MODULE 1

What Is Organizational Behavior (OB)?

Organizational behavior is the academic study of how people interact

within groups. The principles of the study of organizational behavior are
applied primarily in attempts to make businesses operate more
effectively.
The study of organizational behavior includes areas of research
dedicated to improving job performance, increasing job satisfaction,
promoting innovation, and encouraging leadership. Each has its own
recommended actions, such as reorganizing groups, modifying
compensation structures, or changing methods of performance
evaluation.

The Hawthorne Effect

—which describes the way test subjects' behavior may change when they
know they are being observed—is the best-known study of organizational
behavior. Researchers are taught to consider whether or not (and to what
degree) the Hawthorne Effect may skew their findings on human
behavior.

Organizational behavior was not fully recognized by the American

Psychological Association as a field of academic study until the
1970s.2 However, the Hawthorne research is credited for validating
organizational behavior as a legitimate field of study, and it's the
foundation of the human resources (HR) profession as we now know it.

The leaders of the Hawthorne study had a couple of radical notions. They
thought they could use the techniques of scientific observation to
increase an employee's amount and quality of work, and they did not
look at workers as interchangeable resources. Workers, they thought,
were unique in terms of their psychology and potential fit within a
company.

Over the following years, the concept of organizational behavior

widened. Beginning with World War II, researchers began focusing on
logistics and management science. Studies by the Carnegie School in the
1950s and 1960s solidified these rationalist approaches to decision-
making.3
Today, those and other studies have evolved into modern theories of
business structure and decision-making. The new frontiers of
organizational behavior are the cultural components of organizations,
such as how race, class, and gender roles affect group building and
productivity. These studies take into account how identity and
background inform decision-making.

Organizational behavior theories inform the real-world evaluation and

management of groups of people. There are several components:

• Personality plays a large role in the way a person interacts with groups
and produces work. Understanding a candidate's personality, either
through tests or through conversation, helps determine whether they are
a good fit for an organization.

• Leadership—what it looks like and where it comes from—is a rich topic

of debate and study within the field of organizational behavior.
Leadership can be broad, focused, centralized or de-centralized,
decision-oriented, intrinsic in a person’s personality, or simply a result of
a position of authority.

• Power, authority, and politics all operate inter-dependently in a

workplace. Understanding the appropriate ways these elements are
exhibited and used, as agreed upon by workplace rules and ethical
guidelines, are key components to running a cohesive business.

Why Is Organizational Behavior Important?

Organizational behavior describes how people interact with one another

inside of an organization, such as a business. These interactions
subsequently influence how the organization itself behaves and how well
it performs. For businesses, organizational behavior is used to
streamline efficiency, improve productivity, and spark innovation to give
firms a competitive edge.

What Are the 4 Elements of Organizational Behavior?

The four elements of organizational behavior are

people, structure, technology, and the external environment. By
understanding how these elements interact with one another,
improvements can be made. While some factors are more easily
controlled by the organization—such as its structure or people hired—it
still must be able to respond to external factors and changes in the
economic environment.

What Are the 3 Levels of Organizational Behavior?

The first is the individual level, which involves organizational psychology

and understanding human behavior and incentives. The second level is
groups, which involves social psychology and sociological insights into
human interaction and group dynamics. The top-level is the
organizational level, where organization theory and sociology come into
play to undertake systems-level analyses and the study of how firms
engage with one another in the marketplace.

What Are Some Common Problems that Organizational

Behavior Tries to Solve?

Organizational behavior can be used by managers and consultants to

improve the performance of an organization and to address certain key
issues that commonly arise. These may include a lack of direction or
strategic vision for a company, difficulty getting employees on board
with that vision, pacifying workplace conflict or creating a more
amenable work environment, issues with training employees, poor
communication or feedback, and so on.

NATURE AND SCOPE (FEATURES) OF ORGANIZATIONAL

BEHAVIOUR

Organizational behaviour has emerged as a separate field of study. The

nature it has acquired is identified as follows :

1. A Separate Field of Study and not a Discipline Only

By definition, a discipline is an accepted science that is based on a

theoretical foundation. But, O.B. has a multi-interdisciplinary
orientation and is, thus, not based on a specific theoretical background.
Therefore, it is better reasonable to call O.B. a separate field of study
rather than a discipline only.
2. An Interdisciplinary Approach

Organizational behaviour is essentially an interdisciplinary approach to

study human behaviour at work. It tries to integrate the relevant
knowledge drawn from related disciplines like psychology, sociology and
anthropology to make them applicable for studying and analysing
organizational behaviour.

3. An Applied Science

The very nature of O.B. is applied. What O.B. basically does is the
application of various researches to solve the organizational problems
related to human behaviour. The basic line of difference between pure
science and O.B. is that while the former concentrates of fundamental
researches, the latter concentrates on applied researches. O.B. involves
both applied research and its application in organizational analysis.
Hence, O.B. can be called both science as well as art.

4. A Normative Science

Organizational Behaviour is a normative science also. While the positive

science discusses only cause effect relationship, O.B. prescribes how the
findings of applied researches can be applied to socially accepted
organizational goals. Thus, O.B. deals with what is accepted by
individuals and society engaged in an organization. Yes, it is not that
O.B. is not normative at all. In fact, O.B. is normative as well that is well
underscored by the proliferation of management theories.

5. A Humanistic and Optimistic Approach

Organizational Behaviour applies humanistic approach towards people

working in the organization. It, deals with the thinking and feeling of
human beings. O.B. is based on the belief that people have an innate
desire to be independent, creative and productive. It also realizes that
people working in the organization can and will actualize these
potentials if they are given proper conditions and environment.
Environment affects performance or workers working in an
organization.

6. A Total System Approach

The system approach is one that integrates all the variables, affecting
organizational functioning. The systems approach has been developed by
the behavioural scientists to analyse human behaviour in view of his/her
socio-psychological framework. Man's socio-psychological framework
makes man a complex one and the systems approach tries to study
his/her complexity and find solution to it.

Scope of Organizational Behaviour

The three internal organizational elements viz., people, technology and

structure and the fourth element, i.e., external social systems may be
taken as the scope of O.B.

1. People

The people constitute the internal social system of the organization. They
consist of individuals and groups. Groups may be large or small, formal
or informal, official or unofficial. They are dynamic. They form, change
and disband. Human organization changes everyday. Today, it is not the
same as it was yesterday. It may change further in the coming days.
People are living, thinking and feeling being who created the
organization and try to achieve the objectives and goals. Thus,
organizations exist to serve the people and not the people exist to serve
the organization.

2. Structure

Structure defines the sole relationship of people in an organization.

Different people in an organization are given different roles and they
have certain relationship with others. It leads to division of labour so
that people can perform their duties or work to accomplish the
organizational goal. Thus, everybody cannot be an accountant or a clerk.
Work is complex and different duties are to be performed by different
people. Some may be accountant, others may be managers, clerks, peons
or workers. All are so related to each other to accomplish the goal in a co-
ordinated manner. Thus, structure relates to power and duties. One has
the authority and others have a duty to obey him.

3. Technology
Technology imparts the physical and economic conditions within which
people work. With their bare hands people can do nothing so they are
given assistance of buildings, machines, tools, processes and resources.
The nature of technology depends very much on the nature of the
organization and influences the work or working conditions. Thus,
technology brings effectiveness and at the same restricts people in
various ways.

4. Social System

Social system provides external environment which the organization

operates. A single organization cannot exist also. It is a part of the whole.
One organization cannot give everything and therefore, there are many
other organizations. All these organizations influence each other. It
influences the attitudes of people, their working conditions and above all
provides competition for resources and power.

O.B. is the study of human behaviour at work in organizations.

Accordingly, the scope of O.B. includes the study of individuals, groups
and organization/structure. Let us briefly reflect on what aspects each of
these three cover.

Individuals

Organizations are the associations of individuals. Individuals differ in

many respects. The study of individuals, therefore, includes aspects such
as personality, perception, attitudes, values, job satisfaction, learning
and motivation.

Groups of Individuals

Groups include aspects such as group dynamics, group conflicts,

communication, leadership, power and politics and the like.

ELEMENTS OF ORGANIZATIONAL BEHAVIOR

The organization's base rests on management's philosophy, values,

vision and goals. This in turn drives the organizational culture which is
composed of the formal organization, informal organization and the
social environment. The culture determines the type of leadership,
communication and group dynamics within the organization. The
workers perceive this as the quality of work life which directs their
degree of motivation. The final outcome are performance, individual
satisfaction and personal growth and development. All these elements
combine to build the model or framework that the organization operates
from.

Organizational behavior is the study and application of knowledge about

how people, individuals and groups act within organizations. It does this
by taking a system approach. That is, it interprets people-organization
relationships in terms of the whole person, whole group, whole
organization and whole social system. Its purpose is to build better
relationships by achieving human objectives, organizational objectives
and social objectives.

Fig. 1.1: Organizational Structure.

There are five basic approaches to organizational behaviour :

1. Inter-Disciplinary Approach : Organizational behaviour is an

integration of all other social sciences and disciplines such as
psychology, sociology, organizational theories etc. They all are
interdependent and influence each other. Man is studied as a whole and
therefore, all disciplines concerning man are integrated.

2. Human Resources or Supportive App-roach : It is just opposed

to traditional approach where the employees were driven by the
managers. This approach is developmental and facilitative. It provides a
climate where a work can develop self-control, responsibilities and other
abilities and contribute to the organization to the limits of their
improved abilities.

3. Contingency Approach : Under traditional management, the

principles of management are presumed to the universal irrespective of
the situation and organization. But later researches show that there may
be few instances where certain principles are used in all circumstances
otherwise different treatment is required in different cases after
analysing the various situational variables carefully. It is also called
Situational Approach.

Fig. 1.2: System Approach Model.

4. System Approach : Organizations are social system. There are so

many variables in the system which are inter-related and
interdependent. Manager must think over the effects of an action on the
whole or a large part of the whole system before taking the action. Effects
may be positive or negative, so a cost-benefit-analysis is required before
an action is taken.

This approach gives the manages a way of looking at the organization as

a whole, whole group and the whole social system. Systems approach has
become an integral part of modern organizational theory. Organizations
are termed as complex systems comprising of interrelated and
interlocking systems. A general system model of organization as drawn
by Kast and Rosenzwerg (1996) is in the Fig. 1.2.

The public and Government have been included keeping in view the
relationship between organization and external environment. The other
subsystems are integral part of overall organizations.

5. Productivity Approach : Productivity means the numerical value

of the ratio of output to input. Higher the value of this ratio, greater is
the efficiency and effectiveness of the management. The traditional
concept of productivity was concerned with economic inputs and output
only. But now-a-days human and social inputs and outputs are equally
important. Productivity, a significant part of organizational behaviour
decisions, is recognised and discussed extensively. These decisions relate
to human, social and economic issues. For example, if better
organizational behaviour can reduce worker's turnover or the number of
absentees, a human output or benefit occurs.
As you can see from the definition above, organizational behavior
encompasses a wide range of topics, such as human behavior, change,
leadership, teams, etc.

The organization's base rests on management's philosophy, values,

vision and goals. This in turn drives the organizational culture which is
composed of the formal organization, informal organization and the
social environment. The culture determines the type of leadership,
communication and group dynamics within the organization. The
workers perceive this as the quality of work life which directs their
degree of motivation. The final outcome are performance, individual
satisfaction and personal growth and development. All these elements
combine to build the model or framework that the organization operates
from.

ORGANIZATIONAL STRUCTURE

The study of organizational structure includes aspects such as formation

of organizational structure, culture and change and development.

In nutshell, O.B. studies how organizations influence people or how

people influence organizations.

Need for Studying Organizational Behaviour

Organizational behaviour is the study of people at work in organizations.

And we study organizations because we spend our lives interacting with
them. If all the world is a stage, it is a stage filled with organizations.
Regardless of the part we play as a student, employee, manager or
customer, we play our roles/parts on an organizational stage. By acting
our parts, we influence organizations and organizations influence us. The
same underlines the need for studying O.B.

The study of organizational behaviour benefits us in several

ways:

• Firstly, the study O.B. helps us understand ourselves and others in a

better way. This helps greatly in improving our inter-personal relations
in the organizations. Friendly and cordial relations between employees
and management and also among the employees create a congenial work
environment in organizations.

• Secondly, the knowledge of O.B. helps the managers know individual

employees better and motivate employees to work for better results. It
helps managers apply appropriate motivational techniques in
accordance to the nature of individual employees who exhibit glaring
difference in many respects.

• Thirdly, one of the basic characteristics of O.B. is that it is human in

nature. So to say, O.B. tackles human problems humanly. It helps
understand the cause of the problem, predicts is future course of action
and controls its evil consequences. Thus, treating employees as human
beings enables the managers to maintain cordial industrial relations
which, in turn, creates peace and harmony in the organizations.

Fourthly, the most popular reason for studying O.B. is to learn how to
predict human behaviour and, then, apply it in some useful way to make
the organization more effective. Thus, knowledge of O.B. becomes a pre-
requirement for a person who is going to assume a managerial job and
succeed as a manager.

Finally, all organizations are run by man. It is man working in the

organizations who makes all the difference. Then, it implies that effective
utilization of people working in the organization guarantees success of
the organization. This is where O.B. comes into the picture. O.B. helps
managers how to efficiently manage human resources in the
organization. It enables manager to inspire and motivate employees
towards higher productivity and better results.

MODULE 2

Individual behaviour refers to the way in which an individual reacts or

behaves at his place of work. It can be defined as a combination of
reactions to internal and external stimuli. Individual behaviour defines
how a person will respond under distinct conditions and will express
different emotions such as happiness, rudeness, love, anger etc. It refers
to some concrete action by an individual. Study of individual behaviour
reveals the behaviour of human at the working environment. Behaviour
of an individual have a great influence on the performance of
organization. Positive behaviour will lead to enhance the productivity.
Whereas on another hand, negative behaviour will cause damages and
bring heavy losses for company.
Factors Influencing Individual Behaviour

Various factors affecting the individual behaviour is classified into

following categories: –

• Personal Factors

• Environmental Factors

• Organizational Factors

Personal Factors

Personal factors are of 2 types: Biographic and Learned Characteristics

Biographic Characteristics: Biographic characteristics are genetic

nature and are inherited by individual by their parents or forefathers.
These are gifted features that an individual possesses by birth. All of
these biographic characteristics are listed below: –

• Psychical Characteristics- Personal characteristics relates to skin,

complexion, vision, height, weight, size of nose etc. which influence the
performance of individual. A person with good physical characteristics
have an attractive personality, they dress well and behave gently in an
organization.

• Age- Age is an individual inherited characteristic that is determined by

date of birth. Young people are expected to be more efficient, energetic,
risk-taking, innovative and ambitious.

• Gender- Gender is an inherited characteristic as being a men or

women is genetic in nature. Woman are expected to be more emotional
than men and generates high turnover rates. It is due to more likeness of
woman quitting their job citing personal reasons.

• Religion- Religious values of individual influence distinct aspects of

his/her behaviour in organization. Highly religious person is stricter
towards following moral values, ethics and code of conduct while
performing their roles.

• Marital Status- Researcher indicated that with marital status,

responsibilities of individual get inclined and for them having steady
proper job becomes more important. Such employees have less absences,
low turnovers and more job satisfaction

Learned Characteristics: Learned characteristics refers to the

changes in persons behaviour that comes from his/her interactions with
environment.

• Personality- Personality solely do not refer to physical characteristics

of person but indicates the growth of individual’s psychological system.
These are the personal traits of persons that comprises of patience,
extrovertness, dominance, aggressiveness etc.

• Perception- It is a viewpoint of individual through which it interprets

a particular situation. Perception is defined as a process via which
information enters mind and an interpretation takes place for providing
some sensible meaning to world.

• Values- These are global beliefs that guides distinct actions and
judgements in several situations. It comprises of idea of an individual
that is based on good, right and desirable opinions.

Environmental Factors

The external environment has an effective role in influencing the

individual behaviour.
• Employment level- Employment opportunities available within the
country act as a major determinant of individual behaviour. In case of
less employment opportunities, he/she will remain stick to same job
level irrespective of how much satisfaction is attained. However, if there
are more employment opportunities available then employees will shift
to other jobs.

• Wages Rate- Monetary compensation is a major factor that every

employee considers before joining any organization. Therefore, a
decision whether to stay in a particular company or shift anywhere else is
taken on the basis of wages he/she is getting.

• General Economic Environment- Economic cycle in a country

greatly influences the behaviour of individual in an organization. They
are subject to retrenchment and layoffs. Job security and a stable income
are the most relevant factors of motivation for these type of employees.
Whereas, employees of public sector undertakings are not affected by
economic position within the country as they receive their fixed salaries
irrespective of economic conditions.

• Political Factors- Political factors indirectly influences the behaviour

of an individual. In a politically stable environment, there will be large
opportunities of steady job positions. It will provide better freedom to
individual which will influence their career choice, performance and jib
design.

Organizational Factors

Wide range of organizational factors influence behaviour of individual

which are listed below: –

• Physical Facilities- Physical environment at work place have a great

influence on behaviour of individual. It comprises of factors like lighting,
cleanliness, heat, noise level, office furnishing, strength of workers etc.

• Structure and Design- It is concerned with set-up design of

departments within an organization. Individual behaviour is influenced
by where an individual perfectly fits in a hierarchy of organization.
• Reward System- Fair reward system adopted by company for
compensating its employees enhances the overall performance and
behaviour of individual.

Maslow's Hierarchy of Needs Theory

One of the most popular needs theories is Abraham Maslow's

hierarchy of needs theory. Maslow proposed that motivation is the
result of a person's attempt at fulfilling five basic needs: physiological,
safety, social, esteem and self-actualization. According to Maslow, these
needs can create internal pressures that can influence a person's
behavior.

Physiological needs are those needs required for human survival such
as air, food, water, shelter, clothing and sleep. As a manager, you can
account for the physiological needs of your employees by

Esteem needs refer to the need for self-esteem and respect, with self-
respect being slightly more important than gaining respect and
admiration from others. As a manager, you can account for the esteem
needs of your employees by offering praise and recognition when the
employee does well, and offering promotions and additional
responsibility to reflect your belief that they are a valued employee.

Self-actualization needs describe a person's need to reach his or her

full potential. The need to become what one is capable of is something
that is highly personal. While I might have the need to be a good parent,
you might have the need to hold an executive-level position within your
organization. Because this need is individualized, as a manager, you can
account for this need by providing challenging work, inviting employees
to participate in decision-making and giving them flexibility and
autonomy in their jobs.

As the name of the theory indicates, Maslow believed that these needs
exist in a hierarchical order. This progression principle suggests that
lower-level needs must be met before higher-level needs. The deficit
principle claims that once a need is satisfied, it is no longer a motivator
because an individual will take action only to satisfy unmet needs. If you
look at this pyramid you can see how Maslow's needs are organized with
basic physiological needs, such as air, food, water and sleep, at the
bottom and the idea of self-actualization, or when a person reaches the
full potential in life, at the top. Again, according to Maslow, before a
person can take action to satisfy a need at any level on this pyramid the
needs below it must already be satisfied.

providing comfortable working conditions, reasonable work hours and

the necessary breaks to use the bathroom and eat and/or drink.

Safety needs include those needs that provide a person with a sense of
security and well-being. Personal security, financial security, good health
and protection from accidents, harm and their adverse effects are all
included in safety needs. As a manager, you can account for the safety
needs of your employees by providing safe working conditions, secure
compensation (such as a salary) and job security, which is especially
important in a bad economy.

Social needs, also called love and belonging, refer to the need to feel
a sense of belonging and acceptance. Social needs are important to
humans so that they do not feel alone, isolated and depressed.
Friendships, family and intimacy all work to fulfill social needs. As a
manager, you can account for the social needs of your employees by
making sure each of your employees know one another, encouraging
cooperative teamwork, being an accessible and kind supervisor and
promoting a good work-life balance.

Herzberg’s Two-Factor Theory of Motivation

In 1959, Frederick Herzberg, a behavioural scientist proposed a two-

factor theory or the motivator-hygiene theory. According to Herzberg,
there are some job factors that result in satisfaction while there are other
job factors that prevent dissatisfaction. According to Herzberg, the
opposite of “Satisfaction” is “No satisfaction” and the opposite of
“Dissatisfaction” is “No Dissatisfaction”.

FIGURE: Herzberg’s view of satisfaction and dissatisfaction

Herzberg classified these job factors into two categories-

• Hygiene factors- Hygiene factors are those job factors which are
essential for existence of motivation at workplace. These do not lead to
positive satisfaction for long-term. But if these factors are absent / if
these factors are non-existant at workplace, then they lead to
dissatisfaction. In other words, hygiene factors are those factors which
when adequate/reasonable in a job, pacify the employees and do not
make them dissatisfied. These factors are extrinsic to work. Hygiene
factors are also called as dissatisfiers or maintenance factors as
they are required to avoid dissatisfaction. These factors describe the job
environment/scenario. The hygiene factors symbolized the physiological
needs which the individuals wanted and expected to be fulfilled. Hygiene
factors include:

• Pay - The pay or salary structure should be appropriate and reasonable.

It must be equal and competitive to those in the same industry in the
same domain.

• Company Policies and administrative policies - The company policies

should not be too rigid. They should be fair and clear. It should include
flexible working hours, dress code, breaks, vacation, etc.

• Fringe benefits - The employees should be offered health care plans

(mediclaim), benefits for the family members, employee help
programmes, etc.

• Physical Working conditions - The working conditions should be safe,

clean and hygienic. The work equipments should be updated and well-
maintained.

• Status - The employees’ status within the organization should be

familiar and retained.

• Interpersonal relations - The relationship of the employees with his

peers, superiors and subordinates should be appropriate and acceptable.
There should be no conflict or humiliation element present.

• Job Security - The organization must provide job security to the

employees.
• Motivational factors- According to Herzberg, the hygiene factors
cannot be regarded as motivators. The motivational factors yield positive
satisfaction. These factors are inherent to work. These factors motivate
the employees for a superior performance. These factors are called
satisfiers. These are factors involved in performing the job. Employees
find these factors intrinsically rewarding. The motivators symbolized the
psychological needs that were perceived as an additional benefit.
Motivational factors include:

• Recognition - The employees should be praised and recognized for their

accomplishments by the managers.

• Sense of achievement - The employees must have a sense of

achievement. This depends on the job. There must be a fruit of some sort
in the job.

• Growth and promotional opportunities - There must be growth and

advancement opportunities in an organization to motivate the employees
to perform well.

• Responsibility - The employees must hold themselves responsible for

the work. The managers should give them ownership of the work. They
should minimize control but retain accountability.

• Meaningfulness of the work - The work itself should be meaningful,

interesting and challenging for the employee to perform and to get
motivated.

Limitations of Two-Factor Theory

The two factor theory is not free from limitations:

• The two-factor theory overlooks situational variables.

• Herzberg assumed a correlation between satisfaction and productivity.

But the research conducted by Herzberg stressed upon satisfaction and
ignored productivity.

• The theory’s reliability is uncertain. Analysis has to be made by the

raters. The raters may spoil the findings by analyzing same response in
different manner.

• No comprehensive measure of satisfaction was used. An employee may

find his job acceptable despite the fact that he may hate/object part of
his job.

• The two factor theory is not free from bias as it is based on the natural
reaction of employees when they are enquired the sources of satisfaction
and dissatisfaction at work. They will blame dissatisfaction on the
external factors such as salary structure, company policies and peer
relationship. Also, the employees will give credit to themselves for the
satisfaction factor at work.

• The theory ignores blue-collar workers.

Despite these limitations, Herzberg’s Two-Factor theory is acceptable

broadly.

Implications of Two-Factor Theory

The Two-Factor theory implies that the managers must stress upon
guaranteeing the adequacy of the hygiene factors to avoid employee
dissatisfaction. Also, the managers must make sure that the work is
stimulating and rewarding so that the employees are motivated to work
and perform harder and better. This theory emphasize upon job-
enrichment so as to motivate the employees. The job must utilize the
employee’s skills and competencies to the maximum. Focusing on the
motivational factors can improve work-quality.

Theory X and Theory Y

In 1960, Douglas McGregor formulated Theory X and Theory Y

suggesting two aspects of human behaviour at work, or in other words,
two different views of individuals (employees):

• one of which is negative, called as Theory X and

• the other is positive, so called as Theory Y

According to McGregor, the perception of managers on the nature of

individuals is based on various assumptions.

Assumptions of Theory X

• An average employee intrinsically does not like work and tries to escape
it whenever possible.

• Since the employee does not want to work, he must be persuaded,

compelled, or warned with punishment so as to achieve organizational
goals. A close supervision is required on part of managers. The managers
adopt a more dictatorial style.

• Many employees rank job security on top, and they have little or no
aspiration/ ambition.

• Employees generally dislike responsibilities.

• Employees resist change.

• An average employee needs formal direction.

Assumptions of Theory Y

• Employees can perceive their job as relaxing and normal. They exercise
their physical and mental efforts in an inherent manner in their jobs.

• Employees may not require only threat, external control and coercion
to work, but they can use self-direction and self-control if they are
dedicated and sincere to achieve the organizational objectives.

• If the job is rewarding and satisfying, then it will result in employees’

loyalty and commitment to organization.

• An average employee can learn to admit and recognize the

responsibility. In fact, he can even learn to obtain responsibility.

• The employees have skills and capabilities. Their logical capabilities

should be fully utilized. In other words, the creativity, resourcefulness
and innovative potentiality of the employees can be utilized to solve
organizational problems.
Thus, we can say that Theory X presents a pessimistic view of employees’
nature and behaviour at work, while Theory Y presents an optimistic
view of the employees’ nature and behaviour at work. If correlate it with
Maslow’s theory, we can say that Theory X is based on the assumption
that the employees emphasize on the physiological needs and the safety
needs; while Theory X is based on the assumption that the social needs,
esteem needs and the self-actualization needs dominate the employees.

McGregor views Theory Y to be more valid and reasonable

than Theory X. Thus, he encouraged cordial team relations,
responsible and stimulating jobs, and participation of all in decision-
making process.

Implications of Theory X and Theory Y

• Quite a few organizations use Theory X today. Theory X encourages use

of tight control and supervision. It implies that employees are reluctant
to organizational changes. Thus, it does not encourage innovation.

• Many organizations are using Theory Y techniques. Theory Y implies

that the managers should create and encourage a work environment
which provides opportunities to employees to take initiative and self-
direction. Employees should be given opportunities to contribute to
organizational well-being.

Theory Y encourages decentralization of authority, teamwork and

participative decision making in an organization. Theory Y searches and
discovers the ways in which an employee can make significant
contributions in an organization. It harmonizes and matches employees’
needs and aspirations with organizational needs and aspirations.

MODULE 3
What is Group Dynamics?

Group dynamics deals with the attitudes and behavioral patterns of a

group. Group dynamics concern how groups are formed, what is their
structure and which processes are followed in their functioning. Thus, it
is concerned with the interactions and forces operating between groups.
What is A Group?

Every organization is a group unto itself. A group refers to two or more

people who share a common meaning and evaluation of themselves and
come together to achieve common goals. In other words, a group is a
collection of people who interact with one another; accept rights and
obligations as members and who share a common identity

Characteristics of a Group:

Regardless of the size or the purpose, every group has similar

characteristics:

(a) 2 or more persons (if it is one person, it is not a group)

(b) Formal social structure (the rules of the game are defined)

(c) Common fate (they will swim together)

(d) Common goals (the destiny is the same and emotionally connected)

(e) Face-to-face interaction (they will talk with each other)

(f) Interdependence (each one is complimentary to the other)

(g) Self-definition as group members (what one is who belongs to the

group)

(h) Recognition by others (yes, you belong to the group).

camaraderie.

Process/Stages of Group Development/Evolution:

Group Development is a dynamic process. How do groups evolve? There

is a process of five stages through which groups pass through. The
process includes the five stages: forming, storming, forming, performing,
and adjourning.
Forming:

The first stage in the life of a group is concerned with forming a group.
This stage is characterized by members seeking either a work assignment
(in a formal group) or other benefit, like status, affiliation, power, etc. (in
an informal group). Members at this stage either engage in busy type of
activity or show apathy

Storming:

The next stage in this group is marked by the formation of dyads and
triads. Members seek out familiar or similar individuals and begin a
deeper sharing of self. Continued attention to the subgroup creates a
differentiation in the group and tensions across the dyads / triads may
appear. Pairing is a common phenomenon. There will be conflict about
controlling the group.

Norming:

The third stage of group development is marked by a more serious

concern about task performance. The dyads/triads begin to open up and
seek out other members in the group. Efforts are made to establish
various norms for task performance.

Performing:

This is a stage of a fully functional group where members see themselves

as a group and get involved in the task. Each person makes a
contribution and the authority figure is also seen as a part of the group.
Group norms are followed and collective pressure is exerted to ensure
the Process of Group effectiveness of the group.

Adjourning:

In the case of temporary groups, like project team, task force, or any
other such group, which have a limited task at hand, also have a fifth
stage, This is known as adjourning.

The group decides to disband. Some members may feel happy over the
performance, and some may be unhappy over the stoppage of meeting
with group members. Adjourning may also be referred to as mourning,
i.e. mourning the adjournment of the group.

Types of Groups:

One way to classify the groups is by way of formality – formal and

informal. While formal groups are established by an organization to
achieve its goals, informal groups merge spontaneously.

Formal groups may take the form of command groups, task groups, and
functional groups.

1. Command Groups:

Command groups are specified by the organizational chart and often

consist of a supervisor and the subordinates that report to that
supervisor. An example of a command group is a market research firm
CEO and the research associates under him.

2. Task Groups:

Task groups consist of people who work together to achieve a common

task. Members are brought together to accomplish a narrow range of
goals within a specified time period. Task groups are also commonly
referred to as task forces. The organization appoints members and
assigns the goals and tasks to be accomplished.
3. Functional Groups:

A functional group is created by the organization to accomplish specific

goals within an unspecified time frame. Functional groups remain in
existence after achievement of current goals and objectives. Examples of
functional groups would be a marketing department, a customer service
department, or an accounting department

Informal groups can take the form of interest groups, friendship groups,
or reference groups.

i. Interest Group:
Interest groups usually continue over time and may last longer than
general informal groups. Members of interest groups may not be part of
the same organizational department but they are bound together by
some other common interest.

The goals and objectives of group interests are specific to each group and
may not be related to organizational goals and objectives. An example of
an interest group would be students who come together to form a study
group for a specific class.

ii. Friendship Groups:

Friendship groups are formed by members who enjoy similar social

activities, political beliefs, religious values, or other common bonds.
Members enjoy each other’s company and often meet after work to
participate in these activities.

iii. Reference Groups:

A reference group is a type of group that people use to evaluate

themselves. The main objectives of reference groups are to seek social
validation and social comparison. Social validation allows individuals to
justify their attitudes and values while social comparison helps
individuals evaluate their own actions by comparing themselves to
others. Reference groups have a strong influence
iii. Reference Groups:

A reference group is a type of group that people use to evaluate

themselves. The main objectives of reference groups are to seek social
validation and social comparison. Social validation allows individuals to
justify their attitudes and values while social comparison helps
individuals evaluate their own actions by comparing themselves to
others. Reference groups have a strong influence on members’ behavior.
Such groups are formed voluntarily. Family, friends, and religious
affiliations are strong reference groups for most individuals.

on members’ behavior. Such groups are formed voluntarily. Family,

friends, and religious affiliations are strong reference groups for most
individuals.

Factors Affecting Group Behaviour:

1. Group Member Resources:

The members’ knowledge, abilities, skills; and personality characteristics

(sociability, self- reliance, and independence) are the resources the
group members bring in with them. The success depends upon these
resources as useful to the task.

2. Group Structure:

Group Size:

Group size can vary from 2 people to a very large number of people.
Small groups of two to ten are thought to be more effective because each
member has ample opportunity to take part and engage actively in the
group. Large groups may waste time by deciding on processes and trying
to decide who should participate next.

Evidence supports the notion that as the size of the group increases,
satisfaction increases up to a certain point. Increasing the size of a group
beyond 10-12 members’ results in decreased satisfaction. It is
increasingly difficult for members of large groups to identify with one
another and experience cohesion.

Group Roles:

In formal groups, roles are always predetermined and assigned to

members. Each role shall have specific responsibilities and duties. There
are, however, emergent roles that develop naturally to meet the needs of
the groups.

Group Norms:

Norms define the acceptable standard or boundaries of acceptable and

unacceptable behaviour, shared by group members. They are typically
created in order to facilitate group survival, make behaviour more
predictable, avoid embarrassing situations, and express the values of the
group.

Group Cohesiveness:

Cohesiveness refers to the bonding of group members or unity, feelings

of attraction for each other and desire to remain part of the group. Many
factors influence the amount of group cohesiveness – agreement on
group goals, frequency of interaction, personal attractiveness, inter-
group competition, favourable evaluation, etc.

3. Group Processes:

Decision-making by a group is superior, because group generates more

information and knowledge, generates diverse alternatives, increases
acceptance of a solution, and increases legitimacy.

Eight Cs for Team Building:

responsibilities of team members, team leaders, and team recorders.

1. Clear Expectations:

The managers must clearly tell the team members of the expected
performance and the team members must understand the reason for its
creation. For it the organization must support the team with resources of
people, time and money.

2. Commitment:

Team members must participate in the team, feel that the team mission
is important, and show commitment to accomplishing the team mission
and expected outcomes. Commitment will come if team members
perceive their service as valuable to the organization and to their own
careers.

3. Competence:

Team members must have the knowledge, skill and capabilities, the
resources, strategies and support needed to accomplish its mission to
address the issues for which the team was formed.

4. Control:

The team must have not only enough freedom and empowerment to feel
the ownership necessary to accomplish its charter, but also the
accountability. There has to be a defined review process.

5. Collaboration:

The team should understand group processes and work effectively and
cooperatively with other members of the team. For it they have to
understand the roles and responsibilities of team members, team
leaders, and team recorders.

6. Communication:

To make team members clear about the priority of their tasks, and
receive regular feedback, team members must clearly and honestly with
each other. Diverse opinions be welcome and conflicts be taken up
positively.

7. Creativity:

The team should value creative thinking, unique solutions, and new
ideas; and reward members who take reasonable risks to make
improvements. If necessary, it should provide the training, education,
access to books and films, and field trips to stimulate new thinking.

The creative development of new products, new technologies, new

services, or new organizational structures is possible because teams may
have variety of skills needed for successful innovation.

Team members can uncover each other’s flaws and balance each other’s
strengths and weaknesses. Managers should empower the team and
make it accountable for the innovation process.
8. Coordination:

Teams should understand the concept of internal customer to whom

they provide a product or a service. Team efforts need to be coordinated
by a central leadership team that assists the groups to obtain what they
need for success.

INFORMAL GROUPS
Characteristics of Informal Groups:

1. Creation:

It is not created by the organisation but springs up spontaneously.

2. Satisfaction of Needs:

The needs which cannot be satisfied within the framework of formal

organisation, like social and psychological needs of people, such people
create informal groups.

3. Voluntary Membership:

Nobody is compelled to join an informal organization.

4. Multi-Group Membership:

A member of an informal group can be a member of more than one

informal group to pursue different interests.

5. Systems and Processes:

Members of such groups follow their own norms, leadership,

communication, etc. to remain cohesive. The communication channels
are referred to as ‘Grapevine’. Grapevine i.e., informal channel runs very
fast to spread the information across the organization.

6. Leadership:

Every informal group has a leader, selected by the group, and who is
capable of helping to realize their goals. The moment it is realized that
the leader is incapable, (s) he is replaced with a new leader.

Benefits of Informal Groups:

The benefits of an informal group are as follows:

1. Blending with formal group allows people to work for the formal
organisation.

2. Informal work group lightens the workload for the formal manager.

3. Brings satisfaction and stability to the organisation as a whole.

4. Provides a useful channel of communication.

5. Encourages managers to plan and act more carefully

Limitations of Informal Groups:

The limitations are as follows:

1. Resistance to Change because they do not want to deviate from

existing norms and learn new ways.

2. Informal group provides most fertile ground for Rumour Mongering

because of maliciousness, lack of proper communication systems and
processes and ambiguous circumstances.

3. Since a member of an informal group is also a member of a formal

group, at times it creates role conflict.

4. Creativity of group member (s) is restricted because of strong pressure

for conformity applied by the group.
MODULE 4

Definition of Organizational Leadership

More specifically, organizational leadership is a multi-faceted job

requiring experience with planning, time management, and an
understanding of company values and goals. Ironically, most companies
don’t usually use the title “organizational leader” as you’ll see.

Leadership Traits

While the list of leadership traits can vary by whoever is drawing up the
list, a recent study outlined behavioral traits that separated lower-level
supervisors from higher-level supervisors.5

According to the researchers, the traits most commonly associated with

great leadership include:

• Adaptability and flexibility: Effective leaders don't get stuck in a

rut. They are able to think outside of the box and adapt quickly to
changing situations.

• Assertiveness: A great leader is able to be direct and assertive

without coming off as overly pushy or aggressive.

• Capacity to motivate people: A great leader knows how to inspire

others and motivate them to do their best.

• Courage and resolution: The best leaders are brave and committed
to the goals of the group. They do not hide from challenges.

• Creativity: Perhaps most importantly, great leaders not only possess

their own creativity, but they are also able to foster creativity among
members of the group.5

• Decisiveness: A great leader is capable of making a decision and is

confident in his or her choices.

• Eagerness to accept responsibility: Strong leaders take on

responsibility and don't pass the blame on to others. They stand by their
success and take ownership of their mistakes.

• Emotional stability: In addition to being dependable overall, strong

leaders are able to control their emotions and avoid overreactions.

• Intelligence and action-oriented judgment: Great leaders and

smart and make choices that move the group forward.

• Need for achievement: Strong leaders have a need to succeed and

help the group achieve goals. They genuinely care about the success of
the group and are committed to helping the group reach these
milestones.

• People skills: Excellent interpersonal skills are essential for leading

effectively. Great leaders know how to interact well with other leaders as
well as with team members.

• Perseverance: Strong leaders stick with it, even when things get
difficult or the group faces significant obstacles.

• Self-confidence: Many of the best leaders are extremely self-assured.

Because they are confident in themselves, followers often begin to share
this self-belief.

• Task competence: A great leader is skilled and capable. Members of

the group are able to look to the leader for an example of how things
should be done.

• Trustworthiness: Group members need to be able to depend upon

and trust the person leading them.

• Understanding their followers and their needs: Effective

leaders pay attention to group members and genuinely care about
helping them succeed. They want each person in the group to succeed
and play a role in moving the entire group forward.
Trait Theories

Trait theories assume that people inherit certain qualities and traits that
make them better suited to leadership. Trait theories often identify a
particular personality or behavioral characteristics shared by leaders.
For example, traits like extroversion, self-confidence, and courage are all
traits that could potentially be linked to great leaders.

If particular traits are key features of leadership, then how do we explain

people who possess those qualities but are not leaders? This question is
one of the difficulties in using trait theories to explain leadership.

There are plenty of people who possess the personality traits associated
with leadership, yet many of these people never seek out positions of
leadership. There are also people who lack some of the key traits often
associated with effective leadership yet still excel at leading groups.

Strengths/Advantages of Trait Theory

• It is naturally pleasing theory.

• It is valid as lot of research has validated the foundation and basis of

the theory.

• It serves as a yardstick against which the leadership traits of an

individual can be assessed.

• It gives a detailed knowledge and understanding of the leader element

in the leadership process.

Limitations of The Trait Theory

• There is bound to be some subjective judgment in determining who is

regarded as a ‘good’ or ‘successful’ leader

• The list of possible traits tends to be very long. More than 100 different
traits of successful leaders in various leadership positions have been
identified. These descriptions are simply generalities.
• There is also a disagreement over which traits are the most important
for an effective leader

• The model attempts to relate physical traits such as, height and weight,
to effective leadership. Most of these factors relate to situational factors.
For example, a minimum weight and height might be necessary to
perform the tasks efficiently in a military leadership position. In business
organizations, these are not the requirements to be an effective leader.

• The theory is very complex

Michigan Leadership Studies

Michigan Leadership Studies is a behavioral Leadership Theory that

indicates the Institute for Social Research at the University of Michigan
conducted empirical studies to identify styles of leader behavior that
results in higher performance and satisfaction of a group.

The studies identified two distinct styles of leadership;

• Job-centered Leadership: Managers using job-centered leader

behavior pay close attention to subordinates’ work, explain work
procedures and are keenly interested in performance.

• Employee-centered Leadership: Managers using employee-

centered leader behavior are interested in developing a cohesive
workgroup and ensuring that employees are satisfied with their jobs. The
Michigan Leadership Studies found that both the styles of leadership led
to an increase in production, but it was slightly more in case of
production of job-centered style.

However, the use of direct pressure and close supervision led to

decreased satisfaction and increased turnover and absenteeism.
The employee-centered approach led to the improved work-flow
procedure and more cohesion in interactions resulting in increased
satisfaction and decreased turnover and absenteeism.

This suggested the superiority of the employee-centered leadership style.

These ‘studies are criticized on the following grounds:

• The Michigan Leadership Studies failed to suggest whether leader

behavior is a cause or effect. They did not clarify whether the employee-
centered leadership makes the group productive or whether the highly
productive group induces the leader to be employee-centered.

• The Michigan Leadership Studies did not consider the nature of the
subordinates’ tasks or their characteristics. Group characteristics and
other situational variables were also ignored.

• The behavioral styles suggested by Michigan Leadership Studies have

been termed as static. A leader is supposed to follow either of the two
styles, viz., task orientation and employee orientation. But in practice, a
practical style may succeed in one situation and fail in another.

Moreover, leaders don’t restrict themselves to a particular style. They

adopt both the orientations in varying degrees to suit the particular
situation.

Fiedler’s Contingency Theory of Leadership

Fiedler’s Contingency Theory, just like all contingency theories, states

that there is no one best way to lead your team. The best way to lead your
team will instead be determined by the situation.

There are two important factors in Fiedler’s Contingency Theory:

leadership style and situational favorableness.

1. Leadership Style
The first step in using the model is to determine your natural leadership
style. To do this, Fiedler developed a scale called the Least Preferred
Coworker (LPC).

To score yourself on this scale you have to describe the coworker with
whom you least prefer to work.

What do you think about those people you least prefer working with?

Well, according to the model, the more favorably you rated the person
you least prefer to work with the more relationship oriented you are. The
less favorably you rated the person you least like working with the more
task-oriented you are. So, in a nutshell:

• »High LPC = Relationship-oriented leader.

• »Low LPC = Task-oriented leader.

Task-oriented leaders tend to be good at organizing teams and projects

and gettings things done. Relationship-oriented leaders tend to be good
at building good relationships and managing conflict to get things done.

2. Situational Favorableness

The next step is to understand the favorableness of the situation you

face. This is determined by how much control over the situation you have
as a leader (situational control).

Determining situational favorableness is done by examining the

following three factors:

a. Leader-Member Relations

This factor measures how much your team trusts you. Greater trust
increases the favorableness of the situation and less trust reduces it.

b. Task Structure

This factor measures the tasks that need to be performed. Are they clear
and precise or vague?
Vague tasks decrease the favorableness of the situation and concrete and
clear tasks increase it.

c. Position Power

This is determined by your authority, meaning the power you have to

reward or punish your subordinates. As you might expect, having more
power increases the situational favorableness.

Advantages and Disadvantages

The advantages of Fiedler’s Contingency Theory of Leadership are:

• »It provides a simple rule of thumb for identifying which leaders are
best for which situations.

• »Unlike many other leadership theories, it takes the situation into

account in determining the effectiveness of a leader.

• »Both the LPC and the situational factors are easy to measure.

The disadvantages of Fiedler’s Contingency of Leadership are:

• »It’s not flexible at all. If your leadership style doesn’t match the
situation that’s it. Game over. You need to be replaced. There is nothing
you can do to change the situation.

• »The LPC scale is subjective and so its possible incorrectly assess your
own leadership style.

• »If you happen to fall in the middle of the LPC scale then there is no
guidance as to which kind of leader you might be.

• »Your assessment of the situation is subjective. This means you may

incorrectly assess the situation and consequently, you may incorrectly
determine what kind of leader is requires

• TYPES OF LEADERSHIP
A)Task oriented leader
Leader who gives priority to work and results.
B) Human oriented leader
Leader who gives priority to relationships rather than meeting dead
lines.

MODERN APPROACH LEADERSHIP THEORIES

1)Innovative leadership:Leaders gasp the entire situation and go beyond
the usual course of action. They are good at visualizing the future and
know exactly what is working and what not as well as bring new ideas
and vision into reality.

2)Authoritative leadership:Leaders dictate procedures and policies,

decide the goals that need to be achieved, and control and direct
activities without meaningful participation by other employees.

3)Pace setters:Considering that communication plays an important role

in an effective leadership, pace setter leaders use proper communication
in setting high standards of performance for both the group and
themselves. They optimize behaviors that are sought from others in the
group.

4)Servant:This is one of the most common approaches to leadership and

the one most widely used in practice. Leaders put their service to other
people in the group before their own interest and include the team in
decision making.

5)Transformational: In today's modern world, the society is in need of

transformational leaders who would bring positive and meaningful
changes. Transformational leadership is where the leaders expect
transformation on their teams even if it is uncomfortable and believe
that everyone will do their best. They also serve as inspiration and role
model to their people.
6)Charismatic or inspiring leadership: This type is primarily based on
the leader's charisma or his/her personal qualities and is one of the most
common approaches to leadership. Leaders are seen to possess strong
sense of vision and mission and arouse a very strong emotion in each of
their followers. Leading others is determined by the type and source of
power that is held by the leaders.
LEADERSHIP STYLES
Leadership styles are the patterns of behaviour which a leader adopts in
influencing the behaviour of his followers.
1)Autocratic style
This style is also known as authoritarian or directive style.
In Autocratic leadership style a manager centralize decision making
power and authority in himself and exercise complete and full fledged
control over his subordinates.

2)Free rein style

Free rein or laissez faire technique means giving complete freedom to
subordinates.
The leader passes on the responsibility for decision making to
his subordinates and takes a minimum initiative in administration.

3)Participative style
This style is also called democrat, consultative or ideographic.
A participative leader decentralizes his decision making process.
Leader is not taking unilateral decisions.
Subordinates are consulted and their participation in formulation of
policies are ensured.

4)Paternalistic style
The leader assumes that his function is paternal or fatherly.
The relationship between the leader and his group is the same as the
relationship between father and his family.
Leader provides good working conditions and fringe benefits to his
subordinates.

MODULE 5
Stress
Many things can cause stress. You might feel stressed because of one big
event or situation in your life. Or it might be a build-up of lots of smaller
things.
Many things can cause stress in different areas of our lives. These may
include:
Personal

• Illness or injury

• Pregnancy and becoming a parent

• Infertility and problems having children

• Bereavement

• Experiencing abuse

• Experiencing crime and the justice system, such as being arrested,

going to court or being a witness

• Organising a complicated event, like a holiday

• Everyday tasks, such as household chores or taking transport

Friends and family

• Getting married or civil partnered

• Going through a break-up or getting divorced

• Difficult relationships with parents, siblings, friends or children

• Being a carer

Employment and study

• Losing your job

• Long-term unemployment

• Retiring

• Exams and deadlines

• Difficult situations or colleagues at work

• Starting a new job

Housing

• Housing problems, such as poor living conditions, lack of security or

homelessness

• Moving house

• Problems with neighbours

Money

• Worries about money or benefits

• Living in poverty

• Managing debt

Social factors

• Having poor access to services such as medical care, green spaces or

transport

• Living through a stressful community-wide, national or global event,

like the coronavirus pandemic

• Experiencing stigma or discrimination, including racism, homophobia,

biphobia or transphobia

Conflict resolution is the process by which two or more parties reach a

peaceful resolution to a dispute.1

In the workplace, there can be a variety of types of conflict:

• Conflict may occur between co-workers, between supervisors and

subordinates, or between service providers and their clients or
customers.
• Conflict can also occur between groups, such as management and
the labor force, or between entire departments.

The Conflict Resolution Process

The resolution of conflicts in the workplace typically involves some or all

of the following processes:

• Recognition by the parties involved that a problem exists.

• Mutual agreement to address the issue and find some resolution.

• An effort to understand the perspective and concerns of the opposing

individual or group.

• Identifying changes in attitude, behavior, and approaches to work by

both sides that will lessen negative feelings.

• Recognizing triggers to episodes of conflict.

• Interventions by third parties such as human resources representatives

or higher-level managers to mediate.

• A willingness by one or both parties to compromise.

• Agreement on a plan to address differences.

• Monitoring the impact of any agreements for change.

• Disciplining or terminating employees who resist efforts to defuse

conflicts.

Types of Conflict Resolution Skills

Assertiveness

Interviewing and Active Listening

Empathy
Facilitation

Mediation

Problem Solving

Accountability

PERCEPTUAL BLOCK
A type of creative block caused by individuals looking at things in
traditional ways rather than opening their minds to imagining things in
fresh and original ways. This type of creative block results from learning
and habit.

1. Seeing What You Expect to See – Stereotyping

2. Difficulty in Isolating the Problem
3. Defining the Problem Area Too Narrowly
4.Inability to see the problem from various viewpoints
5. Failure to utilize all sensory inputs