

 Bureaucracy an organization structure with highly routine operating task achieved through
specialization, much formalized rules and regulation, tasks that are grouped into functional
departments, centralized authority, narrow span of control, and decision making that
follows the chain of command.

 Matrix structure is one that assigns specialists from different functional departments to
work on one or more projects.

37
 Chapter 16
Organization Culture

Organizational Culture is a set of assumptions, belief, values, and norms that are
shared by an organization’s members. Organizational culture refers to a system of
shared meaning held by members that distinguishes the organization from other
organizations.

Impact of Organizational Culture: -

Organizational culture, being unique and distinctive, prescribe some specific modes of
behavior for its members. These modes of behavior, then, affect the entire behavioral
processes. Though such behavior processes may have different dimension, they
ultimately create impact on objective setti ng, work ethic, motivational pattern, and
organizational processes.

Culture as a Liability: -
The culture of an organization provides boundaries and guidelines for the behavior of the
organizational members. Culture is usually an asset to an organization, but can become
a liability when it acts as a barrier to change and prevents the company from adapting to an
unfamiliar environment.
 Institutionalization
 Barriers to Change
 Barriers to Acquisitions and mergers

Creating Organizational Culture: -

Organizational culture is a long-term proposition that must satisfy the member’s
needs and values and match the cultural requirements of the society of which the
organization is a part.

Let us discuss the step involved in the process of creation of organizational culture:
 Establishing Values: The first step in creating organizati onal culture is
establishment of values which will govern members of the organization.
 Creation Vision: Vision represents the imagination of future events and prepares
the organization for the same.
 Operationalizing Value and Vision: The third step is preparing a written statement
containing its values and vision and communicates these to organizational
members.

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 Socialization of Employees: It is the process by which new employees understand the
company’s policies, the internal culture, how the company hierarchy works and the ways to
function effectively in the organization.

Spirituality and Organizational Culture: -

Organizations that promote a spiritual cultural recognize that people have both a mind and a
spirit, seek to find meaning and purpose in their work, and desire to connect with other human
beings and be part of a community.

Characteristics of a Spiritual Organization: -

The unique characteristics that differentiate a spiritual organization from others are: strong
sense of purpose, focus on individual development, trust and openness, employee
empowerment and toleration of employee expression.

Creating a positive Organizational Culture: -

Creating a positive culture may sound hopelessly naïve or like a Dilbert-style conspiracy.
Positive organizational culture emphasizes building on employee strengths, rewards more than
it punish, and emphasizes individual vitality and growth.

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 Chapter 17
Human Resource
Policies and Practices

An organization's human resource policies and practices create important forces that shape
employee behavior and attitudes. In this chapter, we specifically discussed the influence of
selection practices, training and development programs, and performance evaluation systems.

If properly designed, an organization's selection practices will identify competent candidates

and accurately match them to the job and the organization. Although employee selection is far
from a science, some organizations fail to design a selection system that can achieve the right
person-job fit.

The most obvious effect of training programs is direct improvement in the skills necessary to
successfully complete the job. Increased ability thus improves potential, but whether that
potential becomes realized is largely an issue of motivation.

A second benefit of training is that it increases an employee's self- efficacy-that is, a person's
expectation that he or she can successfully execute the behaviors required to produce an
outcome. Employees with high self-efficacy have strong expectations about their abilities to
perform in new situations. They're confident and expect to be successful. Training, then, is a
means to positively affect self-efficacy because employees may be more willing to undertake
job tasks and exert a high level of effort.

A major goal of performance evaluation is to assess an individual's performance accurately as a

basis for allocating rewards. If evaluation is inaccurate or emphasizes the wrong criteria,
employees will be over- or under rewarded. As demonstrated in Chapter 7 in our discussion of
equity theory, evaluations perceived as unfair can result in reduced effort, increases in
absenteeism, or a search for alternative job opportunities.

The content of the performance evaluation also influences employee performance and
satisfaction. Specifically, performance and satisfaction are increased when the evaluation is
based on behavioral and results-oriented criteria, when career issues as well as performance
issues are discussed, and when the employee has an opportunity to participate
in the evaluation.

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 Chapter 18
Organizational Change

Organizational Change is the alternation of work environment in organization. It implies a new

equilibrium between different components of the organization- technology, structural
arrangement, job design and people.

Factors in Organizational Change

Organizational Change is required to maintain equilibrium between various external and
internal forces to achieve organizational goals.
Planned change: Planned change is the deliberate design and implementation of a structural
innovation, a new policy or goals in operating philosophy or style.
Process of planned change: A major Organizational Change required considerable planning. The
various steps involved in a planned change are:
Identifying need for change
 Elements to be changed
 Planning for change
 Assessing change forces
 Change action
 Feedback

Resistance to change
Resistance to change is the action taken by individuals and groups when they perceive that a
change that is occurring as a threat to them.

Factors in resistance to change

People tend to evaluate the effect of change individually but they express it through group in
collective form. The reason underline resistance to change may be identified at two levels-
individual resistance and economic factors.

Change Agents
A change agent is a person from inside or outside the organization who helps an organization
transform itself by focusing on such matters as organizational effectiveness, improvement, and
development.

Organizational growth and change

There are five phases in Organizational growth- creativity, direction, delegation, coordination
and collaboration.

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 Summary

The subject of organizational behavior is composed of a large number

of theories that are research based. Research studies, when
cumulatively integrated, become theories, and theories are proposed
and followed by research studies designed to validate them. The
concepts that make up OB, therefore, are only as valid as the research
that supports them. The topics and issues in this book are for the most
part research-derived. They represent the result of systematic
information gathering rather than merely hunch, intuition, or opinion.
This doesn’t mean, of course, that we have all the answers to OB issues.
Many require far more corroborating evidence. The generalizability of
others is limited by the research methods used. But new information is
being created and published at an accelerated rate. To keep up with the
latest findings, we strongly encourage you to regularly review the latest
research in organizational behavior.

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 My OPINION

I like this book because this book does the best job in incorporating the latest
concepts and practices in organizational behavior and most comprehensive
coverage with latest development.
Personality, Perception and Motivation is my favorite part of the book. It is a
major factor to think and understand in a human because different people react
differently in a same situation.
This book has a proper blend of theories and practice of organizational behavior.
I would recommend this book to MBA/PGDM/M.Com. Students as the present
edition is ideally suited to other relevant PG courses students and Professors of
the different collages.
This book is helpful for the Professors to show the new path for better
understanding different dimensions of human behavior their students. The
conclusion of various Indian research studies on different aspects of
organizational behavior has been presented in this book so the researchers get a
great help from this book.

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