Chapter - 1

Introduction to Leadership
Leadership - Definitions:
Leadership is the process of influencing the activities of an individual or a group in efforts towards goal
achievement in a given situation.
Leadership is defined as “a social influence process in which the leader seeks the voluntary
participation of subordinates in an effort to reach organizational goals.
Leading versus Managing:
Leadership should be distinguished from management. A manager has formal authority by virtue of his or
her position or office. Leadership, by contrast, primarily deals with influence. A manager may or may not
be an effective leader. A leader's ability to influence others may be based on a variety of factors other than
his or her formal authority or position.
Broadly speaking, managers typically perform functions associated with:
i. Planning and budgeting
ii. Organizing and staffing
iii. Controlling and problem solving
iv. The management process reduces uncertainty and stabilizes an organization
v. Managers, implementing the vision and strategic plan
In contrast, the leadership process involves:
i. Setting the direction for the organization
ii. Aligning people with that direction through communication
iii. Motivating people to action, partly through empowerment and partly through basic need satisfaction
iv. Leaders deal with the interpersonal aspects of manager’s job
v. Leaders inspire others, provide emotional support, and try to get employees to rally around a
common goal
vi. Leaders also play a key role in creating a vision and strategic plan for an organization.
Exhibit 1: Differences between Leaders and Managers:
S.No. Leaders Managers
1. Innovate Administer
2. Develop Maintain
3. Inspire Control
4. Long-term view Short-term view
5. Ask what and why Ask how and when
6. Originate Initiate
7. Challenge the status quo Accept the status quo
8. Do the right things Do things right

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Source: Distinctions were taken from W.G. Bennis, On becoming a Leader (Reading MA: Addison Wesley,
1989).
Personal Characteristics of Leaders:
Leadership is an intangible quality and its effectiveness can best be judged by the behavior and attitudes of
the followers. Even though, personal backgrounds and personalities differ widely, some of the factors such
as education and soc-economic status are poor indicators of judgments of successful leaders. However, some
behavioral characteristics may be common to most of the successful and effective leaders. Some of these
characteristics are:
1. Ability to inspire others: This ability may be due to an internal charisma, which is an inborn trait
and may not be a learnable factor.
2. Problem solving skills: An effective leader has developed the patience and ability to look at the
problem from various angles and get down to the cause of the problem and tries to solve the problem
from its roots rather than the symptoms of the problem.
3. Emotional maturity: Emotional stability and maturity is a major ingredient for effective
leadership. It pertains to good adjustment to life, calm, cool and calculated reaction to undesirable
situations and obstacles and normal acceptance of success as well as failure, such leaders are self
confident, rational and are open hearted towards differences in opinions and opposing view points.
They generally have a happy family life and have a balanced outlook towards life and the world.
They are warm and sensitive and not vindictive in nature.
4. Ability to understand human behavior: A leader must understand the needs, desires and behavior
of their subordinates and show respect for such desires. He is emotionally supportive and is careful
enough to avoid ego-threatening behavior. He must give credit to subordinates when their efforts are
successful.
5. Verbal assertiveness: A leader must be an effective orator and must be confident of his views and
opinions. He must communicate his views honestly and in a straightforward manner without fear of
consequences.
6. Willingness to take risks: Routine work, no matter how well-done, never make a leader.
Successful leaders always charter the unknown. They must accept and seek new challenges.
However, the risks must be calculated ones and outcomes of actions be reasonably predicted. Should
these risks result in failure, a leader must take full blame and responsibility and not shift blame on
others, even though they may be operative factors. He must be willing to tolerate frustration and
defeat and learn from these failures.
7. Dedication to organizational goals: A leader must demonstrate his dedication and commitment to
the organization’s mission, goals and objectives by hard work and self sacrifice. He must make sure
that his followers fully understand the organizational objectives and are equally dedicated and
willing to work for these objectives.
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 8. Skill in the art of compromise: Setting differences is a vital part of leadership and genuine
differences must be solved by compromise and consensus. This will induce faith in the fairness of the
leader. He must be willing to give in where necessary and must be able to take criticism with grace.
However, he must not compromise for the sake of compromising or just smooth sailing only and
must be willing to take a stand on controversial issues and accept the consequences of his stand.
Role of Team Leader
Most teams will have a leader, and this is a very important position because he or she is responsible for the
management of the entire project. A leader is typically responsible for setting a base agenda, facilitating
meetings, and monitoring progress with communicating with members as needed.
Following are the typical role a team leader should follow:

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i. Coordinating x. Trust and faith
ii. Encouraging xi. Approachable
iii. Fair, supportive, and recognized xii. Open communication
iv. Cooperation xiii. Personal rapport
v. Selecting team members xiv. Delegate responsibility
vi. Reward system xv. Self-control
vii. Working climate xvi. Set an example
viii. Prevent overriding role xvii. Training and developmen
ix. Clear objective

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 CHAPTER TWO
LEADERSHIP THEORIES AND STYLES
Leadership style
A style of leadership is a “relatively enduring set of behaviors, which is a characteristic of the individual,
regardless of the situation
Autocratic or Dictatorial Leadership:
It is one in which the manager retains as much power and decision-making authority as possible. The
manager does not consult employees, nor are they allowed to give any input. Employees are expected to
obey orders without receiving any explanations. The motivation environment is produced by creating a
structured set of rewards and punishments.
Also, they structure the entire work situation in their own way and expect the workers to follow their orders
and tolerate no deviation from their orders. The subordinates are required to implement instructions of their
leaders without question. They are entirely dependent on their leader and the output suffers in the absence
of the leader.
This leadership style has been greatly criticized:
 Rely on threats and punishment to influence employees
 Do not trust employees
 Do not allow for employee input
 Effective supervision can be provided only through detailed orders and instructions
 Employees do not respond to any other leadership style
 There are high-volume production needs on a daily basis
 There is limited time in which to make a decision
 A manager’s power is challenged by an employee
 Employees become tense, fearful, or resentful
 Employees begin depending on their manager to make all their decisions weak employee morale,
high turnover and absenteeism and work
Democratic leadership or Participative leadership:
Here leaders try to share decision-making with others. Many of the early writers that looked to participative
and people-centered leadership, argued that it brought about greater satisfaction amongst followers
(subordinates).

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In this type of leadership, the subordinates are consulted and their feedback is taken into the decision
making process. The leader’s job is primarily of a moderator, even though s/he makes the final decision
and s/he alone is responsible for the results.
The democratic leadership style is also called the participative style as it encourages employees to be a part
of the decision making. The democratic manager keeps his or her employees informed about everything
that affects their work and shares decision making and problem solving responsibilities.
The management recognizes that the subordinates are equipped with talents and abilities and that they are
capable of bringing new ideas and new methodologies to work setting. Thus the group members are
encouraged to demonstrate initiative and creativity and take intelligent interest in setting plans and policies
and have maximum participation in decision-making.
This ensures better management-labor relations, higher morale and greater job satisfaction. This type of
leadership is especially effective when the workforce is experienced and dedicated and is able to work
independently with least directives, thereby developing a climate which is conducive to growth and
development of the organization as well as the individual personality.
This not only increases job satisfaction by involving employees or team members in what’s going on, but it
also helps to develop people’s skills. Employees and team members feel in control of their own destiny,
and so are motivated to work hard by more than just a financial reward. It can be most suitable where team
working is essential, and quality is more important than speed to market or productivity. Democratic
leadership can produce high quality and high quantity work for long periods of time. Many employees like
the trust they receive and respond with cooperation, team spirit, and high morale.
Laissez-faire leadership:
This French phrase means “leave it be” and is used to describe a leader who leaves his or her colleagues to
get on with their work. In this type of leadership, the leader is just a figure-head and does not give any
direction but delegates the authority to subordinates so that they must plan, motivate, control and
otherwise be responsible for their own actions. Most often, laissez-faire leadership works for teams in
which the individuals are very experienced and skilled self-starters.
The leader acts principally as a liaison between the group and the outside elements and supplies
necessary materials and information to group members. S/He lets the subordinates develop their own
techniques for accomplishing goals within the generalized organizational policies and objectives.

The leader participates very little and instead of leading and directing, s/he becomes just one of the
members. S/He does not attempt to intervene or regulate or control and there is complete group or
individual freedom in decision making. This type of leadership is highly effective when the group members
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are highly intelligent and are fully aware of their roles and responsibilities and have the knowledge and
skills to accomplish these tasks without direct supervision.
Bureaucratic leadership:
Bureaucratic leaders work "by the book." They follow rules carefully, and ensure that their staff follows
procedures exactly. This is a very appropriate style for work involving serious safety risks (such as
working with machinery, with toxic substances, or at dangerous heights) or where large sums of money are
involved (such as handling cash).
Attractive leadership:
Charisma is, literally, a gift of beauty or of God (Wright 1996: 194). Max Weber, more than anyone,
brought this idea into the realm of leadership. He used ‘charisma’ to talk about self-appointed leaders who
are followed by those in distress. Such leaders gain influence because they are seen as having special
talents or gifts that can help people escape the pain they are in.
Task-Oriented leadership:
Here leaders underline the achievement of concrete objectives. They look for high levels of productivity,
and ways to organize people and activities in order to meet those objectives.
They actively define the work and the roles required, put structures in place, plan, organize, and
monitor. However, because task-oriented leaders don't tend to think much about the well-being of their
teams, this approach can suffer many of the flaws of autocratic leadership, with difficulties in motivating
and retaining staff.
People-oriented leadership or relations-oriented leadership:
In this style, leaders look upon their followers as people - their needs, interests, problems,
development and so on. They are not simply units of production or means to an end.
This is the opposite of task-oriented leadership. With people-oriented leadership, leaders are totally
focused on organizing, supporting, and developing the people in their teams. It's a participative style,
and it tends to encourage good teamwork and creative collaboration. In practice, most leaders use both
task-oriented and people-oriented styles of leadership.
Theory X and Theory Y Leadership:
There are two basic classes of people: Those who want to lead and take responsibility, i.e., the leaders and
managers; and those who want to be directed and do not want to take responsibilities. On this basis,
McGregor (1960) classified leadership as either an authoritarian style (Theory X), or a more
egalitarian style (Theory Y).
Theory X:
Theory X assumes that:
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  Man is inherently lazy, dislikes work and avoids it whenever possible.
 As a result, leaders must use strong measures to control the behavior of subordinates and
properly control them so that they work towards organizational goals.
 Most human beings are incapable of self-direction and control, preferring to respond to direct
orders rather than assume responsibility for their own actions.
According to Theory X, management does not trust employees with important decisions. They are
altogether excluded from the decision making process. Management assumes complete responsibility for
organizing, planning, making important decisions, directing and motivating people. If management
does not act, employees will do little or nothing.
Theory Y:
The Theory Y style of leadership is based on Maslow's concept of self-actualization. It considers that:
 Work can be enjoyable.

 People will work hard and assume responsibility if they have the opportunity to satisfy their
personal needs while at the same time achieving organizational goals.

 People have a great deal more capability and potential for imagination and creativity than they
are given credit for.
 Given proper conditions, individuals will work hard to do a good job.
 An individual's performance is actually based on innate rather than external controls.
Management only has to ensure the appropriate working conditions to bring out all these abilities. With
the right kind of leadership, employees will not be inactive and resistive. On the contrary, management
can trust employees and assign responsibility for taking important decisions to lower levels. The overall
effect is to make work inherently satisfying to the employee.
Transactional leadership:
This style of leadership starts with the idea that team members agree to follow their leader totally
when they accept a job. The "transaction" is usually the organization paying the team members in
return for their effort and compliance.
Transactional leadership is really a type of management, not a true leadership style, because the focus
is on short-term tasks. It has serious limitations for knowledge-based or creative work; however it can
be effective in other situations. Transactional leadership, people are motivated by reward and
punishment. Social systems work best with a clear chain of command. When people have agreed to do a
job, a part of the deal is that they cede all authority to their manager. The prime purpose of a subordinate
is to do what their manager tells them to do.

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The transactional leader works through creating clear structures whereby it is clear what is required of
their subordinates, and the rewards that they get for following orders. Punishments are not always
mentioned, but they are also well-understood and formal systems of discipline are usually in place.
When the Transactional Leader allocates work to a subordinate, they are considered to be fully
responsible for it, whether or not they have the resources or capability to carry it out. When things go
wrong, then the subordinate is considered to be personally at fault, and is punished for their failure (just as
they are rewarded for succeeding).
Transformational leadership:
People with this leadership style are true leaders who inspire their teams constantly with a shared
vision of the future. While this leader's enthusiasm is often passed onto the team, he or she can need to be
supported by "detail people." That's why, in many organizations, both transactional and transformational
leadership is needed. The transactional leaders (or managers) ensure that routine work is done
reliably, while the transformational leaders look after initiatives that add new value
Transformational leadership, people will follow a person who inspires them. A person with vision and
passion can achieve great things. The way to get things done is by injecting enthusiasm and energy.
Working for a Transformational Leader can be a wonderful and uplifting experience. They put passion and
energy into everything. They care about you and want you to succeed. Transformational Leadership starts
with the development of a vision. The next step, which in fact never stops, is to constantly sell the vision.
Theories of Leadership:
Great man theory:
This assumption says that, leaders are born and not made. Great leaders will arise when there is a
great need. Early research on leadership was based on the study of people who were already great leaders.
These people were often from the aristocracy/upper class, as few from lower classes had the opportunity
to lead. This contributed to the notion that leadership had something to do with breeding.
The idea of the Great Man also strayed into the mythic domain, with notions that in times of need, a Great
Man would arise, almost by magic. This was easy to verify, by pointing to people such as Eisenhower and
Churchill, let alone those further back along the timeline, even to Jesus, Moses, Mohammed and the
Buddah.
Gender issues were not on the table when the 'Great Man' theory was proposed. Most leaders were male
and the thought of a Great Woman was generally in areas other than leadership.

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Trait Theory:
The Trait Theory rests on the traditional approach, which describes leadership in terms of certain personal
and special characteristics, which are not acquired, by knowledge and training but are considered,
inherited. This theory emphasizes that leaders are born and not made and that leadership is a function
of these inborn traits. Some these inborn traits are considered to be

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 Intelligence  maturity
 Understanding  need for self- actualization
 Perception  self-assurance
 high motivation  Understanding of interpersonal
 socio-economic status human relations.
 initiative

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Since all individuals do not have these qualities, only those who have them would be called as potential
leaders.
Behavioral Leadership Theory:
This theory studies leadership by looking at leaders in terms of what they “do”. This is in contrast to trait
theory, which seeks to explain leadership in terms of what the leaders “are”. Thus according to behavior
theory, leadership is shown by a person’s act more than by his traits. The leadership effectiveness is
determined in terms of leader-subordinate interaction and outcome.
There are two particular factors affecting the leadership dimension. These are:
I. Consideration: It refers to the extent to which there is a rapport between the leader and the
group, mutual warmth and trust, a concern for the need of the members of the work group, an
attitude that encourages participative management, two-way communication and respect for the
feedback of the followers.
II. Initiating structure: It refers to the extent to which a leader is task oriented and his ability and
concern in utilizing resources and personnel at optimum level. It involves creating a work
environment so that the work of the group is organized, coordinated, sequential and
organizationally relevant so that people know exactly what is to be done and how it is to be done.
Contingency Leadership Theory/Situational leadership theory
The life-cycle theory of leadership has been developed by Paul Hersey and Kenneth Blanchard. The
model focuses on the “maturity” of the followers as a contingency variable affecting the style of
leadership. The “maturity” of the subordinates can be defined as their ability and willingness to take
responsibility for directing their own behavior in relation to a given task. The level of such maturity
would determine the leader emphasis on task behaviors (giving guidance and direction) and relationship
behavior (providing socio-emotional support).
“Task behavior” can be defined as the extent to which the leader engages in spelling out the duties and
responsibilities of an individual or group. These behaviors include telling people what to do, how to do
it, when to do it, where to do it and who is to do it. Task behavior is characterized by one-way
communication from the leader to the follower and this communications is meant to direct the
subordinate to achieve his goal.
Relationship behavior is defined as the extent to which the leader engages in two-way or multi-way
communication. The behaviors include listening, facilitating and supportive behaviors.

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 CHAPTER THREE
OVERVIEW OF CHANGE MANAGEMENT
Basic Definitions
The term ‘change’ refers to any adjustment which occurs in the overall work environment of an
organization. It implies alterations of structural relationships and role of people in an organization.
Change management is a set of processes employed to ensure that significant changes are
implemented in a controlled and systematic manner.
One of the goals of change management is the alignment of people and culture with strategic shifts in
the organization, to overcome resistance to change in order to increase engagement and the
achievement of the organization’s goal for effective transformation.
Achieving sustainable change begins with a clear understanding of the current state of the
organization, followed by the implementation of appropriate and targeted strategies. The focus of
change management is on the outcome the change will produce – the NEW arrangements that must be
understood
A comprehensive change management strategy should lead to the desired objectives and create a sense of
ownership, enable sustained and measurable improvement and build capability to respond to future
change.
Forms of Change
Change has become the norm in most organizations.
There are two basic forms of change in organizations. These are:-
Planned Change:- is change resulting from a careful decisions to alter the organization. Examples?-
 Changes in Products
 Changes in Administrative Systems
 Changes in Organizational Size and Structure
 Introduction of New Technologies
 Advances in Information Processing and Communication
Unplanned Change:- is obligatory on the organization and is often unforeseen. Changes in the economy
are some of the examples of unplanned change.
Examples:-
 Changing Employee Demographics
 Performance Gaps
 Government Regulation
Forces of Change
Forces of change in the organization come from external and internal.
 External Forces: - are forces arising from outside the company. These are

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Globalization:- Globalizing an organization means re-thinking the most efficient ways to use
resources, disseminate, and gather information and develop people. It requires not only structural
changes but also changes in the minds of employees.
Workforce Diversity(mixiture): - Managing diversity effectively requires that organizations help
employees view differences as valuable assets. Successfully managing workforce diversity means
enabling all workers including physically and mentally disabled employees to reach their potential.
Technological Change: - Rapid technological innovation is another for change in organizations, and
those who fail to keep pace can quickly fall behind.
Managing Ethical Behavior: - The need to manage ethical behavior has brought about several changes
in organizations. Most center on the idea that an organization must create a culture that encourages ethical
behavior.
 Internal Forces: - Pressures for change that originate inside the organization are generally
recognizable in the form of signals indicating that something needs to be altered.
A crisis also may stimulate change in an organization. Strikes or walkouts may lead management to
change the wage structure.
Changes in employee expectations also can trigger change in organization.
Changes in the work climate at an organization can also stimulate change.
Change in the organizations is inevitable, but change is a process that can be managed. The scope of
change can vary from small to quantum.
Understanding and Managing Fight to Change
Resistance to change
Organizations face strong resistance to change. People are afraid of the unknown, many think things are
fine the way they are and don’t understand the need for change.
Managers are taught to manage processes and resources effectively. Change however requires the
‘management’ of people’s anxiety and confusion, or conversely their enjoyment and engagement.
These are emotions that most managers find difficult to deal with or address. Managing the change
process and transition emotions is fundamental to the success of a change oriented.
Many people are naturally negative about change, many doubt there are effective means to accomplish
major organizational change. Often there are conflicting goals within the organization, for example,
increasing resources to accomplish goals yet cutting costs to remain viable. Organizational change often
goes against the very values held dear by people, that is, the change may go against how they believe
things should be done or diminish ownership of ‘how we do things around here’.
Fight is a natural defense mechanism for those ‘losing’ something. The closer we are to something or
someone, the greater the grief or loss. Reasons for resisting change are varied. Some of the major reasons
for resisting change as follow:

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 Fear of the Unknown: - Change often brings with it substantial uncertainty.
Fear of Loss: When a change is impending some employees may fear losing their jobs
particularly, when an advanced technology like robotics is introduced. Employees also may fear
losing their status because of change.
Fear of Failure: - Some employee fear changes because they fear their own failure. Introducing
computers in to the work place often arouses individuals. Self- doubts about their ability to
interact with the computer resistance can also stem from a fear that the change itself will not really
take place.
Disruption of inter personal relationships: - Employees may resist change that threatens to limit
meaning full interpersonal relationships on the job.
Personality conflicts:- A change agent who appears insensitive to employee concerns and feeling
may meet considerable resistance, because employees perceive that their needs are not being taken
in to account.
Politics: - Individuals or groups who hold power under the current Arrangement may be
threatened with losing these political Advantages in the advent (coming of an important) of
change.
MANAGING RESISTANCE TO CHANGE
One key to managing resistance is to plan for it and to be ready with a variety of strategies for using the
resistance as feedback and helping employees negotiate the transition. Three key strategies for managing
resistance to change are:-
o Communication: - about impending change (stopping change) is essential it employee are to
adjust effectively. The details of the change should be provided, but equally important is the
rationale behind the change. Providing accurate and timely information about the change can
help prevent unfounded fears and potentially damaging rumors from developing. Educating
employee on new work procedures is often helpful.
o Participation:- helps employees become involved in the change and establish a feeling of
ownership in the process when employees are allowed to participate they are more committed to
the change.
o Understanding and support: - providing empathy (understanding another person’s feeling) and
support to employee who has trouble dealing with the change.
o Facilitation and Support: In order to successfully implement the change, subordinates must be
indoctrinated in new relationships, taught new skills, helped to change attitudes, and how they will
be expected to operate under the new set-up the educational processes can be aided by training
classes, meetings and conferences. Emotional support and encouragement can help and employee

15
 deal with the anxiety that is a natural response to change. Employee who experience severe
reaction to change can benefit from talking with a counselor
o Negotiation: Negotiation with those resisting change and offering them incentives may be a
useful tactic for overcoming resistance to change. Examples are union agreement, promotion of
nominees of the union, increased economic benefits to employees, etc. In many cases, it is
possible to avoid major resistance through negotiation with those resisting the change.

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 Chapter 4
Types of change
Evolutionary vs. revolutionary Change
Organizational evolution is a normal progression where both the organization and its people attain a
higher level of awareness. It’s a form of evolution that involves developing the ability to think
systematically, to be trustworthy and transparent. It’s about decentralized and participative decision
making and the realization that all people – regardless of position – have an important, valuable role
to play.
Evolutionary or Incremental change
 Evolutionary change is incremental and takes place slowly, over time.
 Slow, gradual change often takes place to ensure the survival of the organization.
 It’s incremental in that it happens step by step, little by little.
 Organizations undergoing evolutionary change may have been prompted by outside pressure, as in
keeping up with technology or addressing the needs of stakeholders more effectively.
 In other cases, evolutionary change may be spurred by competition.
Revolutionary or transformational change
 By contrast, revolutionary(new) or transformational change is profound.
 It is complete overhaul, renovation and reconstruction.
 It is a fundamental change in power or organizational structures that takes place in a relatively
short period of time.
 From an organizational perspective, revolutionary change reshapes and realigns strategic goals
and often leads to radical breakthroughs in beliefs or behaviors.
 When an organization decides to engage in revolutionary change, radical transformations to
products or services often follow.
1. In efforts to stay ahead of the curve and reach evolution, outstanding organizations often pursue
revolutionary change.
2. Business Process Reengineering (BPR):
Business process re-engineering (BPR) is the analysis and design of workflows and processes within an
organization. The concept of reengineering trace its origin back to management theories developed as
early as the nineteenth century. The purpose of reengineering is to make all the process the best-in-class.
Frederick Taylor suggested in 1880s that managers to discover the best process for performing work and
reengineering them to optimize productivity. In early 1900s Henri Fayol originated the concept of
reengineering to conduct the undertaking toward its objectives by seeking to drive optimum advantage
from all available resources.

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According to Davenport a business process is a set of logically related tasks performed to achieve a
defined business outcome. Re-engineering is the basis for many recent developments in management.
Business process reengineering is the main way in which organizations become more efficient and
modernize. Business process reengineering transforms an organization in ways that directly affect
performance.
Business process re-engineering is an approach for redesigning the way work is done to better
support the organization's mission and reduce costs. Reengineering starts with a high-level assessment
of the organization's mission, strategic goals, and customer needs.
Definition and meaning of Business process re-engineering:
According to Hammer and Champy, Business process re-engineering is the fundamental rethinking and
radical redesign of business processes to achieve dramatic improvements in critical modern measures of
performance, such as cost, quality, service, and speed.
BPR is basically the fundamental re-thinking and radical re-design, made to an organization's existing
resources.
 Redesign refers to new way of doing a job.
 Process…group or collection of related tasks or activities which are performed in a logical
sequence to create an output that adds value to customer’.
 Dramatic… radical improvement in performance, achieving breakthrough or break points’’.
Business process re-engineering encompasses the envisioning of new work strategies, the actual process
design activity, and the implementation of the change in all its complex technological, human, and
organizational dimensions.
Business process re-engineering began as a technique to help organizations fundamentally rethink how
they do their work in order to dramatically improve customer service, cut operational costs, and become
world-class competitors.
A key stimulus for re-engineering has been the continuing development and deployment of sophisticated
information systems and networks. Leading organizations are becoming bolder in using this technology
to support innovative business processes, rather than refining current ways of doing work.
Re-engineering recognizes that an organization's business processes are usually fragmented into sub
processes and tasks that are carried out by several specialized functional areas within the organization.
Re-engineering maintains that optimizing the performance of sub processes can result in some benefits,
but cannot yield dramatic improvements if the process itself is fundamentally inefficient and outmoded.
For that reason, re-engineering focuses on re-designing the process as a whole in order to achieve the
greatest possible benefits to the organization and their customers. This drive for realizing dramatic
improvements by fundamentally re-thinking how the organization's work should be done distinguishes re-
engineering from process improvement efforts that focus on functional or incremental improvement.

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This idea, to unbiased review a company’s business processes, was rapidly adopted by a huge number of
firms, which were striving for renewed competitiveness, which they had lost due to the market entrance
of foreign competitors, their inability to satisfy customer needs, and their insufficient cost structure.
Even well-established management thinkers, such as Peter Drucker and Tom Peters were accepting and
advocating BPR as a new tool for (re-)achieving success in a dynamic world. However, the critics were
fast to claim that BPR was a way to dehumanize the work place, increase managerial control, and to
justify downsizing, i.e. major reductions of the work force, and a rebirth of “Taylorism” under a different
label.
The bases for Business Process Reengineering:
For being able to reap the achievable benefits fully on Business Process Reengineering the use of
information technology (IT) is conceived as a major contributing factor. While IT traditionally has been
used for supporting the existing business functions, i.e. it was used for increasing organizational
efficiency, it now plays a role as enabler of new organizational forms, and patterns of collaboration within
and between organizations.
For example, in banking sector, bank charges were automatically triggered on the computer when the
agreed limit for the account was exceeded. This is an application IT in money transaction.
BPR derives its existence from different disciplines, and four major areas can be identified as being
subjected to change in BPR viz;
i. Business Strategy
ii. Organization
iii. Technology
iv. People
i. Business Strategy: Business strategy is the primary driver of BPR initiatives and the other dimensions
are governed by strategy's encompassing role.
ii. Organization: The organization dimension reflects the structural elements of the company, such as
hierarchical levels, the composition of organizational units, and the distribution of work between them.
ii. Technology: Technology is concerned with the use of computer systems and other forms of
communication technology in the business. In BPR, information technology is generally considered as
playing a role as enabler of new forms of organizing and collaborating, rather than supporting existing
business functions.
iv. People: The people / human resources dimension deals with aspects such as education, training,
motivation and reward systems. If individuals are motivated and working hard, organizational
performance will get more effectiveness.

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BPR Process
BPR is an understanding of the processes to be redesigned.
There are numerous methodologies being proposed, but all share common elements. The most
common stage and steps are:
Stage one-The Planning Stage
Key issues in the planning stage:
 Understanding top level commitment
 Select process or support process for entry
 Establish BPR governance
 Planning
Stage Two-The Analysis and Interpretation Stage
The key issues under the second stage are:
 Identify customer need
 Bench marking
Stage Three-Redesigning the New Process
The key issues of the third stage
 Determine the size of the performance gaps
 Envisioning improvement goals
 Begin redesigning
 Looking opportunities for creative application of IT
 Fitness assessment of the alternatives
 Pilot testing
Stage Four: The Action Stage
 At this stage, implementing the new process design and installing new form of organization i.e.
the Business system diamond will be realized.

Business Process
Jobs and structure Values and Beliefs

Management and Measurement systems

20
 Implementation of BPR in Organizations:
The best way to map and improve the organization's procedures is to take a top down approach, and not
undertake a project in separation. That means:
Starting with mission statements that define the purpose of the organization and describe what sets it apart
from others in its sector or industry.
Producing vision statements which define where the organization is going, to provide a clear picture of
the desired future position.
.
Once these building blocks are in place, the BPR exercise can begin in cooperative.
Other kinds of Change:
The Relationship between BPR and other Management tools such as:
1. Kaizen
2. TQM(total quality management)
3. Just-in-time
Johansson provide a description of BPR relative to other process-oriented views, such as Total Quality
Management (TQM) and Just-in-time (JIT), and state:
"Business Process Reengineering, although a close relative, seeks radical rather than merely continuous
improvement. It escalates the efforts of JIT and TQM to make process orientation a strategic tool and a
core competence of the organization. BPR concentrates on core business processes, and uses the specific
techniques within the JIT and TQM ”toolboxes” as enablers, while broadening the process vision."
BPR and Kaizen
Kaizen: is a Japanese philosophy, which is concerned with continuous improvement in small steps,
standardization of each improvement, and gradual but unending rising of standards based on better
performance.
 In kaizen approach, every employee in the organization at every level, status or function will give
freedom to identify the problem of the organization to be solved.
 Some features of BPR, which are in kaizen are;

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 data based decision making,
 priority of quality over
profit,
 management of previous
processes,
 customer focus,
 Ongoing training,
 cross functional approach to
business management, and
 Standardization of results.
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Total Quality Management and Business Process Reengineering
are recognized as two potential concepts in doing business efficiently and effectively.
 Several common features exist between the two are :
 Their Focus on customer,
 Process orientation,
 Cross-functional approach, and
 Their stress on cultural changes, their top-down approach nature, an ongoing
improvement of processes, and involvement of employees at all levels.
BPR and TQM
 Davenport describes that the continuous improvement or Total Quality Management
(TQM) movement, when he states: "Today firms must seek not fractional, but
multiplicative levels of improvement – 10x rather than 10%."
 Total quality management (TQM) in the west known as ‘’Total quality control (TQC)’’
or ‘’company- wide quality control (CWQC) in Japan’’.


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 Chapter 5
Conflicts and Conflict Management
Nature of Conflict:
In the context of an organization, broad features of a conflict are as under:
a. Conflicts occur when individuals are not able to choose among the available alternative courses of
action.
b. Conflict between two individuals suggests that they have conflicting perceptions, values and goals.
c. Conflict is a dynamic process as it indicates a series of events. Each conflict is made up of a series of
joining conflict periods.
d. Conflict must be perceived by the parties to it. If no one is aware of a conflict, then it is generally
agreed that no conflict exists.
Types of Conflict:
I. Individual conflict: In this case, the individual is not in a position to take a decision about certain
matter. S/He faces difficulty to choose out of the alternative courses of action, which are either
unacceptable or uncertain or incomparable. The management can help the individual in such a situation
by providing him counseling service.
1. Intra-Individual Conflict: In an intra-individual conflict, the individual is in a state of conflict in her/his
mind as s/he is not able to take any decision in a given situation.
Intra-individual conflict arises within an individual member of the organization. Intra-individual conflict
generally arises because of in-congruency between individual goals and organizational goals and other
situations where there is widespread uncertainty and scarcity of acceptable alternatives.
Intra- personal conflicts arises due to role conflict and goal conflict discussed below:
A. Role conflict and disbelief: A role is a set of activities expected of a person holding a particular
position in a group or organization. When the communication of role expectations is distorted, role
ambiguity and role conflict may occur. If a person is not clear about her/his job duties, the resulting role
uncertainty can be stressful for her/him. S/He will lose his self-confidence and will draw less satisfaction
from the job. Role ambiguity arises if either the manager has not properly communicated the duties of the
subordinate or the subordinate has note properly understood the boss.
i. Intra-sender role conflict: This conflict arises when person is asked to do a job, which s/he is not capable
of doing or time and resources are not sufficient to do the job.
ii. Inter sender role conflict: Different role- set members may have conflicting expectations from a
particular member. For example, the boss asks the supervisor to exercise strict control over subordinates, but
subordinates want loose supervision.

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iii. Person- role conflict: This conflict occurs when a person is asked to a job, which is mismatched with
his own value system.
For instance a manger may be asked to get favors from public officials by bribing them, but his value system
does not permit him to do so.
iv. Inter –role conflict: Such conflict arises when an individual holds multiple and different roles. For
example, a worker spends overtime at the work at the order of the boss, and his family is dissatisfied as he is
not giving sufficient time to the family.
v. Role-overload: A common form of conflict is role –overload. This is a situation in which there are simply
too many role expectations being communicated to a person at a given time. There is too much to be done
and too little time to do it.
Role uncertainties and conflict can create tensions among individuals and affect their attitudes and behaviours
adversely. The Managers should try to minimize such situations by maintaining effective two-way
communications among all members of his role sets.
B. Goal Conflict: Intra –individual conflicts also include actual or perceived pressures from mismatched
goals or expectation of the following types:
i. Approach –approach conflict: Such a conflict arises when a person has to choose from two or more equally
attractive goals. He can choose only one goal at the cost of other.
For instance, a person has to choose between accepting a promotion in the present organization and taking a
desirable job with another organization.
ii. Avoidance-avoidance conflict: This conflict arises when a person has to choose between two alternatives
each with negative aspects. Both the alternatives are equally unattractive.
For instance, a person may dislike his present job but the alternative of resigning and looking for another job is
equally unattractive.
iii. Approach-avoidance conflict: In this type of conflict, an individual is faced with an alternative that has
both positive and negative consequences.
For example, a person may be offered a promotion carrying much higher pay but away from his home- town.
2. Inter Individual Conflict: In case of inter-individual conflict two persons are not able to reconcile their
views and hence there is a break-down of mechanism of decision making.
Inter –Individual conflict arises from differences between the choices made by different individuals in the
organization. Each individual has a separate acceptable alternative of action and different individuals prefer
different alternatives.

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Sources of Inter-personal Conflicts:
The sources of conflicts are found in some degree of actual or perceived divergence of interest. It may be
noted that people disagree over facts, goals, methods and values because they have different interests and
perceptions. The important factors which contribute to inter-personal conflicts are as follows:
A. Informational Factors: These exert their influence when various points of view have been developed on
the basis of different sets of facts. Because each of the participants has contact with a different set or has a
limited knowledge, they disagree.
B. Difference in Perceptions: The perceptual factors exert their influence when the persons have different
images of the same stimulus. Because of perception each will attend to and select from the information
available, those items which he thinks important. Each will interpret the information in a somewhat different
manner. The picture, which he gets from his own experience, is unique to him. Thus it is not surprising that the
same basic facts may produce distinctive perceptual pictures in the minds of different individuals.
C. Difference in Value Systems: Two persons may have misunderstanding between themselves because of
difference in their value systems and social backgrounds.
For instance, production manager may suggest lowering of product quality to increase profits but the marketing
manager may term it unethical.
D. Scarcity of resources: Inter- personal conflicts also arise when individuals compete for scarce resources.
For example, if three qualified employees compete for one higher vacancy, conflict may develop among them.
Similarly, availability of a common telephone facility to a number of executives may be a source of conflict
among them.
E. Divergent Roles: Role conflict is the result of divergent role expectations. It exists when the expectations
of a job are quite different and the individual cannot meet one expectation without rejecting the other. Such
situation arises when the roles are so conflicting that one does not know which set of expectations one should
follow in the given situation.
Inter-personal conflicts can be resolved through counseling, effective communication win-win negotiation and
transactional analysis.
II. Group Conflict: Conflicts or difference of opinions arises between the groups members are known as group
conflict. Some time different group members may also have conflicts between the groups concerned. A group
consists of two or more persons, who are in interaction with each other, have a well –defined structure of role
and status relations and have a system of values and norms of behavior for the smooth working of the group.

26
1. Intra-Group Conflict: Intra group conflict arises when differences over an issue crop up between the
members of the group. In case of Intra-group the process of conflict can be explained as breakdown of
decision-making mechanism between the members of the same group.
Intra-group conflict may arise in three ways:
a. When the group faces a novel problem.
b. When new values are imported from the social environment into the group.
c. When a persons extra group role comes into conflicts with his intra-group role.
2. Inter Group-Conflict: Conflicts between different groups in the organization are known as inter group
conflicts. Inter –group behavior occurs whenever individuals belonging to one group interact, collectively or
individually with another group or its members in terms of their reference group identification
A conflict between production team and marketing team is an example of Inter-group conflict. Inter group
conflicts may arise based on the following reasons.
A. Joint Decision-making: The need for joint decision-making is felt because of the following factors.
i. Sharing of resources: The resources at the disposal of the organization are limited and they have to be
shared by different groups. Each group wants a greater share of the limited resources.
ii. Inter-dependency: Interdependency of various departments requires decisions regarding sharing of
resources and fixing of schedules for the completion of various jobs.
For instance, there may be misunderstanding between marketing and production departments if the latter is not
able to complete an order as desired by the former.
iii. Need for coordination: Coordination at the higher levels requires joint decision-making by various
departmental heads. If they are not able to pool their knowledge and resources effectively, conflicts are likely
to arise.
B. Difference in goals: Various groups differ in their views about organizational goals because of the
following reasons:
i. Differences in sub-goals: There are differences in sub-goals of various groups. If a person is a member of
various groups, he may face role conflict because goals of the organization are different from sub-goals of
various groups.
ii. Socio-cultural differences: Individuals who are members of different groups differ in family background,
culture, education, training, etc; professionals look at the organizational goals from their respective
professional point of view. Thus, conflicts over goals arise.

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iii. Division of work: Division of work and departmentation may lead to certain groups, which might
internalize their group goals. They may not be able to relate their group goals to the organizational goals,
which might be highly non-operational or vague.
iv. Pattern of interaction: Pattern of interaction among the group members may lead to differentiations of
goals.
For example, if people in a group do not interact frequently, there is bound to be differentiation of goals. But if
the group members interact quite often they are likely to share some goals with the other groups.
C. Difference in Perceptions: Difference in perceptions of people arises because of the following factors:
i. When people differ in their views about goals, perceptions are bound to be different.
ii. Perceptions of people may differ because of differences in background factors such as family background,
culture, education, training etc. The value system also influences the perception of people to a great extent.
iii. People may have different perceptions or if the flow of information is not smooth. Lack or inadequacy of
information with some people is bound to affect their perceptions.
D. Task Haziness: Inter-group conflict is likely to arise when it is not certain which group is responsible for
certain activities. This lack of clarity over job responsibilities is called task ambiguity, and it frequently leads
to hostility between work groups.
E. Differences in work orientation: The ways in which employees handle their work and deal with others
vary widely across functional departments of an organization.
F. Organizational reward system: Inter-group conflicts also arise because of the way in which an
organization monitors group performance and distribute rewards-economic and non- economic. If the reward
system allows only one group to accomplish its goals at the expense of other groups, there are bound to be
conflicts and even power struggle among the groups.
Conflict Management Techniques:

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I. Conflict Resolution Techniques:
 Problem Solving: Face to face meeting of the conflicting parties for the purpose of identifying the
problem and resolving it through open discussion.
 Super-ordinate Goals: Creating a shared goal that cannot be attained without the cooperation of each
of the conflicting parties.
 Expansion of Resources: when a conflict is caused by the scarcity of resources-say money, promotion
opportunities, office space expansion of the resource can create a win-win solution.
 Avoidance: Withdrawal from, or suppression of, the conflict.
 Smoothing: Playing down differences while emphasizing common interests between the conflicting
parties.
 Compromise: Each party to the conflict gives up something of value.
 Authoritative Command: Management uses its formal authority to resolve the conflict and then
communicates its desires to the parties involved.
 Altering the human variable: Using behavioral change techniques such as human relations
training to alter attitudes and behaviors that cause conflict.
 Altering the structural variables: Changing the formal organization structure and the interaction
patterns of conflicting parties through job redesign, transfers,
creation of coordinating positions, and the like

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Negotiation
Negotiation is a process in which two or more parties exchange goods or services and attempt to agree
on the exchange rate for them. Negotiation basically involves bargaining. The dictionary meaning of
negotiation is bargaining for the purpose of mutual agreement. It may be seen that negotiation is an
attempt to settle differences among parties; it is not necessary that the differences are actually settle. For
example, many times, negotiations between management and workers do not bring desired outcomes,
and the issues on which they have differences are settled by other mechanisms. In negotiation, two
types of bargaining may be involved: distributed and integrative.
i. Distributive Bargaining: Distributive bargaining operates under zero-sum conditions, that is,
any gain to one party is at the expense of the other party. Normally, in a distributive
bargaining, various economic issues are involved, such as wages/salaries, bonus, and other
financial matters. While bargaining with each other, each party has a target point that defines
what it would like to achieve. Each party also has a resistance point which marks the lowest
outcome that is acceptable – the point below which the parties would break off negotiation
rather than accepting a less-favorable settlement. The area between these two points makes
up each one’s aspiration range. While engaged in negotiation, each party’s tactics is to get its
opponent to agree to one’s target point or to get as close to it as possible. Depending on the
relative bargaining power to each party, settlement is arrived at between target and
resistance points.
ii. Integrative Bargaining: In contrast to distributive bargaining, integrative bargaining operates
under the assumption that there exist one or more settlements that cac create a win-win
situation. In terms of organizational behavior, integrative bargaining is preferable to distributive
bargaining because the former builds long-term relationship and facilitates working together in
the future. It bonds negotiators and allows them to leave the negotiating table with a feeling that
they have achieved a victory. In integrative bargaining, and attempt is made to understand the
viewpoint of each party empathetically. With the result, many issues which are perceived to be
contentions and are not likely to be resolved amicably do not appear to be so. However,
integrative bargaining becomes effective when some conditions exist. These are: parties must
have sensitivity to each other’s needs, have ability to trust others, and maintain flexibility.

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