1.1.

1 What are organizations and why do we study

them?

Organizations are mechanisms through which many people
combine their efforts and work together to accomplish more
than any one person could do alone.

Organizations share basic ingredients of purpose, division of
labor, and synergy.

Division of labor is a process of breaking the required work
into tasks that can be performed by individuals or groups
continued....

Division of labour is a way of organizing the efforts
of many people in their advantage

Synergy: an action of two or more substances that
results in an effect that is different from the
individual summation of the substances

Synergy in an organization occurs when people work
together as they use available resources to pursue a
common purpose.
1.1.2 What is OB and why do we
study it?
 OB is a field of study dedicated to better understanding and
managing people at work
 OB studies three determinants of behavior in
organizations: individuals, groups,and structure
 OB applies the knowledge gained about individuals, groups
and the effect of structure on behavior in order to make
organizations work more effectively
 OB is concerned in what people do in an organization and
how that behavior affects the performance of the
organization
Developing an OB model
 A model is an abstraction of reality;a simplified
representation of some real-world phenomenon( refer to
fig 1.1)
 It proposes three levels of analysis in OB
 As we move from the individual level to the organization
system level, we add systematically to our understanding
of behavior in organizations
 Group concepts grow out of the foundation laid on the
individual section

continued...
OB researchers draw conclusions about casual
relationships of two(dependent and independent)
variables.
 Dependent variables are the key factors we want to explain
or predict; and independent variables are the presumed
causes of some change in the dependent variables.
 The primary dependent variables in OB are:
productivity,absenteeism, turnover, and job satisfaction
Continued..
 Productivity is a performance measure including
effectiveness(achievement of goals) and efficiency
 Absenteeism is failure to report to work
 Turnover is voluntary and involuntary permanent
withdrawal from the organization
 Job satisfaction is a general attitude toward one's job,
the difference between the amount of rewards workers
receive and the amount they believe they should receive.
1.3.3 Disciplines that contributed to OB
 OB is an applied behavioural science that is built on
contributions from a number of behavioural sciences. Such as
 Psychology-is the science of human behaviour
 Sociology-is the science of society
 Social psychology-is an area within psychology, but blends
concepts from both psychology and sociology.
 Anthropology-is the science of the learned behaviour of
human beings
 Political science-is the study of the behaviour of individuals
and groups with in a political environment
Chapter 2-
Understanding and managing individual
behavior
 The study of individuals is important because the out
come of and organization depend partly on how its
individual member behave
 When an organization acquires its individual employees
they enter into psychological contract, meaning that
then individual employee and the organization each
expect to contribute to and receive benefits from the
employment relationship.
continued..
 When both parties value each other's contributions, then
it could be said that both parties to this contract are
satisfied. And that there is a good person-job fit.
 Managing individual behavior requires understanding
individual differences and how they affect the
organization.
 It requires not only seeing the trees with in the forest, but
also nurturing them individually and collectivley
2.1 Foundations of Individual
Behavior
 All our behaviour is some what shaped by our
personalities and the learning experiences we have
faced.
 Four individual level variables-biographical
characteristics, ability,and learning-have effect on
employee performance and satisfaction
1.Biographical characteristics
 Biographical characteristics are personal
characteristics such as age,sex, marital status, and
tenure(length of service in an organization)-that are
objective and obtained from personal records.
 Age
 The older you get the less likely you are to quit a job.
Hence age is negatively related to turn-over.
 On the other hand, age is found to be positively
related to unavoidable absence and negatively related
to avoidable absence
continued..
 Gender
 There is no significant difference in job productivity between males and
females.
 Similarly no evidence shows and employee's gender affects job satisfaction
 Marital status
 There are nor enough studies to draw any conclusion about the effect of
marital status on productivity
 But consistent researches indicates that married employees have fewer
absences, undergo less turnover, and are more satisfied with their jobs than
unmarried ones.
 Tenure
 Seniority by itself is not a good predictor of productivity, however, studies
consistently demonstrate seniority to be negatively related to absenteeism.
 Moreover, the evidence indicates that tenure and satisfaction are positively
related
2. Ability
 An individual's capacity to perform the various tasks in
a job is ability.
 An individual's abilities are essentially made up of two
set of factors: intellectual and physical
 It directly influences and employee's level of
performance and satisfaction through ability-job-fit
continued..
 Ability-job-fit can be ensured by the following
methods:

By ensuring effective selection process

By conducting promotion and transfer decisions
affecting individuals existing in the organization
according to the abilities of the candidates.

By fine-tuning the job to better match an incumbents
abilities

By providing training for employees(applicable to
both new and old employees)
 3. Personality
 It is the sum total of ways in which an individual reacts with
others.
 It is reflected by the measurable traits exhibited by a person
 Determinants of personality

Heredity-it reflects to those factors that were determined at
conception. Characteristics like physical structure, facial
attractiveness, temperament, reflexes, and energy level come to a
person through heredity

Environment- an individual's culture, early conditioning, norms
prevalent among family, friends, and social groups etc influence the
personality formation
continued...

Situation- different demands of different situations
brings about different aspects of individual's
personality.
4. Learning
 Learning is a change in behavior acquired through
experience.
 There are four approaches to learning:
 Classical conditioning
 Operant conditioning
 Cognitive learning
 Social learning
1.Classical Conditioning
 Classical conditioning is a form of learning through
association. This type of learning involves the
manipulation of stimulus or stimuli to influence
behaviour. Stimulus can be defined as something that
incites action.
 Classical conditioning associates a previously neutral
stimulus that has no effect on behaviour with another
stimulus that does affect behaviour. The former
becomes a conditioned stimulus, which upon its
occurrence also draws forth the now conditioned
response. Classical conditioning is passive.
2. Operant Conditioning
 Operant conditioning is a type of conditioning in
which desired voluntary behaviour leads to a reward or
prevents a punishment.
 Operant conditioning argues that behaviour is a
function of its consequences.
 Operant conditioning is then the process of controlling
behaviour by manipulating its consequences.
3. Cognitive learning
 Cognitive learning is a form of learning achieved by thinking about the
perceived relationship between events and individual goals and
expectations.
 Essentially what ‘cognition’ means is ‘to know’, gaining knowledge through
thought or perception.
 Cognitive learning is about enabling people to learn by using their reason,
intuition and perception. This technique is often used to change peoples’
behaviour. But people’s behaviour is influenced by many factors such as
culture, upbringing, education and motivation. Therefore cognitive learning
involves understanding how these factors influence behaviour and then
using this information to develop learning programs.
 Cognitive learning is concerned with explaining how and why people decide
to do things by examining the ways in which people come to view various
work abilities as perceived opportunities to pursue desired rewards, to
eliminate felt inequities and the like.
4. Social learning
 Social learning is learning that is achieved through the
reciprocal interactions among people.
 Individuals can learn by observing what happens to
other people, by being told about something, as well as
by direct experiences.
 Social learning is, hence, the theory that believes
learning occurs through the observation of other
people and the modeling of their behavior.
2.2. KEY PESONALITY CHARACTERISTICS
RELEVANT TO WORK PLACE

2.2.1 Authoritarianism and Dogmatism:

 People who are likely to have authoritarian orientation tend to
use their power more aggressively towards their subordinates
and create a very defensive climate in the department, while at
the same time they are being very submissive or docile towards
their supervisors
 Dogmatism refers to the extent to which people are flexible or
rigid in dealing others. Managers who are exhibiting these traits
are likely to be detached from others and people show much of
hatredness in them
 Cont…
2.2.2 Machiavellianism:
This refers to the extent to which people are manipulative and
tactical in achieving one’s own goals.
These people strongly believe that ends can justify means.
People who are high Machiavellian tend to be cool, willing to
twist and turn facts to influence others and try to gain control
of people, events, and situations by manipulating the system to
their advantage.
Cont…
High Machiavellians may be successful only for a short
period but in long run they tend to be distrusted and
disliked by many in the department and finally they may be
ineffective.
High- Machiavellians manipulates more, win more, are
persuaded less and have a greater influence over other
people than do low- Machiavellians. Yet these High-
Machiavellians outcomes are moderated by situational
factors.
Cont…
2.2.3 Type A and Type B Personality:
This refers to the extent to which people tend exhibit
certain characteristics.
Type A person feels a chronic sense of time urgency, are
highly achievement oriented, exhibit a competitive drive
and are impatient when their work is slowed down for
any reason.
Type B persons are easygoing individuals who do not
have sense of time urgency, and who do not experience
the competitive drive.
Cont…
Type A Mangers do operate under moderate to high level of
stress.
They subject themselves to more or less continuous time
pressure, creating for themselves a life of deadlines.
These characteristics result in some rather specific behavior
outcomes. For example, Type A people are fast workers
because they emphasize quantity over quality.
 Cont…
2.2.4 Tolerance for Ambiguity
This dimension refers to the extent to which individuals are
threatened by or have difficulty coping with situations that
are ambiguous, where change occurs rapidly or predictably,
where information is inadequate or unclear or where
complexity exists.
This personality characteristic indicates the level of
uncertainty that people can tolerate without experiencing
undue stress and can still function effectively.
Cont…
2.2.5 Work Ethic Orientation:
This refers to the extent to which people are committed to
work and involved in their activities
Extreme work ethic values could lead to traits of
workoholism and workaholic people tend to give
predominant interest to work which might lead to
premature burnout and health problems such as
hypertension, anxiety etc..
Cont…
Some individuals are highly work oriented while others try
to do the minimum that is necessary go get by without
being fired on the job.
The extremely work ethic oriented person gets greatly
involved in the job and lives up to being described as ‘living,
eating and breathing the job’.
Extreme work ethic values could lead to traits of
‘workoholism’ when work becomes to be considered as the
only primary motive for living with very little outside
interests
Cont…
2.2.6 Matching Personality and Job Types:

This refers to the extent to which people successfully

match their personalities with their jobs. If there is a
perfect relationship between the job and personality, the
job satisfaction and production turnover among the
employees will be significantly higher.
Cont…
John Holland present six personality types and proposes
that the satisfaction and the propensity to leave a job
depend on the degree to which people successfully match
their personalities with a suitable occupational
environment.
Holland’s typology of personality is given as below:
(see in your reading material)
2.3. REINFROMCENTS THOERIES
2.3.1. TYPES OF REINFROMCENTS
There are four types of reinforcement available to manage or
modify an individual’s behavior.
1. Positive Reinforcement
2. Punishment
3. Avoidance Learning
4. Extinction
Cont…
1. Positive Reinforcement:
The application of this type of reinforcement to a given
response or behavior increases the likelihood that the
particular behavior by the individual will be repeated.
For example, an engineer is given the task of designing a
new piece of equipment (stimulus). The engineer exerts a
high level of effort and completes the project in time
(response).
Cont…
The supervisor reviews the work and not only praises the
engineer for his or her work, but recommends, for
example, a pay increase for the excellent work (positive
reinforcement).
Negative reinforcement increases the frequency and
strength of a desired behavior by making it contingent
upon the avoidance of undesirable consequences for the
employees
Cont…
2 Punishment:
The application of punishment is used to decrease the
likelihood that the undesirable behavior or response by the
individual will be repeated.
Just as positive reinforcement strengthens a particular
behavior, punishment weakens it
Cont
3) Avoidance:
Just as with positive reinforcement, this type of
reinforcement is a method used by managers to
strengthen desired behavior.
• When a particular reinforcement can prevent the
occurrence of an undesired stimulus, it is termed
avoidance learning.
As the same example cited above, in order to avoid
reprimand and criticism, the worker makes a special
effort to take only an hour for lunch. With the avoidance
learning, the individual works hard to avoid the
undesired consequences of the stimulus.
 Cont…
4) Extinction:
Extinction is the withholding of positive reinforcement for a
previously acceptable response.
 With continued non- reinforcement over time, the response
or behavior will eventually disappear or be eliminated.
 Cont…
Extinction involves three steps:
i) identifying the behavior that needs to eliminated
 ii) identifying the reinforces which encourage the behavior
that is desired to be eliminated and
 iii) stopping the reinforces.
Behavior that is desired to be eliminated in an
organizational setting, a company may offer their
salespersons a bonus for every order from a new customer.
2.3.3. SCHEDULES OF REINFORCEMENT:

Reinforcement works effective when they follow some

schedules or pattern. The two main types of
reinforcement schedules are continuous or partial
(intermittent)
1) Continuous Reinforcement:
This schedule reinforces the desired behavior each and
every time it is demonstrated.
Continuous reinforcement helps to direct behaviors
toward desired goals quickly.
 Cont…
However, it is more expensive to administer, especially if
monetary rewards are used as reinforcement.
 Behaviors reinforced through a continuous reinforcement
schedule are also likely to weaken very rapidly once the
reinforcements are stopped.
2) Intermittent or Partial Reinforcement:
In this type of reinforcement not every instance of the
desirable behavior is reinforced, but reinforcement is
given often enough to make the behavior worth
repeating.
 Cont…
There are four types of intermittent reinforcement schedule
based on the intermittent intervals and intermittent behavioral
responses.
i. Fixed Internal Schedule: refers to the interval of time when
behaviors will be rewarded. It could be hourly, weekly, daily,
monthly and so on.
ii. Variable Interval Schedule:A variable interval schedule rewards
desired behaviors at random intervals of time. Instead of
praising every day, a manager praises his employees
occasionally, once in a ten days or fortnightly without a fixed
time frame
2.4 Perceptions and Attitudes
 Perception

Perception involves the way we view the world around
us. It adds meaning to information gathered via the
five senses: touch, smell, hearing, vision and taste.

Perception is the primary vehicle through which we come
to understand our surroundings and ourselves. It is a
process in which individuals organize and interpret their
sensory impressions in order to give meaning to their
environment.

It typically results in different people having somewhat
different, even contradictory views or understanding of
the same event or person. Often managers and their
subordinates, coworkers, or supervisors see and describe
Factors influencing Perception
 The perceiver
Personal characteristics of an individual perceiver greatly
influence the interpretation of the target. The relevant
personality characteristics affecting perception are
attitudes, motives, interests, past experience,and
expectations.
Factors related to the perceiver influence his/her
perceptions. Unsatisfied needs or motives stimulate
individuals and may exert a strong influence on their
perceptions.
continued..
2. The target(perceived)

Perception is affected by the characteristics of the
target being observed. Attributes of the target like
motion, sounds, size, and others shape the way we
see it.

Because targets are not looked at in isolation, the
relationship of a target to its background influences
perception. So does our tendency to group close
things and similar things together.
continued...
3. The situation
 The context in which we see objects or events is
important. Elements in the surrounding environment
influence our perceptions.
 For example, a person dressed in informal clothes to a
health club does not capture any attention from his
colleague, whereas if he goes in the same dress to office,
he will certainly catch the attention of his colleagues.
 Again, the situation affects the perception. There is no
change either in the perceiver or the target, but only in
the situation. The time at which an object or event is seen
can influence perception.
 Time, location, light, heat, and other situational factors
influence perception.
Person perception
 Absenteeism, turnover, and job satisfaction are also
reactions to the individual perceptions. Managers must
spend time understanding how each individual
interprets reality and where there is a significant
difference between what is seen and what exists, try to
eliminate the distortions.
 Failure to deal with the differences when individuals
perceive the job in negative terms will result in
increased absenteeism, and turnover and also lower
job satisfaction.
Factors that may distort our judgment on others
A)SELECTIVE PERCEPTION
We selectively interpret what we see on the basis of our
interests, background, experience, and attitudes.
And since we see what we want to see, we can
draw unwarranted conclusions from an ambiguous
situation.
continued...
b) HALO EFFECT
 It is drawing a general impression about an individual
on the basis of a single characteristic. For instance,
when appraising their instructor, students may give
prominence to a single trait of the instructor such as
enthusiasm and allow their entire evaluation to be
biased by how they judge the instructor on that one
trait.
continued..
c) CONTRAST EFFECTS
 Refers to evaluations of a person ‘s characteristics that
are affected by comparisons with other people recently
encountered that rank higher or lower on the same
characteristics. For example, a candidate is likely to
receive a more favourable evaluation if preceded by
weak applicants and less favourable evaluation if
preceded by strong applicants.
continued..
d) PROJECTION
 It is a tendency to project one‟s own characteristics to
other people. People who engage in projection tend to
perceive others according to what they themselves are
like rather than according to what the person being
observed is really like. We assume that others are
similar to us.
continued...
e) STEREOTYPING
 It is judging someone on the basis of one’s perception
of the group to which he/she belongs. Since
stereotypes are widespread many people make
inaccurate perceptions on the basis of a false premise
about a group.
2.4.2. Values
Values can be defined as broad preferences concerning
appropriate course of action or outcomes.
An individual's values refer to the basic principles and
tenets that guide his or her beliefs, attitudes and
behaviour.
Values reflect a person's sense of right and wrong or
what ought to be
continued..
Values can be described as peripheral and core values.
Peripheral values are more susceptible to change,and
core values are less susceptible to change.
continued..
Although changing core values is difficult,
diagnosing their impact on work situations is a first
step in helping managers place workers in situations
that fit well with their values and result in productive
outcomes.
SOURCE & IMPORTANCE OF VALUES
A significant portion of our value systems is genetically
determined.
The rest is attributable to factors like national culture,
parental dictates, teachers, friends, and similar
environmental influences
continued..
 Values are important to the study of organizational
behavior because they lay the foundation for the
understanding of attitudes and motivation, and because
they influence our perception
Values generally influence our attitudes and behavior.
Values also may cloud our objectivity and rationality
TYPES

OF VALUES
Different scholars classified value differently, the
following are some. Milton Rokeach, psychologist
classified values into two categories:
(1) Terminal Values: - Refer to desirable end-stages of
existence. The goals that a person would like to achieve
during his or her lifetime
continued..
ii) Instrumental Values:-Refer to preferable modes of
behavior or means of achieving the terminal values.
continued...
Allport and associates have identified 6 types of values
and they are:
i) Theoretical

ii) Economic

iii) Aesthetic

iv) Social

v) Political

vi) Religious
2.4.3. Attitudes
Attitudes are evaluative statements – either favourable or
unfavourable – concerning objects, people, or events.
They reflect how one feels about something. So, an
attitude is a predisposition to respond in a positive or
negative way to someone or something in one's
environment.
continued...
Attitude has 3 components:
Cognition (Opinion or Belief segment of an attitude),
Affect (Emotional/ Feelings segment of an attitude), and
Behavior (refers to an intention to behave in a certain way
toward someone or something)
SOURCE & IMPORTANCE OF ATTITUDES
Attitudes, like values are acquired from parents, teachers,
and peer group members.
Attitudes are modeled after those whom we admire,
respect, or maybe even fear in our early years.
In contrast to values, attitudes are less stable.
TYPES OF ATTITUDES
Most of the research in organizational behavior has been
concerned with 3 attitudes:
job satisfaction,
job involvement, and
organizational commitment.
I) ORGANIZATIONAL COMMITMENT
The degree to which an employee identifies with a
particular organization and its goals, wishes to
maintain membership in the organization is
organizational commitment.
High job involvement means identifying with one's
specific job, whereas high organizational
commitment means identifying with one's employing
organization.
II) JOB INVOLVEMENT
The degree, to which a person identifies with the job,
actively participates in it, and considers his
performance important to self – worth is job
involvement.
Employees with high level of job involvement
strongly identify with and really care about the kind
of word they do. High levels of job involvement have
been found to be related to less absenteeism and
lower resignation rates.
III) JOB SATISFACTION
The term job satisfaction refers to an individual‟s
general attitude toward his job.
A person with a high level of job satisfaction holds
positive attitude toward the job. Job satisfaction has
been treated both as a general attitude and as
satisfaction with five specific dimensions to the job:
pay, the work itself, promotion opportunities,
supervision, and coworkers.
MEASURING JOB SATISFACTION
There are several measures of job satisfaction.
Single Global Rating (SGR) and
Summation Score (SS)
DETERMINANTS OF JOB SATISFACTION

1) Mentally challenging work

2) Equitable Rewards
3) Supportive working conditions
4) Supportive Colleagues
EFFECT OF JOB SATISFACTION (JS) ON EMPLOYEE
PERFORMANCE

1) Job satisfaction and productivity

2) Job Satisfaction and Absenteeism
3) Job satisfaction and Turnover
CHAPTER 3
MOTIVATION
3.1. Foundations of Motivation
 Motivation is the process of arousing and sustaining
goal-oriented behavior.
Simply said, motivation is an inner desire to satisfy
an unsatisfied need.
In organizational settings, motivation is the
willingness to achieve organizational objectives.
MOTIVATION PROCESS
The motivation process starts with an unsatisfied need.
An unsatisfied need creates tension that stimulates drives
within the individual.
These drives generate a search behavior to find particular
goals.
The particular goals, if attained, will satisfy the need.
When need is satisfied it leads to the reduction of
tension.( see your note)
FACTORS THAT AFFECT MOTIVATION
Factors that affect work motivation include: Individual
differences and Organizational practices.
Individuals differ in their personal needs, values and
attitudes, interests, and abilities that the people bring to
their jobs.
Continued...
Organizational practices that affect work motivation
include: the rules, policies, managerial practices, and
reward systems of an organization.
Managers must consider how these factors interact to
affect employee job performance.
3.2. Theories of Motivation
3.2.1 Content theory of Motivation
1) HIERARCHY OF NEEDS THEORY
This theory proposes that employees are motivated
through five levels of needs: Physiological,
Safety,Social, Esteem, and Self-actualization.
Abraham Maslow developed this theory in the 1940s,
based on four major assumptions.
Abraham Maslow's assumptions
First, only unmet needs motivate.
Second, people's needs are arranged in order of
importance (hierarchy) going from basic to complex.
Third, people will not be motivated to satisfy a higher-
level need unless the lower-level need(s) has been at least
minimally satisfied.
 Finally, Maslow assumed that people have five
classifications of needs.
1) PHYSIOLOGICAL NEEDS
This category include people's primary or basic needs:
air, food, shelter,sex, and relief from or avoidance of pain.
Organizations meet these needs through adequate salary,
breaks,and safe working conditions.
1. SAFETY NEEDS
Once they satisfy their physiological needs, people are
concerned with safety and security.
Organizations meet these needs through safe working
conditions, salary increases to meet inflation, job
security, and fringe benefits (medical insurance/ sick
pay/ pensions) that protect the physiological needs.
3) SOCIAL NEEDS
 After establishing safety, people look for love, friendship,
acceptance and affection.
 Organizations meet these needs by providing employees
with the opportunity to interact with others, to be
accepted, and to have friends.
 Activities include parties, picnics, trips, and sports
teams.
4) ESTEEM NEEDS
After they meet their social needs, people focus on ego,
status, self-respect, recognition for accomplishments,
and a feeling of self-confidence and prestige.
5) SELF-ACTUALIZATION NEEDS
The highest level of need is to develop one's full
potential. To do so,people seek growth, achievement and
advancement.
Organizations meet these needs by developing
employees skills, the chance to be creative, achievement
and promotions, and the ability to have complete control
over their jobs.
continued...
Physiological and safety needs were described as
lower-order needs and social, esteem, and self-
actualization needs are higher-order needs.
Higher-order needs are satisfied internally (within the
person), whereas lower-order needs are predominantly
satisfied externally (such as pay, union contracts and
tenure).
Limitation
 Maslow did not take into consideration that a person can be
at different levels of needs based on different aspects of their
lives.
 Nor did he mention that people could revert back to lower-
level needs.
 Also, our needs change, and needs often exist in combination.
 So it is difficult to set up a motivation program to satisfy
employee needs based on Maslow's theory.
2) THEORY “X” AND THEORY “Y” (DOUGLAS MCGREGOR)
McGregor understood people‟s motivation using
Maslow‟s need theory.
McGregor grouped the physiological and safety needs as
'lower-order' needs and the social, esteem, and self-
actualization needs as 'higher-order' needs.
continued...
 McGregor proposed/formulated two alternative sets of
assumptions about human nature or people at work based
upon which set of needs were the motivators.
 He labeled these sets of assumptions as Theory X and Theory
Y.
 Theory X is a set of assumptions of how to manage individuals
who are motivated by lower-order needs.
 Theory Y is a set of assumptions of how to manage individuals
who are motivated by higher-order needs.
Theory X
 His Theory X assumptions were pessimistic and negative.
Assumptions held by managers under Theory X are:
1) Employees dislike work and will avoid work if they can.
2) As employees dislike work, they must be coerced to
achieve objectives.
3) Employees have little ambition; they prefer to be directed
and to avoid responsibility.
4) Employees primarily want security.
Theory Y
 Theory Y, in contrast, is a modern and positive set of assumptions
about people. Assumptions held by managers under Theory Y are:
1) Employees do not inherently dislike work; working is as natural as
resting and playing.
2) Employees are capable of self-direction and self-control if they are
committed to objectives.
3) The typical employee can learn to accept and seek responsibility.
4) Most employees are able to use creativity to solve problems.
Summary
 According to McGregor, people should be treated differently
according to whether they are motivated by lower-order or
higher-order needs.
 Specifically, he believed that theory X assumptions are
appropriate for employees motivated by lower-order needs.
 Theory Y assumptions, in contrast, are appropriate for
employees motivated by higher-order needs, and theory X are
then inappropriate.
3) THE TWO-FACTOR THEORY
A departure from the idea of hierarchically ordered needs
is given in the theory of Frederick Herzberg and his
associates (1959).
Herzberg divided the work environment into two major
groups: hygiene/ maintenance factors or dissatisfiers,
and motivators or satisfiers.
continued..
This theory was termed the two-factor theory and
proposes that motivators rather than hygiene factors
motivate employees.
From this research, Herzberg concluded that job
dissatisfaction and job satisfaction arise from two
separate sets of factors.
1.DISSATISFIERS/ HYGIENE FACTORS
 Are features of the work environment rather than the
work itself.
They include such factors as salary, status, and fringe
benefits, working conditions, quality of supervision,
interpersonal relations, and company policy.
The most important of these factors is company policy,
which many individuals judge to be a major cause of
inefficiency and ineffectiveness.
continued..
The word 'hygiene' indicates that they stop
dissatisfaction from occurring, and work could be
very dissatisfying if they are absent.
 Positive ratings for these factors did not lead to job
satisfaction but merely to the absence of job
dissatisfaction.
All the hygiene factors do is ensure that a state of no
dissatisfaction exists.
2.MOTIVATORS/ SATISFIERS
 Includes achievement, recognition, responsibility,
and nature of the job itself, and advancement- all
related to the job context and the rewards of work
performance.
If motivators are absent, this will not actually result
in dissatisfaction, so long as the hygiene factors are
adequate, because the opposite of satisfaction is not
dissatisfaction, it is merely no dissatisfaction.
3.2.2. Contemporary Theories of Motivation
1.ERG THEORY
ERG theory proposes that employees are motivated
by three needs: Existence, Relatedness, and
Growth.
 Clayton Alderfer reorganized Maslow's needs
hierarchy into three levels of needs: existence
(physiological and safety needs), relatedness (social),
and growth (esteem and self-actualization).
continued..
 ERG theory differs from Maslow's theory in two basic
ways.
• Alderfer broke needs down into three categories: ERG
• And more important, he stressed that when higher
needs are frustrated, lower needs will return, even
though they were already satisfied.
MOTIVATING EMPLOYEES WITH ERG THEORY
 For using ERG theory, one should find out which needs
have been met, which needs have not been met or
have been frustrated, and how to meet the unsatisfied
needs.
 Employee needs have to be satisfied while achieving
the organizational objectives.
2) EQUITY THEORY
 Equity theory proposes that employees are
motivated when their perceived inputs equal
outputs.
 According to L. Fostinger, the proponent of equity
theory, people compare their inputs (effort,
experience, seniority, status, intelligence, and so
forth) and outputs (praise, recognition, pay,
benefits, promotions, increased status, supervisors
approval, etc) to that of relevant others.
continued..
 An unpleasant, dissonating experience arises if the
employee perceives an inequity.
 When employees perceive inequity, they attempt to
reduce it by reducing input or increasing output.
 A comparison with relevant others lead to three
conclusions: the employee is under rewarded, over
rewarded, or equitably rewarded.
1) UNDER REWARDED
When employees perceive that they are under rewarded, they
may do the following.
 They may reduce the inequity by trying to increase outputs
(increase in pay).
 Reducing inputs (doing less work, absenteeism, long
breaks, etc)
 Rationalizing (finding a logical explanation for inequity)
 Changing others‟ inputs or outputs (more work or less
pay), leaving the situation (resigning), etc.
2) OVERREWARDED

Generally, employees do not feel any tension in this
situation.

If so,employees may reduce perceived inequity by
increasing input, reducing output, rationalizing, or
trying to increase others output.
3) EQUITA BY REWARDED
 Motivation exists when inputs and outputs are
perceived as being equal.
 Employees may believe that relevant others should
have greater outputs when they have more experience,
education, and so on.
MOTIVATING EMPLOYEES WITH EQUITY
THEORY
 Equity theory offers some useful general
recommendations.
 First, managers should be aware that equity is based
on perception, which may not be real.
 Second, rewards should be equitable.
 Third, high performance should be rewarded, but
employees must understand the inputs needed to
attain certain outputs.
continued...
 Evidences indicate that the referent chosen is an
important variable in equity theory
 There are four referent comparisons we can use:
1. Self-inside: An employee’s experiences in a different
position inside his/her current organization.
2. Self-outside: An employee’s experiences in a
situation or position outside his/her current
organization.
continued..
3. Other-inside: Another individual or group of individuals
inside the employee’s organization.
4. Other-outside: Another individual or group of
individuals outside the employee’s organization.
3) EXPECTANCY THEORY
 It is based on Victor Vroom's formula: Motivation =
Expectancy x Valence
 It proposes that employees are motivated when they
believe they can accomplish the task and the rewards
for doing so are worth the effort.
continued..
The theory is based on the following assumptions:
1) Both internal (needs) and external (environment) factors
affect behaviour;
2) Behaviour is the individual's decision;
3) People have different needs, desires, and goals; and
4) People make behaviour decisions based on their perception of
the outcome.
1) EXPECTANCY
 It refers to the person's perception of his ability
(probability) to accomplish an objective.
 Generally, the higher is one's expectancy, the better
the chance for motivation.
 When employees do not believe that they can
accomplish objectives, they will not be motivated to
try.
 Also important is the perception of the relationship
between performance and the outcome or reward.
2) VALENCE
 It refers to the value a person places on the outcome or
reward.
 Generally, the higher is the value (importance) of the
outcome or reward, the better the chance for
motivation.
MOTIVATING EMPLOYEES WITH EXPECTANCY
THEORY
 This theory can accurately predict a person's work
effort, satisfaction, and performance, but only if
correct values are plugged into the formula. Therefore,
this theory works in certain contexts but not in others.
continued..
 The following conditions should be implemented to
make the theory result in motivation:
i) Clearly define objectives and the necessary doable
performance needed to achieve the objectives.
ii) Tie performance to rewards. High performance should
be rewarded.
continued...
iii) Be sure rewards have value to the employee. Managers
should get to know employees as individuals. Develop
good human relations.
iv) Make sure your employees believe you will do what you
say you will do.
3.3. Management of Motivation / Applied
Motivation Practices/
 An organization, in order to achieve optimum
performance from its employees, must have not
only employees with the required skills and
abilities but also the motivation and willingness to
perform.
 To motivate employees the management uses
several important ways such as rewards, job
design, self-leadership, empowerment, and
performance feedback.
1) REWARD SYSTEMS
 Organizations can offer two types of rewards: intrinsic
and extrinsic.
 Intrinsic rewards include rewards associated with the
job itself, such as challenging assignments,
responsibility, autonomy, and opportunities for
growth.
 Extrinsic awards include all other rewards that are
typically external to the job's content, such as higher
pay, a promotion, a larger office, and a new job
title.
2) JOB DESIGN
 Jobs that are designed to permit satisfaction of
important employee needs are likely to be those in
which people become motivated to give out their best.
 OB scholars usually emphasize the job itself as the
preferred source of motivation.
continued..
 A job is a set of tasks performed by one person.
 Job design is the process of assigning tasks to a
job,including the interdependency of those tasks with
other jobs.
 Traditional approach to job design relied heavily on
job specialization.
 Job specialization subdivides work into separate jobs
for different people
continued..
 Contemporary job design strategies reverse job
specialization through job rotation, job
enlargement, and job enrichment.
 Three main strategies potentially increase the
motivational potential of jobs: job rotation, job
enlargement, and job enrichment.
continued...
 JOB ROTATION :It is the practice of moving
employees from one job to another typically for short
periods of time.
 JOB ENLARGEMENT:It is the practice of increasing the
number of tasks employees performs within their job.
 JOB ENRICHMENT:It occurs when employees are given
more responsibility for scheduling, coordinating, and
planning their own work.
3) SELF-LEADERSHIP
 It is the process of influencing oneself to establish the
self-direction, and self-motivation needed to perform
the task.
 It takes the view that individuals mostly regulate their
own actions through the behavioral and cognitive
(thought) activities.
continued..
 The five elements of self-leadership are: personal goal
setting, constructive thought patterns, designing
natural rewards, self-monitoring, and self-
reinforcement.
 Constructive thought patterns include self-talk and
mental Imaging.
4) EMPOWERMENT
 Empowerment means creating conditions in which
employees perceive themselves as competent and in
control of performing meaningful tasks.
 Because empowerment enhances self-efficacy,
empowered employees will work creatively, diligently,
and productively.
5) PERFORMANCE FEEDBACK
 Appropriate feedback about performance can enhance
motivation.
 Employees‟ self-efficacy can boost by hearing their
successes. And receiving objective information about
their performance can help employees determine how
they must adjust their behavior to achieve desired
outcomes.
CHAPTER 4
LEADERSHIP
4.1. What does Leadership Involve?
 Leadership is the process whereby
one individual influences other group
members towards the attainment of
defined group, or organizational goals‟
– Barron and Greenberg, 1990
continued..
 Leadership is the process of creating a
vision for others and having the power
to translate it into a reality and sustain
It.‟ – Kotler,1988
 Leadership is the „ability of a superior
to induce subordinates to work with
confidence and zeal.‟ – Koontz and
O‟Donnel
FEATURES OF LEADERSHIP
1) Interpersonal influence
2) Followers
3) Unity of Interest
4) Continuous process
5) Situational
4.2. Leadership Theories
1. Traits Theory
 This theory was one of the earliest
theories on leadership, and stated that
people are born with leadership qualities,
and that leadership cannot be acquired.
 This theory is also known as the ‘natural
leader theory’.
continued..
2. Behavioral Leadership Theories
 Behavioral theories are those theories
that propose that specific behaviors
differentiate leaders from non-leaders.
 Since trait theory failed to predict the
success of leaders, researchers now
focused on what behaviors are most
closely associated with leadership
1. OHIO STATE UNIVERSITY STUDIES
A team of Ohio state university researchers including
Edwin Fleishman conducted extensive surveys and
concluded that leaders may have the following basic
behavior styles.
I) INITIATING STRUCTURE
 This behavior clearly defines the role of leader and
follower so that everyone knows what is expected for
to accomplish the group's goal. This includes
establishing formal lines of communication and
deciding how tasks are to be performed.
continued..
II) CONSIDERATION
 Consideration refers to the degree to which the leader
addresses individual's needs.
 This behavior demonstrates concern for followers and
trying to establish a supportive and friendly work climate
based on mutual trust.
2. UNIVERSITY OF MICHIGAN STUDIES
 University of Michigan researchers led by Renis Likert
have conducted extensive interviews with managers
and their subordinates in this study.
 The researchers proposed two basic approaches of
leadership based on their studies.
continued....
I) TASK- CENTERED LEADER BEHAVIOR
 It is an effort to lead employees by focusing on work
and how well employees work.
 The task-centered leader pays close attention to
employees work, explains work procedures, and is
deeply interested in performance.
continued...
II) EMPLOYEE- CENTERED LEADER BEHAVIOR
 It is an effort to lead employees by developing a
cohesive work group and ensuring employee
satisfaction.
 The employee-oriented leader emphasizes employees
well being, rather than the tasks they perform.
3. THE MANAGERIAL/ LEADERSHIP GRID
 Blake and Mouton have developed a graphic portrayal
of a two-dimensional view of leadership style.
 Based on the styles of „concern for people‟ and
„concern for production‟ they proposed a Managerial
Grid.
Cont…
I) IMPOVERISHED MANAGEMENT (1, 1)

The manager has minimal concern for people or
production.

The manager does the minimal required work under this
management style.
continued..
II) AUTHORITY- OBEDIENCE/ COMPLIANCE
MANAGEMENT (9, 1)
 The manager has high concern for production and low
concern for people.
 The result of this management style is efficient
operations.
continued..
III) MIDDLE-OF-THE-ROAD MANAGEMENT (5, 5)
 The manager has moderate concerns for both people
and production.
 This management style balances needs through
compromise, resulting in adequate performance.
continued..
IV) COUNTRY CLUB MANAGEMENT (1, 9)
 The manager has low concern for production and high
concern for people.
 This management style creates a work environment
where employees feel comfortable.
continued..
V) TEAM MANAGEMENT (9, 9)
 The manager has both high concern for both people
and production.
 This management style results in superior
performance from committed employees.
SUMMARY OF BEHAVIORAL LEADERSHIP THEORIES
 These theories had very little success in identifying
consistent relationships between leadership behavior
and group performance.
 General statements could not be made because
results would vary over different ranges of
circumstances.
 Situational factors that influence success or failure
were not considered.
Managerial GRID
4.2.3. Contingency Leadership Theories
 Assumes that there is no single way of leading works in
all situations.
 Most appropriate leadership style depends on the
situation.
1. FIEDLER’S CONTINGENCY MODEL


Concerned with leader effectiveness

Conducted 25 major studies

Fiedler Contingency Model:
Used to “predict leader effectiveness and to assign
leaders to specific task situations”
Fiedler...
- Concerned with Styles and Situations
- Assess Leadership Style
- Assess the Situation
- This “provides the framework for effectively matching the
leader and the situation”
Leadership Style
1.Task-motivated leaders
“primarily concerned with reaching a goal”

2.Relationship-motivated leaders
primarily “concerned with developing close interpersonal
relations”
Leadership Style: LPC Scale
Least Preferred co-worker
Low LPC:
You are task motivated
Scoring

Pleasant 8 7 6 5 4 3 2 1Unpleasant _______ High LPC:

Friendly 8 7 6 5 4 3 2 1Unfriendly _______
Rejecting 8 7 6 5 4 3 2 1Accepting _______ You are relationship
Distant 8 7 6 5 4 3 2 1Relaxed _______ motivated
Cold 8 7 6 5 4 3 2 1 Warm _______
Supportive 8 7 6 5 4 3 2 1 Hostile _______
Boring 8 7 6 5 4 3 2 1 Interesting _______
Middle LPC:
both
Total _______
Situation
-Leader-member relations

Good or Bad?

-Task Structure

High Structure or Low Structure?

-Position Power

Strong or Weak?
Fiedler’s Contingency Model
4.3. Basic Leadership Styles

A leadership style is the manner a leader
accomplishes his/her task and handles his/her
subordinates or followers.

Leadership style is a combination of traits, skills,
and behaviours managers use to interact with
employees.
1.AUTOCRATIC OR LEADER-CENTERED LEADERSHIP

It is also called authoritarian leadership

Leader uses strong, directive, and controlling actions
to enforce the rules, regulations, activities, and
relationships in the organizations.

Provide clear expectations for what needs to be done,
when it should be done, and how it should be done
2.DEMOCRATIC OR PARTICIPATIVE LEADERSHIP

Lewin’s study found that participative (democratic)
leadership is generally the most effective leadership
style.

Democratic leaders offer guidance to group members,
but they also participate in the group and allow input
from other group members.
continued..

Participative leaders encourage group members to
participate, but retain the final say over the decision-
making process.

Group members feel engaged in the process and are
more motivated and creative.
3.LAISSEZ-FAIRE (FREE-REIN) LEADERSHIP

Delegative leaders offer little or no guidance to group
members and leave decision-making up to group
members.

While this style can be effective in situations where
group members are highly qualified in an area of
expertise, it often leads to poorly defined roles and a
lack of motivation.
FACTORS AFFECTING THE CHOICE OF LEADERSHIP STYLES
AND EFFECTIVENESS

The leader's personality

The nature of the task and the type of activities
involved

The type of people involved in the task

The expectation of the group

The relationship between the leader and the other
members of the group
continued..

The nature of the organization

Level of interaction and cooperation among the
members of the group

Commonality of objectives and goals

The level at which decisions are made

The larger environment which the organization or
group operates
Chapter 5
UNDERSTANDING & MANAGING GROUP BEHAVIOR

A group is defined as two or more individuals who
have come together to achieve particular objectives.

Groups interact and affect one another's behavior.

Group Dynamics-interaction between groups
5.1. Types of Groups

FORMAL GROUPS
-Command Groups
-Task Groups
-Team

INFORMAL GROUPS
SOCIAL STRUCTURE OF THE INFORMAL GROUP

1. Group leader
2. Regular members
3. Deviantes
4. Isolates
5.2. Group Formation & Development

Reasons for group formation
1. Common needs
2. Common Interest
3. Common goal
4. Physical proximity
5. Cultural similarity
 Group development stages
1. Forming
It is characterized by much uncertainty about the group’s
purpose, structure,& leadership.
2. Storming
It is marked by interpersonal conflict as members compete for
leadership and other roles.
3. Norming
It is characterized by close relationship and cohesiveness
4. Performing
The group structure at this point is fully functional and
accepted
5. AdjourningIt is characterized by concern with wrapping up
1. Forming

Definition: Stage 1 teams are generally new teams
that are learning how to work together

Characteristics of stage 1 teams: Members tend to
be tentative and polite and to have little conflict

Critical skills and activities: Stage 1 teams need to
identify their purpose, develop group norms, identify
group processes, define roles, build relationships and
trust

Role of facilitator/leader: Stage 1 teams usually
need a strong leader who can help the team go
through its forming activities
2.Storming
Definition: Stage 2 teams have moved past the early forming
stages and are now encountering some disagreements and/or
conflict. This is natural, but teams need to find effective ways
to handle conflict before they can move on to stage 3.
Group characteristics: Members of stage 2 teams tend to
exhibit increased conflict, less conformity and “jockeying” for
power.
Critical skills and activities: Stage 2 teams need to learn how
to resolve conflict; clarify their roles, power, and structure;
and build consensus through re-visiting purpose.
Role of leader(s): Stage 2 teams need leaders and other team
members who are willing to identify issues and resolve
conflict.
3.Norming

Definition: Stage 3 teams have successfully moved out of
the storming stage and are ready to move to a higher level
of communication and problem-solving.

Group characteristics: Members of stage 3 teams
demonstrate an improved ability to complete tasks, solve
problems, resolve conflict.

Critical skills and activities: Stage 3 teams need to
learn to engage in more sophisticated problem-solving
and decision-making, continue the use of effective
strategies for conflict resolution and take greater levels of
responsibility for their roles

Role of leader(s): In stage 3, leaders become less
directive, team members feel empowered, and multiple
leaders emerge.
4.Performing

Definition: Stage 4 teams are at the highest level of
performance and can process their strengths and weaknesses
while accomplishing their goals.

Group characteristics: In stage 4, the team takes a flexible
approach to roles and structures depending on the task at
hand. The team is able to evaluate its effectiveness and views
conflict is viewed as an opportunity. Stage 4 teams tend to be
energetic, creative, and fun!

Critical skills and activities: Stage 4 teams need to hold high
expectations for their performance. They often use sub-groups
as well as the large group for decision-making and task
completion. Teams also recognize the need to ensure that all
members are in agreement with the role and purpose of sub-
groups.

Role of Leader: In a stage 4 team, it’s often difficult to identify
the leader, because everyone is sharing in leadership.
5. ADJOURNING

It is characterized by concern with wrapping up
activities rather than task performance.

The group prepares for its disbandment.

Members shift their attention from task attention to
socio-emotional focus as they realize that this
relationship is ending.
5.3. Factors That Determine Group Performance and
Satisfaction
A) EXTERNAL CONDITIONS IMPOSED ON THE
GROUP

Organizational strategy

Authority structure

Formal Regulation

Organizational resources

Personnel selection process

Performance evaluation and reward system

Organizational culture

Physical work setting
continued..
B) GROUP MEMBER RESOURCES


Abilities

Personal characteristics
continued..
C) GROUP STRUCTURE

Formal leadership

Roles
 Role identity
 Role perception
 Role expectations
 Role conflict
continued..

Norms

Group size

Status

Composition
continued..
D) GROUP COHESIVENESS

Cohesiveness is the degree to which group members
are attracted to each other and share common goals.

Members of cohesive groups have a strong desire to
stay in the group.

Attractiveness is a key ingredient in cohesiveness.
DETERMINANTS OF COHESIVENESS
 Time spent together
 Severity of Initiation/difficulty of entry
 Group size
 External threat
 Previous success
Chapter 6
MANAGERIAL DECISION MAKING


Decision-making is defined as an act
of making a choice among alternative
courses of action.
6.1. Types of Decisions

Programmed decision
- are those involving routine and frequently
occurring problems determined by rule,
procedure or work experience that have
well established and understood solutions.
continued..

Non-programmed decision
- are unstructured and unique decisions that
arise from situations that are unusual and
involve changeable and unpredictable
circumstances.
DECISION MAKING CONDITIONS

A) DECISION MAKING UNDER CERTAINTY

B) DECISION MAKING UNDER RISK
C) DECISION MAKING UNDER UNCERTAINTY
A) DECISION MAKING UNDER CERTAINTY

This is a condition in which the decision maker
knows the outcome of carrying out each alternative
under consideration.

Decision-maker knows what alternatives are
available, the nature of each alternative, the payoff
from each alternative, and likelihood of chance
events associated with each alternative.
B) DECISION MAKING UNDER RISK

This is a decision-making situation where the
decision maker can estimate the probability of each
possible outcome.

The decision-maker has some information regarding
the outcome of the decision but does not know
everything.

When making decisions under conditions of risk, the
decision-maker may find it helpful to use
probabilities
C) DECISION MAKING UNDER UNCERTAINTY

This is a condition under which the decision maker
has no knowledge of the outcome of each alternative.

Uncertainty exists when the probabilities of various
outcomes are not known.

The decision-maker does not know the alternatives,
the risk associated with each, or the likely
consequences of each alternative
THE DECISION MAKING PROCESS
 Identification and definition of the problem
 Develop decision criteria
 Development of alternative solutions
 Evaluating alternative solutions
 Select the best alternative
 Implement the decision
 Controlling and evaluation
6.2. Models of Decision Making

THE RATIONAL MODEL

SIMON’S NORMATIVE MODEL

THE GARBAGE CAN MODEL
THE RATIONAL MODEL

The rational model proposes that managers use a
rational, four-step sequence when making decisions:
1) Identifying the problem
2) Generating alternative solutions
3) Selecting a solution, and
4) Implementing and evaluating the solution
SIMON’S NORMATIVE MODEL

Bounded rationality- represents the notion that
decision makers are “bounded” or restricted by a
variety of constraints when making decisions.

As opposed to the rational model, Simon's normative
model suggests that decision making is characterize
by
(1) limited information processing,
(2) the use of rules of thumb or short cuts, and
(3) satisficing-choosing a solution that meets minimum
qualification not optimal
THE GARBAGE CAN MODEL

It assumes that decision making does not follow an
orderly series of steps.

In fact, organizational decision making is said to be
such a sloppy and haphazard process that the
garbage can label is appropriate
continued...

According to the garbage can model, decisions result
from a complex interaction between four
independent streams of events: problems, solutions,
participants, and choice opportunities.
GUIDELINES THAT CAN HELP IMPROVE DECISION-MAKING
EFFECTIVENESS
1) Provide time for decision-making
2) Have self–confidence
3) Encourage others to make decisions
4) Learn from past decisions
5) Consider the different decision-making situations
6) Recognize the importance of quality information
7) Communicate the outcome of your decisions
8) Be ready to ask for help
6.3. Group Decision Making
 Group decision making- involves solving a problem by
a group of two or more individuals
ADVANTAGES AND DISADVANTAGES OF GROUP-AIDED
DECISION MAKING
Advantage Disadvantage
 Greater pool of Social pressure
knowledge
Minority
 Different perspective
 Greater comprehension domination
 Increased acceptance Goal displacement
 Training ground Group think
TECHNIQUES OF GROUP DECISION MAKING
 Brain storming
 Nominal group technique
 Delphi technique
 Interacting group decision(consensus)
1) BRAINSTORMING
Brainstorming is the process of suggesting many
possible alternatives/ideas without evaluation or
criticism.
Four rules:
 No criticism
 Encourage freewheeling
 Piggyback ideas
 Encourage many ideas
continued..
Brainstorming is based on observing the following
rules:
• Group members are encouraged to state any idea that
comes to mind, even if it is wild, extreme or
outrageous.
• Group members are encouraged to use and build on
another’s ideas.
• Group members may not criticize any idea.
2) NOMINAL GROUP TECHNIQUE
 It is a structured approach to decision making that
focuses on generating alternatives and choosing one
alternative by voting.
 It is the variation of traditional brainstorming and Delphi
technique that tries to combine individual efficiencies
with team dynamics.
continued..
 Nominal group technique has the following distinct
steps:
 Individuals silently list their ideas.
 Ideas are written on a chart one at a time until all ideas are
listed.
 Discussion is permitted, but only to clarify the ideas. No
criticism is allowed.
 A written vote is taken secretly to select the alternative.
3) DELPHI TECHNIQUE
 It is a group process that anonymously generates ideas or
judgements from physically dispersed experts through
questionnaires and feedback.
 The group coordinator sends out questionnaires asking
about the issue to its members..do it again and again till
consensus is reached.
4) INTERACTING GROUP DECISION (CONSENSUS)
 Consensus is the process of presenting opinions and
gaining agreement to support a decision.
 Group members openly discuss, argue about and agree
on the best alternative(s)
Chapter 7
CONFLICT & STRESS
7.1. Organizational Conflict
 Is the behaviour of an individual or group which
purposely sets out to block or inhibit another individual
or group from achieving its goals.
 Conflict can be a disagreement, the presence of tension,
or some other difficulty between two or more parties.
continued...
 Conflict commonly arises from four circumstances.
 First, conflict can occur when individuals or groups
perceive they have mutually exclusive goals or values.
 Second, behaviour designed to defeat, reduce, or
suppress an opponent may cause conflict.
continued...
 Third, groups that face each other with mutually
opposing actions and counteractions cause conflict.
 Finally, if each group attempt to create a relatively
favoured position vis-à-vis the other, then conflict may
ensue.
continued..
Conflict has a number of dimensions.
 These dimensions are public (overt, visible, and
authorized), or private (covert, hidden, and
unauthorized), formal or informal, rational
(premeditated or logical) or non-rational (spontaneous,
impulsive, and emotional).
SOURCES OF CONFLICT
1) Organizational Change
2) Personality Clashes
3) Differences in Value Sets
4) Threats to Status
5) Perceptual Differences
6) Competition for Limited Resources
7) Work Flow Relationship
7.1.2. Conflict Management
 Mismanagement of conflict rather than the conflict itself
causes real trouble in an organization
 If there is too much, conflict needs to be reduced, and if
there is too little, the level may need to be increased in a
controlled way
 Conflict should either be resolved or stimulated
A) ANALYSIS OF CONFLICT
SITUATION
Managers can analyse a conflict situation
by identifying the following:
1) Conflicting parties
2) Source of conflict
3) Level of conflict
B) CONFLICT STIMULATION
 Techniques of stimulation:
1) Stimulating Competition
2) Communication:
3) Altering Organizational Structure
4) Bringing in Outside Persons
C) CONFLICT RESOLUTION
 CONFLICT RESOLUTION TECHNIQUES
1) Problem solving
2) Superordinate goal-
3) Expansion of Resources
4) Avoidance
Superordinate goals-common objectives held by conflicting parties that are
more important than their conflicting departmental or individual goals.
continued..
5) Smoothing
6) Compromise
7) Altering the Human Variable
8) Altering the Structural Variable
9) Authoritative Command / Impose a Solution
7.2. Stress in Organizations
 Stress is a person's adaptive response to a demand on the
person.
 Managing stress requires a general idea of its sources and
the way it affects people.
 The stimulus that causes stress is called stressor.
 The demands placed on a person by a stressor may be
psychological, physical, or both.
Causes and Consequences of Stress
 Conflict and Uncertainty
 Physical and Social Environment.
 Tasks and Job Demands
COSTS OF STRESS
 HEALTH PROBLEMS
 ABSENTEEISM AND TURN OVER
 PERFORMANCE PROBLEMS
 BURNOUT
7.2.2. Managing Stress
1. Organizational Intervention
2. Individual intervention
Chapter 8
ORGANIZATIONAL OBJECTIVES
8.1. Meaning and Nature of Objectives
 Goal or objective is a projected state of affairs that a
person or a system plans or intends to achieve
 Summarized in the phrase "dream with a deadline," a
goal is an observable and measurable end result having
one or more objectives to be achieved within a more or
less fixed timeframe
continued..
 Organizational objectives are those ends that the
organization seeks to achieve by its existence and
operations.
 They are also yardsticks for tracking an organization's
performance and progress.
 Basically, objectives spell out how much of what kind
of performance by whom.
CLASSIFICATION OF OBJECTIVES
 Organizations establish many different kinds of
objectives.
 Organizational objectives vary by level, and by
time frame.
 Strategic , Tactical, and Operational or
 Long-term, Medium-term, and Short-term.
HIERARCHY OF OBJECTIVE
1) STRATEGIC OBJECTIVES
 Strategic objectives are objectives set by and for top
management of the organization.
 They focus on broad, general issues.
 Strategic objectives are long-term, company-wide
goals set by top management strategic planning
efforts.
 Strategic objectives are broad statements of where the
organization wants to be in the future.
continued..
2) TACTICAL OBJECTIVES
 Tactical objectives are set by and for middle
managers.
 Tactical objectives are the results that major divisions
and departments within the organization intend to
achieve.
 Their focus is on how to operate actions necessary to
achieve the strategic objectives
continued..
3) OPERATIONAL OBJECTIVES
 Operational objectives are set by and for lower-level
managers.
 Their concern is with shorter-term issues associated
with the tactical objectives.
 Operational objectives are specific results expected
from departments, work groups, and individuals.
OBJECTIVES BY TIME FRAME
1) LONG-TERM OBJECTIVES
2) MEDIUM-TERM OJECTIVES
3) SHORT – TERM OBJECTIVES
CHARACTERISTICS OF EFFECTIVE OBJECTIVES
1) BE SPECIFIC AND M EASURABLE
2) FOCUS ON KEY RESULT AREAS
3) BE CHALLENGING BUT ACHIEVABLE
4) COVER A STATED TIME PERIOD
5) BE LINKED TO REWARDS
 SMART-
specific,measurable,achievable,relevant,time
framed
8.2. Multiplicity of Objectives & their Conflict(s) among
Objectives
 The most common trade-offs are between:
1) Short term profits versus long term growth
2) Profit margin versus competitive position
3) Direct sales effort versus development effort
4) Greater penetration of current markets versus developing new
markets
5) Achieving long term growth through related businesses versus
unrelated businesses
6) Profit objectives versus social responsibilities
7) Growth versus stability
8) Low risk environment versus high risk environment
8.3. Management By Objectives (MBO)
 MBO is the process/system/technique in which
managers and their subordinates jointly set
objectives/goals for the employees, periodically
evaluate the performance, and reward according to the
results.
 MBO relies on the defining of objectives for each
employee and then comparing and directing their
performance against the objectives which have been
set.
continued..
 It aims to increase organizational performance by
aligning goals and subordinate objectives throughout
the organization.
 Ideally, employees get strong input to identifying their
objectives, time lines for completion, etc.
 MBO includes ongoing tracking and feedback in the
process to reach objectives.
Elements of MBO
1. Goal specificity
2. Participative decision making
3. Specific/explicit time period
4. Performance feedback
Problems with MBO
 Problematic in dynamic environment
 Overemphasis by employees on accomplishing goals
with out regards to others
 Just a paper work sometimes
 Poor management-worker relation reduce
effectiveness