POM & OB by Dr. Ravi Avuldar

�ICL
(DEEMED TO BE u N I V E R s I Ty)
CENTER FOR DISTANCE AND ONLINE E DUCATION
MBA
PRINCIPLES OF
MANAGEMENT AND
ORGANISATIONAL
BEHAVIOUR
CDOE
CENTER FOR DISTANCE AND ONLINE EDUCATION
How to Use Self-Learning Material?

The pedagogy used to design this course is to enable the student to assimilate the concepts
with ease. The course is divided into modules. Each module is categorically divided into units or
chapters. Each unit has the following elements:
Table of Contents: Each unit has a well-defined table of contents. For example: “1.1.1.
(a)” should be read as “Module 1. Unit 1. Topic 1. (Sub-topic a)” and 1.2.3. (iii) should
be read as “Module 1. Unit 2. Topic 3. (Sub-topic iii).
Aim: It refers to the overall goal that can be achieved by going through the unit.
Instructional Objectives: These are behavioural objectives that describe intended

learning and define what the unit intends to deliver.
Learning Outcomes: These are demonstrations of the learner’s skills and experience
sequences in learning, and refer to what you will be able to accomplish after going
through the unit.
Self-Assessment Questions: These include a set of multiple-choice questions to be

answered at the end of each topic.
Did You Know?: You will learn some interesting facts about a topic that will help you
improve your knowledge. A unit can also contain Quiz, Case Study, Critical Learning
Exercises, etc., as metacognitive scaffold for learning.
Summary: This includes brief statements or restatements of the main points of unit and
summing up of the knowledge chunks in the unit.
Activity: It actively involves you through various assignments related to direct application
of the knowledge gained from the unit. Activities can be both online and offline.
Bibliography: This is a list of books and articles written by a particular author on a

particular subject referring to the unit’s content.
e-References: This is a list of online resources, including academic e-Books and journal
articles that provide reliable and accurate information on any topic.
Video Links: It has links to online videos that help you understand concepts from a
variety of online resources.
CREDITS
Author
Dr. Ravi Avuldar
Director CDOE
C.Shanath Kumar
Instructional Designer
Ms. Nabina Das
Content Editor
Ms. Mounika
Project Manager
K.D.N Lakshmi
Graphic Designer
Satish Babu Kotla
First Edition, 2023.
KL Deemed to be University-CDOE has full copyright over this educational material. No

part of this document may be produced, stored in a retrieval system, or transmitted,
in any form or by any means.
CDOE
Author's Profile
Dr. Ravi Avuldar is a distinguished professor for the past 28 years teaching both Marketing
Management and Human Resources Management at Undergraduate as well as Postgraduate
levels in various premier Institutions in India, Ethiopia, Malaysia, and Zambia. He is currently an
Associate Professor and the Coordinator of Programmes Management at Centre for Distance
and Online Education (CDOE) in Koneru Lakshmaiah Education Foundation, Andhra Pradesh,
India. He has five years of experience in managing industries at various locations in India prior
to pursuing his passion for a teaching career.
He received his Master’s degree at Alagappa University, Tamil Nadu, and his Ph.D. at
Bundelkhand University, Uttar Pradesh, both in Marketing Management.
Dr. Avuldar is the author of Personnel Management, International Marketing, and Principles
of Management. In addition, he has published more than 30 articles in leading journals,
including IEEE and Scopus-indexed journals.
He has been a member of Ph.D. Curriculum Review Committee at Haramaya University,

Ethiopia, and has been trained in programme quality assessment in Malaysia. He has
established the Department of Management, and developed curriculum for undergraduate
management programme at Adama University in Ethiopia. He has been the Chairman and
External Examiner of the Postgraduate Dissertation Evaluation Committees at various
universities in Ethiopia. He has considerable experience in virtual teaching and is quick to
adapt to technological changes taking place in the teaching-learning process from time to time.
Principles of Management and Organisational Behaviour

CDOE
Principles of Management & Organisational Behaviour

Course Description
People’s management and understanding fundamentals of their behavioural dynamics are
important aspects in the management of any business organisation since organisations are
built by and through people. Hence this course is for those who are interested in learning the
human side of the organisation. This course discusses how management thought and the
field of organisational behaviour have evolved over time. This course familiarises the students
with the individual and group behaviour concepts and helps to improve their analytical skills,
and their knowledge of the subject. It also aids them in making meaningful decisions under
various situations. This course also deals extensively with various concepts such as individual
personality and his values, perceptions and decision making, motivations, management of
conflicts, organisational culture and leadership.
Through this course, the students will be able to understand various functions of management and
the various models of organisational behaviour. They will also be able to explain the personality
determinants and the major personality attributes influencing organisational behaviour. They
will get to know the types of values and attitudes and will be able to describe the theories of
motivation, learning, and leadership. The students will also be able to demonstrate how to apply
the different techniques for managing various types of conflicts and stress. By the end of this
course, the students will explain the functions of organisational culture and will be able to identify
various methods of change management. They will also describe the various techniques of
organisational development.
This course is designed to serve as a stepping stone for the students to build a career in the field
of Organisational Behaviour.
Module 1: Introduction To Organisational Behaviour
Introduction to Organisational Behaviour: Evolution of management thought, five functions of

management, Evolution of OB. models of OB (Autocratic, Custodial, Supportive, Collegial and
SOBC), Importance of Organisational Behaviour.
Module 2: Foundations of Individual Behaviour
Foundations of Individual Behaviour: Personality- Personality determinants; Personality traits:

MBTI – The Big Five Model, Major personality attributes influencing OB; Psycho-Analytic Theory
– Johari Window – Values – Types of Values; Perception - Perceptual process; Factors
influencing Perception; perceptual distortion; Linkage between perception and individual
decision making Theories of Motivation – Hierarchy Needs Theory – Two-Factor Theory –
Expectancy Theory; Applications of Motivation; Attitudes – Source of attitudes; Types of
Attitudes, Attitudes and consistency – Cognitive Dissonance theory. Learning - Theories of
learning; Principles of learning.
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Module 3: Foundations of Group Behaviour
Foundations of Group Behaviour: Groups – Nature of groups; Types of groups; Stages of

Group Development; Group Cohesiveness; Group Decision-Making; Leadership – Nature;
Theories of leadership: Trait Theories, Behavioral Theories and Contingency Theories;
Conflict Management - Transactions in conflict thought; Functional versus Dysfunctional
conflict; The Conflict process; Conflict Management. Stress – Causes and consequences of
stress; Stress management.
Module 4: Organisational Culture and Change Management
Organisational Culture and Change Management: Nature; Culture’s Functions; Creating and
sustaining Organisational Culture; Forces for change; Resistance to change; Approaches to
Managing Organisational Change – Lewin’s Model – Kotter’s Plan for Implementing Change;
Organisational Development – Techniques of organisational development.
Table of Contents
MODULE 1
INTRODUCTION TO ORGANISATIONAL BEHAVIOUR ............................................... 1
1.1 Evolution of Management Thought ....................................................................... 7
1.2 Evolution of Organisational Behaviour ............................................................... 26
MODULE 2
FOUNDATIONS OF INDIVIDUAL BEHAVIOUR ........................................................... 48
2.1 Personality .............................................................................................................. 52
2.2 Values and Perception ......................................................................................... 76
2.3 Motivation ............................................................................................................. 103
2.4 Attitudes and Learning ....................................................................................... 124
MODULE 3
FOUNDATIONS OF GROUP BEHAVIOUR ................................................................. 147
3.1 Nature of Groups and Leadership ..................................................................... 151
3.2 Conflict and Stress Management ...................................................................... 178
MODULE 4
ORGANISATIONAL CULTURE AND CHANGE MANAGEMENT ........................... 210
4.1 Nature of Organisational Culture ...................................................................... 214
4.2 Change Management ......................................................................................... 227
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Module 1
Unit 1
INTRODUCTION TO
ORGANISATIONAL
BEHAVIOUR
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MODULE 1
INTRODUCTION TO ORGANISATIONAL BEHAVIOUR
Module Description
Every individual is unique in his nature and behaviour. So when an individual becomes a
part of an organisation, s/he brings along their unique behaviour, cultural background, family
background, their perceptions and personality characteristics. Hence, it becomes
mandatory for the management to understand her/him as a whole based on their attributes
for making them to contribute to the achievement of organisational goals. After all, the
employees’ behaviour makes an impressive impact on various factors related to the
organisational structure, culture, job performance, personal motivation, organisational
communication and overall leadership.
We can conclude that the organisational behaviour is a field of studying and understanding
about how individuals behave as an employee in an organisation as well as applying this
knowledge for the mutual benefit of both the employees and the organisation. To achieve
this, the field of organisational behaviour utilises the knowledge from other fields such as
anthropology, sociology, psychology, philosophy, and medical sciences, among others.
By the end of this module, the students will be able to summarise the evolution of management
thought and organisational behaviour, and identify various functions of management. They
will also be able to infer the importance of organisational behaviour and classify various models
of organisational behaviour.
Unit 1.1
Evolution of Management Thought
Unit 1.2
Evolution of Organisational Behaviour
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Unit Table of Contents

Unit 1.1
1.1 Evolution of Management Thought
Aim ................................................................................................................................... 6
Instructional Objectives ................................................................................................. 6
Learning Outcomes ....................................................................................................... 6
1.1.1 Evolution of Management Thought .................................................................... 7
Self-Assessment Questions .......................................................................... 8,16
1.1.2 Functions of Management ................................................................................ 17
Self-Assessment Questions ............................................................................. 19
Summary ....................................................................................................................... 20
Terminal Questions ...................................................................................................... 21
Answer Keys ................................................................................................................. 21
Activity ........................................................................................................................... 22
Glossary ........................................................................................................................ 22
Bibliography .................................................................................................................. 24
e-References ................................................................................................................ 24
Video Links .................................................................................................................... 24
Image Credits ............................................................................................................... 25
Keywords ....................................................................................................................... 25
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AIM
To familiarise students to the basic concepts of Management and its Evolution, and
also the basic functions of Management.
INSTRUCTIONAL OBJECTIVES
In exploring of this unit, students will be able to:

1. Define management
2. Elaborate upon the evolution of management thought
3. List the various functions of management
LEARNING OUTCOMES
At the end of the chapter, you are expected to:

1. Summarise the evolution of management thought
2. State the functions of management
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1.1.1 Evolution of Management Thought

Management helps and directs the various efforts of all kinds of organisations, whether business,
political, cultural, or social, towards a definite purpose. The following definitions explain the
concept of management clearly.
“Management is an art of getting things done through and with the people in formally
organised groups.” - Harold Koontz.
“Management is an art of knowing what to do, when to do and see that it is done in the
best and cheapest way.” - F. W. Taylor.
From the above definitions, we can understand that management is the process of achieving the
organisational goals through people who are working towards it. The goals specify what to do
by an organisation, proper planning tells how to do and when to do, and the optimum utilisation
of resources makes it possible to do in the best and cheapest way. The goals may vary from
organisation to organisation but it is the way an organisation is managed, and it helps to achieve
the goals optimally in all respects.
The management of an organisation is said to be efficient when it achieves its goals with minimum
wastage of resources such as men, money, materials, and time. When things are done in the
right and appropriate way, it is said to be an effective management. Hence it is the responsibility
of the managers of an organisation to see that the goals are achieved both in an efficient and
effective manner.
The art and science of management is ancient. It is evolved in several phases throughout the
human history. The earlier civilisations such as Greek and Roman, the Catholic Church and the
military organisations have used management and administrative methods while dealing with the
public. But the pace of management was accelerated with the beginning of industrial revolution.
The industrial revolution made the organisational structure very complex. The complexity of the
organisations led to the development of several theories and practices related to industrial
management.
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Self-Assessment Questions
1) The management of an organisation is said to be _______________ when it achieves

its goals with minimum wastage of resources.
(a) Effective
(b) Corrective
(c) Concurrent
(d) Efficient
2) When things are done in the right and appropriate way, it is said to be an
___________________ management.
(a) Efficient
(b) Effective
(c) Cooperative
(d) Operative
3)__________________ led to the development of several theories and practices of

industrial management.
(a) Complexity of organisations

(b) Structure of management
(c) Structure of resources
(d) Structure of finance
4)__________________ led to the development of several theories and practices of

industrial management.
(a) Complexity of organisations

(b) Structure of management
(c) Structure of resources
(d) Structure of finance
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Evolution of management thought may be divided into four stages:
1. Pre-scientific management period.

2. Classical Theory
a) Scientific Management of Taylor
b) Administrative Management of Fayol
c) Bureaucratic Model of Max Weber
3. Neo-classical Theory or Behaviour Approach
4. Modern Theory or Systems Approach
EVELUTION OF MANAGEMENT THOUGHT
PRE-SCIENTIFIC CLASSIC NEO - MODERN

MANAGEMENT THEORY CLASSICAL THEORY
PERIOD THEORY
Contributions Scientific Systems

made by Management Hawthorne approach
Roman Experiment
Catholic Administrative Contingency
Church Management approach
Military Theory
Organisations
Writers like Bureaucratic
Charles Model
Babbage
James Watt,
Etc.
Fig. 1: Evolution of Management Thought
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Pre-Scientific Management Period
As we discussed earlier, the industrial revolution resulted in several changes in technology,

methods of production, financial structure, workforce structure, etc. The traditional methods of
management were challenged by certain management thinkers and they, in turn, introduced
various new approaches to managing industrial organisations. The ideas and concepts of some
of these pioneers are discussed below.
Professor Charles Babbage (1729-1871, UK):
Charles Babbage observed that the industrial owners were using guess work instead of science
and mathematics to solve business problems. So, he emphasised approaching business
problems with mathematics and science.
James Junior (UK 1796-1848) and Mathew Boulton (1770-1842, UK):
These two thinkers proposed the following techniques to manage industrial enterprises:
• Planned production
• Component standardisation
• Plant maintenance
• Plant layout
• Welfare measures for workers
• Planned development of senior executives
• Forecasting through marketing research
• Well-maintained records
Robert Owens (1771-1858, UK)
He propounded that if the workers are treated well and their needs are taken care of, they pro-
vide better performance. So, to improve performance, he suggested the management to
provide such welfare measures as canteen facilities, housing facilities, education facilities,
pleasant work environment, reasonable working hours, etc. to the workers. As a recognition of
his work, he was called the father of personnel management.
Henry Towne (1844-1924, USA)
Towne advocated a combination of engineers and economists together with some accounting
skills, to act as managers for the successful management of industrial workers.
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Classical Theory
The impact of the contributors of pre-scientific management era on the industry was meager. At
the end of 19th century, F. W. Taylor, H. L. Gantt, Emerson, Gilberth, etc., laid the foundation
for scientific management.
Taylor’s Scientific Management
Like Charles Babbage, Taylor also advocated that the management should practice scientific
methods to improve efficiency in the organisations. The following lines summarise his thoughts
on scientific management:
• No rule of thumb but science

• No discord but harmony
• No individualism but co-operation
• No restricted output but maximum output
• Achieving the highest possible efficiency through proper training and
development of workforce
Elements of Taylor’s Scientific Management
Scientific Task & Rate-setting (Work Study)

Planning the Task.
Vocational Selection & Training
Standardisation
Specialisation
Mental Revolution
Scientific Task & Rate-Setting (Work Study)
“Work study is defined as the systematic, objective and critical examination of all the
factors governing the operational efficiency of any specified activity to effect
improvement.” – F. W. Taylor.
Work study is comprised of:

Motion Study: It is the process of studying a worker while he is performing a task in
order to eliminate wasteful and unproductive movements of him.
Method Study: It is the process of studying various methods of performing a task in
order to develop the best possible method.
Time Study: It is the process of analysing the time taken by each task in order to
develop standard time for each task.
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Fatigue Study: It is the process of studying the workers while performing their jobs
to suggest standard rest intervals to increase workers’ efficiency.
Rate-setting: Taylor suggested to the management to provide higher wage rate to
those workers who perform their task within the standard time than those who could
not complete their work within the standard time limit.
Planning the Task
Taylor advocated that every task must be planned properly to avoid any bottlenecks and to
ensure smooth production in the industry.
Vocational Selection and Training
He proposed that the selection of workforce must be centralised and all the workers must be
provided with scientific training to carry out their tasks in proper ways.
Standardisation
Achieving uniformity in every process is known as standardisation. Taylor proposed to introduce
standardisation related to methods of work, operating equipments, working conditions,
and quality.
Specialisation
Instead of combining, he advocated separating the two functions of ‘planning’ and ‘doing’ to
manage an organisation.
Mental Revolution
Taylor advocated that the gains from higher productivity can be shared between the workers and
management in the form of profits and increased wages.
Frank and Lillian Gilbreth (1867-1924, USA)
They are experts in motion study, who proposed to develop best method to perform every job in
the organisation by eliminating unproductive and unnecessary motions involved in performing
those jobs.
Henry Gantt (1861-1819, USA)
Henry Gantt charted out a day-to-day plan of production such as production process, workers’
daily performance, work-in- progress, and finished work. This chart is known as Gantt chart.
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Fayol’s Administrative Management Theory
Henri Fayol (1841-1925, France), the father of modern management, stated 14 principles
for effective management:
1. Division of work: All the activities must be divided into small segments and are to
be assigned to different workers so that specialisation can be achieved.
2. Authority and Responsibility: Authority is the power to give instructions and the
responsibility is the obligation of a person to fulfill his assigned job. Both should be
used by the employees in a balanced manner to achieve their goals.
3. Discipline: It is the compliance of organisational rules and regulations appropriate

to help in achieving the desired goals. Penalties and punishments must be
incorporated for indiscipline.
4. Unity of Command: This principle insists that one subordinate should be given
orders and instructions by one superior only to avoid confusion and conflict.
5. Unity of Direction: All the employees from top to bottom should work together in a
coordinated way towards achieving the organisational goals.
6. Subordination of Personal Interest to General Interest: All organisational

members should give priority to the common organisational interest rather than to
their personal interest.
7. Remuneration: All employees must be paid with adequate financial and

non-financial incentives.
8. Centralisation: Centralisation provides for decision-making by one person only and

decentralisation provides for decision-making at various levels throughout the
organisation. So, a good balance between centralisation and decentralisation of
authority must be achieved.
9. Scalar Chain: There must be a hierarchy of authority in an organisation from top to

bottom and communication must be carried out through proper channels.
10. Order: There is a place for everything.
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11. Equity: All employees must be treated in an equal manner while dealing with
organisational matters.
12. Stability of Tenure: Organisations should provide job security to their employees
to help improve their efficiency over time.
13. Esprit de corps: It means unity is strength. Hence, an organisation should

encourage team work and cooperation among its members.
14. Initiative: The members of an organisation should be encouraged to take initiative

to accomplish various tasks in an organisation confidently.
Bureaucratic Model
This model was developed by Max Weber. It consists of authority structure;

functional specialisation; a systematic rules and procedures; impersonal relationships, and
recruitment of competent personnel.
The bureaucratic model can be implemented in governmental organisations and in those

organisations where change is not a regular feature.
Neo-Classical Theory
It is a modified and an improvised version of the classical theory. This theory draws from the fields
of sociology as well as from psychology to make conclusions regarding organisational
behaviour.
Elton Mayo (1880-1949, Australia)
Mayo conducted the famous Hawthorne Experiments at Hawthorne Plant of Western Electrical
Company in Chicago and found out that the productivity of employees is not dependent only on
the wages paid to them but more on their emotional and job satisfaction involved in their work.
So, the neo-classical theory insists more on people and their level of morale rather than on
machines.
But this approach was criticised that this theory overemphasises relational aspect and
undermines the importance of technical aspects of a task.
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Modern Theory (Systems Approach)
This theory states that an organisation is a system which must adopt changes in its environment.
A system is comprised of various inter-related components or sub-systems to achieve its goals.
When this theory is applied to an organisation, an organisation will have the following features
In its environment, an organisation is a sub-system

As a system, it is oriented towards a goal
It is a sub-system of technology as it applies technical knowledge and equipment
As a sub-system, an organisation has people who are working on various
activities which are inter-related
An organisation as a system is a psycho-social one since its members have
socially related to one another
The whole organisation as a system is managed through various functions
such as planning, organising, leading, and controlling to accomplish the stated
objectives
An organisation as a system gets its inputs from its environment and gives back outputs to the
environment. If the organisation gets a negative feedback from its environment regarding its
output, it then makes modifications in its inputs accordingly and provides the right output to its
environment.
Contingency Theory
The contingency theory states that every organisation has to make adjustments in its own de-
sign, structure, and other various managerial activities according to the specific situations that
arise in the environment from time to time. So, the management should make provisions for
un-expected contingencies in its planning and implementations to offset any unexpected
setbacks in the environment. These contingencies act as cushions or buffers for the smooth
functioning of an organisation towards achieving its desired goals.
DID Artha Shastra is the oldest book written on the subject of management in the
YOU world. It was written in 300 B.C. by Kautilya, who is also famously known as
KNOW
Chanakya.
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5) The art of getting things done through and with the people in formally organised
groups is known as __________________.
(a) Leadership
(b) Bureaucracy
(c) Management
(d) Motivation
6) Who propounded that the methods of science and mathematics could be applied in
the place of guess work for the solution of business problems?
(a) F. W. Taylor
(b) Henri Fayol
(c) Max Weber
(d) Charles Babbage
7) The study of the possibilities of eliminating or combining certain operations is called

______________________.
(a) Time study

(b) Method study
(c) Time measurement
(d) Fatigue study
8) The principle that each member of an organisation must receive orders and
instructions from only one superior is known as __________.
(a) Unity of command

(b) Scalar chain
(c) Esprit de corps
(d) Order
9) Elton Mayo’s Hawthorne experiments emphasise on __________.
(a) Logical factors

(b) Technical aspects
(c) Employee morale
(d) Leadership
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1.1.2 Functions of Management

In every organisation, each type of manager must perform certain basic functions to achieve
the overall objectives of the organisation. These functions are planning, organising, staffing,
directing, and controlling.
Fig. 2 Functions of Management
Planning
“Planning is the continuous process of making present entrepreneurial decisions

systematically and with best possible knowledge of their futurity, organising
systematically the efforts needed to carry out these decisions and measuring the results
of these decisions against the expectations through organised and systematic
feedback.” - Peter Drucker.
Hence the above definition states that planning is a process of making decisions for
accomplishing certain goals in future. So, planning always foresees the future of an
organisation. It gives proper direction for the smooth functioning of an organisation. For this
purpose, planning takes all the possible certainties and uncertainties in its environment into
consideration to make it a success. The organisational environment consists of external
environmental factors such as economic trends, technological changes, legal and political
factors among others; and internal environmental factors such as workers’ demands,
stakeholders’ demands, organisational structure among others.
Organising
“Organising is the process of identifying and grouping the work to be performed,

defining and delegating responsibility and authority and establishing relationships for
the purpose of enabling people to work most effectively together in accomplishing
objectives.” - Louis Allen.
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According to the above definition, all the activities of an organisation which are necessary to
achieve its stated objectives are to be divided into various subdivisions and each subdivision
must be allocated with the necessary authority and responsibility to carry out their respective
functions in a cooperative and coordinated manner.
Staffing
“Managerial function of staffing involves manning the organisation structure through

the proper and effective selection, appraisal and development of personnel to fill the
roles designed in the structure.” - Koontz & O’Donnell.
From the above definition, the staffing function involves recruitment, selection of the right people
in the right place at the right time. They must be provided with adequate financial and non-
financial compensation, proper training, and the development necessary to discharge their
respective duties effectively and efficiently to accomplish the organisational goals.
Directing
According to Human, “Directing consists of process or technique by which instruction

can be issued and operations can be carried out as originally planned.”
The above definition states that the function of directing involves communicating the necessary
orders, instructions, and guidelines to the subordinates by their superiors to specify clearly
what is expected of them. Directing also includes motivating and leading the members of an
organisation in a proper direction to achieve the desired goals effectively as well as efficiently.
Controlling
“Controlling is the measurement and correction of performance activities of subordinates

to make sure that the enterprise objectives and plans desired to obtain them are being
accomplished.” - Koontz & O’Donnell.
While the planning function chalks out the various standards to be performed in an organisation,
the controlling function sees whether those standards are met. Accordingly, the controlling
function measures the performance of each activity, compares the measured performance with
the standard performance, finds out whether both the performances are matched, and takes
corrective action if there is any deviation between the two.
Walmart is the largest employer in the world with approximately 2

million employees.
DID Walmart Stores and China National Petroleum, the two largest companies in
YOU the world by number of employees, employ 2.2 million and 1.38 million
KNOW people worldwide, respectively. Apart from the US and UK, Walmart has the
largest number of employees in Mexico and China, with a total of 176,000 and
90,000, respectively. Walmart is one of the largest companies in the world, with
US $ 523.96 billion in 2019.
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9) The function which involves the ability to foresee the effects of current actions in the
long run in the future is known as __________________.
(a) Organising
(b) Planning
(c) Controlling
(d) Motivation
10) The controlling function involves not only finding out the deviations in the performance
but also to take _________________.
(a) Corrective action

(b) Compensation
(c) Communication
(d) Performance measurement
11) The process of recruiting, training, and developing employees is called

________________.
(a) Directing
(b) Planning
(c) Supervising
(d) Staffing
12) Issuing instructions and guiding the subordinates about procedures and methods
involves the function of _________________.
(a) Training
(b) Planning
(c) Leadership
(d) Performance
13) Which function is concerned with defining the authority and responsibility of the
personnel?
(a) Organising
(b) Development
(c) Counselling
(d) Planning
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Summary
Management is an art of getting things done through and with the people in formally
organised groups – Harold Koontz.
Evolution of management thought is divided into four stages: Pre-scientific

management period, Classical theory, Neo-classical theory, and Systems approach.
Charles Babbage emphasised to approach business problems with mathematics and

science rather than with guesswork.
Robert Owens propounded that if the workers are treated well and their needs are
taken care of, they provide better performance.
F. W. Taylor advocated that the management should practice scientific methods to

improve efficiency in the organisations by using method study, time study, fatigue
study, standardisation, and specialisation.
Gilbreth proposed to develop the best method to perform every job in the organisation
by eliminating unproductive and unnecessary motions involved in performing those jobs.
Henry Gantt charted out a day-to-day plan of production such as production process,
workers’ daily performance, work-in- progress, and finished work.
Henri Fayol, the father of administrative management propounded fourteen principles for
effective management.
Max Weber developed a bureaucratic model with a system of rules and a hierarchy
of authority.
Elton Mayo, through his Hawthorne experiments, showed that the key to higher
productivity is not dependent only on the wages paid to them but more on their
emotional and job satisfaction involved in their work.
Systems theory states that an organisation is a system which must adopt changes in its
environment.
The contingency theory states that every organisation must make adjustments in its
own design, structure, and other various managerial activities according to the specific
situations that arise in the environment from time to time.
In every organisation, each type of manager must perform certain basic functions such
as planning, organising, staffing, directing, and controlling to achieve the overall
objectives of the organisation.
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Terminal Questions
1) Define the terms: management, work study, motion study, and time study.
2) Name Fayol’s principles of management and explain them briefly.
3) Summarise the outcome of Hawthorne experiments conducted by Elton Mayo.
4) Define standardisation. Explain in brief where it can be applied.
5) List and explain in brief the five functions of management.
Answer Keys
Question No: Answers
1 d
2 b
3 a
4 c
5 d
6 b
7 a
8 c
9 b
10 a
11 d
12 c
13 a
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Activity
Activity Type: Offline & Online Duration: 60 Minutes
Description:
1. Tabulate the various stages of management thought and compare.
2. Browse and choose an organisation of interest and explain how it carries out the five
primary functions of management.
Glossary
Controlling: Function of measuring and correcting of subordinates’ performance to make
sure that the enterprise objectives are being accomplished.
Directing: Function of communicating, motivating, and leading the members of an

organisation in a proper direction to achieve the goals effectively and efficiently.
Esprit de corps: The principle of “union is strength”.
Fatigue Study: Process of studying the workers while performing their jobs to suggest
standard rest intervals to increase workers’ efficiency.
Management: Process of achieving the organisational goals through people who are
working towards it.
Method Study: Process of studying various methods of performing a task to develop the
best possible method.
Motion Study: Process of studying a worker while he is performing a task to eliminate

wasteful and unproductive movements of him.
Organising: Function of identifying and grouping the work to be performed, delegating

responsibility and authority for the purpose of enabling people to work most effectively
together in accomplishing objectives.
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Planning: Function of making decisions for accomplishing certain goals in future.
Rate-setting: Fixation of higher wage rate to those workers who perform their task within
the standard time than those who could not complete their work within the standard time
limit.
Scalar Chain: Hierarchy of authority in an organisation from top to bottom to carry out
communication through proper channels.
Specialisation: Separation of ‘planning’ and ‘doing’ to manage an organisation.
Staffing: The function of recruiting and selecting the right people in the right place at the
right time.
Standardisation: The method of achieving uniformity in every process.
System: A set of various inter-related components or sub-systems to achieve its goals.
Time Study: Also called work measurement, it is the process of analysing the time taken
by each task to develop standard time for each task.
Unity of Command: Principle of one subordinate should be given orders and instructions
by one superior only.
Work Measurement: Refer Time Study.
Work Study: Systematic, objective, and critical examination of all the factors governing
the operational efficiency of any specified activity to effect improvement.
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BIBLIOGRAPHY
e-References
• Principles of Management and Organisational Behaviour (1st ed.). Retrieved from
https://www.wisdomjobs.com/e-university/principles-of-management-and-organisation
al-behaviour-tutorial-366/evolution-of-management-thought-12679.html
• Functions of Management (1st ed.). Retrieved from https://www.managementstudyhq.

com/functions-of-management.html
External Resources
• Koontz, H., Weihrich, H., & Aryasri, R. (2004). Principles of Management (1st ed.). Tata
McGraw-Hill Education.
• Prasad, L. M. (2019). Principles and Practice of Management (10th ed.). Sultan

Chand & Sons.
• Tripathi, P. C., & Reddy, P. N. (2017). Principles of Management (6th ed.). McGraw-Hill
Education.
Video Links
Topic Link
Evolution of
Management https://www.youtube.com/watch?v=0sEWwrVMyJg
Thought
Functions of
https://www.youtube.com/watch?v=_NV7y6E4Ibk
Management
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Image Credits
• Fig 1:
https://www.wisdomjobs.com/tutorials/evolution-of-management-thought.jpg
• Fig 2:
https://sf.ezoiccdn.com/ezoimgfmt/www.managementstudyhq.com/wp-content/up-
loads/2013/07/management_functions.jpg?ezimgfmt=rs:518x447/rscb1/ng:webp/ngcb1
Keywords
Administrative management Motion study

Bureaucratic model Neo-classical theory
Behaviour approach Rate setting
Classical theory Scalar chain
Contingency theory Scientific management
Esprit de corps Staffing
Fatigue study Management Standardisation
Mental revolution Systems approach
Method study Time study
Modern theory Work study
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Module 1
Unit 2
Evolution of
Organisational Behaviour
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Unit 1.2
Evolution of Organisational Behaviour .................................................................... 26
Aim ......................................................................................................................... 28
Instructional Objectives .......................................................................................... 28
Learning Outcomes ................................................................................................ 28
1.2.1 Evolution of Organisational Behaviour .......................................................... 29
Self-Assessment Questions .............................................................................. 32,36
1.2.2 Models of Organisational Behaviour ............................................................. 37
(i) Autocratic Model ..................................................................................... 37
(ii) Custodial Model ..................................................................................... 38
(iii) Supportive Model .................................................................................. 38
(iv) Collegial Model ..................................................................................... 38
(v) SOBC Model ......................................................................................... 39
Self-Assessment Questions ................................................................................... 40

1.2.3 Importance of Organisational Behaviour ....................................................... 41
Summary ................................................................................................................ 43
Terminal Questions ................................................................................................ 44
Answer Keys .......................................................................................................... 44
Activity .................................................................................................................... 45
Glossary.................................................................................................................. 45
Bibliography ............................................................................................................ 45
e-References .......................................................................................................... 46
Video Links ............................................................................................................. 46
Image credits .......................................................................................................... 46
Keywords ................................................................................................................ 46
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AIM
Introducing students to basic concepts of organisational behaviour and its evolution,

various models of organisational behaviour, and the importance of organisational
behaviour.
This unit intends to:
• Define organisational behaviour

• Elaborate the evolution of organisational behaviour
• List out the various models of organisational behaviour
• Describe the importance of organisational behaviour
LEARNING OUTCOMES
At the end of this unit, you are expected to:
• Summarise how the field of organisational behaviour has evolved over time
• Classify the models of organisational behaviour
• Explain why the study of organisational behaviour is important
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1.2.1 Evolution of Organisational Behaviour
Organisational Behaviour studies human behaviour in the organisation. To make their

organisation more effective, managers have to understand and predict the human behaviour
in the organisation they are working for. An individual brings with her/him their personal
background and characteristics along with their experiences from other organisations
when s/he joins an organisation. Organisational behaviour studies the dynamics of how an
incoming individual interacts with the broader organisation.
ur is a field of
“Organisational behavio
that inve stig ates the impact that tly
stud y
structures have Organisational behaviour is direc
individuals, groups and concerned with the understan
ding
organisations
on behaviours within the of production and control of hum
an
g such
for the purpose of applyin behaviour in organisation.
roving an
knowledge towards imp
ss”.
organisation’s effectivene
Stephen P. Robbins Fred Luthans
Several individuals contributed to the growth and development of the study of organisational
behaviour.
Adam Smith
He propounded that the division of labour increased productivity by raising each worker’s skills
by minimising time that is generally lost in changing tasks, and by encouraging creating
labour-saving inventions and machinery. The development of assembly-line production
processes in this century has been stimulated by the economic advantages of specialisation of
work advocated by Adam Smith two hundred years ago.
Charles Babbage
Babbage stated that the economies resulting from work specialisation should be relevant to both
mental work and physical work.
Robert Owen
During his time, Owen observed the unruly practices occurring in factories, such as
the employment of small children (of the age of 10), 13 working hours per day, and wretched
working conditions. He advocated regulated hours of work for all employees, labour laws
for children, public education, company-sponsored meals at work, and involvement of the
company in community projects.
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Human Behavioural
Classical Behavioral Contingency
Relations Science
Era Era Approach
Movement Theory
Fig. 1 Evolution of Organisational Behaviour
The Classical Era (1900 to mid 1930

The various contributors of the classical era are: Frederick Taylor, Henri Fayol, Max Weber,
Mary Parker Follett, and Chester Barnard who laid the foundation for contemporary management
practices.
Scientific Management
F. W. Taylor demonstrated how his scientific method could be used to apply the “one best way” for
a job to be accomplished. He suggested creating a mental revolution between the workers and
management by providing clear guidelines for increasing the efficiency of production. To motivate
workers, he favoured incentive wage plans. He suggested that the role of managers is to plan
and control and the role of workers to perform as they were instructed.
Administrative Theory
Henri Fayol, who contributed to administrative theory advocated that all managers in an organisation
perform five managerial functions, viz., planning, organising, commanding, coordinating, and
controlling. He stated that management is to be considered as an activity common to all human
undertakings such as business and government organisations, and even in one’s home.
He advocated 14 principles of management which can be taught in business schools and
universities.
Structural Theory
Max Weber, a German sociologist proposed the concept of authority structures and viewing
organisational activity as based on authority relationships. He advocated that the system
of bureaucracy is characterised by division of labour, a clearly defined hierarchy of authority,
prescribed rules and regulations combined with impersonal relationships.
“Social Man” Theory
Mary Parker Follett and Chester Barnard viewed organisations from the social perspective.
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Mary Parker Follett:

She proposed that group ethics rather than individualism should be the basis for any organisation.
The job of the managers is to synchronise and coordinate the efforts of the groups. Both the
managers and the workers should see themselves as partners, that is, a part of a common
group. So, to lead their subordinates, the managers should depend more on their knowledge
and expertise rather than on their formal authority given to their position.
Chester Barnard:
He viewed an organisation as a social system which demands the cooperation of humans. He
saw organisations as formed by people who are interacting with themselves and have social
relationships. The main role of managers is to communicate with and to induce his subordinates to
put higher efforts. So, the success of an organisation is depended on getting required cooperation
from its employees. He further stated that an organisation’s success is also depended on
maintaining good relations with the stakeholders and other institutions outside the organisation
with whom the organisation regularly interacted. Since an organisation depends on its
suppliers, investors, customers, and other external stakeholders, Chester Barnard proposed
that managers had to scan the environment continually and adapt the changes in the
environment to maintain a state of equilibrium.
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1) Organisational behaviour is directly concerned with the understanding production and

control of ___________________ in organisation.
a) Production
b) Materials
c) Human behaviour
d) Finance
2) Adam Smith propounded that ____________________ increased productivity by

improving each worker’s skills.
a) Efficiency
b) Division of labour
c) Training
d) Long working hours
3) Who created the concept of mental revolution between the workers and management?
a) F. W.Taylor
b) Robert Owen
c) Charles Babbage
d) Chester Barnard
4) One of the five management functions proposed by Henri Fayol is ____________
a) Staffing
b) Maintain
c) Coordinate
d) Governance
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The Behavioural Era

Two historical incidents in 1930s played a major role in the application and development of
organisational behaviour - the birth of the “personnel office” and the birth of industrial psychology.
The Birth of the “Personnel Office”

In the early twentieth century, certain organisations created the position of “welfare secretary”
to help the workers to improve working conditions, medical facilities, housing and educational
facilities because of the growth of trade unionism. These companies are pioneers in modern
heads of human resource management function.
The Birth of Industrial Psychology

Hugo Munsterberg propounded industrial psychology and he supported the concept of the
scientific study of human behaviour to identify and explain the differences among individuals. He
suggested scientific analysis of the work and to match individual skills with the requirements of
various jobs to increase efficiency. He also advocated to use psychological tests while selecting
employees. He liked to use learning theory to develop various methods of training. He also stated
to motivate workers effectively, the human behaviour must be studied and develop appropriate
techniques for it.
The Magna Carta of Labour

In 1935, the Wagner Act recognised trade unions as the authorised representatives of workers,
which can bargain with employers to protect the interests of their members. It is the Magna
Carta of labour that legitimised the role of workers unions and helped to increase membership in
unions. Due to this Act, management of organisations started to improve working conditions and
maintain good relations with their workers.
Human Relations
The major contributors of the human relations movement were Elton Mayo, Dale Carnegie,
Abraham Maslow, and Douglas McGregor.
The Hawthorne Studies:

Elton Mayo conducted Hawthorne experiments and found that the influence of group significantly
affected individual behaviour, the standards of the group influenced the output of individual
workers, and financial incentives were influenced less in determining a person’s output than the
group standards and job security. These findings in turn led the management to emphasise on
human relations in the management of organisations and the achievement of their goals. These
findings also increased to apply paternalism by the management.
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Dale Carnegie:
He advocated that to be successful, one has to win the cooperation of others. He suggested
to appreciate others’ efforts sincerely to make them feel important. He stated that by praising
people’s positive traits, one can change them, and give an opportunity to save the face of an
offender.
Abraham Maslow:
He stated a hierarchy of human needs: physiological, safety, social, esteem, and self-actualisation.
He suggested to satisfy one need before satisfying the another. When a need is fully satisfied,
then that need will not motivate a person’s behaviour any longer. And he stated that the need of
self-actualisation, i.e., achieving one’s full potential is the zenith of the life of the human beings.
Douglas McGregor:
McGregor explained human nature through his Theories X and Y. In Theory X, he states that
human beings have little or no ambition, they dislike work, want to avoid responsibility, and
they should be closely supervised to work effectively. In Theory Y, he states that under proper
conditions, people are self-directed, ready to accept responsibility, and take work as play. He
suggested that the management approach must be based on the assumptions of Theory Y since
it clearly reflects the true nature of people. Hence, the managers should provide freedom to their
employees to exploit their full potential.
Behavioural Science Theorists

The proponents of behavioural science theory are involved in objective research of human
behaviour in organisations. Let us briefly outline the contributions of two major theorists.
B. F. Skinner:
He proposed that the human behaviour is a function of its consequences. If properly rewarded,
people would engage in desired behaviour. But the rewards should be offered immediately after
the desired response if the rewards are to be effective. The behaviour is not repeated if the
behaviour is not rewarded or is punished.
Frederick Herzberg:
Herzberg interviewed hundreds of people in the late 1950s and found that people preferred
jobs that offered opportunities for recognition, achievement, responsibility, and growth. Herzberg
suggested redesigning and enriching the jobs to motivate workers so that they perform varied
and more tasks.
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OB Today: A Contingency Perspective

In modern days, organisational behaviour must be studied and applied from a contingency
perspective. Contingency theory states that there is no “one best way” to manage people in
organisations and no single set of simple principles that can be applied universally. Nowadays
the recent trends in organisational behaviour are the study of the theories of leadership, job
satisfaction, motivation, and work design. The major emphasis now is on refining and improving
upon existing theories, clarifying previous concepts, and identifying relevant contingency
variables. Hence, studies are being conducted to identify those variables, which are relevant to
the understanding of various behavioural patterns. This approach leads the behavioural experts
to develop the field of organisational behaviour as a separate scientific discipline.
As its upper floors had been packed with heavy machinery, the five-story
DID Pemberton Mill in Massachusetts collapsed killing 145 workers in
YOU 1860. Industrial disasters such as these are being watched and prevented
KNOW
around the world. But similar tragedies continue to occur, especially in
several developed and under-developed countries even in the 21st century.
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5) Through Hawthorne experiments, Mayo concluded that ________________ influences

significantly affected individual behaviour.
a) Individual
b) Money
c) Goals
d) Group
6) According to Abraham Maslow, achieving one’s full potential is known as

______________________.
a) Safety
b) Self-actualisation
c) Esteem
d) Leadership
7) McGregor suggested that the management approach must be based on the assumptions
of ___________________________ since it clearly reflects the true nature of people.
a) Theory Y
b) Theory Z
c) Theory X
d) Theory B
8) Herzberg suggested redesigning and enriching the ____________ to motivate workers

so that they perform varied and more tasks.
a) Relations
b) Jobs
c) Organisation
d) Timings
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1.2.2 Models of Organisational Behaviour
The five models of organisational behaviour are:
Autocratic model
Custodial model
Supportive model
Collegial model
SOBC model
Autocratic
Model
SOBC Custodial
Model ORGANISATIONAL Model
BEHAVIOUR
MODELS
Collegial Supportive
Model Model
Fig. 2 Models of Organisational Behaviour
Autocratic model
This model is based on power, strength, and formal authority. In the autocratic organisation, the
owners or management have formal authority for controlling the employees working under them.
Those who are working under the management have little control over the functioning of the
work. The ideas and innovations of these lower-level people are not generally considered since
all the major decisions are taken by the top management.
The underlying concept of the autocratic model is that the top management has better business
expertise, and an average employee has relatively low levels of skill and he needs to be fully
guided and directed. This kind of autocratic system of management was prevailing in companies
during the time of industrial revolution.
The major problem associated with the autocratic model of management is that the top
management is required to micromanage their employees, that is, they have to go through all
the details and make every single decision. Hence the system of autocratic management model
becomes highly inefficient and also impractical in today’s world where specialisations are in
vogue and specialists are employed.
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The autocratic model is highly detrimental to employee morale and their job satisfaction. The
reason is that the employees feel themselves under-valued and are not made a part of the
organisation for which they are working. This might lead to their performing at lower levels. The
autocratic model is suitable for such organisations where most operations are automated, but it
might not be appropriate for today’s organisations.
Custodial model
This model depends upon the provision of economic security for workers through wages and
other incentives, which lead to their motivation and loyalty.
Nowadays, many organisations around the world are providing medical allowances, housing,
education for the workers’ children, insurance, free transportation, and other financial incentives
with good salary packages so that high quality and skilled employees would be attracted to and
retained in the organisation for a longer period.
The guiding principle behind this concept is that the organisations can have employees with
higher motivation levels, skill set, which gives an organisation a competitive advantage in the
industry.
But the disadvantage associated with the custodial model is that it might as well attract employees
with low performance levels. Some employees may feel that the incentives offered by the company
are so good that they do not want to leave the organisation and they perform with lower level of
motivation due to the financial security they got.
Supportive model
The aspiring leadership is the major focus of this model rather than autocracy and the economic
security. So, the supportive model, as the name implies, attempts to maintain good relationship
between the management and employees on a regular basis to motivate them.
This model proposes that the employees would be self-motivated and have good insight to
contribute to the company they are working for and are ready to go an extra mile if good relations
with them are maintained.
Hence, this model suggests that a positive workplace would sufficiently help to motivate
employees when their opinions and ideas are welcomed and implemented by the management.
Collegial model
This model is depended upon teamwork. The collegial model suggests that every employee
works as a colleague instead of a subordinate. The name ‘collegial’ is derived from the
word ‘colleague'.
According to this model, both management and workers work together like a team or colleagues
without bothering about their job titles and job status. This kind of work culture must be imbibed
within the corporations and strive together to make better organisations.
The managers’ role is only to nurture the concept of teamwork among the workforce and develop
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an energetic and positive work environment. Hence the manager merely plays the role of a coach
for his team. As a coach, the manager makes the team to perform well rather than concentrating
his efforts more on his own performance or other top employees’ performance.
This model is especially more suitable for software companies, research and development and
marketing organisations where teamwork is an essential feature.
SOBC Model
SOBC stands for Stimulus, Organism, Behaviour and Consequence. Let us examine these terms
in detail.
Stimulus:
Stimulus is any incident or an event, which occurs in the environment. The incident/event might
be a sound (for example, shouting by a person), a scene (for instance, a street fight, or a car
accident) or an event (for example, receiving a reward).
Organism:
Organism is nothing but a person or it might be an employer or an employee. This person includes
both physiological and psychological being.
Behaviour:
Behaviour is the person’s or organism’s behaviour in response to the stimulus being provided.
For instance, a teenager (Organism) may consume (Behaviour) an ice-cream after watching an
advertisement on television (Stimulus). Hence an individual displays this pattern of behaviour
when he comes in contact with the stimuli.
Consequence:
Consequence is the outcome that results after the person’s behaviour. This behaviour might be
repeated due to reinforcement or might not be repeated due to the punishment he got. In the
above instance discussed earlier, his father might scold him (Consequence) for the behaviour he
displayed, that is eating ice-cream.
Actually, the SOBC model explains the process of how behaviour is formed. According to this
model, behaviour takes place due to the interaction of S-O-B-C.
DID In the early years, Bill Gates managed Microsoft company by following
YOU the autocratic model to make sure that his company developed at a rapid
KNOW pace, whereas Mark Zuckerberg, the founder of Facebook, adopted a
collegial model.
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9) Autocratic model depends upon __________________.
a) Teams
b) Incentives
c) Participation
d) Formal authority
10) Which OB model makes provision for economic security of employees through wages
and other incentives? __________________.
a) Autocratic
b) Custodial
c) Collegial
d) Supportive
11) The supportive model of OB attempts to motivate employees through the

_____________ relationship.
a) Leader-leader
b) Management-employee
c) Supervisor-supervisor
d) Employee-employee
12) Collegial model of organisational behaviour derived its name since everybody is
working as _______________ in an organisation.
a) Superiors
b) Collegegoers
c) Colleagues
d) Subordinates
13) In SOBC model of OB, behaviour stands for a person’s response in regard to
__________________.
a) Organism
b) Outcome
c) Stimulus
d) Consequence
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1.2.3 Importance of Organisational Behaviour
Creates Sustainable Competitive Advantage
Organisational behaviour transforms people in an organisation into productive, valuable, unique,

and non-substitutable through various practices of organisational behaviour to accomplish
the desired goals. For example, organisational behaviour creates a culture of creativity and
innovation, improved performance, sharing of knowledge, and mutual trust through a combination
of leadership and individual development.
Improves Individual Performance
The organisational behavioural study helps the management in identifying the causes for poor
or non-performance of the employees and helps to introduce change accordingly. It helps an
individual to modify his behaviour to reach his full potential by finding out what motivates him, his
way of learning things and how he is coping with his stress. Hence, the organisational behaviour
makes it possible to take corrective actions to make the individual to perform competitively.
Improves Group/Team Effectiveness
Organisational behaviour uses various tools and techniques to motivate work groups to cooperate
among them and to make them perform in a more effective manner.
Improves Organisational Culture
Organisational behaviour helps the management to design and change the working culture of an
organisation which leads to create an innovative and learning environment in an organisation.
It also shows various ways to implement an organisational sub-culture within the overall
organisational culture.
Improves Leadership
To create a winning culture in an organisation, it is required to understand the methods of
changing individuals’ behaviour positively and also to understand the effectiveness of various
leadership styles. The major contributors to organisational behaviour are those organisations
which transformed themselves through various crises.
Helps to Adapt to External Environment
Organisational behaviour helps an organisation to adapt to its dynamic environment by applying
various techniques such as corporate social responsibility (CSR), intrinsic motivators, job rotation
and job enrichment, among others.
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The famous American organisation Google offers cash rewards and

DID individual recognition, parties and vacations, free lunches, open talks by
YOU top level executives, gymnasiums, and a pet-friendly atmosphere to their
KNOW
employees around the world. Google’s organisational culture has become
the gold standard for all other IT firms to follow.
14) The study of organisational behaviour helps in identifying the various causes for better
performance and helps to hinder change.
a) True
b) False
15) Organisational behaviour uses various tools and techniques to motivate work groups
to cooperate among them and to make them perform in more effective manner.
a) True
b) False
16) Organisational behaviour shows various ways to implement an overall organisational

culture within an organisational sub-culture.
a) True
b) False
17) Organisational behaviour cannot help an organisation to adapt to its dynamic

environment by applying various techniques such as corporate social responsibility
(CSR).
a) True
b) False
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Summary
Organisational behaviour is directly concerned with the understanding production and

control of human behaviour in organisation.
Adam Smith propounded that the division of labour increased productivity by raising each
worker’s skills and Robert Owen proposed regulated hours of work for all.
F. W. Taylor used scientific methods to do the jobs in the best way possible. He advocated
mental revolution between workers and management for improving production efficiency.
Henri Fayol proposed five management functions and advocated fourteen principles of
management which can be taught in business schools and universities.
Max Weber advocated bureaucracy with authority structures and detailed rules and
regulations with impersonal relationships.
The Wagner Act, 1935, is the Magna Carta of labour that legitimised the role of
workers unions and helped to increase membership in unions. Due to this Act,
management of organisations started to improve working conditions and maintain good
relations with their workers.
Through Hawthorne experiments, Mayo found that the influence of group affected individual
behaviour and output, and financial incentives were influenced less in determining a
person’s output than the group standards and job security.
Maslow propounded a hierarchy of human needs such as physiological, safety,
social, esteem, and self-actualisation to motivate human behaviour.
Douglas McGregor advocated Theories X and Y about human nature, and Frederick
Herzberg suggested redesigning and enriching the jobs to motivate workers so that they
perform varied and more tasks.
Today, organisational behaviour scientists opine that there is no “one best way” to
manage people in organisations and no single set of simple principles that can be applied
universally.
Autocratic model is based on power, strength, and formal authority; the custodial model
depends upon the provision of economic security for workers through wages and other
incentives; the aspiring leadership is the major focus of the supportive mode; and the
collegial model is depended upon teamwork.
Organisational behaviour is important for creating sustainable competitive advantage;
improving individual performance; improving group effectiveness; improving organisational
culture; improving leadership; and adapting to external environment.
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Terminal Questions
1) Define the term organisational behaviour.

2) Briefly explain the contributions of classical theorists who laid the foundation for
contemporary management practices.
3) Describe, in brief, the contributions of human relations movement for the understanding
of human behaviour in the organisations.
4) Name the five models of organisational behaviour and explain them in detail.
5) Discuss the importance of studying organisational behaviour for the effective functioning
of an organisation.
Answer Keys
1 c
2 b
3 a
4 c
5 d
6 b
7 a
8 b
9 d
10 b
11 b
12 c
13 c
14 b
15 a
16 b
17 b
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Activity
Duration: 60 Minutes
Activity Type: Online
Description:
1. Tabulate the various models of organisational behaviour and compare.
2. Browse through Dale Carnegie’s book How to Win Friends and Influence People,
choose any one of the tips given in it, apply in your daily life and explain the consequences.
Glossary
Bureaucracy: A system characterised by division of labour, a clearly defined hierarchy
of authority, prescribed rules and regulations combined with impersonal relationships.
Organisational behaviour: A study of the behaviours of individuals as well as groups

which influence the functioning of organisations.
Self-Actualisation: Process of achieving one’s full potential.
BIBLIOGRAPHY
External Resources
Robbins, S. P., & Judge, T. A. (2019). Essentials of Organisational Behavior. Pearson.

Aswathappa, K. (2018). Organisational Behaviour. Himalaya Publishing House.
Luthans, F. (2010). Organisational Behaviour (12th ed.). McGraw-Hill Education.
Prasad, L. M. (2014). Organisational Behaviour (5th ed.). Sultan Chand & Sons.
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e-References
The Historical Evolution of Organisational Behaviour (1st ed.). Retrieved from
http://www.rim.edu.bt/wp-content/uploads/2014/09/OBCDAP_A6.pdf
Organisational Behaviour Study Guide (1st ed.). Retrieved from

https://www.myorganisationalbehaviour.com/five-models-of-organisational-behaviour/
Video Links
Topic Link
Evolution of
Organisational https://www.youtube.com/watch?v=eMZ-iuMQmrw
Behaviour
Models of
Organisational https://www.youtube.com/watch?v=__YS3a9Dmtc
Behaviour
Image Credits
Fig. 1: Self
Fig. 2: https://businesspedia.in/models-of-organisational-behaviour/
Keywords
Custodial model
bureaucratic model
supportive model
autocratic model
collegial model
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Module 2
Unit 1
FOUNDATIONS OF
INDIVIDUAL BEHAVIOUR
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Foundations Of Individual Behaviour
Module Description
Each human being is unique when he is born but he becomes different as s/he gains
various experiences in his life. So, the organisational management can motivate their
employees by treating them as separate individuals. But one cannot treat all individuals on
the same scale of measurement since each individual is different from others. For example,
different individuals respond differently to a given stimulus under the same situation. Also, the
same individual may respond to the same stimulus differently in a different situation. The
differences are due to gender, age, family, culture, attitudes, perceptions, personalities, and
values among others. Hence it is necessary to study these individual behaviours for a better
understanding of people and their influence on the organisations they are working for.
By the end of this module, the students will be able to identify various determinants and traits of
personality and explain the Big Five model and personality attributes influencing organisational
behaviour. They will be able to summarise the perceptual process and list out the types of
values an individual holds. They will also be able to explain the factors influencing
individual perception and describe the linkage between perception and individual decision-
making.
Unit 2.1: Personality
Unit 2.2: Values and Perception
Unit 2.3: Motivation
Unit 2.4: Attitudes and Learning
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Unit 2.1
Foundations Of Individual Behaviour ............................................................. 48
Aim ................................................................................................................................. 51
Instructional Objectives .................................................................................................. 51
Learning Outcomes ........................................................................................................ 51
2.1.1 Personality determinants ....................................................................................... 52

Self-Assessment Questions ........................................................................................... 54
2.1.2 Major personality attributes influencing organisational behaviour.......................... 55
Self-Assessment Questions ...................................................................................... 56,60
2.1.3 The Big Five Model ................................................................................................ 61
2.1.4 Psycho-Analytic Theory ......................................................................................... 64
2.1.5 Johari Window ....................................................................................................... 67
Summary ........................................................................................................................ 70
Terminal Questions ......................................................................................................... 70
Answer Keys.................................................................................................................... 71
Activity ............................................................................................................................ 72
Glossary ......................................................................................................................... 72
Bibliography .................................................................................................................... 73
e-References .................................................................................................................. 73
Video Links ..................................................................................................................... 74
Image Credits ................................................................................................................. 74
Keywords ........................................................................................................................ 75
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AIM
To familiarise students with the concepts of personality determinants and traits, the Big
Five Model, the personality attributes influencing organisational behaviour, and the Johari
window.
After completing this unit, you should be able to:
• Define personality
• Examine the various personality determinants and traits
• Enumerate the personality attributes influencing organisational behaviour
• Describe the Big Five and Johari Window models
LEARNING OUTCOMES
• State what factors determine an individual’s personality

• Summarise the various kinds of personality traits
• Analyse how the employees’ behaviour in an organisation is influenced by
their personality attributes
• Explain how human personality can be measured by using the models of Big
Five and Johari Window
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2.1.1 Personality Determinants
G. W. Allport defined personality as “a person’s pattern of habits, attitudes, and traits

which determine his adjustment to his environment.”
According to Robert E. Park and Earnest W. Burgess, personality is “the sum and
organisation of those traits which determine the role of the individual in the group.”
According to Lundberg and others, “The term personality refers to the habits, attitudes, and
other social traits that are characteristic of a given individual’s behaviour.”
According to Anderson and Parker, “Personality is the totality of habits, attitudes, and
traits that result from socialisation and characterises us in our relationships with
others.”
Therefore, an individual’s personality is a combination of four factors, i.e., culture,

heredity, physical environment, and particular experiences. The factors that determine the
personality are discussed below in detail.
ENVIRONMENT
• Culture
HEREDITY • Family background
• Life experiences
• Socialisation process
PERSONALITY
Fig. 1 Determinants of Personality
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Physical Environment
An individual’s personality is largely determined by the geographical environment he lives in.

The environment of an individual leads to the development of a certain culture, which in turn
determines a person’s personality. So ultimately, the geographical environment and the
people’s personality are both interrelated.
For instance, those who are living in hot regions normally develop lack of enthusiasm to do
hard work, whereas those in warm and average temperatures, have contributed much to the
growth of civilisation. But those who live in mountainous and desert areas normally are
courageous and powerful. However, it cannot be generalised that all people have these
attributes and cultural influences with respect to their personality. Other factors also play their
role in shaping one’s personality.
Heredity
Generally human beings inherit certain characteristics from their parents such as physical
features, certain abilities, and intelligence. Still, it can be observed that all siblings in a family
who have born of the same parents do not exhibit the types of personality traits. So, it can be
said that heredity alone is not responsible for the development of an individual’s personality.
Culture
An individual who grows up in a particular culture is influenced by that culture and consequently
his personality is also shaped by it. Culture is composed of a specific people’s customs,
traditions, religion, beliefs, morals, and social standards which in turn affect the personality of
those who follow them. Those who born in a certain culture tend to be more aggressive than
those born in other cultures.
Particular Experiences
The kind of experiences an individual undergo in his life may also affect his personality. These
experiences may be of two types: one is continuous and the other is sudden.
People are naturally associated with their parents continuously from their childhood and hence
are strongly influenced by them which shapes their personality. The child’s personalities may
vary depending on whether the parents are aggressive or kind in nature. And the impressions
formed by a child at the early stages of his life strongly influence and endure throughout his
life. Similarly, there may be sudden experiences encountered by people that make a lasting
impression on his personality. For example, a child who encountered a traumatic experience or
met with an accident may develop certain fears in his life later.
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As earthquakes are common to Japan, every Japanese child is given training

DID
YOU in disaster management, which in turn shapes their unique personality
KNOW traits such as community feeling, unity, teamwork, hard work, honesty, and
patriotism.
1) The people of mountains and deserts are usually __________________.
a) Timid
b) Bold
c) Weak
d) Sophisticated
2) All the sons and daughters of the same parents brought up in the same environment
have identical personalities.
a) True
b) False
3) The customs and traditions, as well as the moral and social standards of a group affect
the personality of the group members.
a) True
b) False
4) Two types of experiences shape an individual’s personality – one is the continuous

experience and the other is __________________.
a) Future experience
b) Continuous experience
c) Sudden experience
d) False experience
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2.1.2 Major personality attributes in luencing organisational behaviour
There are 12 major personality attributes influencing organisational behaviour which are
discussed below:
1. Authoritarianism
It states that people in organisations should have different powers and statuses. They advocate
stable and structured organisational designs with clear-cut rules and procedures and like the
people to conform to them. They expect blind and strict obedience and respect to authority.
2. Bureaucratic Personality
This type also conforms to rules and procedures but does not prefer blind acceptance of it. They
advocate formal relationships in an organisation and are not innovative and risk-takers.
3. Machiavellianism
According to Machiavelli, to gain power, a man is pragmatic, maintains emotional
distance, manipulates more, and has high self-esteem and confidence. They are ready to
exploit people for their own advantage. They do not yield to loyalty and friendship.
4. Introversion and Extroversion

Individuals with extroversion type are highly sociable in nature and they prefer to work in jobs
that allow them to interact with people such as managerial, sales, and public relations. People
with introversion are normally shy and reserved and are interested to work alone in such jobs as
accountants, software, etc., where considerable analytical skills are required.
5. Problem Solving Style
Under this, people are classified into 4 types:

(i) Sensation Feeling Style: They understand people’s emotions and are very sociable and are
suitable for jobs that involve continuous interaction with people.
(ii) Sensation Thinking Style: Their approach is logical in nature and are very particular about
details. They are suitable for such jobs as accountants and software engineers.
(iii) Intuition Feeling style: These are similar to the first classification as they are sociable and
helpful. They prefer jobs like PRO, advertising executives, and politicians.
(iv) Intuition Thinking Style: This style prefers challenging jobs like lawyers, and researchers
since these individuals are very creative and energetic.
6. Achievement Orientation
These people always look for challenging and highly risky jobs since they like to achieve things
and prove their mettle. They are ready to take full responsibility for their own successes and
failures.
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5) Some individuals are ready to take full responsibility for their own successes and
failures. This type of personality attribute is called __________________.
a) Introversion
b) Machiavellianism
c) Achievement orientation
d) Extroversion
6) Persons with intuition thinking style prefers ______________________.
a) Sociable jobs
b) Challenging jobs
c) Detailed jobs
d) Low risk jobs
7) People with this type of personality attribute do not prefer blind acceptance of rules and
procedures ________________.
a) Authoritarian
b) Introversion
c) Autocratic
d) Bureaucratic
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7. Locus of Control
Locus of control is of two types - Internal locus of control and external locus of control.
(i) Internal Locus of Control: These individuals believe that events are under their control and
hence, they are very independent thinking, and do not yield to others’ influence. They reach
higher positions very quickly and take utmost care about their good health and hence
absenteeism among them is lower.
(ii)External Locus of Control: They believe that events are always beyond their control and
are influenced by external forces. They are often sick, and the rate of absenteeism is high
among them. They want to be directed by others and are not much interested in their career
advancement. Instead, they are more interested in their job security.
Fig. 2 Locus of Control
8. Self-Esteem
Self-esteem is the degree of respect a person has for himself. It is of two types:
(i) High self-esteem: This type of individuals are high performers, very sociable and are good
at interpersonal skills.
(ii) Low self-esteem: These individuals always look for others’ approval for their achievements
and are easily influenced by others’ opinions. They are often depressed and are ready to blame
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others for their own mistakes.

9. Self-monitoring
People with this type of personality are ready to adapt to the external situations. They are
capable of presenting striking contradictions between their public and private selves. They are
more successful in managerial positions where individuals are required to play multiple and even
contradictory roles.
10. Risk Taking
People who are ready to take high risks make their decisions even when there is less
information available. But a low risk-taker tread carefully and gathers all information until s/he is
satisfied with enough of it to make a decision. They prefer jobs that are suitable to their
personality.
11. ‘Type A’ and ‘Type B’ Personality
People with Type A personality are competitive, aggressive, and achievement oriented.
They work very hard and are highly productive people, but they are impatient and irritable and
are not suitable to work in teams.
People with Type B personality are non-competent, easy-going, less stressed, and
indifferent. They are good judges and do jobs accurately.
Fig. 3 Type A and Type B Personalities
12. Myers-Briggs Type Indicator (MBTI

It is a personality test that measures people’s attention (extrovert or introvert), information
collection (sensing or intuition), information processing (thinking or feeling) and perception
(judging or perceiving). It then combines these four measures into 16 personality types.
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These measures are denoted by different alphabets such as E for extrovert, I for introvert, S
for sensing, N for intuition, T for thinking, F for feeling, J for judging and P for perceiving. So,
if marketing people are ESTJ, it denotes that they are extrovert, sensing, thinking and judging
types. Many organisations encourage their employees to reveal their four-letter type so that
others in the organisation can better understand their personality.
Fig. 4 Myers-Briggs Type Indicator: The 16 Personality Types
In 1532, Niccolo Machiavelli said in his book The Prince that when a ruler is
DID
YOU establishing a kingdom or a republic, and is criticised for his deeds, including
KNOW violence, he should be excused when the intention and the result is
beneficial to him.
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8) The concept that there should be status and power differences among people in
organisations is called __________________ .
a) Locus of control
b) Authoritarianism
c) Introversion
d) Machiavellianism
9) When people have no hesitation in using others to achieve their own goals, that
particular personality trait is known as ______________________.
a) Machiavellianism
b) Extroversion
c) Type A personality
d) Type B personality
10) The individuals who are gregarious and sociable are termed as _______________.
a) Introverts
b) Risk takers
c) Self monitors
d) Extroverts
11) When an individual believes that events are determined by forces beyond one’s
control, he is referring to ______________________________.
a) Type B personality
b) Internal locus of control
c) External locus of control
d) Type A personality
12) The negative side of the individuals with Type A personality is that they are very
_______________________.
a) Impatient
b) Easy going
c) Non-competitive
d) Lethargic
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2.1.3 The Big Five Model
Also called the Five Factor model, it states that the human personality can be measured along
five major factors or dimensions such as openness, conscientiousness, extraversion,
agreeableness, and neuroticism. By taking the first letters of these dimensions, the acronym
of this model is called OCEAN or CANOE. Through these scientifically measured dimensions,
one can understand the differences underlying in each personality type of human being as a
whole.
Fig. 5 The Big Five Model
The five personality dimensions of the Big Five model are:
Openness
Here, openness means that a person with this type of personality is more open to innovative
ideas and new experiences. These people are highly creative and adventurous in nature. They
are ready to jump into the unknown and their way of thinking is abstractive in nature. Those
who are not open to new ideas are traditional in their behaviour and they avoid meeting the
unknown.
Conscientiousness
This trait explains the goal-orientation and persistence levels of a person. Those with high
levels of conscientiousness are persistent and enduring with strong determination and are
ready to sacrifice short-term gratifications for the sake of long-term goals. Persons with low
levels of conscientiousness focus more on short-term gratifications rather than on long-term
achievement.
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Extraversion
Individuals with extraversion type of personality are always looking for admiration and attention
from others. They interact more with others to seek their friendship, power, and status, whereas
introverts do not seek these rewards from others and so do not work hard to earn these
rewards.
Agreeableness
Agreeableness is a kind of behavioural tendency that those who possess this type of
personality always put the others’ needs prior to their own needs. They feel a lot of empathy
and think from others’ point of view. They feel happy by serving others. People, who feel less
agreeableness, put their needs first than the others’ needs.
Neuroticism
Neuroticism is the personality characteristic of a person about how he reacts to a given

situation mostly in a negative way. For instance, a person may react in a fearful way when he
faces a dangerous situation, another may feel guilty or shameful for some wrong-doing, and
still another may feel sad for a loss. Not all may feel so strongly but others may endure these
kinds of disasters and look forward to the future in a positive way.
So, an individual is composed of all these five dimensions. People may be low in some
factors, high in other factors and average in other factors. Based on these scores an
individual’s personality can be measured in totality.
The army general of Northern Virginia during Civil War, Tom “Stonewall”
DID
Jackson had a belief that one of his arms was longer than the other, and he
YOU
KNOW would frequently raise it over his body to balance out blood circulation. This
comes under personality traits.
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13) Individuals with this type of personality are always looking for admiration and attention
from others __________________.
a) Neuroticism
b) Agreeableness
c) Extraversion
d) Conscientiousness
14) Which personality type of people are ready to jump into the unknown?
__________________ .
a) Openness
b) Neuroticism
c) Agreeableness
d) Extraversion
15) The type of personality which always put the others’ needs prior to their own needs is
called __________________.
a) Extraversion
b) Agreeableness
c) Openness
d) Neuroticism
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2.1.4 Psycho-Analytic Theory
Also called structural theory of personality, through psychoanalytic theory, Sigmund Freud states
that human behaviour is the result of the interactions among three component parts of the mind:
the id, superego, and ego.
The Id
This part of the mind, called id, is concerned with instant gratification of basic physical needs
and urges, and it operates unconsciously. For instance, when a person sees another individual
eating ice cream, immediately the person’s id wants to grab it without bothering about what the
individual or society thinks. It would care only to gratify its need.
Fig. 6 Freudian Psychoanalytic Theory of Personality
The Superego
The superego is concerned with the morals and norms of the society in which an individual is
part of. So, in the above example, if the id wants to grab the ice cream, the
superego says that it was not the right thing to do so. Then the conflict arises and if the id wins,
the person grabs the ice cream. If the superego wins, he would not do so. When the id wins and
the person grabs the ice cream, later the person feels guilty and ashamed.
The Ego
The ego thinks practically and rationally, and it always tries to strike a balance between id and
superego. Freud calls it the “self”. In the above example, the ego suggests the person to go and
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buy an ice cream. In this way the person is saved by gratifying his need and also from feeling
guilty.
Freud says that all the three components of the mind – id, superego, and ego – are in
constant conflict in a person. He says that a person with a strong ego would have a healthy
personality, whereas a person with the imbalances in the three components suffers from
neurosis, that is depression and anxiety.
DID In 1931, Sigmund Freud analysed the Charlie Chaplin movie “The Tramp”
YOU and commented that the movie was actually a portrayal of Chaplin’s life in
KNOW his younger days.
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16) Which part of the mind is concerned with the morals and norms of society?
__________________ .
a) Superego
b) Id
c) Supraego
d) Ego
17) Which part of the mind is concerned with instant gratification of basic physical needs
and urges? __________________ .
a) Ego
b) Supraego
c) Id
d) Superego
18) The part of the mind that thinks practically and rationally is known as
__________________.
a) Id
b) Ego
c) Superego
d) Supraego
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2.1.5 Johari Window
The name Johari is derived from the first names of its developers, viz., Joseph Luft and
Harry Ingham. Johari Window helps in understanding a person’s relationship with himself
and with others. It is based upon two things – to acquire the trust of others by revealing one’s
information to others and also to learn about oneself from the feedback received from others.
Known to Self Not Known to Self
Known to Arena Blindspot

Others ‘‘Open Self’’ ‘‘Blind Self’’
Not Facade Unknown

Known to ‘‘Hidden Self’’ Self
Others
Fig. 7 Johari Window
Johari Window comprises of four quadrants just like panes in a window and each
quadrant represents feelings and personal information. The horizontal quadrants show the
feelings and information known and unknown to others about oneself. The vertical quadrants
represent the feelings and information known and unknown to oneself about oneself. One has
to see oneself to which quadrant one belongs to and assess his personality accordingly.
Quadrant 1: Open Self/Arena
The feelings, emotions, and information about a person, who falls in this quadrant, is known to
himself and also to others. The person belongs to this arena constantly socialises himself with
others and receives feedback from them about him, which leads to strong relationships and
effective groups.
Quadrant 2: Blind Self/Blind spot
In this quadrant, the information about a person’s personality characteristics are known to others
but the same is not known to the person himself. That is, others are thinking differently about the
person than what he is expecting from others.
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Quadrant 3: Hidden Self or Facade

In this quadrant, the person hides certain information about himself from others. So only he
knows that information about himself, but others do not know anything about it. The reason is
that the person does not like to share such information as personal secrets, weaknesses, and
private affairs with others.
Quadrant 4: Unknown Self
In this quadrant, certain information about himself is not known to the person and also to others.
The reason is that the person himself is unaware about it until he discovers it himself at one point
of time.
In quadrant 1, when the person reveals more about himself to others, the quadrant 1 can be
extended horizontally to reduce the blind spot. It can also help to extend vertically so that the
façade can be reduced. In quadrant 2, the blind spot can be reduced by getting feedback
constantly from others. In quadrant 4, when he discovers the unknown information himself, he
can reduce the unknown self-area through open communication.
DID
YOU The Hollywood movie “Mean Girls” starring Lindsay Lohan exactly
KNOW portrays all the quadrants of Johari Window.
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Match the following:
19) Hidden Self a) Unknown to self and others
20) Blind self b) Known to self and others
21) Unknown self c) Unknown to self and known to others
22) Open self d) Known to self and unknown to others
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Summary
According to Lundberg and others, “The term personality refers to the habits, attitudes,
and other social traits that are characteristic of a given individual’s behaviour.”
The major factors that determine the personality of an individual are culture, heredity,
physical environment, and particular experiences.
The twelve major personality attributes influencing organisational behaviour are:
authoritarianism, bureaucratic personality, Machiavellianism, introversion and
extroversion, problem-solving style, achievement orientation, locus of control, self-
esteem, self-monitoring, risk taking, ‘Type A’ and ‘Type B’ personalities, and MBTI.
The Big Five model states that human personality can be measured along five major factors
or dimensions such as openness, conscientiousness, extraversion, agreeableness, and
neuroticism.
Sigmund Freud, through his psychoanalytic theory states that human behaviour is the
result of the interactions among three component parts of the mind: the id, superego, and
ego.
Johari Window helps in understanding a person’s relationship with himself and with others.
It is based upon two things – to acquire the trust of others by revealing one’s information
to others and also to learn about oneself from the feedback received from others.
Terminal Questions
1. List and explain the four major factors that determine a person’s personality.
2. Discuss, in brief, the main personality attributes influencing organisational behaviour.
3. Illustrate how the human personality can be measured by applying the Big Five Model.
4. Describe through psycho-analytic theory how the three component parts of the mind
influence the human behaviour with the help of an example.
5. Demonstrate, with the help of a diagram, how the Johari Window helps in understanding
a person’s relationship with himself and with others.
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Answer Keys
1 b
2 b
3 a
4 c
5 c
6 b
7 d
8 b
9 a
10 d
11 c
12 a
13 c
14 a
15 b
16 a
17 c
18 b
19 d
20 c
21 a
22 b
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Description:
1. Study the culture and physical environment of Rajasthan in India and explain how
these two factors are influencing their personality.
2. Watch the English movie “Mean Girls” and list out the incidents where each quadrant
of Johari Window is portrayed.
Glossary
Personality: The habits, attitudes, and other social traits that are characteristic of a
given individual’s behaviour.
Machiavellianism: A personality attribute that manipulates and exploits people for self-
ish gains.
Introversion: A shy and reserved type of personality trait.
Extroversion: A highly sociable kind of personality trait.
Locus of Control: A personality trait that shows how an individual responds to events
happening to him.
Self-Esteem: The degree of respect a person has for himself/herself.
Type A Personality: Individual with a competitive and aggressive personality.
Type B Personality: Individual with a non-competent and easy-going personality.
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BIBLIOGRAPHY
e-References
Organisational Behaviour (1st ed.). Retrieved from

https://old.mu.ac.in/wp-content/uploads/2014/04/Management-PAPER-II-Organiza-
tional-Behavior-final-book.pdf
Handbook of Personality: Theory and Research (1st ed.) Retrieved from
https://www.truity.com/book/big-five-personality-model
Personality and its Determinants (1st ed.) https://www.yourarticlelibrary.com/person-
ality/personality-meaning-and-determinants-of-personality/24336
Personality Traits (1st ed.) https://www.yourarticlelibrary.com/organization/top-12-per-
sonality-traits-influencing-organizational-behavior/63790
Handbook of Personality: Theory and Research (1st ed.)
https://www.truity.com/book/big-five-personality-model
Psychodynamic Perspectives on Personality (1st ed.)
https://courses.lumenlearning.com/boundless-psychology/chapter/psychodynam-
ic-perspectives-on-personality/
Introduction to Business Communication (1st ed.)
https://www.toppr.com/guides/business-communication-and-ethics/intro-to-busi-
ness-communication/johari-window/
External Resources
Robbins, S. P., & Judge, T. A. (2019). Essentials of Organizational Behavior. Pearson.

Aswathappa, K. (2018). Organisational Behavior. Himalaya Publishing House.
Luthans, F. (2010). Organisational Behavior (12th ed.). McGraw-Hill Education.
Prasad, L. M. (2014). Organisational Behavior (5th ed.). Sultan Chand & Sons.
Pervin, L. A., & John, O. P. (1999). Handbook of personality: Theory and research
(2nd ed.). Guilford Press.
Bhushan, U. (2012). Introduction to Business Communication (1st ed.). Jaico Publish-
ing House.
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Video Links
Topic Link
The Big Five https://www.youtube.com/watch?v=IB1FVbo8TSs

Personality Traits
Sigmund Freud: Id, https://www.youtube.com/watch?v=KOCt_-0EO-

Ego & Superego 5Y&list=RDLVXCtm0FSGZus&index=11
The Johari Window https://www.youtube.com/watch?v=BWii4Tx3GJk

Model
Image Credits
Fig. 1
http://arts.brainkart.com/article/determinants-of-personality---personality-and-individu-
al-differences-447/
Fig. 2
https://twitter.com/ap_psychology/status/1105253674924863493
Fig. 3
https://lifestoogood.net/personality-theory-type-type/
Fig. 4
https://www.verywellmind.com/the-myers-briggs-type-indicator- 2795583
Fig. 5
https://courses.lumenlearning.com/wm-organizationalbehavior/chapter/personali-
ty-traits/
Fig. 6
https://courses.lumenlearning.com/boundless-psychology/chapter/psychodynam-
ic-perspectives-on-personality/
Fig. 7
https://www.toppr.com/guides/business-communication-and-ethics/intro-to-busi-
ness-communication/johari-window/
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Keywords
Autocratic model Behavioural science
Bureaucracy Collegial model
Contingency Custodial model
Hawthorne studies Hierarchy of needs
Mental revolution Organisational behaviour
Organisational culture Personnel office
Scientific management SOBC model
Social systems Supportive model
Theory X and Theory Y Wagner Act
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Module 2
Unit 2
Values and Perception
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Unit 2.2
Values and Perception ............................................................................. 76
Aim ........................................................................................................................ 78
Instructional Objectives ......................................................................................... 78
Learning Outcomes ............................................................................................... 78
2.2.1 Types of Values ............................................................................................ 79

Self-Assessment Questions .................................................................................. 81
2.2.2 Perceptual process ....................................................................................... 82
2.2.3 Factors influencing Perception ..................................................................... 87
2.2.4 Perceptual distortion ..................................................................................... 91
2.2.5 Linkage between perception and individual decision-making ...................... 95
Summary ............................................................................................................... 97
Terminal Questions ................................................................................................ 97
Answer Keys .......................................................................................................... 98
Activity ................................................................................................................... 99
Glossary ................................................................................................................ 99
Bibliography ......................................................................................................... 100
e-References ....................................................................................................... 100
Video Links .......................................................................................................... 101
Image Credits ...................................................................................................... 101
Keywords ............................................................................................................. 102
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AIM
To familiarise students with the concepts of the types of values, perceptual

process, the factors influencing perception, perceptual distortion, and the linkage
between perception and individual decision-making.
• List out the types of values

• Elaborate upon the perceptual process
• Identify the factors influencing perception
• Describe the link between perception and individual decision-making
LEARNING OUTCOMES
• Describe how various types of values affecting an individual’s decisions

• Summarise the process of individual perception
• Discuss how the decision-making process of individuals is affected by the way
they perceive things, people, and situations
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2.2.1 Types of Values
Every individual forms certain value in her/his life and these direct them to take decisions
in their life. The values may be right or wrong from the perspective of the individual who
holds them. These values that guide their behaviour, are long-standing and enduring.
“Values are global beliefs that guide actions and judgements across a
variety of situations.” - M. Rokeach.
“Values are a specific mode of conduct or end-state of existence which

is personally or socially preferable to an opposite or converse mode of
conduct or end-state of existence.” - Stephen Robbins.
“Values are a constellation of viewpoints, prejudice, inner inclinations,

likes & dislikes, rational & irrational judgements, and association patterns
that determine a person’s view of the world.” - Edward Spranger.
Rokeach classified the values into two major types – terminal values and instrumental values.
Fig.1 Types of Values
Terminal Values
Terminal values are the desired outcomes an individual wants to achieve. For example, s/he
wants to have a comfortable and happy life, self-respect, security and safety, and
accomplishment. But business organisations may have profitability, quality, innovation,
competence, and economy as their terminal values.
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Instrumental Values
Instrumental values are nothing but the means to achieve the individual’s desired goals in her/
his life. To achieve these desired goals, a person may have certain instrumental values like
hard work, honesty, sincerity, courage, and ambition. Business organisations may have such
instrumental values as innovativeness, hard work, honesty, sincerity, creativity, obedience, and
respect to the superiors.
Dhirubhai Ambani, who challenged the monopoly of the Tatas and the
DID
YOU Birlas in the 1970s and whose life was a rags-to-riches story, followed his
KNOW core value “Think Big”, and built a company worth US$8 billion. This is
how perception and thinking may shape an individual’s success.
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1) Terminal values are the desired __________________ an individual wants to achieve.
a) Outcomes
b) Incomes
c) Means
d) Averages
2) Instrumental values are the ________________ to achieve the individual’s desired

goals in his life.
a) Outcomes
b) Means
c) Incomes
d) Averages
3) Which of the following values is called a terminal value?
a) Sincerity
b) Honesty
c) Security
d) Creativity
4) If an individual wants to have a happy and comfortable life, he should have ambition as
one of his values in his life.
a) False
b) Not necessary
c) Unnecessary
d) True
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2.2.2 Perceptual Process
“Perception includes all those processes by which an individual receives information

about his environment—seeing, hearing, feeling, tasting and smelling.” - Joseph Reitz.
“Perception can be defined as the process by which individuals organise and

interpret their sensory impressions in order to give meaning to their environments.” –
Stephen Robbins.
Fig. 2 Definition of Perception
Perceptual Process
Perceptual process consists of the following steps:
• Perceptual selection of objects
• Perceptual organisation of objects
• Interpretation and response
Different individuals perceive the world differently by going through the above steps. So, the
different responses by the individuals to the outside world can be explained with the help of the
perceptual process they have gone through.
Fig. 3 Perceptual Difference
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For instance, in fig. 3, one can see the ‘Necker’ cube as having two perfect squares, one in the
front and the other in the back. But we see only one square at one time, and both the squares
cannot be seen simultaneously. And the ‘Rubin’ vase also consists of two images – a vase and
two faces, but one can see only one at a time. Both cannot be seen together.
Perceptual Selection
Perceptual selection of a person is caused by two factors, viz., internal factors and external
factors.
Internal factors:
• Personality – The personality characteristics of an individual greatly influence the

selection of his perception. For example, a person with a conscientious personality goes
into elaborate details before selecting his perception.
• Motivation – As people are motivated daily based on their various needs, an individual
selects his perception depending on which need he likes to fulfil at that time and situation
and ignores other objects which do not satisfy that need.
• Experience – Individuals also select the perceptions based on their past experiences
with the object. If it does not suit their experience, they reject it and select those which
fits into their experience.
External factors:
• Size – When you offer apples with different sizes to a child, he selects a bigger one
since it attracts him more. The same is true with the adults also.
• Contrast – If a lighter coloured object is projected on a darker background, it would
surely get the attention of a person.
• Intensity – For example, a brighter object instantly attracts the attention of a person.
That’s why some marketers use dazzling ads to attract consumers.
• Repetition – An individual selects an object when it is repeated several times to him.
Marketers telecast advertisements over several media repeatedly for this reason.
• Motion – Normally, people are prone to focus their attention more on moving objects
than on stationary ones. For example, a video presentation of an object has more
chances to get selected rather than a printed version of the same.
• Novelty and Familiarity – A person selects an object when it is entirely new and
different from what he has seen. At the same time, he also selects an object which is very
familiar to him. Both possibilities occur in the people’s perceptual selection.
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Perceptual Organisation
Once the selection of perceptions is done, the individual organises them to get a meaningful
understanding for him to make decisions. This is done based on the following factors.
• Figure-ground – The object perceived by the person stands out against the background
of all other objects. For example, a novel idea may stand out against all other old ideas.
Fig. 4 depicts a young woman and an old woman. When you see the young woman, you
cannot see the old one, and vice versa.
Fig. 4 Ground Perception
• Closure – Individuals attempt to fill in or close the gaps, if any, between the parts of
their perception to get the whole meaning. If they fill with the wrong ones, it may lead to
a wrong perception.
• Perceptual grouping – People normally try to organise their perceptions into a
meaningful group or pattern for better understanding.
• Similarity – Similarly, people more like to group the perceptions that are similar in one
way or other.
• Proximity – Persons also highly likely to organise the perceptions that are closer to
them or easier to access to get a meaningful whole.
• Perceptual Context – When different perceptions are related in some manner, then
the person connects them and creates a context out of them.
• Perceptual Constancy – If an object is always perceived in the same way by the
individual and the object acts similarly, then that object will be most likely selected by
him.
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Interpretation and Response
Having gone through the elaborate steps of perceptual selection and organisation, the individual
now interprets and responds to the object in the world. But the processes of selecting and
organising of perceptions take place rather very quickly. As enormous data is stored in the mind,
it processes these entire complex databases and makes an interpretation about the perceptions
and the individual responds accordingly. The database is also continuously updated as the
time passes, and new knowledge and experiences are added. Then the same individual’s
interpretations may change over time due to this phenomenon.
DID
YOU The figure-ground concept was first developed in the early 1970s by
KNOW the Canadian media theorist and philosopher Marshall McLuhan.
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5) When individuals select the perceptions based on their past experiences, they reject
the object if it fits into their past experience.
a) True
b) False
6) If a lighter coloured object is projected on a _____________ background, it would
surely get the attention of a person.
a) Darker
b) Lighter
c) Whiter
d) None of the above
7) Normally, people are prone to focus their attention more on moving objects than on
stationary ones.
a) True
b) False
8) The figure-ground perception says that an object perceived by a person stands out
against the ___________________ of all other objects.
a) Motion
b) Proximity
c) Foreground
d) Background
9) Name the perceptual organisation where people organise the perceptions that are
closer to them to get a meaningful whole.
a) Similarity
b) Intensity
c) Proximity
d) Creativity
10) When individuals attempt to fill in or close the gaps between the parts of their perception
to get the whole meaning, it is known as _____________________.
a) Perceptual context
b) Closure
c) Proximity
d) Similarity
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2.2.3 Factors Influencing Perception
An individual’s perception is affected by three sets of factors - characteristics of the perceiver,

characteristics of the perceived/target, and the characteristics of the situation.
Fig. 5 Factors that Influence Perception
Characteristics of the Perceiver:
Various types of characteristics of an individual or perceiver may affect her/him when s/he
tries to interpret a target or a perceived object.
Needs and Motives – When a person’s need is unfulfilled, s/he perceives things that
are related to that unsatisfied need. For example, when a person is so hungry and
looks for hotels, the signboard with the word ‘hospital’ looks like a hotel’s name board
to her/him. Similarly, a person’s motives also play a greater role in perceiving objects.
A dishonest person is more likely to view others also as dishonest.
Self-concept – It is the way one perceives oneself. If we perceive ourselves correctly,

then it is possible to perceive others correctly. The happier we perceive ourselves, the
happier we see others also and vice versa.
Past Experience - Our past experiences also influence the way we perceive others and
this world. If we were cheated by our partner in a previous business, then we make a
perception that a partnership doesn’t work anymore.
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Current Psychological State – According to the psychological condition a person is in,

his perception changes towards the objects he perceives. If he sees a snake inside his
house and is frightened, he would perceive a rope outside his house also as a snake.
Beliefs – If a person believes that Chinese products are of low quality, he never buys
any Chinese product even if some Chinese products are of good quality.
Expectations – The behaviour expected from others by an individual also affects the
level of his perception. The students may perceive that a newly appointed gold medallist
teacher would teach his subject in a better way. It might be possible that the reality would
be different.
Cultural Upbringing – Individuals who were brought up in different cultural backgrounds

perceive the same things in different ways since they have been influenced by their
cultures. An Indian considers it rude sitting cross-legged before the elders while a
westerner doesn’t consider it so.
Characteristics of the Perceived/Target:
Here, we consider that the characteristics of the object, target, or the other person who is being
perceived also affect our perception.
Physical Appearance – Generally, physically attractive persons are noticed immediately and
are perceived to be warm and friendly.
Gender – Men are perceived to be physically strong and are having a logical mind, whereas
women are perceived to be weak and highly emotional in their character.
Manner of Communication – People who talk louder than others in a group are instantly noticed.
The selection of words and the sophistication of language used while talking make people to be
perceived whether they are educated, professional, or illiterate. The body language of a
person while talking also tells us whether s/he is confident or nervous.
Occupation and Status of a Person – We usually respect other individuals depending upon
their status. People such as college principals, police officers, and spiritual persons are highly
respected. Later, depending upon their characteristics, this perception may change.
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Characteristics of the Situation:
Our perception about objects or people changes due to the environments or the situation in
which they are in.
Location – If a person meets her/his superior at a wedding reception, their perception

about the superior is different than when s/he meets her/him at their office.
Social Context – If you meet a stranger with a celebrity, you perceive that s/he is a special
person in society. But if you meet her/him with another person who is a drunkard, your
perception may immediately change.
Organisational Setting – If employees in an organisation are provided with a friendly

atmosphere, they perceive that the management respect them and as a result, they work hard
and become loyal to their organisation.
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11) The way one perceives oneself is known as ___________________ .
a) Self-concept
b) Self-analysis
c) Selfishness
d) Self-confidence
12) Individuals who were brought up in different cultural backgrounds perceive the same
things in the same way since they have been influenced by their cultures.
a) True
b) False
13) Physically attractive persons are noticed immediately and are perceived to be warm
and _________________.
a) Deadly
b) Vile
c) Friendly
d) Sulky
14) Men are perceived to be physically strong and are having logical mind, whereas
women are perceived to be weak and highly ________________ in their character.
a) Logical
b) Reasonable
c) Analytical
d) Emotional
15) If a person meets his superior at a wedding reception, his perception about his superior
is different than when he meets him at his office. Name the situational characteristic that
influence the perception _______________.
a) Organisational setting
b) Self-concept
c) Social context
d) Location
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2.2.4 Perceptual Distortion
Perceptual distortion is the lack of connection between how a stimulus is perceived and how a
person perceives the stimulus under a given set of circumstances.
The perceptual distortion is of four types: stereotyping, halo effect, selective perception,
and projection.
Stereotyping
In stereotyping, an individual is not perceived based purely on his individual traits but rather on
the general traits of the group which he belongs to. For instance, all Japanese are perceived as
very hard workers, Indians are highly spiritualistic people, and women are more conscious of
their appearance.
Fig. 6 Gender Stereotyping
Halo Effect
When a person develops certain impressions about an individual based on a single attribute
of that individual, it is known as “halo effect.” For example, we sometimes think that a decently
dressed person might have decent behaviour, but the fact is otherwise. Halo effect occurs with
the way the other person talks, his mannerisms, appearance, body language, stature, nationality,
etc.
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Fig. 7 Halo Effect
Selective Perception
Selective perception happens when a person selects only those characteristics or information
about others which support our belief system and rejects the all other information and
attributes which do not support her/his belief system.
Fig. 8 Selective Perception
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For instance, when we hear that our neighbour is a very nice person with all his good characteristics,
and we also hear that he is a drunkard, then we select only his drinking habit and conclude that
he is a bad guy in spite of all good things our neighbour possesses.
Projection
Projection is another kind of perceptual distortion where a person attributes her/his own
characteristics to others. The person does this to protect her/his own self. For instance, a
dishonest person views others also dishonest. Similarly, some people are highly talkative and
do not have patience to listen to others. If you interrupt them while talking, they would accuse
you that you didn’t have patience to listen to others.
Fig. 9 Projection
DID Frederick Wells perceived the halo effect in 1907 when he found people
YOU ranked some authors’ achievements based on their looks; and
KNOW in 1920, Edward Thorndike coined the word “Halo Effect”.
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Match the Following:
16) Lack of connection between

general perception and personal perception a) Projection
17) Perception based on the group which

an individual belongs to b) Selective perception
18) Perception based on a single attribute

of an individual c) Halo effect
19) Perception based on those characteristics

which support one’s belief system d) Stereotyping
20) Perception where a person attributes his

own characteristics to others to protect his own self e) Perceptual distortion
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2.2.5 Linkage between Perception and Individual Decision-Making
The decision-making process of individuals is largely affected by the way they perceive things,
people, and situations in the outer world. Whatever factors contribute to the perceptual process,
the same would, in turn, affect the decision-making process also since perception and decision-
making are both inter-related.
Selective Perception
As we discussed much in detail about selective perception in previous topics, the same would
affect one’s decision-making. If the perception formed is wrong, so are the decisions made by
the individual concerned.
Halo Effect
If perceptions are formed based on halo effect, then the decisions made based on those
perceptions would be affected negatively.
Stereotyping
Stereotyping is the process of generalising people based on their attributes as we discussed in

earlier topics. If perceptions are made based on these generalisations, then there is a possibility
that the decisions might go wrong.
Intuitive Decision-making
When an individual uses his instinctive feeling to make a decision rather than her/his logical
reasoning, it is known as intuitive decision-making. Sometimes decisions are made in the
organisations based on intuitive feelings if there is a high level of uncertainty, lack of sufficient
information, or time constraints.
Confirmation Bias
Individuals like to have only that information which confirms their past judgment, and they then
make decisions based on that particular information. They reject the information that contradicts
their past judgment.
Gender
As far as gender differences are concerned in making decisions, generally women take more
time to make a decision since they like to analyse a problematic situation more than men. This
practice gives rise to more accurate decisions in the organisations.
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DID The term ‘stereotype’ was coined by Walter Lipmann, and the most common
YOU stereotypes one can hear about India are that all Indians are vegetarians, and
KNOW
they worship millions of gods.
21) If perceptions are made based on halo effect, then the decisions made based on
those perceptions would be affected positively.
a) True
b) False
22) If perceptions are made based on stereotyping, then there is a possibility that the
decisions might go wrong.
a) True
b) False
23) Sometimes decisions are made in the organisations based on intuitive feelings if there
is a high level of certainty, or sufficient information.
a) True
b) False
24) Individuals like to have only that information which confirms their past judgment, and
they then make decisions based on that particular information.
a) True
b) False
25) The practice among women of taking more time to make a decision gives rise to
inaccurate decisions in the organisations.
a) True
b) False
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Summary
Values are of two types: terminal values and instrumental values.

Perceptual process consists of three steps: (i) Perceptual selection of objects; (ii)
Perceptual organisation of objects: and (iii) Interpretation and response.
An individual’s perception is affected by three sets of factors: (i) Characteristics of the
perceiver; (ii) Characteristics of the perceived/target; and (iii) Characteristics of the
situation.
Perceptual distortion is the lack of connection between how a stimulus is generally
perceived and how a person perceives the stimulus under a given set of circumstances.
The perceptual distortion is of four types: (i) Stereotyping; (ii) Halo effect; (iii) Selective
perception; and (iv) Projection.
The factors such as selective perception, halo effect, stereotyping, intuition, confirmation
bias, and gender, which contribute to the perceptual process, would in turn, affect the
decision-making process also since perception and decision-making are both inter-
related.
Terminal Questions
1. Define values and discuss the types of values with suitable examples.
2. Explain, in brief, the various steps involved in perceptual process.
3. Describe how the characteristics of the perceiver, target and the situation influence a
person’s perception of the outer world.
4. What do you mean by perceptual distortion? Explain the four types of perceptual
distortion by giving examples for each.
5. Discuss, in detail, how the decision-making process of individuals is affected by the
way they perceive things, people, and situations in the outer world.
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Answer Keys
1 a
2 b
3 c
4 d
5 b
6 a
7 a
8 d
9 c
10 b
11 a
12 b
13 c
14 d
15 d
16 e
17 d
18 c
19 b
20 a
21 b
22 a
23 b
24 a
25 b
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Description:
1. Select any five MNCs of your choice, identify both the terminal and instrumental values
for each and compare.
2. Make a brief presentation on the perceptual process.
Glossary
Halo effect: Perception based on a single attribute of an individual.

Instrumental values: The means to achieve the individual’s desired goals in his life.
Perceptual constancy: The act of perceiving an object always in the same way by an
individual.
Perceptual context: The process of connecting different perceptions and creating a
context out of them.
Perceptual distortion: Lack of connection between general perception and personal
perception.
Perceptual grouping: The process of organising individual’s perceptions into a mean-
ingful group.
Selective perception: Perception based on those characteristics which support one’s
belief system.
Self-concept: The way how one perceives oneself.
Stereotyping: Perception based on the group which an individual belongs to.
Terminal values: The desired outcomes an individual wants to achieve.
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BIBLIOGRAPHY
e-References
Organisational Behaviour (1st ed.) Retrieved from

https://www.dynamicstudyhub.com/2021/08/values-meaning-definition-nature.html
Boundless Management (1st ed.) Retrieved from
https://courses.lumenlearning.com/boundless-management/chapter/individual-per-
ceptions-and-behavior/#:~:text=The%20perceptual%20process%20consists%20of,(-
contrast%2C%20repetition)%20factors
Organisation and Perception (1st ed.) Retrieved from
https://www.yourarticlelibrary.com/organization/perception/factors-influencing-the-per-
ceptual-set-3-factors/63824
Defense Mechanism (1st ed.) Retrieved from
https://www.healthline.com/health/projection-psychology
Management Solutions (1st ed.) Retrieved from
https://quickguideforyou.com/relationship-between-perception-and-decision-making/
External Resources
Locke, E. A. (2003). Principles of Organizational Behavior (1st ed.). Wiley-Blackwell.

Robbins, S. P., & Judge, T. A. (2019). Essentials of Organizational Behavior.
Pearson.
Gupta, C. B. (2014). A Textbook of Organisational Behaviour. S Chand & Company.
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Video Links
Topic Link
Types of Values https://www.youtube.com/watch?v=1Pj3kbAZW3Q
Perceptual Process https://www.youtube.com/watch?v=bJzJQHt2S5k
Perceptual Distor- https://www.youtube.com/watch?v=4OcfN_FTbBU&t=99s

tion
Image Credits
Fig. 1: https://www.iedunote.com/types-of-values
Fig. 2: https://www.braingymmer.com/en/blog/perception/
Fig. 3: https://courses.lumenlearning.com/boundless-management/chapter/
individual-perceptions-and-behavior/#:~:text=The%20perceptual%20process%
20consists%20 of,(contrast%2C%20repetition)%20factors
Fig. 4: http://www.analytictech.com/mb021/perception.htm
Fig. 5: https://www.geektonight.com/perception/
Fig. 6: https://yoast.com/gender-stereotypes-prejudice-sociology/
Fig. 7: https://advanced-hindsight.com/blog/b-e-for-dogs-halo-effect/
Fig. 8: https://www.dreamstime.com/illustration/selective-perception.html
Fig. 9: https://brightside.me/inspiration-psychology/why-a-person-may-
project-their-insecurities-onto-others-and-how-to-prevent-them-from-hurting-
you-802645/
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Keywords
Confirmation bias Figure-ground

Halo effect Instrumental values
Perceptual constancy Perceptual context
Perceptual distortion Perceptual grouping
Perceptual organisation Perceptual selection
Selective perception Self-concept
Stereotyping Terminal values
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Module 2
Unit 3
Motivation
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Unit 2.3
Motivation ................................................................................................................ 103
Aim ..................................................................................................................... 105

Instructional Objectives .................................................................................... 105
Learning Outcomes .......................................................................................... 105
2.3.1 Theories of Motivation ............................................................................. 106

(i) Hierarchy of Needs Theory .............................................................. 106
(ii) Two-Factor Theory .......................................................................... 108
(iii) Expectancy Theory ......................................................................... 109
2.3.2 Applications of Motivation ....................................................................... 113
Summary ............................................................................................................ 119

Terminal Questions ........................................................................................... 119
Answer Keys ...................................................................................................... 120
Activity ................................................................................................................ 121
Glossary ............................................................................................................. 121
Bibliography ....................................................................................................... 121
e-References ..................................................................................................... 122
Video Links ........................................................................................................ 122
Image Credits .................................................................................................... 123
Keywords ........................................................................................................... 123
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AIM
To familiarise students with various theories of motivation such as hierarchy of needs

theory, two-factor theory, and expectancy theory as well as various applications of
motivation.
• Identify various theories of motivation

• Illustrate various applications of motivation
LEARNING OUTCOMES
• Describe how an individual can be motivated according to various theories of

motivation
• Explain how organisations are trying to motivate their employees by applying
various motivational theories
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2.3.1 Theories of Motivation
The term ‘motivation is derived from the word ‘motive’ which means the desires that drive
an individual to take action to accomplish his goals. The desires of an individual stimulate
her/him towards achieving her/his goals. The desires may be financial gains or non-financial
gains. Hence, organisations strive to provide their employees with both financial and non-
financial incentives to motivate them towards achieving organisational goals. On these lines,
several authors have defined motivation and some of them are given below.
“Motivation is the process of influencing or stimulating a person to take

action that will accomplish desired goals”. - Mondy, Holmes and Flippa.
“Motivation is an emotion or desire operating on a person’s will and

causing that person to act.” - Mathis and Jackson.
“Motivation refers to the willful desire to direct one’s behaviour

toward goal”. - Middlesmist and Hitt.
Various behavioural scientists have developed several theories about what motivates a
person to do what he wants to do. Some of the major theories such as Maslow’s need
Hierarchy theory, Herzberg’s Two-factor theory, and Vroom’s Expectancy theory are discussed
hereunder.
Maslow’s Need-Hierarchy Theory
This theory has been propounded by Abraham Maslow, who stated that a man is
motivated when his various needs are satisfied in a sequential order. He classified the human
needs into five groups/levels and placed them in a hierarchy. When an individual’s needs at first
level are satisfied, then he looks for the next level needs to be satisfied, and so on so forth. The
hierarchy of various needs are shown in figure 1.
5
Self
Actualisation
4
Esteem Needs
Fig. 1
3
Social Needs Maslow’s Hierarchy
of Needs
2
Safty Needs
1
Psysiological Needs
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Physiological Needs:
Air, food, water, clothes, shelter, and health are known as physiological needs, which are very
basic for the survival of a human being. So, to motivate a person, one should first satisfy these
needs. Once these needs are fully satisfied, he is no longer motivated by these needs, and he
next looks for higher needs to be satisfied.
Safety Needs:
Now the individual looks for his physical safety and economic security for his future life. These
are called safety needs. Hence the organisations take care of these needs to be satisfied to
motivate the individual. But once these needs are fully satisfied, the person concerned will no
longer be satisfied. He wants to satisfy his needs at the higher level.
Social Needs:
The third level of needs in the hierarchy is social needs. Since human beings are social animals,
they crave for love, affection, and belongingness. People want to share their feelings and emotions
with their colleagues at the workplace. Hence, they form unions and associations.
Esteem Needs:
Examples of esteem needs are self-respect and self-esteem. One strives to fulfill these needs
once the social needs are satisfied. The esteem needs give rise to an individual’s level of
confidence and independence. He works with pride in the organisation if these needs are fulfilled.
If these needs are not satisfied enough, the person concerned would feel inferior and loss of self-
confidence. After the esteem needs, a person desires to satisfy his need for self-actualisation.
Self-Actualisation Needs:
Self-actualisation means utilising a person’s potential to its fullest extent. So, after all the lower
needs of a person has been satisfied, the person finally strives to actualise his full potential to
its maximum. If the organisation which the person is working for does not provide scope for the
fulfilment of this need, then the person switches over to other organisations where his potential
would be fully utilised.
Criticisms of the theory:
• The needs may or may not always follow the same sequence as stated by Maslow. The sequence
may change or overlap.
• Maslow’s needs theory is not applicable for all times and situations.
• Some individuals may stick up at some level only in their life. They do not want to move further
to satisfy other needs.
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Exercise:
Dr. Rao parked his car and headed straight to the Company’s cafeteria and had a
hearty breakfast. He then went to the administrative block and wrote a check to pay
for the due to his pension fund. No sooner he entered his office, than his boss called
him in and announced that he received the “Best Employee Award” for that year. He
called his wife over phone and shared the news with her, and his daughter and they
congratulated him. In response to the appreciation from his superiors at the meeting
that evening, Dr. Rao thanked the Company’s management for the award and
said that he is very pleased with Company’s management since they always
encourage his creativity, besides also providing training for challenging assignments.
List out the five activities mentioned in the exercise and match them with the
corresponding needs discussed in Maslow’s hierarchy of needs (Answers at
the end of unit).
Herzberg’s Motivation-Hygiene Theory
Also called Two-factor theory proposed by Frederick Herzberg who researched 200
engineers and accountants in Pennsylvania about good and bad aspects of their jobs.
Based on their responses, he categorised them into two groups and named good aspects as
motivators for job satisfaction, and bad aspects as hygiene factors for job dissatisfaction.
Herzberg’s motivational and hygiene factors are shown in figure 2.
Hygiene Factors Motivating Factors
• Salary • Achievement
• Security • Recognition
• Job Security • Advancement
• Status • Personal Growth
• Relationship with Supervisor • Responsibility
• Personal Life • Job Itself
Fig. 2 Herzberg’s Two-Factor Theory of Motivation
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Herzberg suggested that the motivational factors for a person may change into hygiene factors
since the person may no longer get motivated once he gets them. Similarly, the hygiene factors
may also change into motivational factors later.
• Herzberg’s theory talks about job satisfaction only. It doesn’t talk anything about
motivation.
• The survey results might be wrong because people accrue their achievements to
themselves whereas they blame others for their own mistakes.
• This theory did not take the situational factors into consideration as also one of the
causes for an individual’s motivation.
Vroom’s Expectancy Theory
The expectancy theory was proposed by Victor Vroom, who stated that an individual’s motivation
is the combination of three factors, viz., effort, performance, and reward. That means, a person
is motivated based on how much reward he is going to get and how much value he assigns to
that reward for his efforts and performance. Accordingly, the person puts forth his efforts and
performance. Vroom calls these factors as expectancy, instrumentality, and valence. He provides
the following equation for motivation.
Motivation = Effort x Performance x Reward.
In other words,
Motivational Force (MF) = Expectancy x Instrumentality x Valence.
Expectancy
Expectancy is an individual’s belief that certain level of effort might lead to a certain level
of performance. The expectancy variable is influenced by one’s skills and the availability
of resources to perform an activity in the organisation.
So, Expectancy = Effort → Performance (E→P).
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Fig. 3 Vroom’s Expectancy Theory
Instrumentality
Instrumentality is the belief of a person that his performance would fetch him an appropriate
reward. This belief is affected by what kind of rewards will be received, how much he receives and
who would decide his reward. So, instrumentality is the relationship between one’s performance
and the corresponding reward or outcome he gets.
Hence, Instrumentality = Performance → Outcome (P→O.
Valence
When a person receives a reward for his performance, he weighs it against his expectation,
goals, or values. That is, valence is the amount of value or importance one gives to the amount
of reward he gets for his performance. If he gets what he expected, he is motivated or vice versa.
So, Valence = Outcome → Reward (O→R.
• Porter and Lawler criticised that the expectancy theory suggests that individuals
select a course of action if it provides them with more pleasure or with less pain.
• This theory assumes that an individual uses his rationality always in choosing their
efforts and rewards makes it seems like an idealistic view.
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• It did not consider the differences among the individuals and also the circumstantial
factors.
DID Google applied expectancy theory by allowing freedom to its employees to

YOU choose their own projects and the related tasks, which made them to see the
KNOW
link between their effort and performance.
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1) Belongingness is one of the __________________ needs.
a) Esteem
b) Physiological
c) Safety
d) Social
2) Utilising a person’s potential to its fullest extent is known as ________________.
a) Esteem
b) Power
c) Self-actualisation
d) Usefulness
3) Status is one of the factors of _____________.
a) Responsibility
b) Hygiene
c) Security
d) Motivation
4) ______________________ is the amount of value or importance one gives to the

amount of reward he gets for his performance.
a) Valence
b) Expectancy
c) Reward
d) Performance
5) Instrumentality is the belief of a person that his performance would fetch him an
appropriate _____________________.
a) Performance
b) Valence
c) Reward
d) Effort
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2.3.2 Applications of Motivation
The concepts of motivation and the different theories of motivation propounded by various
behavioural experts found applications in motivating employees of modern organisations. Based
on these ideas and theories, management of organisations designed the jobs, reward systems,
work environment, financial and non-financial incentives, and various other systems accordingly
to motivate the workforce towards achieving the desired goals. Hence, these practices undertaken
by the management of organisations to motivate their employees are briefly discussed below.
The management can use any one of them or a combination of them as and when the situation
demands.
Job Design
Jog design is the process of assigning the various tasks to a specific job in relation to other jobs
in the organisation. The various jobs in an organisation should be designed in such a way that
they should be interesting and should match the skills and experience of the people who are
going to perform them.
Fig. 4 Job Design
If the jobs are made interesting to the employees, they would be highly motivated to the tasks
involved in the job and their level of job satisfaction also would be increased accordingly. If the
jobs are designed in a monotonous way, the people would find them boring and uninterested
and as a result, the productivity would be low, the rate of absenteeism would be higher, labour
turnover would be higher, and the complaints would be more.
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Employee Recognition
Employee recognition is nothing but an appreciation for the employees who did a great work
or for their contribution towards achieving the organisational goals. Every human being craves
for appreciation or at least for a simple pat on their back. This act would raise their level
of productivity and the level of job satisfaction. When the superiors recognise the work done by
their subordinates, they feel a sense of achievement, which motivates them to accept and
carry out more responsibilities in the organisation.
Fig. 5 Employee Recognition
Managers adopt several practices to recognise their employees to further their motivation level
in their organisation. These are discussed hereunder:
(i) Years of Service:
Recognising employees for their distinguished and continuous service to the organisation
for a longer period is one of the best practices of employee recognition. Organisations offer
various rewards to such employees in the form of medals, awards, cash incentives, promotions,
increments, pension schemes, longer vacations, and other fringe benefits. These employee
recognition programmes help to motivate other employees also and the rate of labour turnover
would be drastically reduced, which in turn would reduce the cost of recruitment to the organisation.
(ii) Certificates:
Some organisations issue beautiful and colourful certificates signed by the top executives to the
outstanding employees to motivate them. These certificates serve as a great recognition for the
employees for their contribution to their organisation. They remind the employees and others to
work for the organisation with more dedication and sincerity.
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Employee Involvement
Employee involvement is the process of involving the employees of an organisation in

decision-making. When an organisation invites its employees to participate in decision
making, they are highly motivated to work in the organisation. Employee involvement helps
to increase the loyalty level to their organisation and also improves organisational productivity.
When employees are made to be involved in the decision making, it assures the safety of
the workplace also. Some companies such as 3M have idea week programmes where
employees are encouraged to generate as many ideas as possible about new products, new
methods of production, new concepts, etc., and the best ideas will be rewarded appropriately.
Fig. 6 Employee Involvement
The various practices of employee involvement are discussed as follows.
(i) Participative Management:
In this method, the employees were consulted by their immediate superiors before making any
decision which affects their work. Since the lower-level employees have hands-on experience
with their tasks, their skills and experience help the superiors to get better suggestions from
them. This practice would help to make better decisions by the managers and the employees are
also motivated.
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(ii) Representative Participation:
When the number of employees in a department is huge, the system of representative participation
would be used to avoid delays in decision making. A few employees who represent all the
employees in a department would be selected and only they were involved in the decision-making
process and the decisions made by them would be accepted by all. These representatives are
selected on the basis of their qualifications, skills, and experience so that they are well versed in
the technicalities of the departmental work.
(iii) Quality Circles:
Quality circles are groups formed by a few employees from the same department for the purpose
of maintaining quality standards within the department. Japan is the pioneering country to use
such quality circles for the improvement of quality in their organisations. These quality circles
study the quality problems encountered by the department, analyse them, and suggest corrective
measures to improve the quality. The quality circles are facilitated by a supervisor. A quality circle
is generally comprised of 8 to 12 members.
(iv) Employees’ Ownership:
In this system, employees of an organisation will be offered stock options instead of a cash
bonus. Each employee will be provided with a certain percentage of shares in the organisation
for which they are working so that all employees will become the owners of the company. When
this happens, the employees feel that the company belongs to them and will be highly motivated
to work towards the achievement of its goals in an efficient and effective manner.
Reward System
The reward system is designed by an organisation to provide its employees with both financial
and non-financial incentives to motivate them towards achieving its goals. The financial rewards
may be in terms of salaries, bonuses, incentives, commissions, fringe benefits such as free
medical services, housing, transportation, and pension. The non-financial rewards are awards,
certificates, special leave allowances, recognitions, etc.
Fig. 7 Reward System (Financial & Non-financial Incentives)
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Job Enrichment
Job enrichment is an extension of the job designing process in which the current job is redesigned
in such a way that the job would be made interesting for the person who undertakes it.
It is the process of vertical enhancement of the job. Certain tasks are removed, and certain other
tasks are added even from other departments so that the jobs would be made challenging and
motivating to the employees. If the employee encounters any problems with the new tasks
while doing her/his job, s/he is given full autonomy and freedom to take their own decisions
within the purview of the organisational policies and objectives. This practice gives them pride
and s/he develops the feeling of owning their job.
Fig. 8 Job Enrichment
DID The Japanese professor Dr. Kaoru Ishikawa of University of Tokyo

YOU introduced the concept of ‘Quality Circles’, and the first company to apply
KNOW this concept successfully was Nippon Telephone & Telegraph.
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6) The process of assigning various tasks to a specific job in relation to other jobs in the
organisation is known as __________________________.
a) Job design
b) Responsibility
c) Authority
d) Instructions
7) An appreciation for the employees for their contribution towards achieving the
organisational goals is called _________________________.
a) Flatter
b) Employee recognition
c) Job Enrichment
d) Job design
8) The process of involving the employees of an organisation in decision-making is known

as ___________________________.
a) Employee turnover
b) Employee decision
c) Employee involvement
d) Employee authority
9) Awards and certificates are ____________________ incentives.
a) Financial
b) Cash
c) Monetary
d) Non-financial
10) The process of vertical enhancement of the job is known as ____________________.
a) Job enrichment
b) Job satisfaction
c) Vertical job
d) Job analysis
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Summary
Abraham Maslow classified the human needs into five groups such as physiological,
safety, social, esteem, and self-actualisation needs and placed them in a hierarchy.
He states that a man is motivated when these five groups of needs are satisfied in the
sequential order given in his theory.
Frederick Herzberg’s two-factor theory suggests that an employee can be motivated by

factors such as achievement, recognition, advancement, personal growth, responsibility,
and the job itself. The hygiene factors such as salary, security, job security, status,
relationship with supervisor, and personal life may not motivate the employee.
The expectancy theory, proposed by Victor Vroom states that an individual’s motivation is
the combination of three factors, viz., effort, performance, and reward.
Based on various theories of motivation, today’s organisations under various practices

such as job design, employee recognition, employee involvement, financial and non-
financial incentives, and job enrichment to motivate their employees towards achieving
the desired goals effectively and efficiently.
Terminal Questions
1. Explain, briefly, the hierarchy of needs theory as stated by Abraham Maslow in order to
motivate an individual.
2. Define motivation and discuss both the hygiene and motivational factors proposed by
Frederick Herzberg.
3. Describe how a person is motivated by a combination of three factors according to

Victor Vroom with the help of a diagram.
4. Define employee recognition. Explain the various practices adopted by the managers
to recognise the employees’ contribution to their organisation.
5. Discuss employee involvement. Explain the methods used to make employees involved
in decision making.
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Answer Keys
1 d
2 c
3 b
4 a
5 c
6 a
7 b
8 c
9 d
10 a
Answers to the Exercise:
Having breakfast Physiological Need
Paying for pension fund Safety Need
Sharing the news of award with

Social Need
family
Appreciation for the award Esteem Need
Encouraging creativity &

providing training for challenging Self-actualisation Need
assignments
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Activity Duration: 60 Minutes
Activity Type: Offline/Online

Description:
• Select a multi-national corporation of your choice and write a report on the employee
needs fulfilled by it according to hierarchy of needs theory.
Glossary
Expectancy: An individual’s belief that certain level of effort might lead to a certain level
of performance.
Instrumentality: A person’s belief that his performance would fetch him an appropriate
reward.
Job enrichment: The process of redesigning the current job to make it more interesting
and challenging for the person who undertakes it.
Jog design: The process of assigning the various tasks to a specific job in relation to
other jobs in the organisation.
Quality circles: Groups formed by a few employees from the same department for the
purpose of maintaining quality standards within the department.
Self-actualisation: Utilisation of a person’s potential to its fullest extent.
Valence: The amount of value or importance one gives to the amount of reward he gets
for his performance.
BIBLIOGRAPHY
External Resources:
Joy, M. M. (2016). Organizational Behavior (1st ed.). Kalyani Publishers.
Pearson.
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e-References
Motivation Theories (1st ed.). Retrieved from

https://www.yourarticlelibrary.com/motivation/motivation-theories-top-8-theo-
ries-of-motivation-explained/35377
Applications of Motivation (1st ed.). Retrieved from
https://languageswells.blogspot.com/2021/06/What%20are%20the%20applica-
tion%20and%20results%20of%20motivation.html
Business Administration and Management (1st ed.). Retrieved from
https://academia.com.ng/what-is-motivation-definitions-of-motivation-by-different-au-
thors/
https://www.managementstudyguide.com/what_is_motivation.htm
https://www.researchgate.net/figure/Vrooms-Expectancy-Theory-Expectancy-Expec-
tancy-is-the-belief-ones-effort-E-will_fig53_323695129
Video Links
Topic Link
Need Hierarchy https://www.youtube.com/watch?v=O-4ithG_07Q

Theory
Herzberg’s https://www.youtube.com/watch?v=KJ8ap4kWPxo
Motivation Theory
Expectancy Theory https://www.youtube.com/watch?v=IpnzW06shsM
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Image Credits
Fig. 1:
https://www.carlacorelli.com/narcissistic-abuse-recovery/maslows-hierarchy-of-
needs-implications-for-abuse-victims/
Fig. 2: https://tyonote.com/herzberg_two_factor_theory/
Fig. 3:
https://www.researchgate.net/figure/Vrooms-Expectancy-Theory-Expectancy-
Expectancy-is-the-belief-ones-effort-E-will_fig53_323695129
Fig. 4: https://www.com-management.org/home/2018/9/4/job-design
Fig. 5:
https://www.dost-dongnai.gov.vn/english/Pages/Global-Sci-Tech-News-Content.
aspx?News_EnglishID=8414
Fig. 6:
https://cobsinsights.org/2016/02/05/employee-participation-on-the-board/
Fig. 7: https://www.easywork.asia/blog/10-tips-to-reward-motivate-employees/
Fig. 8:
https://pt.slideshare.net/Ritika-kumari/principles-underlying-job-enlargement-job-
enrichment-and-job-rotation/12
Keywords
Employee Involvement Expectancy

Instrumentality Job Enrichment
Jog design Participative Management
Quality Circles Representative Participation
Self-actualisation Valence
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Module 2
Unit 4
Attitudes and Learning
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Unit 2.4
Evolution of Organisational Behaviour ............................................................124
Aim ............................................................................................................................ 126

Learning Outcomes ................................................................................................ 126
2.4.1 Sources of Attitudes ...................................................................................... 127

2.4.2 Types of Attitudes .......................................................................................... 130
2.4.3 Attitudes and Consistency ........................................................................... 133
2.4.4 Cognitive Dissonance Theory ..................................................................... 133
2.4.5 Theories of Learning ..................................................................................... 136
2.4.6 Principles of Learning ................................................................................... 139
Summary .................................................................................................................. 142

Terminal Questions ................................................................................................. 142
Answer Keys ............................................................................................................ 143
Activity ....................................................................................................................... 144
Glossary ................................................................................................................... 144
Bibliography ............................................................................................................. 145
e-References ........................................................................................................... 145
Video Links .............................................................................................................. 146
Image Credits .......................................................................................................... 146
Keywords .................................................................................................................. 146
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AIM
To familiarise students with various types and sources of attitude, cognitive dissonance
theory, as well as the theories and principles of learning.
After completing this chapter, you should be able to:
• List out various sources and types of attitudes

• Describe the cognitive dissonance theory
• Identify various theories of learning
• List out the principles of learning
LEARNING OUTCOMES
At the end of this chapter, you are expected to:
• Describe how individuals form their attitudes

• Explain, through cognitive dissonance theory, the conflicts between beliefs and
reality encountered by individuals
• Discuss how various theories of learning can help
• Explain the underlying principles of learning
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2.4.1 Sources of Attitudes

Attitude means a person’s liking or disliking towards an object, person, or country. Attitudes may
be positive and negative. For example, a person doesn’t like junk food because it contains lots
of carbs and fats. It means the person has a negative attitude towards junk food. Another person
eats apples daily because he believes that an apple a day keeps the doctor away. So, this person
has a positive attitude towards apples.
Different authors have defined “attitude” as follows:
“An attitude is a negative or positive evaluation of an object which influences

human behaviour towards that object.” – Michael Hogg
“An attitude is a learned predisposition to respond in a favourable or

unfavourable manner towards people, an object, an idea or a situation.” –
Martin Fishbein
Attitudes of individuals are formed by means of various sources:
MASS DIRECT PERSONAL

ASSOCIATION
COMMUNICATIONS EXPERIENCE
ATTITUDES
ECONOMIC
STATUS AND NEIGHBOURHOOD FAMILY AND
OCCUPATIONS PEER GROUPS
Fig.1 Sources of Attitudes
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1. Direct Personal Experience:

When an individual had an experience with an object or with the other person, it might lead him
to form certain attitudes such as positive and negative attitude towards it. For example, when the
new mobile phone purchased by a person is heated within a short time of its use, he develops
a negative attitude towards that brand of mobile and he advices his friends against buying that
particular brand of mobile phone.
2. Association:
This kind of attitude is developed because of the combination of two objects, individuals or groups.
There is a saying “Tell me about your friends, and I will tell about you.” Similarly, if a person has
friendship with people of good character in the town, then others think that this person is also of
the same character. So, due to the kind of association, a favourable attitude is formed about the
person.
3. Family and Peer Groups:

Our attitudes are most likely to be formed in our childhood through observation of our parents,
siblings, and relatives. Attitudes are also formed with the influence of our classmates in schools
and colleges and also the colleagues in the organisation we are working for.
4. Neighbourhood:
Our neighbours also influence our attitudes. Their customs and traditions, or cultural and religious
aspects may influence individuals to form either positive or negative attitudes. For example, if
the neighbour is so nice and friendly and is hailed from a certain area, then we form a favourable
attitude towards all people who belong to that particular area.
5. Economic Status and Occupations:

An individual’s financial position and the profession also affect the formation of his attitude. For
instance, people belonging to higher class normally consider social drinking as a part of life,
whereas the middle class consider drinking as a taboo.
6. Mass Communications:
People may form their attitudes based on mass communications such as advertisements and
other promotional messages bombarding every day from a wide variety of mass media. These
advertisements use various strategies to change people’s attitudes favourably towards
their product. Coca Cola, through its advertisements, changed the attitude of teenagers that
drinking Coke is a symbol of modern society. Several pizza companies are also doing the
same thing through their advertisements.
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1) When the new mobile phone purchased by a person is heated within a short time of
its use, s/he develops a negative attitude towards that brand of mobile. Here, the source
of attitude is known as __________________.
a) Mass Communications
b) Direct Personal Experience
c) Occupations
d) Economic Status
2) If a person has friendship with people of good character, then others have a favourable
attitude about the person. The source of attitude here is called ___________________.
a) Peer Groups
b) Neighbourhood
c) Family
d) Association
3) Attitudes are formed with the influence of our classmates in schools and colleges
and also the colleagues in the organisation. The source of attitude here
is__________________ .
a) Peer Groups
b) Occupations
c) Association
d) Economic Status
4) What is the source of attitude formation when a rich person thinks that drinking alcohol
is a part of social life?
a) Family
b) Occupations
c) Neighbourhood
d) Economic Status
5) When Coca Cola, through its advertisements, changed the attitude of teenagers
that drinking Coke is a symbol of modern society, the source of attitude used here is
_____________________.
a) Direct Personal Experience
b) Family
c) Mass Communications
d) Occupations
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2.4.2 Types of Attitudes
There are several types of attitudes but here we discuss four major types of attitudes most
prevalent in individuals in the society.
Fig. 2 Types of Attitudes
1. Positive Attitude
Positive attitude is also commonly known as a favourable attitude towards an object or a person.
People who have the positive attitude always see the positive side of the life and they hope
for the best. Some examples of positive attitudes are – confidence, happiness, sincerity, and
determination.
(i) Confidence
Having confidence in oneself always gives a person enthusiasm and makes him to take initiative
which lead to success. Confidence and positive attitude are inter-related.
(ii) Happiness
Happiness is the result of having confidence and positive attitude towards life. When a person
has a positive attitude towards the incidents, whether good or bad, he will be always cheerful in
his life.
(iii) Sincerity
Persons having a positive attitude will be sincere in all their dealings with others. They are truthful
in their promises and strive to keep their promises, come what may.
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(iv) Determination
Since people with positive attitude are confident with themselves, they are determined in all their
efforts and goals. Their level of perseverance and endurance are normally high and they rarely
step back from their goals.
2. Negative Attitude
Negative attitude is also commonly known as an unfavourable attitude towards an object or a

person. People who have the positive attitude always see the negative side of the life and they
hope for the worst. Some examples of negative attitudes are – anger, doubt, and disappointment.
(i) Anger
People having negative attitudes are succumbed to anger occasionally. Anger causes physical
as well as mental ailments. Decisions taken at the time of anger may go wrong.
(ii) Doubt
People with negative attitude are always doubtful in all their dealings and endeavours. Those
who are unnecessarily doubtful might lose their confidence also. This may lead to lack of initiative
and enthusiasm in their work.
(iii) Disappointment
Disappointment is also one of the traits of people with negative attitudes. Individuals who are
disappointed may lose their confidence levels, their energy, and enthusiasm to do things in a
positive way. They lack determination and endurance towards achieving goals.
3. Sikken Attitude
Sikken attitude is an extension of negative attitude but the people with this kind of attitude have
very high degree of negativity and aggressiveness in their character. This attitude is highly
dangerous and destructive to the person himself and also to others who come in contact with
them. Persons with sikken attitude normally do not want to change their attitude, but it is better
for a person to change his sikken attitude for his own growth and development.
4. Neutral Attitude
This kind of attitude belongs neither to positivity nor to negativity. The persons who have this
kind of attitude neither show any positivity nor show any negativity towards objects and people.
They are simply indifferent and emotionless towards incidents happening to them. They do not
show any enthusiasm and initiative, and they do not face any challenges in their work and life.
People with neutral attitude should change it towards positive attitude to lead and a happy and
successful life.
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DID R.J. Reynolds, the American tobacco company, changed the attitude of
YOU minor children towards smoking with its Joe Camel cartoon ads in 1988 and
KNOW
made a whopping sale of $500 million by 1992.
6) The type of attitude that belongs neither to positivity nor to negativity is

called _____________.
a) Sikken Attitude
b) Negative Attitude
c) Positive Attitude
d) Neutral Attitude
7) The kind of attitude where a person has a very high degree of negativity and
aggressiveness in his character is called _________________________.
a) Negative Attitude
b) Positive Attitude
c) Sikken Attitude
d) Neutral Attitude
8) Following is one of the examples of negative attitude ___________________________.

a) Determination
b) Doubt
c) Confidence
d) Sincerity
9) An example of positive attitude is ____________________.

a) Sincerity
b) Anger
c) Doubt
d) Disappointment
10) Name the type of attitude of which the people are simply indifferent and emotionless
towards incidents happening to them:
a) Sikken Attitude
b) Negative Attitude
c) Positive Attitude
d) Neutral attitude
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2.4.3 Attitudes and Consistency
No individual has only one attitude in his life either simultaneously or at different times. The same
individuals may have different types of attitudes at a given time in a given situation. But they like
to maintain consistency in their approach and behaviour irrespective of what attitudes they hold.
So, they want to project themselves as consistent human beings in their life.
To maintain consistency, people sometimes change their attitudes temporarily, change their
behaviour, or rationalise their behaviour or attitude. For example, drunkards always rationalise
their drinking habit by saying that they were drinking just to relax from their tiresome work at the
office.
People often change their attitudes also according to the situation if it serves their purpose of
maintaining consistency. A person, for example, always maintains that whatever products
that come from China are of inferior quality, hence, s/he never wants to use Chinese products.
When a friend gifts a Chinese watch, s/he starts to wear it and sees that it works better than the
watch s/he wore earlier, which was manufactured by a company belonging to a country other
than China. With this experience, the person changes their negative attitude towards
Chinese products, and starts recommending them to friends and acquaintances.
2.4.4 Cognitive Dissonance Theory
Cognitive dissonance theory is propounded by the American social psychologist, Leon

Festinger in 1957 in his book, A Theory of Cognitive Dissonance. The term ‘cognitive
dissonance’ means that a person’s feeling of mental discomfort. Festinger stated that an
individual feels mental discomfort whenever he either holds conflicting beliefs or his actions
differ with his beliefs. For example, a meat-eater stops eating meat because of the influence
of a spiritual organisation, since it amounts to killing life. But he holds another belief that life is
present even in vegetarian food. So, he develops a mental discomfort or cognitive dissonance
related to food.
People who suffer from cognitive dissonance wants to relieve themselves from the feeling
of mental discomfort. Festinger calls this urge to relieve from the mental discomfort,
“Principle of Cognitive Consistency” because cognitive dissonance creates a kind of
uneasiness and unnecessary tension in the minds of the persons who have it.
But not every person feels cognitive dissonance when they have conflicting beliefs or contrast
in belief and behaviour. It is felt only when they are aware of those conflicts. And also, not
everyone has the same level or degree of cognitive dissonance in a particular situation.
Some people are more tolerant and enduring and they can tolerate and accept the
presence of cognitive dissonance. But others who do not have such tolerance, try to ease the
discomfort by changing their beliefs or behaviour to attain consistency.
Cognitive dissonance unfavourably affects one’s decision-making, mental health, way of
thinking, and the way of behaviour. Due to this reason, people with cognitive dissonance
attempt to hide
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their beliefs and behaviours exposing to others; rationalise their beliefs and actions; ignore any
new information coming to them which are contradicting their belief system; and also avoid any
topic, conversation, and advice which instigate their cognitive dissonance. Some people try to
change their beliefs and behaviour to resolve their problem of cognitive dissonance. They make
healthy choices like good eating habits, likable behaviours, socialisation, and maintaining good
rapport with others.
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11) An individual has only one attitude in his life either simultaneously or at different times.
a) True
b) False
12) To maintain consistency, people sometimes change their attitudes temporarily, change
their behaviour, or rationalise their behaviour or attitude.
a) True
b) False
13) Drunkards rationalise their drinking habit to maintain ___________________ in their

behaviour.
a) Dissonance
b) Cognition
c) Consistency
d) Discomfort
14) ‘Cognitive dissonance’ means a person’s feeling of mental ____________________.
a) Comfort
b) Happiness
c) Positive attitude
d) Discomfort
15) Cognitive dissonance unfavourably affects one’s decision making, mental health, way
of thinking, and the way of behaviour.
a) True
b) False
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2.4.5 Theories of Learning
Various behavioural experts defined learning in different ways.
“Learning is the process of acquisition of knowledge, habits and

attitudes.” - Crow and Crow.
“Learning can be described as a change in the individual which takes

place as a result of the environmental change.” - E.A. Peel.
There are several theories to explain the process of learning taking place in an individual. Among
them, three of the major theories are discussed below:
• Classical conditioning theory

• Operant conditioning theory
• Observational learning theory
Fig. 3 Theories of Learning
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Theory of Classical Conditioning
The classical conditioning theory, proposed by Ivan Pavlov, a Russian psychologist, states that
learning occurs when an association between a neutral stimulus and a natural stimulus has been
formed.
Pavlov conducted the famous study with his dog by offering food to it. First he offered
food to it and rang a bell. Next day he rang a bell and offered food to the dog. Finally, on
one fine day, he just rang the bell but did not offer food to it. But the dog, merely by
hearing the sound of the bell, began to salivate for food. The dog perceived that his
master would offer food after ringing the bell. So, the sound of the bell is associated
with the food. Here, the sound of the bell is the neutral stimulus and the food is the
natural stimulant. This is what is known as learning by classical conditioning.
Theory of Operant Conditioning
B. F. Skinner, a renowned psychologist opined that all learning might not occur through
classical conditioning only. Some learning occurs because of the consequences that occur as
a result of behaviours.
Hence, Skinner, like Pavlov, made association between a person’s behaviour and the
consequences of that particular behaviour. That means, if certain behaviour of a person results
in positive consequence, he would more likely repeat that behaviour. On the other hand, if the
behaviour results in a negative consequence, he would never repeat that particular behaviour
again.
Theory of Observational Learning
This was proposed by Albert Bandura, who stated that the associations and the
consequences of the behaviour could not sufficiently explain all types of learning in every
situation.
In his book Social Learning Theory, Bandura proposed that most of the learning takes place
through observation. For example, children learn things in their life mostly by means of
observing their parents, siblings, relatives, friends, and neighbours. They exactly imitate the
behaviours of these people, whether these behaviours are positive or negative.
He also stated that learning through observation may or may not result in change in one’s
behaviour. Sometimes the behavioural change happens whenever the situation demands.
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16) The behavioural modification which occurs as a result of experience as well as training
is called ________________________.
a) Learning
b) Dissonance
c) Teaching
d) Compensation
17) According to Ivan Pavlov, learning occurs when an association between a neutral
stimulus and a ___________________ stimulus has been formed.
a) Neutral
b) Natural
c) Response
d) Learning
18) B. F. Skinner stated that learning happens because of the _________________ that
occur as a result of behaviours.
a) Observation
b) Cognition
c) Consequences
d) Attitudes
19) Albert Bandura proposed that most of the learning takes place through
____________________.
a) Consequences
b) Learning
c) Teaching
d) Observation
20) The theory of observational learning states that learning through observation always
results in change in one’s behaviour.
a) True
b) False
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2.4.6 Principles of Learning
For the learning to take place effectively, certain principles or guidelines are very helpful
for an organisation so that they could design their employee training programmes based on
these principles for effective learning.
Many principles are found for a learning process but here, five major principles are discussed
for a basic understanding.
1. Principle of Participation
2. Principle of Repetition
3. Principle of Relevance
4. Principle of Transference
5. Principle of Feedback
1. Principle of Participation
This principle states that when a person is allowed to participate in a learning environment, he
actively engages himself and learn the things by doing. He would get hands-on experience,
which enhances his learning process effectively. For example, instead of providing a person with
all the information about swimming, a person can learn swimming by jumping into the water. One
can never forget their learning if a person participates actively in the learning process.
2. Principle of Repetition
When an activity is performed repetitively, there will be more chances for an individual to learn
about it easily. That is why most children learn their lessons by rote. Hence people never forget
things when they learn through repetition method.
3. Principle of Relevance
If the knowledge provided to a person is highly relevant to his needs, the person concerned
is highly motivated to learn things faster. He shows enthusiasm to learn about things which
will solve their immediate problems. Hence the knowledge and skills provided to the individuals
should always be related to the person’s needs to make learning successful.
4. Principle of Transference
Learning process should have the quality of transference. That means, when a training programme
is designed and offered in an environment that is completely different from actual environment,
then the person who underwent that particular training will be confused when put in an actual
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environment which is completely different from where he learnt. So the environment in which the
learning process is taken place must match the actual environment so that the learner can easily
cope with the actual environment.
5. Principle of Feedback
This principle states that a learner should be provided with sufficient feedback about their learning
progress. This feedback will help the learner to improve himself. It gives information to the learner
about his setbacks and mistakes and also suggests how to correct their mistakes and improve
their learning further. This knowledge gives confidence to the learners and motivates them to
learn new things enthusiastically.
DID
YOU Russian physiologist Ivan Pavlov’s classical conditioning theory developed in
KNOW 1902 is the first systematic study of basic laws of learning.
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21) When an individual is allowed to get hands-on experience, it that enhances his learning
process effectively. This principle of learning is called ________________
a) Feedback
b) Transference
c) Repetition
d) Participation
22) Which principle of learning suggests providing information to the learner about his
setbacks and mistakes and also suggests on how to correct their mistakes and improve
their learning further?
a) Relevance
b) Repetition
c) Feedback
d Transference
23) Mention the learning principle which states that the learning environment must match
the actual environment:
a) Repetition
b) Transference
c) Participation
d) Relevance
24) Which learning principle states that a person shows enthusiasm to learn about things
which will solve their immediate problems?
a) Relevance
b) Repetition
c) Feedback
d) Participation
25) When children learn their lessons by rote, they are said to be following the learning
principle of _________________________.
a) Repetition
b) Transference
c) Feedback
d) Participation
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Summary
Attitudes of individuals are formed by means of various sources such as direct personal
experience, association, family and peer groups, neighbourhood, economic status and
occupations, and mass communications.
There are four major types of attitudes, viz., positive attitude, negative attitude,
sikken attitude, and neutral attitude.
Individuals like to maintain consistency in their approach and behaviour irrespective
of what attitudes they hold. To maintain consistency, people sometimes change their
attitudes temporarily, change their behaviour, or rationalise their behaviour or attitude.
An individual feels mental discomfort whenever he either holds conflicting beliefs or his
actions differ with his beliefs. Some people try to change their beliefs and behaviour to
resolve their problem of cognitive dissonance.
Theory of classical conditioning states that learning occurs when an association between
a neutral stimulus and a natural stimulus has been formed.
Theory of operant conditioning states that learning happens because of the consequences
that occur as a result of behaviour.
Theory of observational learning proposes that most of the learning takes place through
observation.
An organisation could design its employee training programmes based on five major
principles of learning: Principle of participation, Principle of repetition, Principle of
relevance, Principle of transference, and Principle of feedback.
Terminal Questions
1. Define attitude. Discuss the various sources through which attitudes are formed.
2. Explain the types of attitudes by giving examples for each.
3. Explain briefly the cognitive dissonance theory as stated by Leon Festinger with the
help of an example.
4. Define learning and describe the three major theories of learning.
5. Explain the five major principles of learning which help an organisation to design its
training programmes effectively.
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Answer Keys
1 B
2 D
3 A
4 D
5 C
6 D
7 C
8 B
9 A
10 D
11 B
12 A
13 C
14 D
15 A
16 A
17 B
18 C
19 D
20 B
21 D
22 C
23 B
24 A
25 A
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Activity
Activity Type: Offline
Description
1. Tabulate the various theories of learning and compare them.

2. Make a presentation on the types of attitudes and explain each.
Glossary
Classical conditioning: A situation where learning occurs when an association between
a neutral stimulus and a natural stimulus has been formed.
Cognitive dissonance: A person’s feeling of mental discomfort due to his conflicting be-
liefs or his actions which differ with his beliefs.
Negative attitude: An unfavourable attitude towards an object or a person.
Neutral attitude: This attitude belongs neither to positivity nor to negativity.
Observational learning: A situation where learning occurs through observation.
Operant conditioning: A situation where learning occurs when there is an association

between a person’s behaviour and the consequences of that particular behaviour.
Positive attitude: A favourable attitude towards an object or a person.
Sikken attitude: It is an extension of negative attitude which consists of very high degree
of negativity and aggressiveness.
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BIBLIOGRAPHY
External Resources

Prasad, L. M. (2014). Organisational Behavior (5th ed.). Sultan Chand & Sons. Joy,
M. M. (2016). Organizational Behavior (1st ed.). Kalyani Publishers.
e-References
Social Psychology (1st ed.). Retrieved from
https://www.studyandexam.com/attitude-meaning.html#:~:text=’An%20attitude%20
is%20a%20negative,Martin%20Fishbein
Organisation (1st ed.). Retrieved from
https://www.yourarticlelibrary.com/organization/attitude/attitude-nature-compo-
nents-and-formation/63825
Human Resource Management (1st ed.). Retrieved from
https://www.citeman.com/184-attitudes-and-consistency.html
Cognitive Dissonance (1st ed.). Retrieved from
https://www.medicalnewstoday.com/articles/326738
Developmental Psychology (1st ed.). Retrieved from
https://www.verywellmind.com/learning-theories-in-psychology-an-overview-2795082
https://www.iedunote.com/principles-of-learning
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Video Links
Topic Link
Sources of Attitude https://www.youtube.com/watch?v=HniLp7i3OmI

Formation
Theories of
https://www.youtube.com/watch?v=eX_uta8NEtI
Learning
Cognitive Disso- https://www.simplypsychology.org/cognitive-dissonance.

nance Theory html
Image Credits
Fig.1
https://www.yourarticlelibrary.com/wp-content/uploads/2015/08/
image15.png
Fig. 2
https://www.marketing91.com/attitude/
Fig. 3
https://www.verywellmind.com/learning-study-guide-2795698
Keywords
Classical conditioning Cognitive dissonance

Negative attitude Neutral attitude
Observational learning Operant conditioning
Positive attitude Sikken attitude
Transference
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Module 3
Unit 1
FOUNDATIONS OF GROUP
BEHAVIOUR
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Foundations of Group Behaviour

Module Description
People form groups in societies as well as in organisations where they work. This activity satisfies
the social needs of human beings as stated by Abraham Maslow.
In the organisations, people are grouped into teams or departments to divide the tasks among
them to achieve specialisation and they give their best to accomplish the goals efficiently and
effectively. The various tasks of different groups are coordinated towards a common goal.
However, when people work in groups, there arise stress and conflicts among the members of
the group. It is the responsibility of the managers to provide effective leadership so as to resolve
the problems of the group and to lead them towards the common organisational goal.
By the end of this module, the students will be able to identify various types of groups and
the stages of group development. They will be able to explain the process of group decision
making and also various theories of leadership. They will be able to identify the types of conflict
and explain the conflict management process. They will be able to describe the causes and
consequences of stress as well as the process of stress management.
Unit 3.1: Nature of Groups and Leadership
Unit 3.2: Conflict and Stress Management
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Unit 3.1
Nature of Groups and Leadership
Aim
Instructional Objectives
Learning Outcomes
3.1.1 Nature of groups

3.1.2 Types of groups
3.1.3 Stages of Group Development
3.1.4 Group Cohesiveness
3.1.5 Group Decision-Making
3.1.6 Nature of Leadership
3.1.7 Theories of leadership
(i) Trait Theories

(ii) Behavioral Theories
(iii) Contingency Theories
Summary
Terminal Questions
Answer Keys
Activity
Glossary
Bibliography
e-References
Video Links
Image Credits
Keywords
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AIM
To familiarise students with the nature and types of groups, stages of group development
and group decision-making, and also the nature and theories of leadership.
This unit will enable students to:
• Define a group and leadership

• Identify the nature and types of groups
• Describe the various stages of group development and group decision-making
• Discuss the nature and theories of leadership
LEARNING OUTCOMES
• Define the various kinds of groups in an organisation

• Describe the stages of group development
• Explain the various steps in making a decision by a group
• Compare different types of theories for understanding leadership
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3.1.1 Nature of Groups
A group can be defined as follows:
“A group consists of two or more interacting persons who share common goals,
have a stable relationship, are somehow interdependent and perceive that they are in
fact part of a group.” - Paulus (1989).
Generally, groups are of the following nature:
• In a group, two or more people participate and are influenced by one another.
• People interact among them and develop relationships among them.
• The group members have common needs, interests, motives, and emotions.
• They communicate among themselves formally as well as informally.
• They come together because of a common interest and work together to achieve the
group’s common goals.
• Each group member treats other members with respect and expects the same from
others, and in the process, they develop a sense of belongingness.
• Each member’s actions are controlled by the group or a group leader.
• Every group has its own norms, and each member is expected to follow them. If any
member does not follow or disagree with them, s/he would be expelled from the group.
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1) A group consists of __________________ .
a) a single individual
b) more than one person
c) independent persons
d) members with different goals
2) The group members have _________________ needs and interests.
a) different
b) independent
c) uncommon
d) common
3) Members in a group communicate among themselves ___________________.
a) formally only
b) informally only
c) formally & informally
d) Nothing
4) Each member’s actions in a group are controlled by the group or a group leader.
a) True
b) False
5) Each group member treats other members with respect and expects the same from
others, and in the process, they develop a sense of _________________.
a) disagreement
b) conflict
c) self-actualisation
d) belongingness
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3.1.2 Types of groups
Groups are of two types, viz., formal, and informal.
Formal groups are formed officially as per organisational structure to achieve organisational
goals. Informal groups are formed by personnel voluntarily to achieve personal goals.
Types of Formal Groups
1. Command Group: These are various departments divided by an organisation according to its
structural requirements with superiors and subordinates under the command of their respective
superiors. For example, in production department, supervisors and workers work under the
command of production manager.
2. Task Group: A task group is formed by an organisation to complete a certain task successfully.
Once the task has been completed, the group will be disbanded. So, they are temporary groups
formed within an organisation for special purposes.
For example, a curriculum committee is formed in a university to design the curriculum for
certain educational programs.
A disciplinary committee is formed to maintain discipline in an organisation.
A project group for the purpose of accomplishing a project, budget committee for
designing budget, new product development committee, planning committee, etc., are formed
similarly for various purposes.
Fig.1 Types of Groups
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Types of Informal Groups
1. Interest Group: These groups are formed for fulfilling certain personal interests by employees
or by non-employees also. For example, trade unions, study groups by students are formed to
fulfil their personal interests.
2. Friendship Group: These groups are formed by a group of friends for their enjoyment. For
instance, friends form yoga groups, cricket clubs, sports clubs, swimming clubs, etc.
3. Reference Group: It is the group to which others refer them for a particular guidance or
advice. For example, a religious organisation guides people on religious matters. Family of a
person guides him on social norms and etiquette.
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6) Formal groups are formed ____________________________.
a) officially
b) voluntarily
c) for personal goals
d) for individual goals
7) Reference groups are formed in an organisation as per its structural requirements with
superiors and subordinates under the command of their respective superiors.
a) True
b) False
8) A task group is _________________ once it completes the given task successfully.
a) continued
b) launched
c) disbanded
d) stayed
9) If a group of people formed a cricket club for their enjoyment, then the group is known
as ______________________________.
a) command group
b) formal group
c) task group
d) friendship group
10) The family of a person guides him on social norms and etiquette. Here the family
belongs to _______________________.
a) Reference group
b) Command group
c) Friendship group
d) Task group
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3.1.3 Stages of Group Development
Normally a group is developed by going through the following stages:
• Forming stage
• Storming stage
• Norming stage
• Performing stage
• Adjourning stage
Forming stage
In this first stage, all group members are new to one another. They do not know about other
members clearly. The behaviours, attitudes, and relationships are all new to them.
Fig. 2 Stages of Group Development
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Storming stage
Since there are members in a group with different attitudes, there will be clashes and conflicts
among the members of the group. Some want to control, some want to dominate over others,
some disagree with others’ decisions, etc. It looks like a storm forming inside a group.
Norming stage
After conflicts and disagreements, members gradually try to understand one another and start
to adjust to others’ opinions and attitudes and start focusing on the common interests and goals.
Performing stage
Once the group members have settled their disputes and disagreements, they now cooperate
with one another and put their concentrated efforts to accomplish the common goal of the group.
Adjourning stage
Since the objective of the group is achieved, now it is time to wind the group up for good. In this
stage, some members feel bad for parting from the group as they developed a certain attachment
to the group. Others may feel happy since the goals are achieved successfully.
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11) In which stage of group development all group members are new to one another and
do not know about other members clearly? __________________ .
a) Norming
b) Storming
c) Adjourning
d) Forming
12) The stage of group development where there will be clashes and conflicts among the
members of the group is called __________________.
a) Performing
b) Norming
c) Storming
d) Forming
13) At a certain stage of group development, members gradually try to understand

one another and start to adjust to others’ opinions and attitudes. This stage is
known as __________________.
a) Performing
b) Norming
c) Storming
d) Forming
14) In which stage of development, the group members cooperate with one another
and put their concentrated efforts to accomplish the common goal of the group?
__________________ .
a) Performing
b) Adjourning
c) Forming
d) Norming
15) The group is wound up once the objective of the group is achieved. This stage of
group development is called __________________.
a) Performing
b) Norming
c) Storming
d) Adjourning
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3.1.4 Group Cohesiveness
Group cohesiveness is the bond among the members of the group. The more the goals of the
group and the goals of the members are aligned perfectly, the stronger is the cohesiveness
among the members of that group. The cohesiveness is also strong if the attachment among the
members is strong. If the goals are not aligned or if the attachment is not found among members,
then the group cohesiveness gets weakened.
Advantages of High Cohesiveness:
Helps in achieving group goals
The high cohesiveness among the members makes them to work as a team which makes it
easier to achieve its goals.
Gives satisfaction to members
People feel so happy and satisfied to work in the group when the bond among the members is
strong.
Improves the members’ interaction level
The presence of high cohesiveness makes the members to happily interact with one another
frequently for the achievement of goals.
Creates the Group Think
High cohesiveness in the group moves everybody in the group towards “groupthink”. That is,
every member thinks in terms of their group’s benefit rather than individual benefit.
Disadvantages of Low Cohesiveness:
Difficulty in Achieving Goals
Lack of cohesiveness leads to lack of cooperation and coordination among members which
makes it difficult to achieve the group’s goals.
Reduction in interaction
Low cohesiveness results in less interaction among members.
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Leads to individual thinking
Due to lack of cohesiveness, members always think more for their own benefit than for the
group’s benefit.
Lack of cooperation and coordination
Due to individual thinking and reduced levels of interaction, the group members do not cooperate
well among themselves.
16) The bond among the members of the group is known as __________________.
a) Group thickness
b) Groupthink
c) Group cohesiveness
d) Group absorption
17) The more the goals of the group and the goals of the members are aligned perfectly,
the stronger is the cohesiveness among the members of that group.
a) True
b) False
18) The phenomenon in which every member thinks in terms of their group’s benefit rather
than individual benefit is known as __________________.
a) Group adversity
b) Group politics
c) Group discussion
d) Groupthink
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3.1.5 Group Decision-Making
Making decisions collectively by a group is commonly known as group decision-making. Normally

group decisions are far better than individual’s decisions since more number of ideas
and alternative solutions are generated in group decision-making process.
Advantages of Group Decision-Making
Group decision-making has the following merits:
Advantage of Synergy
Many ideas from more than one individual are generated from the group and by analysing
all these alternatives, a better decision can be made by synergising them.
Fig. 3 Group Decision-Making
Information Sharing
Since lots of information from the members who have expertise in their own field of
knowledge are shared, it leads to better decision-making.
Disadvantages of Group Decision-Making
Some of the disadvantages of group decision-making are:
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Lack of Accountability
Since decisions are taken in a combined manner by the entire group, no one can be fixed any
accountability for the decisions made by the groups.
Less Efficient Decisions
Sometimes group decisions result in low efficiency. That is, group decision-making requires
longer time to analyse each member’s ideas and if they do not find enough time, they take
decisions without much evaluation of all alternative ideas.
Compromised Decisions
The major drawback in group decision-making is that many a time a decision is taken by the
group members which satisfies all members’ viewpoints. Decisions are taken to compromise all
the members which may lead to wrongful decisions.
Irving Janis, an American psychologist, pioneered the research

on groupthink theory. He studied a number of “disasters” in history
DID such as the Japanese attack on Pearl Harbour and Nazi Germany’s
YOU decision to invade Soviet Union, both occurring in 1941. He
KNOW concluded in his book Victims of Groupthink in 1972 that the
decisions occurred largely because of groupthink, which prevented
contradictory views from being expressed and subsequently
evaluated.
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19) Normally group decisions are far better than individual decisions.
a) True
b) False
20) Less number of ideas and alternative solutions are generated in group decision-
making process.
a) True
b) False
21) Since lots of information from the members who have expertise in their own field of
knowledge are shared, it leads to better decision-making.
a) True
b) False
22) Accountability can be easily fixed on a particular member for the decisions made by
the groups.
a) True
b) False
23) In groups, decisions are taken to compromise all the members which may lead to
wrongful decisions.
a) True
b) False
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3.1.6 Nature of Leadership
Leadership is defined as follows:
“Leadership is the ability to influence a group toward the achievement of a

vision or set of goals.” – Stephen Robbins and Timothy Judge.
Nature of leadership
Leadership is the ability to drive people enthusiastically towards achieving

goals.
Leadership gets the power from its personal qualities whereas the management
gets the power from its position given by the organisational hierarchy. But
managers have to use their leadership qualities in the organisations.
Leaders can be found in unorganised groups, but managers are found only in
organised groups.
Managers should also be leaders, but leaders may not be managers.
Leader’s goals and his followers’ goals must be coincided. Then only followers
would follow a leader.
Leaders must be both physically and mentally strong.
Leaders are able to guide their followers in the face of crisis.
Leaders have normally a kind of charisma which attracts their followers to follow
them.
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24) Leaders have normally a kind of charisma which attracts their followers to follow
them.
a) True
b) False
25) Leaders are unable to guide their followers in the face of crisis.
a) True
b) False
26) Managers should also be leaders, but leaders may not be managers.
a) True
b) False
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3.1.7 Theories of leadership
Various leadership theories explain about the leadership qualities, characteristics, and nature
of leaders. Some of the major theories are discussed here:
(i) Trait Theories
This theory states that successful leaders possess certain qualities by nature. These traits are
conspicuous in great leaders. The common traits found in successful leaders are: intelligence,
creativity, interpersonal skills, competency, trustworthiness, and decision-making skills.
Fig. 4 Trait Theory of Leadership
(ii) Behavioural Theories
These theories state that actions or behaviours but not the traits make one a great leader. Great
leaders behave in such a way that their actions call for great number of followers towards them.
Others who observe their style of behaviour can also implement those behaviours to become
successful leaders. The most popular styles of the leaders are (i) autocratic leaders, who behaves
autocratically to command their followers like Hitler and Mussolini; (ii) democratic leaders, who
give equal importance to participate in decision making such as Gandhi and Nehru, and
(iii) laissez faire leaders, who give full freedom to their followers to take their own decisions.
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The behavioral theorists concentrated

Behavioral theories of leadership
on the unique behavioral aspects
are based upon the belief that great
found in leaders that enabled them to
leaders are made, not born
attain effective leadership
These theories advocate that According to this theory, people can

leadership is shown by acts rather learn to become leaders through
than traits and that leadership results teaching and observation
from effective role behavior
Fig. 5 Behavioural Theory of Leadership
(iii) Contingency Theories
There is no single best kind of leadership which is suitable for all kinds of situations. Hence
leadership style must be matched with the demands of the situation. Two of the
contingency theories are discussed below:
a) Situational Leadership Theory
Depending on the type of situation created by the followers, a leader should use his
leadership style accordingly. Four situations are discussed here:
Fig. 6 Situational Theory of Leadership
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• If followers are unable and unwilling to accomplish a given task, a leader should guide them
properly and maintain good relations with them.
• If they are unable but willing to accomplish, the leader should provide required instructions to
them.
• If they are able but unwilling to do a task, the leader provides a participative leadership style to
make them willing to do the task.
• Finally, if the followers are both able and willing to do the task, then the leader’s role is very
minimal.
b) Path-Goal Theory
A leader should pave a path for his followers to make them reach the goal. It is done in
the following steps:
Fig. 7 Path-Goal Theory of Leadership
• Define the clear-cut goals for the followers

• Provide proper directions and instructions on how to achieve those goals
• Help them to remove any obstacles on the way to achieve the said goals
• Finally provide them proper support and motivation by rewarding them appropriately.
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Indra Nooyi, who was born in Chennai, I n d i a , was the first female
president and CEO of PepsiCo, USA, and she uses situational leadership
DID style to lead her companies. She maintains a maternal relationship with
YOU employees (democratic leadership style), has high-task orientation by
KNOW being tough on herself and raises the standard for everybody (task
leadership style), and chalks out courageous goals, motivates and rewards
employees towards achieving them (path-goal leadership).
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27) The common trait found in successful leaders is ____________________________.
a) Impotency
b) Competency
c) Solvency
d) Currency
27) The type of leader who gives his followers equal importance to participate in
decision-making is called _________________________________.
a) Autocratic
b) Democratic
c) Dictatorial
d) Laissez faire
28) If the followers are unable but willing to accomplish, the leader should provide required
_____________________ to them.
a) Relationship
b) Incentives
c) Punishment
d) Instructions
29) If the followers are both able and willing to do the task, then the leader’s role is
_____________________.
a) Highly needed
b) Enormous
c) Highly instructive
d) Minimal
27) In path-goal theory, leaders help the followers to remove any _______________ on
the way to achieve the said goals.
a) Motivation
b) Support
c) Obstacles
d) Path
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Summary
A group consists of two or more interacting people who share common goals and have a
stable relationship.
Groups are of two types - formal groups, which are formed officially as per organisational
structure to achieve organisational goals; and informal groups, which are formed by
personnel voluntarily to achieve personal goals.
A group is developed by going through five stages: Forming stage, Storming stage,
Norming stage, Performing stage, and Adjourning stage.
Group cohesiveness is the bond among the members of the group. The more the goals
of the group and the goals of the members are aligned perfectly, the stronger is the
cohesiveness among the members of that group.
Group decisions are far better than individual’s decisions since more number of ideas
and alternative solutions are generated in group decision-making process.
Leadership is the ability to drive people enthusiastically towards achieving goals.
Trait Theories state that successful leaders possess certain qualities such as intelligence,
creativity, interpersonal skills, competency, trustworthiness, and decision-making skills.
Behavioural Theories state that actions or behaviours but not the traits make one a
great leader.
Contingency Theories state that there is no single best kind of leadership which is suitable
for all kinds of situations. Hence leadership style must be matched with the demands of
the situation.
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Terminal Questions
1. Briefly explain the nature and types of groups.

2. Discuss the various stages of group development.
3. Write notes on group cohesiveness and group decision-
making.
4. Define leadership and describe the nature of leadership.
5. Discuss briefly various theories of leadership with examples.
Answer Keys
1 B
2 D
3 C
4 A
5 D
6 A
7 B
8 C
9 D
10 A
11 D
12 C
13 B
14 A
15 D
16 C
17 A
18 D
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19 A
20 B
21 A
22 B
23 A
24 A
25 B
26 A
27 B
28 B
29 D
30 D
31 C
Activity
Activity Type: Offline & Online
Description:
1. Tabulate various theories of leadership and compare.
2. Select any multinational company and list out the types and nature of formal groups it
has. Also list out the types and activities of informal groups your friends and neighbours
are part of.
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Glossary
• Formal group: Formed officially as per organisational structure to achieve organisational

goals.
• Friendship Group: Formed by a group of friends for their enjoyment.
• Group cohesiveness: The bond among the members of the group.
• Groupthink: A phenomenon where every member in a group thinks in terms of their

group’s benefit rather than individual benefit.
• Informal group: Formed by personnel voluntarily to achieve personal goals.
• Interest Group: Formed for fulfilling certain personal interests by employees or by non-
employees also.
• Laissez faire leader: The leader who gives full freedom to his/her followers to take their
own decisions.
• Reference Group: The group to which others refer them for a particular guidance or
advice.
• Task Group: Formed by an organisation to complete a certain task successfully.
BIBLIOGRAPHY
External Resources
Bhushan, U. (2012). Introduction to Business Communication (1st ed.). Jaico Publishing
House.
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e-References
Human Resource Management (1st ed.).

Retrieved from
https://www.geektonight.com/group/
Human Resource Management (1st ed.).
Retrieved from
https://scoopskiller.com/management-materials/human-resource-management/
groups-types/
Fundamentals of Economics and Management (1st ed.).
Retrieved from
https://www.toppr.com/guides/fundamentals-of-economics-and-management/
group-dynamics/group-cohesiveness/#:~:text=In%20business%20parlance%20
group%20cohesiveness,group%20as%20a%20single%20unit.
Organisation (1st ed.).
Retrieved from
https://www.businessmanagementideas.com/organisation/group-cohesion/group-co-
hesion/21330
Organisational Behaviour (1st ed.).
Retrieved from
https://www.tutorialspoint.com/organizational_behavior/group_decision_making.htm
Organisational Behaviour (1st ed.).
Retrieved from
https://www.iedunote.com/leadership
Leadership Skills (1st ed.).
Retrieved from
https://www.mindtools.com/pages/article/leadership-theories.htm
Leadership Theories and Skills (1st ed.).
Retrieved from
https://www.wgu.edu/blog/leadership-theories-styles2004.html#:~:text=The%20be-
havioral%20leadership%20theory%20focuses,created%20based%20on%20learn-
able%20behavior.
Organisational Behaviour (15th ed.).
Retrieved from
https://hostnezt.com/cssfiles/businessadmin/Organizational%20Behavior%20By%20
Stephen%20P%20Robbins%20&%20Timothy%20A%20Judge%205th%20Ed.pdf
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Video Links
Topic Link
Types of groups https://www.youtube.com/watch?v=WMcWQyg1kYc
Stages in group
https://www.youtube.com/watch?v=e_mgaaplQz0
development
Leadership theories https://www.youtube.com/watch?v=WOtBp0D85LI
Image Credits
Fig.1
https://bcisnotes.com/fourthsemester/group-dynamics/
Fig. 2
https://www.dreamstime.com/stages-group-development-ex-
plained-team-growth-steps-outline-diagram-educational-forming-storming-norm-
ing-performing-image219890499
Fig. 3
https://theinvestorsbook.com/group-decision-making.html
Fig. 4
https://www.verywellmind.com/what-is-the-trait-theory-of-leadership-2795322
Fig. 5
https://www.sketchbubble.com/en/presentation-behavioral-theory-of-leadership.html
Fig. 6
https://www.verywellmind.com/what-is-the-situational-theory-of-leadership-2795321
Fig. 7
https://www.slidegeeks.com/business/product/path-goal-theory-tamplate-3-ppt-power-
point-presentation-infographic-template
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Keywords
Behavioural theories Command group

Contingency theories Formal group
Friendship group Group cohesiveness
Group think Informal group
Interest group Path goal theory
Reference group Situational leadership
Task group Trait theories
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Module 3
Unit 2
Conflict and Stress

Management
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Unit 3.2
Conflict and Stress Management ..............................................................................178
Aim .................................................................................................................................... 180

Instructional Objectives .................................................................................................. 180
Learning Outcomes ........................................................................................................ 180
3.2.1 Transitions in conflict thought .............................................................................. 181

Self-Assessment Questions .......................................................................................... 183
3.2.2 Functional versus Dysfunctional conflict ........................................................... 184
3.2.3 The Conflict process ............................................................................................. 187
3.2.4 Conflict Management ........................................................................................... 190
3.2.5 Causes and consequences of stress ................................................................. 193
Self-Assessment Questions ................................................................................... 195,197
3.2.6 Stress management ............................................................................................. 198
Self-Assessment Questions ................................................................................... 199,201
Summary .......................................................................................................................... 202

Terminal Questions ......................................................................................................... 202
Answer Keys .................................................................................................................... 203
Activity .............................................................................................................................. 204
Glossary ........................................................................................................................... 205
Bibliography ..................................................................................................................... 205
e-References ................................................................................................................... 205
Video Links ...................................................................................................................... 206
Image Credits .................................................................................................................. 207
Keywords ......................................................................................................................... 208
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AIM
This unit aims to familiarise students with the concepts of transitions in conflict thought,
functional and dysfunctional conflicts, the conflict process and management, the causes
and consequences of stress, and also the strategies of stress management.
• Explain the transitions in conflict thought

• Distinguish between functional and dysfunctional conflicts
• List the techniques of conflict management
• Describe the strategies of stress management
LEARNING OUTCOMES
• Summarise the effects of functional and dysfunctional conflicts on individuals

• Explain the various conflict management techniques
• Explain how stress affects both individuals and organisations
• Summarise various stress management strategies used by managers
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3.2.1 Transitions in Conflict Thought
Conflict can be defined as a disagreement between two or more

individuals or groups, with each individual or group trying to gain
acceptance of its view or objectives over others.
- David L. Austin.
Conflict is a process in which an effort is purposefully made by a

person or unit to block another that results in frustrating the
attainment of other’s goals or furthering of his or her interests.
- Stephen Robbins.
Conflict is viewed from three approaches.
Transitions in Conflict Thought
Transitions in Conflict Thought
The belief that all conflict is harmful and must

be avoided.
Human Relations View of Conflict
The belief that all conflict is natural occurrance

in all groups and organisations.
Interactionist view of conflict
The belief that conflict is not only a positive force

in a group but that it is absolutely necessary for a
group to perform effectively.
Fig. 1 Transitions in Conflict Thought
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The traditional View:
The Traditional view sees conflict as a malfunctioning in an organisation and hence should be
avoided. This view was expressed in the 1930s. Since conflict is bad, management analysed
and resolved all kinds of conflict to improve performance.
The Human Relations View:
The Human relations view says that conflicts are a natural occurrence in a group and has a positive
side too. This view existed in the 1940s. Conflicts sometimes help improve performance.
The Interactionist view:
The Interactionist view feels that conflict is necessary to use it positively to improve
performance in organisations. In the modern times, healthy conflicts are encouraged
among the group members to generate as many ideas as possible to improve performance.
But this view holds that dysfunctional conflicts must be avoided at any cost as they disturb
the equilibrium of the organisation.
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1) Disagreement between two or more individuals or groups, with each individual

or group trying to gain acceptance of its view or objectives over others is known as
__________________.
a) Conflict
b) Concurrence
c) Consequence
d) Convergence
2) The process in which an effort is purposefully made by a person or unit to block another
that results in frustrating the attainment of other’s goals or furthering of his or her interests
is called ________________.
a) Acceptance
b) Conflict
c) Agreement
d) Frustration
3) Traditional view sees conflict as a _____________ in an organisation and hence should

be avoided.
a) Encouraging
b) Heartening
c) Malfunctioning
d) Creative function
4) Human relations view says that conflicts are a ______________ occurrence in a group
and has a positive side to it.
a) Unnatural
b) Artificial
c) Unnecessary
d) Natural
5) _________________ view feels that conflict is necessary to use it positively to improve

performance in organisations.
a) Interactionist
b) Human relations
c) Traditional
d) Perfectionist
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3.2.2 Functional versus Dysfunctional Conflict
Functional conflicts, which are also known as constructive conflicts, result in positive outcomes,
whereas dysfunctional conflicts, which are also known as destructive conflicts, result in negative
outcomes.
FUNCTIONAL VERSUS
DYSFUNCTIONAL CONFLICT
Functional or Constructive:
Forms of conflict support the

goals of the group and improve
its performance.
Dysfunctional or Destructive:
These are conflicts that hinder

group performance.
Fig. 2 Functional versus Dysfunctional Conflict
Functional Conflict and its Positive Effects
• Helps to steam off tensions.

• Helps in analytical and critical thinking and analysis.
• Helps in bringing in positive change in the organisation.
• Helps in innovative and creative thinking among group members.
• Helps in fault-finding in the system and human relations mechanism.
• Helps in energising people occasionally.
• Helps in accepting challenging tasks by conflicting parties to compete with each other.
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Dysfunctional Conflict and its Negative Effects
• Creates low morale among group members.

• Results in delay in all kinds of schedules.
• Increases distrust among members.
• Results in lack of coordination and cooperation.
• Creates communication problems within the organisation.
• Destroys group cohesion.
• Reduces the level of interest, enthusiasm, and energy among the employees.
• Increases stress among the employees.
• Finally, dysfunctional conflict leads to reduced productivity, high labour turnover,
reduced profitability, low quality products, and lower customer satisfaction.
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6) Functional conflicts, which are also known as constructive conflicts, result in

_______________ outcomes.
a) Negative
b) Neutral
c) Nil
d) Positive
7) Dysfunctional conflicts, which are also known as destructive conflicts, result in

_______________________ outcomes.
a) Positive
b) Neutral
c) Negative
d) Good
8) Functional conflicts, helps to steam off ________________.
a) Happiness
b) Tensions
c) Positivity
d) Joys
9) Dysfunctional conflict leads to reduced_____________
a) Productivity
b) Labour turnover
c) Distrust
d) Communication problems
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3.2.3 The Conflict Process
The conflict process is comprised of five stages:
• Potential opposition or incompatibility

• Cognition and personalisation
• Intentions
• Behaviour
• Outcomes
Fig. 3 The conflict process
Potential Opposition or Incompatibility

In this first stage, conflict begins to arise due to the following causes:
• Communication: Due to communication gaps and barriers, conflicts arise.

• Structure: Due to hierarchical differences in the organisational structure, conflicts related to
their tasks and functions may arise.
• Personal variables: Conflicts may also arise due to differences in personalities, attitudes, and
perceptions of the people who interact among themselves.
Cognition and Personalisation
When a conflict is in the early stage, people only perceive it, but they would not express it until
it doesn’t affect them directly. When it affects their function negatively, then they feel the conflict
more directly.
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Intentions
Intentions are the responses by an individual to the other individuals when conflicts
arise. Following are the ways in which people may respond to conflicts:
• Accommodating: During conflict, the person tries to make peace with the other.
• Avoiding: Here the person avoids it or suppresses it completely.
• Collaborating: People from both sides try to satisfy the requirements of each conflicting party.
• Competing: Each conflicting party wants to fulfill their own needs without bothering about the
other party.
• Compromising: It’s a win-win situation in which each conflicting party accepts to sacrifice
something to solve their conflict.
Behaviour
In this stage, the intentions of conflict become overt or open to others. Each party openly increases
the conflict to be now clearly evident to everybody. So, each party’s behaviours and reactions
reach the highest point at this stage.
Outcomes
As a result of the above behaviours and reactions, the outcome may be either functional, where
the group’s performance increases, or dysfunctional, where the group’s performance decreases.
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10) Due to economic differences in the organisational structure, conflicts related to their
tasks and functions may arise.
a) True
b) False
11) When a conflict is in the beginning stage, people only perceive it but would not express
it since it didn’t affect them directly.
a) True
b) False
12) In accommodating way of response to conflict, each conflicting party wants to fulfill his
own needs without bothering about the other party.
a) True
b) False
13) In compromising way of response to conflict, people from both sides try to satisfy the
requirements of each conflicting party.
a) True
b) False
14) The outcome of the conflicting process may be either functional or dysfunctional.
a) True
b) False
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3.2.4 Conflict Management
Identifying conflicts, analysing to find out the root causes, and resolving them in the best
possible way is called conflict management. There are five kinds of conflict management:
1. Collaborating:
In this type of conflict management, the conflicting parties discuss the issues that benefit both
of them and arrive to a mutual agreement on those issues so that both the parties win together.
2. Competing:
The conflicting parties do not easily give up or agree upon anything. Each group wants to
satisfy their own ends without bothering about the other’s goals or needs.
3. Avoiding:
The manager sometimes simply ignores the conflict and does not take any step to resolve it.
This strategy works if the conflict is trivial, if the manager needs enough time to think over the
right solution, or if the manager is incompetent. But this strategy does not work for a long term.
assertive
Competing Collaborating
The goal is The goal is
attempting to satisfy own concern
‘to win’ ‘to find a win-win solution’
Compromising
The goal is
‘to find a middle ground’
unassertive
Avoiding Collaborating
The goal is The goal is
‘to delay’ ‘to yield’
uncooperative cooperative
attempting to satisfy others' concern
Fig. 4 Conflict Management Styles
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4. Accommodating:
Here, one of the conflicting parties give way to the other party and fulfills the competitor’s needs
to resolve the conflict. This technique can be used when the issue is less critical.
5. Compromising:
Both the conflicting parties give up something to reach an agreement. When the collaborating
method is called a win-win situation, compromising method is called a lose-lose situation. Mostly
this method is used when there is a time constraint to achieve the goals.
DID According to the United Nations Development Programme (UNDP), more

YOU
than 526,000 people die each year as a result of violent conflicts -- just over
KNOW
one per minute.
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15) The type of conflict management where the conflicting parties discuss the issues
that benefit both of them and arrive to a mutual agreement on those issues is known as
__________________.
a) Avoiding
b) Compromising
c) Collaborating
d) Competing
16) When each conflicting group wants to satisfy their own ends without bothering about
others’ goals or needs, the kind of conflict management used is called ________________.
a) Accommodating
b) Avoiding
c) Competing
d) Collaborating
17) The manager sometimes simply ignores the conflict and does not take any step to
resolve it. This type of conflict management style is known as _____________
a) Collaborating
b) Competing
c) Compromising
d) Avoiding
18) In this conflict management style, one of the conflicting parties give way to the other
party and fulfills others’ needs to resolve the conflict.
a) Accommodating
b) Avoiding
c) Competing
d) Collaborating
19) The style of conflict management where both the conflicting parties give up something
to reach an agreement is called ________________________
a) Collaborating
b) Compromising
c) Competing
d) Avoiding
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3.2.5 Causes and Consequences of Stress
“Stress can be considered as any factor, acting internally or externally that makes it
difficult to adapt and that induces increased effort on the part of the person to maintain
a state of equilibrium both internally and with the external environment.” -
James Humphrey.
“Stress is the non-specific response of the body to any demand for change.” - Hans
Selye.
Causes of Stress
Three types of factors – individual, organisational, and environmental – cause stress to a person.
Individual Factors
Individual factors are an individual’s family problems, financial problems, and attitude
problems which cause stress to her/him.
Organisational Factors
These are as follows:

Demands of tasks: Unrealistic deadlines and work overloads may create stress.
Interpersonal relations: Stress is created due to conflicts o r d isagreements with

colleagues at workplace.
Organisational structure: Innumerable rules and delay in decision-making due to

longer chains of authority create stress.
Organisational leadership: Managers who pressurise their subordinates to work as

per their impractical expectations create stress in their subordinates.
Organisational life stage: At the initial stage of an organisation, employees feel

stressed due to work overload and fear of uncertainty of the organisation’s and also
their own future.
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Fig. 5 Causes of Stress
Environmental Factors
Unstable economic, political, and technological conditions also create stress in people.
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20) According to Hans Selye, stress is the non-specific response of the body to any
demand for _____________________
a) Sickness
b) Money
c) Change
d) Finance
21) Family problems and attitude problems are _________________ factors that cause
stress to a person.
a) Organisational
b) Environmental
c) Individual
d) Company
22) Unrealistic deadlines and work overloads are _____________ factors that cause
stress to a person.
a) Environmental
b) Individual
c) Attitudinal
d) Organisational
23) Unstable economic, political, and technological conditions are ____________________

factors that cause stress to a person.
a) Environmental
b) Organisational
c) Individual
d) Enterprise
24) Conflicts or disagreements with colleagues at workplace are _______________

factors that cause stress to a person.
a) Attitudinal
b) Organisational
c) Environmental
d) Individual
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Consequences of Stress
Stress at workplace has its own consequences.
Absenteeism
Overstressed employees absent from work frequently which affects organisational productivity.
Fig. 6 Consequences of Stress
Turnover
When employees are affected by stress at their workplace, they dislike the organisation which
leads to high employee turnover.
Workplace Violence
Workplace stress causes the employees to become tense and finally turn to violent behaviour.
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25) Overstressed employees absent from work frequently which affects organisational
productivity.
a) True
b) False
26) When employees are affected by stress at their workplace, they like the organisation
which leads to low employee turnover.
a) True
b) False
27) Workplace stress causes the employees to become tense and finally turn to violent
behaviour.
a) True
b) False
28) Stress at workplace causes frequent absenteeism and turnover among the employees
of an organisation.
a) True
b) False
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3.2.6 Stress Management

Various strategies to manage the stress are categorised into two types: individual strategies and
organisational strategies.
Individual Strategies
Individuals apply the following strategies to eliminate their stress.
Being self-aware
Individuals develop awareness about their limits and withdraw from a situation when it causes
stress.
Pursuing hobbies
Individuals start physical exercise or participate in sports activities to relieve themselves from
stress.
Leaving the organisation
Individuals may leave the company if it is beyond their capacity to cope with stress.
Cognitive perspective
An individual understands that stress is a part of life and changes his attitude towards it positively,
so that the level of stress he feels would be reduced.
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29) Those individuals who do not develop awareness about their limits, withdraw from a
situation when it causes stress.
a) True
b) False
30) Individuals start physical exercise or participate in sports activities to relieve themselves
from stress.
a) True
b) False
31) Individuals do not leave the company if it is beyond their capacity to cope with stress.
a) True
b) False
32) The level of stress an individual feels would be reduced if he understands that stress
is a part of life and changes his attitude towards it positively.
a) True
b) False
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Organisational Strategies
These strategies are taken by the managers to reduce employees’ stress.
Selection of personnel
Managers select the employees at the time of interview after testing their ability to cope with the
stress.
Provision of training
Managers impart training to their employees about new work-related skills and soft skills to help
them cope with stress effectively.
Redesigning of jobs
Stress will be reduced through job rotation and job enrichment.
Counselling of employees
Personal advice and guidance are offered to those employees under stress so that they can cope
easily with their stress.
Participative decision-making
Managers allow their subordinates to participate in decision-making related to matters that

affect their performance.
Team building
Managers encourage team building among employees and achieve group cohesiveness to
support and cooperate with one another so that conflicts can be reduced.
Improved Communication
Managers allow their subordinates to communicate with them more about their problems and
suggestions.
Health programs
Companies provide expert advice to their employees on physical fitness well-being which help
them to cope with stress in a better way.
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DID According to a survey by Savvy Sleeper in January 2020, Tokyo, the capital
YOU of Japan, ranked the highest stressed-out city, whereas Tallinn, the capital of
KNOW Estonia, ranked with the lowest levels of workplace burnout in the world.
33) As a stress management strategy, managers select the employees at the time of
interview after testing their ability to cope with the stress.
a) True
b) False
34) Managers impart training to their employees about new work-related skills and soft
skills to help them increase their stress.
a) True
b) False
35) Stress will be reduced through job rotation and job enrichment.
a) True
b) False
36) Managers encourage team building among employees and achieve group cohesiveness
to support and cooperate with one another so that conflicts can be increased.
a) True
b) False
37) Personal advice and guidance are offered to those employees under stress so that
they can cope easily with their stress.
a) True
b) False
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Summary
Conflict is viewed from three approaches: Traditional view; Human relations view; and
the Interactionist view.
Functional conflicts, which are also known as constructive conflicts, result in positive
outcomes, whereas dysfunctional conflicts, which are also known as destructive conflicts,
result in negative outcomes.
The conflict process is comprised of five stages: (i) Potential opposition or incompatibility;
(ii) Cognition and personalisation; (iii) Intentions; (iv) Behaviour; and (v) Outcomes.
There are five kinds of managing conflicts in an organisation: (i) Collaborating; (ii)
Competing; (iii) Avoiding; (iv) Accommodating; and (v) Compromising.
Three types of factors – individual, organisational, and environmental – cause stress to

a person.
Absenteeism, labour turnover, and workplace violence are the consequences of stress at
the workplace.
Various strategies to manage the stress are categorised into two types: individual
strategies and organisational strategies.
Terminal Questions
1. Define conflict and explain the effects of functional and dysfunctional conflicts.
2. Describe the various steps involved in the conflict process.
3. Discuss the five kinds of managing conflicts in an organisation.
4. What are the causes and consequences of stress? Explain briefly.
5. Explain briefly the various strategies used for stress management.
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Answer Keys
1 a
2 b
3 c
4 d
5 a
6 d
7 c
8 b
9 a
10 b
11 a
12 b
13 b
14 a
15 c
16 c
17 d
18 a
19 b
20 c
21 c
22 d
23 a
24 b
25 a
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26 b
27 a
28 a
29 b
30 a
31 b
32 a
33 a
34 b
35 a
36 b
37 a
Activity
Activity Type: Online & Offline Duration: 60 Minutes
Description:
1. Select a conflict situation of your choice and discuss how it can be solved by using any
one of the conflict management techniques.
2. Describe an incident in your life that caused stress to you and explain what strategy
you used to manage it?
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Glossary
Conflict: A disagreement between two or more individuals or groups, with each individual
or group trying to gain acceptance of its view or objectives over others.
Dysfunctional conflicts: Conflicts that result in negative outcomes.
Functional conflicts: Conflicts that result in positive outcomes.
BIBLIOGRAPHY
External Resources
Edwin, A., & Locke, E. A. (2003). Principles of Organizational Behavior (1st ed.). Wi-
ley-Blackwell.
e-References
Human Resource Management (1st ed.)
Retrieved from
https://www.citeman.com/3790-transitions-in-conflict-thought-2.html
Organizational Conflict (1st ed.)

Retrieved from
https://www.yourarticlelibrary.com/organization/conflict-management/organizational-
con-flict/99695
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Project Management (1st ed.)

Retrieved from
https://analysisproject.blogspot.com/2020/09/functional-and-dysfunctional-conflicts.html
Organizational Behaviour and Human Relations (1st ed.)

Retrieved from
https://courses.lumenlearning.com/wm-organizationalbehavior/chapter/the-conflict-pro-
cess/
Conflict Management (1st ed.)

Retrieved from
https://www.peoplehum.com/glossary/conflict-management#
Organizational Behaviour (1st ed.)

Retrieved from
https://granite.pressbooks.pub/mgmt805/chapter/stress-in-an-organization/
Organizational Behaviour (1st ed.)

Retrieved from
https://opentextbc.ca/organizationalbehavioropenstax/chapter/coping-with-work-
related-stress/
Conflict Prevention (1st ed.)

Retrieved from
https://www.un.org/en/land-natural-resources-conflict/pdfs/FF_conflict_prevention.pdf
Forbes (20th Jan 2020 ed.)

Retrieved from
https://www.forbes.com/sites/laurabegleybloom/2020/01/30/ranked-worlds-20-most-
stressed-out-cities/?sh=29d1f772519c
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Video Links
Topic Link
Difference Between
Functional and Dysfunc- https://www.youtube.com/watch?v=unL8ScUo5K0
tional Conflicts
Stages of Conflict https://www.youtube.com/watch?v=UNvVSGUl9oM
Thomas Kilmann’s
Conflict Management https://www.youtube.com/watch?v=PFIydyH2H8Y
Styles
What Causes Stress https://www.youtube.com/watch?v=dERu8051t4w
https://study.com/academy/lesson/stress-management-in-
Stress Management dividual-and-organizational-techniques-methods.html
Image Credits
Fig. 1
http://unilife1998.blogspot.com/2017/03/traditional-perspective-viewed-conflict.html
Fig. 2
https://www.chegg.com/homework-help/questions-and-answers/functional-versus-dys-
functional-conflict-functional-constructive-forms-conflict-support-go-q66044905
Fig. 3
https://www.oreilly.com/library/view/essentials-of-organizational/9780134523859/
xhtml/fileP70010122300000000000000000023EB.xhtml
Fig. 4
https://www.americanwatercollege.org/how-do-you-deal-with-conflict-2/
Fig. 5 https://www.facebook.com/459715460824167/posts/causes-of-stress-in-the-
modern-generationthe-main-cause-of-stress-on-the-modern-/3153387658123587/
Fig. 6 https://marketbusinessnews.com/financial-glossary/work-stress/
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Keywords
Conflict process Dysfunctional conflict

Functional conflict Stress management
Transitions in conflict Workplace violence
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Module 4
Unit 1
ORGANISATIONAL
CULTURE AND CHANGE
MANAGEMENT
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ORGANISATIONAL CULTURE AND CHANGE MANAGEMENT
Module Description
Like individuals, each organisation has its own culture. That means, every organisation has its
own values, norms, ethics, and a way of doing things. These values and norms are brought into
an organisation by its founders. This culture forms the basis on which every activity is carried out
in the organisation. And this culture is also imbibed by the employees who work for that particular
organisation.
A positive culture helps in the development and growth of the organisation, whereas a negative
culture hinders its growth. New talents are attracted towards a company which holds an open-
minded, free, and friendly culture.
Similarly, it is equally important for an organisation to adapt to the changes happening in its
environment from time to time. It holds good especially in modern times where the changes are
taking place at a rapid pace. Those organisations which resist the change finally perish.
By the end of this module, the students will be able to describe the nature of organisational
culture and identify various functions of culture. They will also be able to explain how culture is
created and maintained by an organisation.
Chapter 4.1 : Nature of Organisational Culture
Chapter 4.2 : Change Management
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Unit 4.1
Nature of Organisational Culture ...................................................................... 210
Aim ............................................................................................................................. 213

Learning Outcomes ................................................................................................. 213
4.1.1 Nature of Organisational Culture ................................................................. 214

4.1.2 Functions of Culture ...................................................................................... 217
4.1.3 Creating and sustaining Organisational Culture ....................................... 219
Summary .................................................................................................................. 223

Terminal Questions .................................................................................................. 223
Answer Keys ............................................................................................................ 224
Activity ....................................................................................................................... 224
Glossary .................................................................................................................... 225
Bibliography .............................................................................................................. 225
e-References ............................................................................................................ 225
Video Links ............................................................................................................... 226
Image Credits ........................................................................................................... 226
Keywords .................................................................................................................. 226
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AIM
To familiarise students with the nature and functions of organisational culture, and also
with the creation and maintenance of organisational culture.
• Identify the nature and functions of organisational culture

• Discuss the creation and maintenance of organisational culture
LEARNING OUTCOMES
• Explain the various characteristics of organisational culture

• Describe the various functions of organisational culture
• Discuss how organisational culture is created and maintained
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4.1.1 Nature of Organisational Culture
Organisational culture refers to a system of shared meaning

held by members that distinguishes the organisation from other
organisations.”
-- E. H. Schein.
Different organisations may have different cultures and the culture re lects in every activity
performed by them. The various characteristics of the culture are discussed as follows (see
primary spell):
7 Primary Characteristics that capture the

essence of an organisation's culture
Outcome
Aggressiveness
Orientation
People Organisational Attention to

Orientation Culture Detail
Innovation and
Stability
Risk Taking
Team
Orientation
Fig. 1 Nature of Organisational Culture
1. Aggressiveness
Organisations with high-aggressive culture are always want to win over their competitors at any
cost. They do not easily give up. Companies with low aggressiveness may not go to extreme
lengths about competition.
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2. Attention to Detail
Organisations having this culture work to achieve precision in every aspect, for example, they
provide their customers with the best quality products without any kind of defect.
3. Innovation and Risk Taking
In this case, organisations encourage their employees to create and use innovative ideas and
methods to cut the costs or to improve their performance. They motivate them to take risks if
the job demands.
4. Outcome Orientation
Organisations following this culture greatly focus on outcomes or results to be achieved at any
cost. They do not care about what process or method followed by their employees to achieve
those results, but ultimately, they look for end results only.
5. People Orientation
Organisations with this culture give first priority to people working for them. These organisations
take great care about their employees and treat them with great respect.
6. Stability
These organisations want to maintain stability at all times. To achieve this, they form various
rules and policies and expect their employees to follow them strictly. Generally, bureaucratic
organisations have this kind of culture.
7. Team Orientation
Organisations place great importance on teamwork rather than individual work. These compa-
nies encourage interpersonal relationships and cooperation among groups or teams. This type
of culture is generally seen in software companies.
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Match the following:
1) Organisations always seek to

win over competitors at any cost a) People orientation
2) Organisations always work to

achieve precision in every aspect. b) Stability
3) Organisations greatly focus on

results to be achieved at any cost. c) Attention to detail
4) Organisations form rules and policies and

expect employees to follow them strictly. d) Outcome orientation
5) Organisations take great care about employees

and treat them with great respect. e) Aggressiveness
f) Team Orientation
g) Innovation and Risk Taking
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4.1.2 Functions of Culture
An organisation’s culture performs several functions within its arena. A few major functions are
discussed hereunder.
01 02
Organisational Collective
Identity Commitment
Organisational
Culture
Social System Sense-Making

Stability Device
03 04
Fig. 2 Functions of Culture
1. The culture of an organisation provides organisational identity. People outside and inside of
an organisation recognise it by its unique culture.
2. The culture creates a kind of collective commitment on the part of employees who are work-
ing for the achievement of its objectives. It makes them to commit to the organisation rather
than to personal interests.
3. The organisational culture provides the social system stability. That means, the culture
provides the required standards based on which all employees carry out their responsibilities
accordingly.
4. The organisational culture also serves as a sense-making device according to which the
em-ployees form their attitudes and behaviour. That is, the employees’ behaviour falls in line
with their organisation’s culture.
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6) The organisational culture provides the social system stability.
a) True
b) False
7) Organisational culture makes its employees to commit to the personal interests rather
than to the organisational interests.
a) True
b) False
8) The organisational culture does not serve as a sense-making device to the employees
to form their attitudes and behaviour.
a) True
b) False
9) The culture of an organisation provides organisational identity.
a) True
b) False
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4.1.3 Creating and Sustaining Organisational Culture
Creating Organisational Culture
Mainly two kinds of factors contribute to the creation of an organisational culture: Founder’s
values and industry demands.
Founder’s Values
When a company is founded by an entrepreneur or a founder, s/he wants to manage it in their

own way. S/he thus brings in their personality into their organisation. Whatever values and
belief systems s/he is holding, all these values are imbibed by their organisation gradually
and it culminates into the organisational culture. For example, when Bill Gates incorporated
Microsoft, he aggressively marketed his product ‘Windows.’ He is so aggressive that
apparently he always competes with his wife to solve the jigsaw puzzles faster than
her. The same personality of aggressiveness has become the culture of his company.
But there is no guarantee that an organisation maintains the same culture throughout. The culture
may change once the founder is no more or it may change due to the change in environmental
factors also.
Fig. 3 Culture Creation and Maintenance
Industry Demands
Any industry consists of a group of firms which are h omogeneous i n nature. For example, all
software companies together are called software industry. Normally software industry is highly
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innovative in nature since the technology it deals with changes at a very rapid pace. Hence the
software industry should keep pace with the changing technology. So, this kind of innovative
culture is shared by all software companies for their survival in the market.
Similarly, stability is the culture of public or bureaucratic industries since they always work
according to many rules and regulations, and they expect their employees also to follow them
strictly.
Sustaining Organisational Culture
Organisational culture is not an isolated process since the culture is maintained by nothing but
their employees. So, an organisation strives to maintain its culture by various means: Attraction-
Selection-Attrition (ASA), new employee onboarding, leadership, and reward systems.
Attraction-Selection-Attrition (ASA)
Organisations attract those candidates for recruitment who can match or fit in with its culture.
They select the potential employees whose personalities match with the culture of the recruiting
organisation. These employees fall in line with the company’s culture and thus help in sustaining
its culture. If any employee is wrongly recruited, he cannot cope with the existing culture of the
organisation. Such employees are made to leave the organisation by a process called attrition.
That is, the employee who doesn’t fit in with the organisational culture will naturally leave the
organisation by himself. And the organisation also motivates him indirectly towards his resignation.
New Employee Onboarding
In modern days, many organisations are imparting orientation lectures to the newly recruited
employees to make them imbibe the culture of the organisation they have joined. These orientation
programmes teach about the value system and working culture of the organisation to the new
recruits so that they can easily accommodate themselves into the system quite smoothly. When
they adapt the organisational culture, they get satisfied with their job, and committed to their
responsibilities and stay in the organisation for a long time.
Leadership
In the organisations, managers influence their subordinates towards the organisation’s culture
through their style of leadership. Managers exactly reflect the organisation’s culture through their
actions, behaviour, and decision-making style. They serve as role models for the employees with
respect to the culture of the organisation. By imitating their bosses, the subordinates also follow
the same culture in all their actions. If the manager is strict in following rules and regulations, his
subordinates also do the same. If he is innovative and risk-taking, his subordinates also follow
the suit.
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Reward Systems
Which behaviours are rewarded, and which are punished, determine and help to maintain
the culture of an organisation. If people are rewarded for their team effort rather than
competitive spirit among individuals, then the organisation is understood to have a team-oriented
culture. If the innovations of the employees are rewarded, then its culture is an innovative one.
Similarly, certain behaviours are punished by the organisation. So, it is said that these
behaviours are against the culture of that organisation. Hence organisations sustain their culture
by rewarding those behaviours which are in line with their specific culture.
Google won the best company culture award consecutively for seven years
from 2016 to 2022.
DID
YOU As for Workplace Culture ratings, according to CNBC, Microsoft is the No. 1
KNOW global company with the best workplace culture, followed by IBM and Google.
The annual ranking is based on anonymous employee ratings for 70,000
companies shared on their site over a 12-month period from March 2021 to
March 2022.
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10) Following is one of the factors in creating an organisational culture :
a) Founder’s values
b) Reward systems
c) Employee onboarding
d) Punishments
11) All firms in an industry generally adapt the culture of the __________________ which
they belong to.
a) Firm
b) Industry
c) Employees
d) Workers
12) Those employees who do not fit in with the culture of their organisation are made to
leave by themselves. This process is called _________________.
a) Resignation
b) Retirement
c) Attrition
d) Termination
13) The process of imparting orientation lectures to the newly recruited employees to
make them imbibe the culture of the organisation is known as ____________________.
a) Attrition
b) Rewarding
c) Compensating
d) Employee onboarding
14) Organisations sustain their culture by ___________________ those behaviours which

are in line with their specific culture.
a) Rewarding
b) Punishing
c) Terminating
d) Avoiding
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Summary
Organisational culture refers to a system of shared meaning held by members that

distinguishes the organisation from other organisations.
The various characteristics of the culture are: aggressiveness; attention to detail;

innovation and risk taking; outcome orientation; people orientation; stability; and team
orientation.
An organisation’s culture performs several functions such as organisational identity,

collective commitment, social system stability, and sense-making device.
Two kinds of factors contribute to the creation of an organisational culture: founder’s

values and industry demands.
An organisation strives to maintain its culture by means such as: Attraction-Selection-

Attrition (ASA), new employee onboarding, leadership, and reward systems.
Terminal Questions
1. Define organisational culture.
2. Describe the common characteristics of organisational culture.
3. Explain the various functions performed by an organisational culture.
4. Discuss the factors that influence an organisation’s culture.
5. Explain briefly the factors that sustain an organisation’s culture.
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Answer Keys
1 e
2 c
3 d
4 b
5 a
6 a
7 b
8 b
9 a
10 a
11 b
12 c
13 d
14 a
Activity
Activity Type: Online
Description:
Select an organisation of your choice, and write down how its culture is created and
maintained.
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Glossary
Attrition: The process of making employees, who do not fit with their organisational
culture, to leave the organisation by themselves.
Employee onboarding: The process of imparting orientation lectures to the newly

recruited employees to make them imbibe the culture of the organisation.
Organisational culture: A system of shared meaning held by members that distinguishes

the organisation from other organisations.
BIBLIOGRAPHY
External Resources
Pervin, L. A., & John, O. P. (1999). Handbook of personality: Theory and research (2nd
ed.). Guilford Press.
Bhushan, U. (2012). Introduction to Business Communication (1st ed.). Jaico Pub-

lishing House.
e-References
Organisational Behaviour (1st ed.) Retrieved from https://www.iedunote.com/culture
Fundamentals of Leadership (1st ed.) Retrieved from

https://opentext.wsu.edu/organizational-behavior/chapter/15-4-creating-and-maintain-
ing-organizational-culture/
Organisational Behaviour (1st ed.) Retrieved from https://www.iedunote.com/organi-

zational-culture
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Video Links
Topic Link
Characteristics of https://www.youtube.com/watch?v=ldbSbmDHn6Q&t=114s
Organisational Culture
Creating and
maintaining https://www.youtube.com/watch?v=3vP1rmMBmOs
organizational culture
Image Credits
Fig. 1
https://www.slideserve.com/tamyra/organizational-culture-and-its-effect-on-organization-
al-effectiveness
Fig. 2
https://amazonia.fiocruz.br/scdp/blog/gregorys-punctuation-checker-tool/organization-
al-culture-and-its-functions.php
Fig. 3
https://opentext.wsu.edu/organizational-behavior/chapter/15-4-creating-and-maintain-
ing-organizational-culture/
Keywords
Attrition Employee onboarding

Organisational culture Outcome orientation
People orientation Team orientation
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Module 4
Unit 2
Change Management
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Unit 4.2
Change Management .............................................................................................. 227
Aim ............................................................................................................................... 229

Instructional Objectives ............................................................................................. 229
Learning Outcomes .................................................................................................... 229
4.2.1 Forces for change ............................................................................................ 230

Self-Assessment Questions ..................................................................................... 233
4.2.2 Resistance to change ...................................................................................... 234
Self-Assessment Questions ...................................................................................... 236
4.2.3 Approaches to Managing Organisational Change ....................................... 237
(i) Lewin’s Model ........................................................................................... 237
(ii) Kotter’s Plan for Implementing Change ................................................ 238
4.2.4 Techniques of organisational development .................................................. 241
Summary ..................................................................................................................... 245

Terminal Questions .................................................................................................... 245
Answer Keys ............................................................................................................... 246
Activity .......................................................................................................................... 247
Glossary ...................................................................................................................... 247
Bibliography ................................................................................................................ 247
e-References .............................................................................................................. 248
Video Links .................................................................................................................. 249
Image Credits ............................................................................................................. 249
Keywords ..................................................................................................................... 250
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AIM
To familiarise students with the forces of change, resistance to change, various

approaches to managing organisational change, and the techniques of organisational
development.
• Identify the forces causing organisational change

• Illustrate individuals’ resistance to change
• Describe the various approaches to managing organisational change
• Discuss the techniques of organisational development
LEARNING OUTCOMES
• Explain the forces that determine an organisation’s readiness for change

• Examine individuals’ resistance to change
• Discuss the various change models in an organisation
• Compare different types of development techniques in organisations
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4.2.1 Forces of Change
When an organisational system is disturbed by some internal or

external force, change frequently occurs. Change as a process is
simply modification of the structure or process of a system. It may be
good or bad, the concept is disruptive only.
- John Bull.
The constantly changing environmental forces – both internal and external – influence the
functioning of organisations.
Fig. 1 Forces for Change
External Forces
1. Competitive Pressures
Nowadays every organisation is facing stiff competition in the market. It has to constantly change
its strategies to beat the competition and provide better offers to their customers.
2. Customer Pressures
Today’s customers are demanding different kinds of products to satisfy their different kinds of
needs. To keep pace with the changing needs of customers, modern organisations have to
continuously innovate to meet these needs.
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3. Economic Forces
The demand fluctuations in the market, share market fluctuations, business cycles, economic
policies, financial policies, tax structure, changes in money value, interest rate fluctuations,
and employment opportunities are the various components of economic forces that constantly
change.
4. Governmental Forces
Privatisation of government sectors, exchange rate fluctuations, laws governing unfair trade
practices, anti-dumping regulations, environmental protection laws, labour laws, etc., are known
as governmental forces.
5. Political Forces
Political instability and political unrest affect the world economy and organisations negatively.
6. Technological Forces
The revolutionary changes in information and communication technologies affected product

innovations, customer services, competition, working style and culture in organisations.
Internal Forces
1. Low Performance
When employees are not performing at par with the standards, the organisations would like to
bring in changes in the level of performance of the employees by imparting suitable training to
develop the skills of them.
2. Low Satisfaction
If employees are not satisfied with their jobs or compensation, the organisations must
take adequate measures to redesign and enrich the current jobs and make revisions in the
compensation schemes to enhance the satisfaction level of employees.
3. New Mission
New tasks, new projects, and new technologies introduced by the management call for changes
in organisational structures, systems, business processes, reallocation of resources, etc.
4. New Leadership
When top leadership changes, the new leaders want to restructure the organisation from top to
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bottom to suit their style of leadership. They bring in a new culture into the organisation.
5. Conflict
The intra-personal, inter-personal, intra-departmental, and inter-departmental conflicts result in

changes in disciplinary rules and regulations, personal policies, promotional policies, procedural
systems, performance appraisals, etc.
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1. The constantly changing _______________________ forces influence the functioning

of organisations.
a) Magnetic
b) Physical
c) Materialistic
d) Environmental
2. Following is one of the external forces which influence the functioning of organisations:
a) Low performance
b) Conflict
c) Economic
d) New leadership
3. Following is one of the internal forces which influence the functioning of organisations:
a) Customer
b) New mission
c) Governmental
d) Political
4. The new leaders who acquired an organisation want to restructure the organisation
from top to bottom to suit their style of _______________________
a) Leadership
b) Conflict
c) Government
d) Politics
5. Following is one of the governmental forces that affect the functioning of organisations:
a) Political instability
b) Political unrest
c) Business cycles
d) Anti-dumping regulations
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4.2.2 Resistance to Change
Sometimes employees resist whenever their organisation brings in changes in response with the
changes in the environment. Some of the major reasons for employees’ resistance to change
are:
Economic Factors
Employees feel that the new changes in the organisation might affect their responsibilities and
would result in the reduction of their remuneration.
Fear of the Unknown
When new technology such as computerisation was introduced to speed up certain processes,
employees all over the world resisted them in the beginning, since they had never seen such a
thing before and didn’t know how to operate it.
Habit
When people perform activities in a fixed pattern for a long time, it then becomes a habit to
them, and they do them unconsciously. If the organisation brings changes in their routine,
psychologically they feel disturbed and they resist it.
Security (Job Security)
New changes such as automation make employees feel threatened that they lose their jobs
due to the changes.
Fig. 2 Resistance to Change
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Selective Information Processing
When people are influenced by selective perception, they want to hear and do things what they
like. If changes occur, they do not want to imbibe them into their perceptual process and as a
result, they resist it.
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6) Organisations bring in changes in response with the changes in ______________.
a) Environment
b) Resistance
c) Personal goals
d) Individual goals
7) It is known as the fear of the unknown when employees feel that the new changes in
the organisation would result in the reduction of their remuneration.
a) True
b) False
8) When employees are habituated to a pattern of activities and if the organisation brings
changes in their routine, psychologically they feel disturbed and they ______________
it.
a) accept
b) agree
c) resist
d) follow
9) If the new changes in organisations threaten employees’ job ________________, they

resist it.
a) Goals
b) Rotation
c) Objectives
d) Security
10) People resist changes in their organisations due to selective information processing
which occurs as a result of selective _______________________.
a) perception
b) information
c) change
d) t ask
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4.2.3 Approaches to Managing Organisational Change
The major approaches to managing organisational change are Lewin’s three-step model, Kotter’s
eight-step plan, and action research.
Lewin’s Three-Step Model
Kurt Lewin states that any organisational change goes through three steps, viz., unfreezing,
movement, and refreezing.
1. Unfreezing
The status quo or the present situation is well-established in the system and in the minds of the
employees. That is, the present condition is in a frozen state. To incorporate a change, the frozen
condition must be unfrozen, that is, it is necessary to change the minds of the employees from
a habituated pattern to the new pattern. For unfreezing the status quo, driving forces are used
to drive away the resistance to change and at the same time the restraining forces must also be
reduced to adapt the change.
For unfreezing the status quo, organisations offer financial and non-financial incentives and
counseling to their employees which make them move towards the required change.
2. Movement
When the driving forces are increased and the restraining forces are decreased, it results in
movement of the frozen state. Gradually, employees begin to accept the change and move
towards it.
3. Refreezing
When the movement towards the change is complete, the new change pattern must be refrozen
or consolidated so that employees permanently adapt to the new changes. Otherwise, there
will be a danger of people reverting to the old ways of doing things. To achieve refreezing,
organisations revise the employees’ salaries and make new rules and regulations to put the new
changes on the right track.
Fig. 3 Lewin’s Three-Step Change Model
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Fig. 4 Unfreezing the Status Quo

Kotter’s Eight-Step Plan
John Kotter pointed out certain mistakes committed by managers while implementing Lewin’s
three-step change model. He suggested an eight-step plan to rectify those mistakes. He expanded
Lewin’s unfreezing step into the first four steps in his model. The next three steps reflect Lewin’s
second step ‘movement’, and the final step is equivalent to Lewin’s final step ‘refreezing’.
Fig. 5 Kotter’s Eight-Step Plan for Implementing Change
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Action Research
This method is similar to the scientific research methodology in which the change is brought into
an organisation by following five steps -- diagnosis, analysis, feedback, action, and evaluation.
1. Diagnosis
The outside consultant or change agent who conducts the action research process, first finds out
the nature of the problem or the changes needed to be made. Then he collects relevant data from
company records, or by questioning the employees.
2. Analysis
The change agent analyses the collected data and finds out any patterns, problem areas, and
possible actions to be taken for implementing the required change.
3. Feedback
The change agent shares his findings with the employees and engages them to participate in
finding out what is to be done and what action plans must be carried out to solve the problem or
to implement the necessary changes in the organisation.
4. Action
From the various alternative action plans generated by the change agent and the employees
together, the best action plan is selected and is implemented to solve the problem or to bring in
the necessary change.
5. Evaluation
Evaluation is done to find whether the action taken solved the problem or brought in the required
change successfully.
Action research process is undertaken objectively since it is carried out by an outside consultant
or change agent. Also, this method greatly reduces the resistance from the employees concerned
for bringing in any change since the employees are also engaged in the change process.
The global consulting firm, McKinsey & Company, conducted a survey

DID of about 3,200 executives from large-scale organisations across the
YOU
globe in 2018 and found that only 1 in 3 organisational change efforts
KNOW
succeeded. The reason, it concluded, for the low rate of success is:
essentially, changing human behaviour is the most difficult part of
organisational change.
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11) According to Lewin’s three-step model, ____________________ forces must be

reduced for unfreezing the status quo.
a) Driving
b) Stimulating
c) Encouraging
d) Restraining
12) According to Lewin’s three-step model, ____________________ forces must be

increased for unfreezing the status quo.
a) Restraining
b) Hindering
c) Driving
d) Obstructing
13) When the driving forces are increased and the restraining forces are decreased, it
results in ___________________________ of the frozen state.
a) Consolidation
b) Movement
c) Solidification
d) Freezing
14) In Kotter’s Eight-Step Plan, the second step of creating the guiding coalition describes
creating a _____________________ group with power to lead the change.
a) Cross functional
b) Cross cultural
c) Cross dressing
d) Crossroads
15) Since action research is carried out by an outside consultant or change agent, it is
undertaken __________________.
a) Individually
b) Personally
c) Subjectively
d) Objectively
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4.2.4 Techniques of Organisational Development
Organization development is a response to change, a complex

educational strategy intended to change the beliefs, attitudes and
structure of organisation so that they can better adapt to new
technologies, markets and challenges. -- Warren Bennis
Organisational development is carried out at three levels – individual, group, and organisational
levels by using various techniques.
Individual Level Techniques:
• Counselling and coaching

• Sensitivity training
• Survey feedback
Group Level Techniques:
• Formation of teams
• Process consultation
• Inter-group development
Organisational Level Techniques:
• Technological changes
• Goal setting
• Quality of work-life programs
These techniques are explained below:

Individual Level Techniques
Three kinds of individual level techniques are discussed which influence on individual level.
Counselling and Coaching
Counselling is offered to those employees to solve the issues of individuals with respect to
their work-related stress, career, interpersonal problems, family problems, etc.
Coaching or training is provided to the employees with the aim of enhancing their skills
and abilities in order to improve their performance.
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Sensitivity Training
In this method, employees are free to express their feelings, sensitive issues with others in the
training group and discuss them openly. It tries to solve sensitive issues, interpersonal problems
through open and fair communication with one another so that sensitive issues are resolved
amicably.
Survey Feedback
The employees are asked questions by an external consultant about their views, feelings,
opinions, attitudes toward their organisation, job, working conditions, organisational systems,
communication network, interpersonal relationships, etc. Based on their responses, the
corresponding action plans are undertaken for the development of the organisation on those
lines.
Group Level Techniques
Three kinds of group level techniques are discussed which influence on group level.
Formation of Teams
Individuals with different kinds of expertise are selected and formed teams with them for
undertaking various activities such as quality appraisal, performance evaluation, organisational
restructuring, business process reengineering, process analysis, goal setting, etc.
Process Consultation
This technique is similar to action research in which an outside consultant is employed, and he
studies the status quo of the various processes in consultation with the affected employees in
each department and identifies the problem areas. He then discusses with the employees about
various alternatives to modify the existing processes, or to introduce new processes, if required
to improve performance.
Inter-Group Development
Various groups in a department participate in the process of solving a particular problem which
affects all of them. This method develops the overall efficiency of all employees. Another
advantage is that they share their feelings, attitudes, views and opinions on various aspects of
the problem, which leads them towards understanding one another.
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Organisational Level Techniques
Three kinds of organisational level techniques are discussed which influence the entire
organisation.
Technological Changes
As technology is affecting the manufacturing, purchasing, human resources, finance, and

marketing fields, the total organisation needs to be transformed to accommodate the new
technologies.
Goal Setting
The overall objectives are set by top management and based on them; individual goals are set in
each department for a specified period. At the end of the period, the achievement of goals by the
individual concerned is appraised, and new goals are set for the forthcoming period. This
process is known as management by objectives (MBO).
Quality of Work Life (QWL) Programmes
These programmes aim at creating a balance between work life and personal life of employees.
They focus on improving working conditions and creating safe and healthy working environments,
provision of social welfare programmes, equitable rewards, etc., to employees throughout
the organisation.
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16) ______________________ is offered to those employees to solve the issues of

individuals with respect to their work-related stress, career, interpersonal problems, family
problems, etc.
a) Counseling
b) Coaching
c) Goal setting
d) Process consultation
17) The organisational development technique where the employees are asked questions
by an external change agent or consultant about their views, feelings, opinions, attitudes
toward their organisation are known as _________________.
a) Counseling
b) Survey feedback
c) Goal setting
d) Intergroup development
18) When an outside consultant studies various processes in consultation with the
affected employees, identifies the problem areas, and suggests modifications, then the
OD technique is called __________________.
a) Coaching
b) Goal setting
c) Process consultation
19) The OD technique in which various groups in a department participate in the process
for solving a particular problem which affects all of them is called __________________.
a) Survey feedback
b) Process consultation
c) Counselling
20) The process of setting individual goals for a specific period and then appraising the
achievement of those goals at the end of that period is known as __________________
a) Management by objectives
b) Process consultation
c) Quality of work-life programme
d) Individual counselling
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Summary
Both the external forces (competitive pressures, customer pressures, economic forces,
governmental forces, political forces, and technological forces), and internal forces (low
performance, low satisfaction, new mission, new leadership, and conflict) influence the
functioning of organisations.
Employees resist organisational change due to several factors such as economic factors,
fear of unknown, habit, job security, and selective information processing.
Lewin’s three-step model states that any organisational change goes through three steps,
viz., unfreezing, movement, and refreezing.
John Kotter expands Lewin’s three-step model into an eight-step plan. Lewin’s unfreezing
step is expanded into the first four steps of Kotter’s plan; the next three steps reflect Lewin’s
second step ‘movement’, and final step is equivalent to Lewin’s final step ‘refreezing’.
Action research method brings change into an organisation by following five steps --
diagnosis, analysis, feedback, action, and evaluation.
The techniques of organisational development are implemented at three levels, viz.,

individual, group, and organisational levels.
Terminal Questions
1. Explain the forces that determine an organisation’s readiness for change.
2. Describe the reasons for resisting the change by individuals working in the organisation.
3. Discuss briefly the various models used for bringing in the required change in an
organisation.
4. Explain in brief the individual, group, and organisational level techniques applied for the
organisational development.
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Answer Keys
1 d
2 c
3 b
4 a
5 d
6 a
7 b
8 c
9 d
10 a
11 d
12 c
13 b
14 a
15 d
16 a
17 b
18 c
19 d
20 a
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Activity
Activity Type: Online & Offline
Description:
1. Tabulate the various models used for bringing in the required change in an organisation
and compare.
2. Select an organisation with work-life balance rating of 4 and above, and identify the
programmes implemented by it to achieve work-life balance for its employees.
Glossary
Intergroup development: A technique of organisational development in which various

groups in a department participate in the process of solving a particular problem which
affects all of them.
Management by objectives: The process of setting individual goals for a specific period
and then appraising the achievement of those goals at the end of that period.
Process consultation: A technique of organisational development where an outside

consultant studies various processes in consultation with the affected employees,
identifies the problem areas, and suggests modifications.
Refreezing: Process of consolidating the employees’ new behavioural changes so that

employees permanently adapt to the new changes in an organisation.
Unfreezing: Process of changing the minds of the employees from a habituated pattern
to the new pattern in an organisation.
BIBLIOGRAPHY
External Resources
Pearson.
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CDOE
Bhushan, U. (2012). Introduction to Business Communication (1st ed.). Jaico Pub-

lishing House.
e-References

https://www.managementstudyguide.com/determining-forces-of-organizational-change.
htm
Management (1st ed.) Retrieved from https://tyonote.com/resistance_to_change/
Organisational Change and Stress Management (1st ed.) Retrieved from

https://hmmcollege.ac.in/uploads/Kotters_model_on_organizational_change-Ste-
phen_P_Robbins_Timothy_A_Judge.pdf
Principles of Management and Organisational Behaviour (1st ed.) Retrieved from

https://www.wisdomjobs.com/e-university/principles-of-management-and-organisation-
al-behaviour-tutorial-366/definition-of-organization-development-od-12910.html#:~:tex-
t=According%20to%20Cummings%20and%20Worly,for%20improving%20an%20orga-
nization’s%20effectiveness.%22
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Video Links
Topic Link
Resistance to Change https://www.youtube.com/watch?v=Vpxy3gp7j7U
Lewin’s Change
https://www.youtube.com/watch?v=uhrbO7lrHro&t=8s
Management Model
Kotter’s 8-Step
Change Management https://www.youtube.com/watch?v=r2WqrOmESTM
Model
Organizational Devel-
opment Intervention https://www.youtube.com/watch?v=qQJ1HNEMpi4
Techniques
Image Credits
Fig. 1
https://courses.lumenlearning.com/wm-organizationalbehavior/unit/forces-of-change/
Fig. 2
https://slidetodoc.com/unit-10-organizational-culture-and-change-unit-10-2/
Fig. 3
https://courses.lumenlearning.com/wm-organizationalbehavior/unit/mod-
els-of-change-management/
Fig. 4
https://hmmcollege.ac.in/uploads/Kotters_model_on_organizational_change-Ste-
phen_P_Robbins_Timothy_A_Judge.pdf
Fig. 5
https://www.pinterest.com/pin/388435536590334189/
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Keywords
Inter-Group Development Management by objectives

Process Consultation Quality of Work Life
Refreezing Resistance to Change
Sensitivity Training Survey Feedback
Unfreezing
Integrated Professional English
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CDOE

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Instructional Objectives: These are behavioural objectives that describe intended

Self-Assessment Questions: These include a set of multiple-choice questions to be

Bibliography: This is a list of books and articles written by a particular author on a

KL Deemed to be University-CDOE has full copyright over this educational material. No

He has been a member of Ph.D. Curriculum Review Committee at Haramaya University,

Principles of Management and Organisational Behaviour

Principles of Management & Organisational Behaviour

Module 1: Introduction To Organisational Behaviour

Introduction to Organisational Behaviour: Evolution of management thought, five functions of

Module 2: Foundations of Individual Behaviour

Foundations of Individual Behaviour: Personality- Personality determinants; Personality traits:

Principles of Management and Organisational Behaviour

Module 3: Foundations of Group Behaviour

Foundations of Group Behaviour: Groups – Nature of groups; Types of groups; Stages of

Module 4: Organisational Culture and Change Management

Principles of Management and Organisational Behaviour

Principles of Management & Organisational Behaviour

Principles of Management and Organisational Behaviour

INTRODUCTION TO ORGANISATIONAL BEHAVIOUR

Principles of Management and Organisational Behaviour

Unit Table of Contents

Principles of Management and Organisational Behaviour

In exploring of this unit, students will be able to:

2. Elaborate upon the evolution of management thought

3. List the various functions of management

At the end of the chapter, you are expected to:

2. State the functions of management

Principles of Management and Organisational Behaviour

1.1.1 Evolution of Management Thought

Principles of Management and Organisational Behaviour

1) The management of an organisation is said to be _______________ when it achieves

3)__________________ led to the development of several theories and practices of

(a) Complexity of organisations

4)__________________ led to the development of several theories and practices of

(a) Complexity of organisations

Principles of Management and Organisational Behaviour

Evolution of management thought may be divided into four stages:

1. Pre-scientific management period.

EVELUTION OF MANAGEMENT THOUGHT

PRE-SCIENTIFIC CLASSIC NEO - MODERN

Contributions Scientific Systems

Fig. 1: Evolution of Management Thought

Principles of Management and Organisational Behaviour

Pre-Scientific Management Period

As we discussed earlier, the industrial revolution resulted in several changes in technology,

Professor Charles Babbage (1729-1871, UK):

James Junior (UK 1796-1848) and Mathew Boulton (1770-1842, UK):

Robert Owens (1771-1858, UK)

Henry Towne (1844-1924, USA)

Principles of Management and Organisational Behaviour

Taylor’s Scientific Management

• No rule of thumb but science

Elements of Taylor’s Scientific Management

Scientific Task & Rate-setting (Work Study)

Scientific Task & Rate-Setting (Work Study)

Work study is comprised of:

Principles of Management and Organisational Behaviour

Planning the Task

Vocational Selection and Training

Frank and Lillian Gilbreth (1867-1924, USA)

Henry Gantt (1861-1819, USA)

Principles of Management and Organisational Behaviour

POM & OB by Dr. Ravi Avuldar

POM & OB by Dr. Ravi Avuldar