MANAGEMENT AND ORGANIZATIONAL BEHAVIOR

UNIT NO.

TOPIC

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UNIT - I

INTRODUCTION TO MANAGEMENT

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Managers and Management

Meaning Role of managers

Processes of management

Historical roots of contemporary management practices

UNIT - II

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HISTORY & PERSPECTIVES IN OB

Organizational behavior

Nature and levels of organizational behavior

Individuals in organization

Individual differences

Personality and ability

The Big 5 Model of personality

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The nature of perception

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Characteristics of the perceiver

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Target and situation

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Perceptual problems.

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Page No. [1319]

PROCESSES IN ORGANIZATIONAL BEHAVIOR

Foundations of planning

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Types of plans

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Approaches to planning

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Planning in dynamic environment

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Organizational designs and structures

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Traditional and contemporary organizational designs.

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Organizational culture and ethical behavior

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Factors shaping organizational culture

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Creating an ethical culture

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UNIT - IV

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THEORIES AND CONCEPTS IN OB

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Motivationearly and contemporary theories of motivation.

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Leadership early and contemporary approaches to leadership.

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Groups and group development

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Turning groups into effective teams.

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Managing change process, types and challenges

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UNIT - V

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Organizationally relevant personality traits.

UNIT - III

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Page No.[713]

COMMUNICATION IN ORGANIZATIONS

Page No.[33-40]

Power

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Sources of individual, functional and divisional Power.

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Organizational politics

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Conflict causes and consequences

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Pondys model of organizational conflict

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Conflict resolution strategies and Negotiations

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Communicating effectively in organizations

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Communication process

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Barriers to communication

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Overcoming barriers to communication

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Persuasive communication

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Communication in crisis situations.

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MANAGEMENT AND ORGANIZATIONAL BEHAVIOR

UNIT- I
MANAGERS & MANAGEMENT
Management is a universal phenomenon. It is a very popular and widely used term. All organizations - business,
political, cultural or social are involved in management because it is the management which helps and directs the
various efforts towards a definite purpose. According to Harold Koontz, Management is an art of getting things done
through and with the people in formally organized groups. It is an art of creating an environment in whichpeople can
perform and individuals and can co-operate towards attainment of group goals.
According to F.W. Taylor, Management is an art of knowing what to do, when to do and see that it is done in the
best and cheapest way.
Levels of Management
The term Levels of Management refers to a line of demarcation between various managerial positions in an
organization. The number of levels in management increases when the size of the business and work force increases
and vice versa. The level of management determines a chain of command, the amount of authority & status enjoyed
by any managerial position. The levels of management can be classified in three broad categories: 1.

Top Level of Management

It consists of board of directors, chief executive or managing director.
2. Middle Level of Management
The branch managers and departmental managers constitute middle level.
3. Lower Level of Management
Lower level is also known as supervisory / operative level of management.
Importance of Management
1. It helps in Achieving Group Goals
2. Optimum Utilization of Resources
3. Reduces Costs
4. Establishes Sound Organization
5. Establishes Equilibrium
6. Essentials for Prosperity of Society
Functions of Management
Planning means looking ahead and chalking out future courses of action to be followed. It is rightly said Well plan
is half done.
According to Koontz & ODonell, Planning is deciding in advance what to do, how to do and who is to do it. Planning
bridges the gap between where we are to, where we want to go. It makes possible things to occur which would not
otherwise occur.
Steps in Planning Function
Planning function of management involves following steps:1. Establishment of objectives
a. Planning requires a systematic approach.
b. Planning starts with the setting of goals and objectives to be achieved.
c. Objectives provide a rationale for undertaking various activities as well as indicate direction of
efforts.
2. Establishment of Planning Premises
a. Planning premises are the assumptions about the lively shape of events in future.
b. They serve as a basis of planning.
c. Internal premises are controllable whereas external are non- controllable.
3. Choice of alternative course of action
a. When forecast are available and premises are established, a number of alternative course of
actions have to be considered.
b. After objective and scientific evaluation, the best alternative is chosen.
c. The planners should take help of various quantitative techniques to judge the stability of an
alternative.
4. Formulation of derivative plans
a. Derivative plans are the sub plans or secondary plans which help in the achievement of main plan.
b. Secondary plans will flow from the basic plan. These are meant to support and expedite the
achievement of basic plans.
5. Securing Co-operation
a. After the plans have been determined, it is necessary rather advisable to take subordinates or
those who have to implement these plans into confidence.
6. Follow up/Appraisal of plans
a. After choosing a particular course of action, it is put into action.
b. The follow up must go side by side the implementation of plans so that in the light of observations
made, future plans can be made more realistic.
Organizing Function of Management
Organizing is the function of management which follows planning. It is a function in which the synchronization and
combination of human, physical and financial resources takes place. A manager performs organizing function with
the help of following steps:-

MANAGEMENT AND ORGANIZATIONAL BEHAVIOR

1.

Identification of activities - All the activities which have to be performed in a concern have to be
identified first. For example, preparation of accounts, making sales, record keeping, quality control,
inventory control, etc. All these activities have to be grouped and classified into units.
2. Departmentally organizing the activities - In this step, the manager tries to combine and group similar
and related activities into units or departments. This organization of dividing the whole concern into
independent units and departments is called departmentation.
3. Classifying the authority - Once the departments are made, the manager likes to classify the powers and
its extent to the managers. This activity of giving a rank in order to the managerial positions is called
hierarchy.
4. Co-ordination between authority and responsibility - Relationships are established among various
groups to enable smooth interaction toward the achievement of the organizational goal.
Staffing Function of Management
The managerial function of staffing involves manning the organization structure through proper and effective
selection, appraisal and development of the personnel to fill the roles assigned to the employers/workforce.
According to Theo Haimann, Staffing pertains to recruitment, selection, development and compensation of
subordinates.
Nature of Staffing Function
1. Staffing is an important managerial function- Staffing function is the most important mangerial act
along with planning, organizing, directing and controlling. The operations of these four functions depend
upon the manpower which is available through staffing function.
2. Staffing is a pervasive activity- As staffing function is carried out by all mangers and in all types of
concerns where business activities are carried out.
3. Staffing is a continuous activity This is because staffing function continues throughout the life of an
organization due to the transfers and promotions that take place.
4. The basis of staffing function is efficient management of personnel Human resources can be
efficiently managed by a system or proper procedure, that is, recruitment, selection, placement, training
and development, providing remuneration, etc.
5. Staffing helps in placing right men at the right job- It can be done effectively through proper
recruitment procedures and then finally selecting the most suitable candidate as per the job requirement.
6. Staffing is performed by all managers depending upon the nature of business, size of the company,
qualifications and skills of managers etc. In small companies, the top management generally performs this
function. In medium and small scale enterprise, it is performed especially by the personnel department of
that concern.
Directing Function of Management
DIRECTING is said to be a process in which the managers instruct, guide and oversee the performance of the
workers to achieve predetermined goals. Directing is said to be the heart of management process. Planning,
organizing, staffing has got no importance if direction function does not take place.
Direction has got following characteristics:
1. Pervasive Function - Directing is required at all levels of organization. Every manager provides guidance
and inspiration to his subordinates.
2. Continuous Activity - Direction is a continuous activity as it continuous throughout the life of
organization.
3. Human Factor - Directing function is related to subordinates and therefore it is related to human factor.
Since human factor is complex and behavior is unpredictable, direction function becomes important.
4. Creative Activity - Direction function helps in converting plans into performance. Without this function,
people become inactive and physical resources are meaningless.
5. Executive Function - Direction function is carried out by all managers and executives at all levels
throughout the working of an enterprise; a subordinate receives instructions from his superior only.
6. Delegate Function - Direction is supposed to be a function dealing with human beings. Human behavior
is unpredictable by nature and conditioning the peoples behavior towards the goals of the enterprise is
what the executive does in this function. Therefore, it is termed as having delicacy in it to tackle human
behavior.
Controlling Function of Management
What is Controlling?
Controlling consists of verifying whether everything occurs in conformities with the plans adopted, instructions
issued and principles established. Controlling ensures that there is effective and efficient utilization of
organizational resources so as to achieve the planned goals.
Controlling has got two basic purposes
1. It facilitates co-ordination
2. It helps in planning
Features of Controlling Function
Following are the characteristics of controlling function of management1. Controlling is an end function- A function which comes once the performances are made in
conformities with plans.
2. Controlling is a pervasive function- which means it is performed by managers at all levels and in all
type of concerns.
3. Controlling is forward looking- because effective control is not possible without past being controlled.
Controlling always looks to future so that follow-up can be made whenever required.

MANAGEMENT AND ORGANIZATIONAL BEHAVIOR

4.

Controlling is a dynamic process- since controlling requires taking reviewable methods; changes have
to be made wherever possible.
5. Controlling is related with planning- Planning and Controlling are two inseparable functions of
management. Without planning, controlling is a meaningless exercise and without controlling, planning is
useless. Planning presupposes controlling and controlling succeeds planning.
Importance of Management Principles
Following are the main importance of the Principles of Management.
1.
1. Improves Understanding
2. Direction for Training of Managers
3. Role of Management
4. Guide to Research in Management
MEANING - ROLE OF MANAGERS
Mintzbergs 10 Managerial Roles
Management expert Professor Henry Mintzberg has argued that a managers work can be boiled down to ten
common roles. According to Mintzberg, these roles, or expectations for a managers behavior, fall into three
categories: informational (managing by information), interpersonal (managing through people), and decisional
(managing through action).
This chart summarizes a managers ten roles:

MANAGEMENT AND ORGANIZATIONAL BEHAVIOR

In the real world, these roles overlap and a manager must learn to balance them in order to manage effectively.
While a managers work can be analyzed by these individual roles, in practice they are intermixed and
interdependent. According to Mintzberg: The manager who only communicates or only conceives never gets
anything done, while the manager who only does ends up doing it all alone.
Management Style - Meaning and Different Types of Styles
The art of getting employees together on a common platform and extracting the best out of them refers to effective
organization management.
Every leader has a unique style of handling the employees (Juniors/Team). The various ways of dealing
with the subordinates at the workplace is called as management style.
The superiors must decide on the future course of action as per the existing culture and conditions at the workplace.
The nature of employees and their mindsets also affect the management style of working.
Different Management Styles
1. Autocratic Style of Working
In such a style of working, the superiors do not take into consideration the ideas and suggestions
of the subordinates.
The managers, leaders and superiors have the sole responsibility of taking decisions without
bothering much about the subordinates.
2. Paternalistic Style of Working
In paternalistic style of working, the leaders decide what is best for the employees as well as the
organization.
Policies are devised to benefit the employees and the organization.
3. Democratic Style of Working
In such a style of working, superiors welcome the feedback of the subordinates.
Employees are invited on an open forum to discuss the pros and cons of plans and ideas.
4. Laissez-Faire Style of Working
In such a style of working, managers are employed just for the sake of it and do not
contribute much to the organization.
The employees take decisions and manage work on their own.
5. Management by Walking Around Style of Working
In the above style of working, managers treat themselves as an essential part of the team and are
efficient listeners.
The superiors interact with the employees more often to find out their concerns and
suggestions.
THE HISTORICAL ROOTS OF CONTEMPORARY MANAGEMENT PRACTICES
The Pre-modern Era
Organized activities and management have existed for thousands of years, for example, the construction of the
Egyptian pyramids and the Great Wall of China.
What was Adam Smith's Contribution to the Field of Management?
Adam Smith, in The Wealth of Nations (1776), made an argument on the economic advantages that organizations
and society would achieve from the division of labor, which is the breakdown of jobs into narrow, repetitive tasks.
Smith concluded that division of labor increased productivity by increasing each worker's skill and dexterity, by
saving time that is usually lost in changing tasks, and by the creation of labor- saving inventions and machinery.
Probably, the most important influence on management was the Industrial Revolution.
CLASSICAL CONTRIBUTIONS
The roots of modern management lie within a group of practitioners and writers who gave their contributions to
management which we call the classical approach. The classical approach is the term used to describe the scientific
management theorists and the general administrative theorists. We can divide it into two subcategories:
1. Scientific management theorists: It's the theorists that looked at the field from the perspective of how to
improve the productivity of operative personnel.
2. General administrative theorists: They were concerned with the overall organization and how to make it more
effective.
The year that the modern management theory was born was 1911. This year was the year that Frederick Winslow
Taylor published his book Principles of Scientific Management, where he describes the theory of scientific
management which is the use o
of the scientific method to define the one best way for a job to be done. Taylor is known as the father of scientific
management. He was a mechanical engineer with a Quaker Puritan background and was appalled at the inefficiency
of workers. Employees used different techniques to do the same job. Taylor set out to correct the situation by
applying the scientific method to jobs on the shop floor.
Who Else, Besides Taylor, Were Mayor Contributors To Scientific Management?
Taylor's most prominent disciples were Frank and Lillian Gilbreth. Frank was a construction contractor, while Lillian
was a psychologist. They both studied work arrangements to eliminate wasteful hand- and- body motions. They also
experimented in the design and use of proper tools and equipment for optimizing work performance.
The Gilbreths also made a classification scheme to label seventeen basic hand motions; for example, search,
select, grasp, hold; and they called them therbligs.

MANAGEMENT AND ORGANIZATIONAL BEHAVIOR

What did Henry Fayol and Max Weber Contribute to Management Thought?
They developed the General Administrative theory.
Fayol wrote during the same time as Taylor, but his attention was directed at the activities of all managers, and he
wrote from personal experience. He was the managing director if a large French coal- mining firm and was a
practitioner.
Fayol argued that management was an activity common to all human undertakings in business, in government, and
even at home. He stated fourteen principles of management which are fundamental or universal truths that could be
applied to management activities in all human endeavors. They are:
1. DIVISION OF WORK. Specialization increases output by making employees more efficient.
2. AUTHORITY. Managers must give orders. Authority gives them the right. But, along with authority, goes
responsibility.
3. DISCIPLINE. Employees must obey and respect the rules that govern the organization. Good discipline is
the result of effective leadership, a clear understanding between management and workers, and the
judicious use of penalties for infractions of the rules.
4. UNITY OF COMMAND. Every employee should receive orders from only one superior.
5. UNITY OF DIRECTION. Each group of organizational activities that have the same objective should be
directed by one manager using one plan.
6. SUBORDINATION OF INDIVIDUAL INTERESTS TO THE GENERAL INTEREST. The interests of any
employee or group of employees should not take precedence over the interests of the organization as a
whole.
7. REMUNERATION. Workers must be paid a fair wage for their services.
8. CENTRALIZATION. It refers to the degree to which subordinates are involved in decision making.
Whether decision making is centralized (to management) or decentralized (to subordinates) is a question of
proper proportion.
9. SCALAR CHAIN. The line of authority from top management to the lowest ranks. Communication should
be included in this chain.
10. ORDER. People and materials should be in the right place at the right time.
11. EQUITY. Managers should be kind and fair to their subordinates.
12. STABILITY OF TENURE OF PERSONNEL. High employee turnover is inefficient. Management should
provide orderly personnel planning and ensure that replacements are available to fill vacancies.
13. INITIATIVE. Employees who are allowed to originate and carry out plans will exert high levels of effort.
14. ESPRIT DE CORPS. Promoting team spirit will build harmony and unity within the organization.
Max Weber was a German sociologist. He developed a theory of authority structures and described organizational
activity on the basis of authority relations. He described an ideal type of organization that he called a bureaucracy
which contains:
1. Division of labor.
2. Authority Hierarchy.
3. Formal Selection.
4. Formal Rules and Regulations.
5. Impersonality.
6. Career Orientation.
Weber recognized that this ideal bureaucracy didn't exist in reality, but that it represented a selective
reconstruction of the real world.
What Were the General Administrative Theorist's Contributions to Management Practice?
General administrative theorists are writers who developed general theories of what managers do and what
constitutes good management practice. For example, the functional view of the manager's job owes its origin to
Henry Fayol. They became a frame of reference against which many current concepts have evolved.
Weber's bureaucracy was a response to the abuses that he saw going on within organizations. Weber believed that
his model could remove the ambiguity , inefficiencies, and patronage that characterized most organizations at that
time. Many of the components of his bureaucracy are still inherent in large organizations today.
HUMAN RESOURCES APPROACH
Managers get things done by working with people.
Human resources approach is the study of management that focuses on human behavior.
Who Were Some Early Advocates of the Human Resources Approach?
They are five: Robert Owen, Hugo Munsterberg, Mary Parker Follet, Chester Barnard, and Elton Mayo.
What Claim to Fame does Robert Owen Hold?
Robert Owen was a Scottish businessman who bought his first factory when he was 18. Repulsed by the harsh
practices in factories like the employment of children, thirteen- hour workdays, and miserable working conditions
made Owen become a reformer. He said that they would buy the best machines but then buy the cheapest labor to
run them. Showing concern for employees was both highly profitable for management and would relieve human
misery.
Owen proposed a utopian workplace. Owen is remembered for his courage and commitment to reducing the
suffering of the working class.
For what is Hugo Munsterberg Best Known?
Munsterberg created the field of industrial psychology. In his text Psychology and Industrial Efficiency, published in
1913, he argued for the scientific study of human behavior to identify general patterns and to explain individual

MANAGEMENT AND ORGANIZATIONAL BEHAVIOR

differences. He suggested the use of psychological tests to improve employee selection, the value of learning theory
in the development of training methods, and the study of human behavior to understand what techniques are most
effective for motivating workers. He saw a link between scientific management and industrial psychology.
What Contributions did Mary Parker Follet Make to Management?
She was one of the earliest writers to recognize that organizations could be viewed from the perspective of
individual and group behavior. Follet was a transitionalist writer but had people- orientated ideas, she was a social
philosopher. Her ideas had clear implications for management practice. Follet said that organizations should be
based on group ethic rather than on individualism. Managers and workers should review themselves as partners, as
part of a common group. Managers should rely on their expertise and knowledge to lead subordinates.
Who was Chester Barnard?
Barnard was also a transitionalist who proposed ideas that bridged classical and human resources viewpoints. He
was a practitioner, he was president of New Jersey Bell Telephone Company. He was influenced by Weber's writings
but Barnard saw organizations as social systems as social systems that require human cooperation. He expressed
his ideas in his book The Functions of the Executive published in 1938.
What were the Hawthorne Studies?
The most important contribution to the human resources approach to management are the Hawthorne studies which
are a series of studies during the 1920's and 1930's that provided new insights into group norms and behaviors.
Mayo's conclusions were that behavior and sentiments are closely related, that group influences significantly affect
individual behavior, that group standards establish individual worker output, and that money is less a factor in
determining output than are group standards, group sentiments, and security. These conclusions led to an emphasis
on the human factor in the functioning of organizations and their goals, and to increased paternalism by
management.
Why was the Human Relations Movement Important to Management History?
They are important for its commitment to making management practices more humane. A satisfied worker was
believed to be a productive worker. Dale Carneige, Abraham Maslow, and Douglas McGregor were individuals whose
views were shaped more by their personal philosophies than by sustantive research evidence.
Change people by praising good traits and giving the offender the opportunity to save face.
Abraham Maslow was a humanistic psychologist who proposed a theoretical hierarchy of five needs: psychological,
safety, social, esteem, and self- actualization. He said that each step in the hierarchy must be satisfied before the
next can be activated and that once a need was satisfied it no longer motivated behavior.
Douglas McGregor is known for his formulation of two sets of assumptions about human nature:
Theory X. Its an essentially negative view of people. It assumes they have little ambition, dislike work, want to
avoid responsibility, and need to be closely directed to work effectively.
Theory Y. Its a positive view. It assumes that people can exercise self- direction, accept responsibility, and
consider work to be as natural as rest or play. It captured the true nature of workers and should guide management
practice.
McGregor's beliefs about human nature have had a strong following among management academics and
practitioners.
What Was the Common Thread that Linked Advocates of the Human Relations Movement?
It's the unshakable optimism about people's capabilities. The strongly believed in their cause and wouldn't change
their view no matter what.
Who Were the Behavioral Science Theorists?
They are a group of psychologists and sociologists who relied on the scientific method for the study of organizational
behavior. They are engaged in the objective research of human behavior in organizations. They attempted to keep
their personal beliefs out of their work and hoped to build a science of organizational behavior.
THE QUANTITATIVE APPROACH
It evolved out of the development of mathematical and statistical solutions to military problems during World War
II. After the war, quantitative techniques were moved into the business sector.
The quantitative approach to management includes applications of statistics, optimization models, information
models, and computer simulations. They have contributed most directly to management decision making,
particularly to planning and control decisions.
What Stimulated the Classical Approach?
The common thread in the ideas offered by Taylor, the Gilbreths, Fayol, and Weber was increased efficiency. The
world that existed in the late nineteenth and early twentieth century was one of high inefficiency. The standardized
practices offered by the classicists was a means to achieve that increased productivity. The result: The application of
scientific management principles contributed to raising the standard of living of entire countries.
What Stimulated the Human Resources Approach?
It began in the 1930's. There was a backlash to the overly mechanistic view of employees held by the classicists and
the emergence of the Great Depression.
The classical view treated organizations and people as machines where the managers were the engineers. The
human resources approach offered managers solutions for lessening this alienation and for improving worker
productivity. Humanizing the workplace had become congruent with society's concerns at the time.
The mayor impetus to the quantitative approaches was World War II. After the war, business executives became
open to applying the techniques to their organizational decision making. By the late 1960's, course work in
mathematics, statistics, and operations management had become required components of most business school
curricula.

MANAGEMENT AND ORGANIZATIONAL BEHAVIOR

UNIT- II

ORGANIZATIONAL BEHAVIOR
It is a field of study that investigates the impact that individuals, groups and structures have on behavior within an
organization for the purpose of applying such knowledge towards improving an organization's effectiveness. It is an
interdisciplinary field that includes sociology, psychology, communication, and management; and it complements
the academic studies of organizational theory (which is focused on organizational and intra-organizational topics)
and human resource studies (which is more applied and business-oriented). It may also be referred to
as organizational studies or organizational science. The field has its roots in industrial and organizational
psychology.
NATURE & LEVELS OF ORGANIZATIONAL BEHAVIOR
The knowledge and information explosion, global competition, total quality and diversity are some of the bitter
realities that the managers are facing today. There are many solutions being offered to deal with these complex
challenges. Yet the simple but most profound solution may be found in the words of Sam Walton, the richest person
in the world and the founder of Wal-Mart. Sam was once asked the key to successful organizations and
management. Sam quickly replied, "People are the key".
The term paradigm comes from the Greek word 'paradigma', which means ''model, pattern or example".
First introduced over thirty years ago, by the philosophy and science historian Thomas Khun, the term "paradigm" is
now used as, a broad model, a framework, a way of thinking, and a scheme for understanding reality. The impact of
information technology, total quality and diversity mentioned earlier has led to a paradigm shift.
New Paradigm
The organizational behaviour has a goal lo help the managers make a transition to the new paradigm. Some of the
new paradigm characteristics include coverage of second-generation information technology and total quality
management such as empowerment, reengineering and benchmarking, and learning organization for managing
diversity of work. The new paradigm sets the stage for the study, understanding, and application of the time-tested
micro-variables, dynamics and macro-variables. One must know why management needs a new perspective to meet
the environmental challenges and to shift to a new paradigm.
Historical background
Scientific Management Approach
Scientific management approach was developed by F.W. Taylor at the beginning of the 20th century. This theory
supported the use of certain steps in scientifically studying each element of a job, selecting and training the best
workers for the job arid making sure that the workers follow the prescribed method of doing the job. It provided a
scientific rationale for job specialization and mass production. His assumption was that employees are motivated
largely by money. To increase the output, Taylor advised managers to pay monetary incentives to efficient workers.
Yet, his theory was criticized by many employers and workers. Workers objected to the pressure of work as
being harder and faster. Critics worried that the methods took the humanity out of labor, reducing workers to
machines responding to management incentives. Therefore, Taylor's view is now considered inadequate and narrow
due to the points given by the critics.
Bureaucratic Approach
While scientific management was focusing on the interaction between workers and the task, me researchers were
studying how to structure the organization more effectively. Instead of trying to make each worker more efficient,
classical organization theory sought the most effective overall organizational structure for workers and managers.
The theory's most prominent advocate, Max Weber, proposed a 'bureaucratic form' of structure, which he
thought would work for all organizations. Weber's idea! bureaucracy was , logical, rational and efficient. He made
the naive assumption that one structure would work best for all organizations.
Henry Ford, Henry Fayol and Frederick W. Taylor, the early management pioneers, recognized the
behavioral side of management. However, they did not emphasize the human dimensions. Although there were
varied and complex reasons for the emerging importance of behavioral approach to management, it is generally
recognized that the Hawthorne studies mark the historical roots for the field of organizational behaviour.
Hawthorne Studies
Even, as Taylor and Weber brought attention with their rational, logical approaches to more efficient productivity,
their views were criticized on the ground that both approaches ignored worker's humanity.
The real beginning of applied research in the area of organizational behaviour started with Hawthorne
Experiments. In 1924, a group of professors began an enquiry into the human aspects of work and working
conditions at the Hawthorne plant of Western Electric Company, Chicago. The findings of these studies were given a
new name 'human relations' the studies brought out a number of findings relevant to understanding human
behaviour at work. The Human element in the workplace was considerably more important. The workers are
influenced by social factors and the behaviour of the individual worker is determined by the group.
Hawthorne studies have been criticized for their research methods and conclusions drawn. But their impact
on the emerging field of organizational behaviour was dramatic. They helped usher in a more humanity centered
approach to work.
APPROACHES TO ORGANIZATIONAL BEHAVIOUR
There are mainly four approaches to organizational behaviour. They are:
Human resources approach '
Contingency approach
Productivity approach
Systems approach

MANAGEMENT AND ORGANIZATIONAL BEHAVIOR

Human Resources Approach

The human resources approach is concerned with the growth and development of people towards higher levels of
competency, creativity and fulfillment, because people are the central resource in any organization. This approach
help employees become better in terms of work and responsibility and then it tries to create a climate in which they
can contribute to the best of their improved abilities.
A Contingency Approach
A contingency approach to organizational behaviour implies that different situations require different behavioral
practices for effectiveness instead of following a traditional approach for all situations. Each situation must be
analyzed carefully to determine the significant variables that exist in order to establish the more effective practices.
The strength of this approach is that it encourages analysis of each situation prior to action. Thus, it helps to use all
the current knowledge about people in the organization in the most appropriate manner.
Productivity Approach
Productivity is a ratio that compares units of output with units of input. It is often measured in terms of economic
inputs and outputs. Productivity is considered to be improved, if more outputs can be produced from the same
amount of inputs. But besides economic inputs and outputs, human and social inputs and outputs also arc
important.
Systems Approach
A system is an interrelated part of an organization or a society that interacts with everyone related to that
organization or society and functions as a whole. Within the organization 'people' employ 'technology' in performing
the 'task' that they are responsible for, while the 'structure' of the organization serves as a basis for co-ordinating all
their different activities.
CONTEMPORARY ORGANIZATIONAL BEHAVIOUR
A Separate Field of Study
Organizational behaviour can be treated as a distinct field of study. It is yet to become a science. Now efforts are
being made to synthesize principles, concepts and processes in this field of study.
Interdisciplinary Approach
Organizational behaviour is basically an interdisciplinary approach. It draws heavily from other disciplines like
psychology, sociology and anthropology. Besides, it also takes relevant things from economics, political science, law
and history. Organizational behaviour integrates the relevant contents of these disciplines to make them applicable
for organizational analysis. e.g. it addresses issues, which may be relevant to the case, such as the following:

What facilitates accurate perception and attribution?

What influences individual, group and organizational learning and the development of individual attitudes
toward .work?

How do individual differences in personality, personal development, and career development affect
individual's behaviours and attitudes?

What motivates people to work, and how. does the organizational reward system influence worker's
behaviour and attitudes?

How do managers build effective teams?

An Applied Science
The basic objective of organizational behaviour is to make application of various researches to solve the
organizational problems, particularly related to the human behavioral aspect.
Normative and Value Centered
Organizational behaviour is a normative science. A normative science prescribes how the various findings of
researches can be applied to get organizational results, which are acceptable to the society. Thus, what is
acceptable by the society or individuals engaged in an organization is a matter of values of the society and people
concerned.
Humanistic and Optimistic
Organizational behaviour focuses the attention on people from humanistic point of view. It is based on the belief
that needs and motivation of people are of high' concern. Further, there is optimism about the innate potential of
man to be independent, creative, predictive and capable of contributing positively to the objectives of the
organization.
Oriented towards Organizational Objectives
Organizational behaviour is oriented towards organizational objectives. In fact, organizational behaviour tries to
integrate both individual and organizational objectives so that both are achieved simultaneously.
A Total System Approach
An individual's behaviour can be analyzed keeping in view his psychological framework, interpersonal-orientation,
group influence and social and cultural factors; Thus, individual's nature is quite complex and organizational
behaviour by applying systems approach tries to find solutions for this complexity.
INDIVIDUAL DIFFERENCES IN[PERSONALITY, ATTITUDE, PERCEPTION AND BEHAVIOR]
Personality and Organizations
Emotional Intelligence (EQ): The extent to which people are self-aware, can manage their emotions, can
motivate themselves, express empathy for others, and possess social skills
Dimensions
Self-awareness

MANAGEMENT AND ORGANIZATIONAL BEHAVIOR

Managing Emotions
Motivating Oneself
Empathy
Social Skill
Locus of control: The extent to which a person believes his/her circumstances are a function of either his/her
own actions or of external factors beyond his/her control
Self-efficacy: A persons beliefs about his/her capabilities to perform a task
Authoritarianism: The belief that power/status differences are appropriate within hierarchical social systems
such as organizations
Machiavellianism: Behavior directed at gaining power and control of others
Self-esteem: The extent to which a person believes he/she is a worthwhile/deserving individual
Risk propensity: The degree to which to take chances and make risky decisions he/she is willing Niccol
Machiavelli 1469 -1527
Attitudes in Organizations
Attitudes: A persons complexes of beliefs and feelings about specific ideas, situations, other people
How Attitudes are Formed Attitude Structure
Affect: A persons feelings toward something
Cognitions: The knowledge a person presumes to have about something
Intention: A component of an attitude that guides a persons behavior
Cognitive Dissonance: The anxiety a person experiences when he/she simultaneously possesses two sets of
knowledge or perceptions that are contradictory or incongruent.
Attitude change due to:
New information
Object of the attitude is less important to the person
Key Work-Related Attitudes
Job satisfaction: The extent to which a person is gratified/fulfilled by his/her work
Organizational commitment (job commitment): A persons identification with and attachment to an
organization
Affect and Mood in Organizations
Positive affectivity: Upbeat/optimistic, overall sense of well-being, seeing things in a positive light
Negative affectivity: Downbeat/pessimistic, seeing things in a negative way, seeming to be in a bad mood
PERCEPTION IN ORGANIZATIONS
Perception: The set of processes by which an individual becomes aware of and interprets information about the
environment
Selective perception: The process of screening out information that we are uncomfortable with or that
contradicts our beliefs
Stereotyping: The process of categorizing/labeling people on the basis of a single attribute
Perception and Attribution
Attribution Theory Suggests that we attribute causes to behavior based on our observations of certain
characteristics of that behavior
Types of Workplace Behavior
Workplace behavior: A pattern of action by the members of an organization that directly or indirectly influences
organizational effectiveness
Performance behaviors: All of the total set of work-related behaviors that the organization expects the
individual to display
Dysfunctional behaviors: Those that detract from organizational performance
Absenteeism: Occurs when an individual does not show up for work
Turnover: Occurs when people quit their jobs
Organizational citizenship: The extent to which a persons behavior makes a positive overall contribution to the
organization
PERSONALITY AND ABILITIY
Every individual has his own characteristic way of behaving, responding to emotions, perceiving things and looking
at the world. No two individuals are similar.
You might like going out for parties but your friend might prefer staying back at home reading his/her favourite
book. It is really not necessary that if you like partying around, your friend will also like the same. Here comes the
role of personality.
Determinants of Personality
Following are the factors which help in shaping ones personality:
1. Heredity - Heredity refers to factors that are determined once an individual is born. An individuals
physique, attractiveness, body type, complexion, body weight depend on his/her parents biological
makeup.

MANAGEMENT AND ORGANIZATIONAL BEHAVIOR

2.

Environment - The environment to which an individual is subjected to during his growing years plays an
important role in determining his/her personality. The varied cultures in which we are brought up and our
family backgrounds have a crucial role in shaping our personalities.
3. Situation - An individuals personality also changes with current circumstances and situations. An individual
would behave in a different way when he has enough savings with him and his behavior would
automatically change when he is bankrupt.
An individuals appearance, character, intelligence, attractiveness, efficiency, style determine his/her personality.
What is Personality Development ?
Personality development is defined as a process of developing and enhancing ones personality. Personality
development helps an individual to gain confidence and high self esteem.
Personality development also is said to have a positive impact on ones communication skills and the way he sees
the world. Individuals tend to develop a positive attitude as a result of personality development.
Personality Types - Different Types of Personality
Let us go through the following personality types:
1. The Duty Fulfiller
2. The Mechanic
3. The Nurturer
4. The Artist
5. The Protector
6. The Idealist
7. The Scientist
Personality Traits - Meaning and Different Types of Traits
An individuals behavior towards others, attitude, characteristics, mindset make his personality. Personality
development is defined as a process of enhancing ones personality. Personality development sessions guide an
individual as to how he/she can develop his/her personality.
Personality Traits
Broadly there are five parameters which describe an individuals personality. These five dimensions are also called
as Big Five Factors, and the model is referred to as Five Factor Model also abbreviated as FFM.
The Five Factor Model was initially proposed by Costa & McCrae in the year 1992 and often describes the relation
between an individuals personality and various behaviours.
Following are five personality traits of an individual:
1. Openness to experience
2. Conscientiousness
3. Extraversion and Introversion
Carl Jung popularized both the terms - Extraversion and Introversion.
a. Extraversion:
b. Introversion:
4. Agreeableness
5. Neuroticism
ORGANIZATIONALLY RELEVANT PERSONALITY TRAITS
Remember being a manager does not mean sitting in a closed cabin and passing on instructions to your team
members. Do not forget that respect is something which is always earned, never demanded. Your role is to extract
the best out of employees and also help them hone their skills and abilities.
Make your team members feel that you are there with them always. Extend your support whenever required. A good
manager is one who smiles even at the times of stress.
Personality Development at Workplace
Personality development plays a crucial role in enhancing ones personality. It helps an individual to develop a
positive attitude and look at the brighter sides of life.
Personality development plays an imperative role at workplace as it decides the way an individual interacts with his
fellow workers and responds to various situations. How an individual behaves at the workplace depends on his/her
personality. Personality development helps in polishing and grooming individuals and makes them better and
efficient resources for the organization.
THE NATURE OF PERCEPTION
Definition: A cognitive information processing process that enables us to interpret and understand our environment
Social perception: the information processing process of interpreting and understanding other people.
How Perception functions: the Social Information Processing Model. Four Stages:
Key concept: bounded rationality
(1). Selective Attention/Comprehension
Limited/scarce attention
Trained attention/inattention
Cognitive structure/mental models: patterns of information processing
(2). Encoding and Simplification: raw information is interpreted and translated into meaningful mental
constructs
Limited interpretation capability:

10

MANAGEMENT AND ORGANIZATIONAL BEHAVIOR

Mental models/basic assumptions

Cognitive categories: beautiful
Schema: a mental picture of a particular event/object
(3). Storage and Retention:
Limited short-term memory capability
Selective storage
Long-term memory: modular/connectivity
(4). Retrieval and Response
3. Fallacies in Social Perception
Stereotype: a generalization of a group of people: stereotype toward the powerless: women, elder people,
gay, minority.
Implicit personality theory: judging other people based on our own mental models about how people
behave: attractiveness, selfishness, worm.
First-impression error: the tendency to form lasting opinions about an individual based on initial
perceptions.
Self-fulfilling prophecy: the situation in which our expectations about people affect interaction with them
that our expectations are fulfiled.
Selective perception: selectively gather, interpret, store, and retrieve information in a way that fits ones
self-concept, viewpoints, attitudes, values, self-interests, and emotions: illusion and escape from reality.
Man is a rationalizing animal
4. Cognitive Dissonance Theory: Leon Festinger, 1957
Cognitive Dissonance: an uncomfortable situation when a person simultaneously holds
inconsistent/conflicting congnitions (ideas, beliefs, opinions).
Festingers: people will reduce cognitive dissonance in the easiest way possible, usually by changing one
or both cognitions.
5. Impression management: the process of enhancing other peoples impression about oneself short-term
orientation
Self-enhancing: name dropping, appearance, dress.
Other-enhancing: flattery, agreement
Facework: preserving, enhancing, and saving the face of self and others. long-term orientation
6. Organizational Perception and Memory
Organizational mental model
Division and specialization in perception
Organizational common knowledge base
Organizational memory
Attributions in Organization
Attribute Theory: how people trace the causes of the behavior of themselves and others
Internal attribution: attribute the individual internal factors as the causes of behavior.
External attribution: attribute external factors as the causes of behavior.
Fundamental attribution error: the tendency to make attributions to internal causes when explaining the
behavior of others.
Self-serving bias: the tendency to attribute ones own successes to internal causes and ones failure to external
causes.
Cultural Differences: Japan may be the opposite
Kelleys Attribution Theory

Consensus: other peoples behavior on the same situation or tasks

Distinctiveness: ones behavior in other situations or tasks
Consistency: ones behavior over time on one given tasks
What are the factors influencing perception?
Factors Influencing Perception
Perception is our sensory experience of the world around us and involves both the recognition of environmental
stimuli and actions in response to these stimuli. Through the perceptual process, we gain information about
properties and elements of the environment that are critical to our survival. Perception not only creates our
experience of the world around us; it allows us to act within our environment.
A number of factors operate to shape and sometimes distort perception. These factors can reside:
i) In the perceiver.
ii) In the object or target being perceived or
iii) In the context of the situation in which the perception is made.

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MANAGEMENT AND ORGANIZATIONAL BEHAVIOR

CHARACTERISTICS OF THE PERCEIVER

1. Characteristics of the Perceiver: Several characteristics of the perceiver can affect perception. When an
individual looks at a target and attempts to interpret what he or she stands for, that interpretation is heavily
influenced by personal characteristics of the individual perceiver. The major characteristics of the perceiver
influencing perception are:
a) Attitudes:
b) Moods:
c) Motives:
d) Self-Concept:
e) Interest:
f) Cognitive Structure:
g) Expectations:

Sheldon S Zalkind and Timothy W Costello on some specific characteristics of the perceiver reveal
Knowing oneself makes it easier to see others accurately.
Ones own characteristics affect the characteristics one is likely to see in others.
People who accept themselves are more likely to be able to see favourable aspects of other people.
Accuracy in perceiving others is not a single skill.
These four characteristics greatly influence how a person perceives others in the environmental situation.
Characteristics of the Target: Characteristics in the target that is being observed can affect what is perceived.
Physical appearance plays a big role in our perception of others. Extremely attractive or unattractive individuals are
more likely to be noticed in a group than ordinary looking individuals. Motion, sound, size and other attributes of a
target shape the way we see it.
Characteristics of the Situation: The situation in which the interaction between the perceiver and the target
takes place has an influence on the perceivers impression of the target.
Perceptual Process
The perceptual process is the sequence of psychological steps that a person uses to organize and interpret
information from the outside world. The steps are:
Objects are present in the world.
A person observes.
The person uses perception to select objects.
The person organizes the perception of objects.
The person interprets the perceptions.
Perceptual Selection
Perceptual selection is driven by internal and external factors.
Internal factors include:
Personality - Personality traits influence how a person selects perceptions. For instance, conscientious people tend
to select details and external stimuli to a greater degree.
Motivation - People will select perceptions according to what they need in the moment. They will favor selections
that they think will help them with their current needs, and be more likely to ignore what is irrelevant to their
needs.
Experience - The patterns of occurrences or associations one has learned in the past affect current perceptions.
The person will select perceptions in a way that fits with what they found in the past.
External factors include:
Size - A larger size makes it more likely an object will be selected.
Intensity - Greater intensity, in brightness, for example, also increases perceptual selection.
Contrast - When a perception stands clearly out against a background, there is a greater likelihood of selection.
Motion - A moving perception is more likely to be selected.
Repetition - Repetition increases perceptual selection.
Novelty and familiarity - Both of these increase selection. When a perception is new, it stands out in a person's
experience. When it is familiar, it is likely to be selected because of this familiarity.
Perceptual Organization
After certain perceptions are selected, they can be organized differently. The following factors are those that
determine perceptual organization:
Figure-ground - Once perceived, objects stand out against their background. This can mean, for instance, that
perceptions of something as new can stand out against the background of everything of the same type that is old.
Perceptual grouping - Grouping is when perceptions are brought together into a pattern.
Closure - This is the tendency to try to create wholes out of perceived parts. Sometimes this can result in error,
though, when the perceiver fills in unperceived information to complete the whole.
Proximity - Perceptions that are physically close to each other are easier to organize into a pattern or whole.
Similarity - Similarity between perceptions promotes a tendency to group them together.
Perceptual Constancy - This means that if an object is perceived always to be or act a certain way, the person will
tend to infer that it actually is always that way.

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MANAGEMENT AND ORGANIZATIONAL BEHAVIOR

Perceptual Context - People will tend to organize perceptions in relation to other pertinent perceptions, and create
a context out of those connections.
Each of these factors influence how the person perceives their environment, so responses to their environment can
be understood by taking the perceptual process into account.
TARGET AND PERCEPTUAL PROBLEMS
Halo effect: which is when our general impression of a person is based on like one prominent characteristic, which
dominates our perception of other characteristics of that person
> For example, a person is sometimes late so the manager forms a negative impression of the person and from
then on sees everything the employee does negatively.
Primacy effect: our opinion of people is based on the first information we form about them
> we evaluate the person based on our first impression of them, so if we had a good first impression you wuold view
that person in a favourable light
Recency effect: when the most recent information dominates our perception of others
> when a manager evaluates an employee's performance, the most recent performance dominates so if the last
thing the employee did was sign a big contract with a supplier than the manger will have a very positive impression
of the employee
False consensus effect: where we overstate the extent to which others have beliefs and characteristics similar to
our own when we want to quit our job we think that a lot of other people are also thinking about quitting their job,
like we think that "everyone does it or thinks so"
Perceptual Problems in Organizations.
Even in ideal circumstances, the best manager will chalk up a failed project or endeavor at some point in his career.
To remain an effective manager and a valued and respected member of a companys staff, a manager must address
perceptual problems related to the failed project.
Lack of Expertise
When a manager has a failure with a project because of a perceived lack of expertise related to the task, he must
address the potential for that concern among co-workers. This can be accomplished by acknowledging the missteps
that led to the failure and offering an explanation for why mistakes were made and why the same issue will not arise
again.
Mismanagement
If a manager faces a failure because of under-budgeting a project, failing to set reasonable deadlines or hire the
right staff, it may give colleagues the perception that the manager does not have the ability to effectively run future
projects.
Ineffectiveness
A manager who loses sales or key customers, or who doesnt push his staff to meet corporate objectives, may be
viewed as ineffective. The manager should regroup and rethink his current approach to his role and responsibility
with the company, and he should develop an overall plan for revamping and improving his future performance.
Inability to Lead
When team members fail to come together on a project under the direction of a manager, the manager may suffer
from a perception that he has the inability to effectively lead. A manager facing this obstacle must regain the trust
and confidence of his superiors, as well as that of his team members.
UNIT- III

FOUNDATION OF PLANNING
Planning means looking ahead and chalking out future courses of action to be followed. It is a preparatory step. It
is a systematic activity which determines when, how and who is going to perform a specific job. Planning is a
detailed programme regarding future courses of action. It is rightly said Well plan is half done.
According to Koontz & ODonell, Planning is deciding in advance what to do, how to do and who is to do it. Planning
bridges the gap between where we are to, where we want to go. It makes possible things to occur which would not
otherwise occur.
Steps in Planning Function
Planning function of management involves following steps:1. Establishment of objectives
a. Planning requires a systematic approach.
b. Planning starts with the setting of goals and objectives to be achieved.
c. Objectives provide a rationale for undertaking various activities as well as indicate direction of
efforts.
2. Establishment of Planning Premises
a. Planning premises are the assumptions about the lively shape of events in future.
b. They serve as a basis of planning.
c. Establishment of planning premises is concerned with determining where one tends to deviate
from the actual plans and causes of such deviations.
3. Choice of alternative course of action
a. When forecast are available and premises are established, a number of alternative course of
actions have to be considered.
b. After objective and scientific evaluation, the best alternative is chosen.
c. The planners should take help of various quantitative techniques to judge the stability of an
alternative.
4. Formulation of derivative plans

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MANAGEMENT AND ORGANIZATIONAL BEHAVIOR

a.
b.

5.

6.

Derivative plans are the sub plans or secondary plans which help in the achievement of main plan.
Secondary plans will flow from the basic plan. These are meant to support and expediate the
achievement of basic plans.
c. Derivative plans indicate time schedule and sequence of accomplishing various tasks.
Securing Co-operation
a. After the plans have been determined, it is necessary rather advisable to take subordinates or
those who have to implement these plans into confidence.
b. The purposes behind taking them into confidence are :a. Subordinates may feel motivated since they are involved in decision making process.
b. The organization may be able to get valuable suggestions and improvement in
formulation as well as implementation of plans.
c. Also the employees will be more interested in the execution of these plans.
d.
Follow up/Appraisal of plans
a. After choosing a particular course of action, it is put into action.
b. After the selected plan is implemented, it is important to appraise its effectiveness.
c. The follow up must go side by side the implementation of plans so that in the light of observations
made, future plans can be made more realistic.

TYPES OF PLANNING
Strategic plans, investment plans, expansion plans, operational plans, annual plans, internal plans, growth plans,
product plans, feasibility plans.
The most standard business plan is a start-up plan,
Internal plans
An operations plan
A strategic
A growth plan or expansion plan or new product plan
A feasibility plan
Budgeting
Budget helps to aid the planning of actual operations by forcing managers to consider how the conditions might
change and what steps should be taken now and by encouraging managers to consider problems before they arise.
It also helps co-ordinate the activities of the organization by compelling managers to examine relationships between
their own operation and those of other departments. Other essentials of budget include:
To control resources
To communicate plans to various responsibility center managers.
To motivate managers to strive to achieve budget goals.
In summary, the purpose of budgeting is tools:
1. tools provide a forecast of revenues and expenditures, that is, construct a model of how a business might
perform financially if certain strategies, events and plans are carried out.
2. Tools enable the actual financial operation of the business to be measured against the forecast.
Forecasting
It is the process of making statements about events whose actual outcomes (typically) have not yet been observed.
A commonplace example might be estimation of some variable of interest at some specified future
date. Prediction is a similar, but more general term.
APPROACHES TO PLANNING
All organizations plan; the only difference is their approach. Prior to starting a new strategic planning process it will
be necessary to access the past planning approach that has been used within the organization and determine how
the organization's cultural may have been affected. Addressing these cultural issues is critical to the success of the
current planning process.
The four possible approaches to planning are:
1. Reactive - past oriented
Reactive planning is an active attempt to turn back the clock to the past. The past, no matter how bad, is
preferable to the present. And definitely better than the future will be.
2. Inactive - present oriented
Inactive planning is an attempt to preserve the present, which is preferable to both the past and the future.
While the present may have problems it is better than the past.
3. Preactive - predict the future
Preactive planning is an attempt to predict the future and then to plan for that predicted future.
Technological change is seen as the driving force bringing about the future, which will be better than the
present or the past.
4. Proactive - create the future
Proactive planning involves designing a desired future and then inventing ways to create that future state.
Not only is the future a preferred state, but the organization can actively control the outcome. Planners
actively shape the future, rather than just trying to get ahead of events outside of their control
PLANNING IN DYNAMIC ENVIRONMENT

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MANAGEMENT AND ORGANIZATIONAL BEHAVIOR

In todays complex business environment, the ability to identify new opportunities and rapidly expand into
untapped markets is becoming a necessary condition for success. The leaders of some major organizations
have even been heard to question the value of a strategic vision in a business world that will certainly
change before the vision statements ink is dry.
ORGANIZATION DESIGN AND STRUCTURE
What is an organization?
An organization is nothing but a common platform where individuals from different backgrounds come together and
work as a collective unit to achieve certain objectives and targets.
Organization structure
Representing the formal structure of a firm in terms of authority, functions and relations. Explanation of
Organization Charts.
What is an Organization Chart? Description
Every organization has both a formal and an informal organizational structure. Examples of organizational structures
are:
Hierarchical structure (typical for the small, entrepreneurial organization)
Line-staff structure
Functional or Departmental structure (based on function, products/service, customer type, geographic region)
Matrix structure (dual reporting lines)
These formal structures of organizations can be represented in the form of an organization chart. Sometimes also referred
to as organizational chart, organigram, organogram, or org chart. It graphically shows the hierarchical authority, roles
and responsibilities, functions and relations within an organization. For a new employee, the organization chart helps to
understand what should happen within the firm. (The informal structure represents what is actually occurring within the
organization.)

Many people have pointed out weaknesses and limitations of org charts. Others have coined a dizzying array of buzzwords to
categorize organizations, including networked organizations, transnational organizations, front-back organizations,
boundaryless organizations, learning organizations, virtual organizations and social networks.
Nevertheless organizational design continues to be one of an important and challenging demand on top management,
because it influences and interconnects the business and corporate strategy, marketing, decision-making, communication,
finance and investing, and leadership within any organization. And organization charts will continue to play a major role in
this process, although they may look quite differently from the traditional tree-like forms of the past. Simply because people
can more quickly absorb information when it is shown in a graphical way.

Origin of the Organizational Chart. History

It is not unlikely that the ancient Egyptians already had documented their methods of organizing the division of labor for their
massive public works projects in one way or the other.
McCallum noted that "other things being equal, a long road should be operated for a less cost per mile than a short one". But
things were not equal. The essential functions of a railroad company - coordinating the delivery of freight and people,
repairing cars and track, monitoring the positions of trains - were vastly more complicated over 500 miles than over 50 miles.
Without effective organization, additional miles of track made railroads more costly to operate. McCallum developed the
organization chart, which according to writer Henry Varnum Poor resembled a tree. Its roots represented the president and
the board of directors. Its branches were the five operating divisions and the passenger and freight departments. Its leaves
indicated the various local ticket and freight agents, crews and foremen, and so on.

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MANAGEMENT AND ORGANIZATIONAL BEHAVIOR

Historically, the organization chart is a symbol of the evolution of Western industry from being fundamentally personal in
nature to enterprises in which the creation of organizational capabilities became a prerequisite for survival.
Usage of the Organization Chart. Applications
Defining the roles and responsibilities of all personnel within the organization.
Establishing a hierarchical structure of authority, power and, hence, decision-making.
Establish communication channels and information flows, incorporating a chain of command with specific rules and
regulations relating to reporting procedures and accountability methods.

Creating an Organizational Chart. Process

Robert Simons (Levers of Organization Design, 2005) suggests that there are four main tensions or levers underlying any
organization design:
1. Strategy (structure follows strategy) versus Structure (organization design influences future strategies)
2. Accountability (for today's goals) versus Adaptability (to future changes)
3. Ladders (vertical hierarchies) versus Rings (horizontal networks)
4. Self-Interest (individual) versus Mission Success (department, business unit, corporation).
Compare also: Greiner, Growth Phases and Simons, Levers of Control.
Strengths of the Organization Chart. Benefits
Transparent and predictable. Helps to understand what should happen within the firm.
Provides a quick snapshot about the formal hierarchy in an organization.
Who is in charge of what. Who reports to who.
Limitations of Organizational Charts. Disadvantages
Static and inflexible. Organizations change and go through Growth Phases.
Does not help much to understand what actually happens within the informal organization. In reality, organization
often behaves quite chaotic and follow complex guesswork and amplification mechanisms (Core Group Theory).
Traditional org charts cannot cope with changing boundaries of firms due to Outsourcing, Information Technology,
Strategic Alliances, and the Network Economy.
TRADITIONAL VS. MODERN ORGANIZATIONAL STRUCTURES
The differences between traditional organizational structures and modern organizational structures are quite extensive, as
you can see below. It helps to identify examples of each type of organizational structure. For example, all government,
church and military organizations are based on traditional structures; lots of layers of managers and red tape.
TABLE 1- TRADITIONAL ORGANIZATIONAL STRUCTURES
Organizational Descriptors
Advantages
Disadvantages
Structure
Simple

Low

Fast

Not appropriate as
Structure
departmentalizatio

Flexible
organization grows; reliance on
n

Inexpensive to maintain
one person

Wide spans of
Clear accountability
control

Authority
centralized to a
single person

Little
formalization
Functional
Grouping of
Cost savings from specialization

Short sighted manager

Structure
similar or relatedo Economies of scale

People can become too

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MANAGEMENT AND ORGANIZATIONAL BEHAVIOR

occupational
specialties
together
Divisional
Structure

Organizational
Structure
Team

Minimum duplication of people and

specialized and lose focus on
equipment
other areas

Employees are grouped together with

others who have similar tasks
Consists of

Focuses on results

Duplication of activities and

separate business
Managers are responsible for what
resources increasing costs and
units or divisions
happens to their products and services
reduces efficiency
TABLE 2- MODERN ORGANIZATIONAL STRUCTURES
Descriptors
Advantages
Disadvantages
A structure in which the entire organization is

made up of work groups or teams.

Matrix-Project

Employees are
more involved and
empowered
Reduced barriers
among functional
areas
Fluid and flexible
design that can
respond to
environmental
changes
Faster decision
making

No clear chain of
command
Pressure on teams to
preform

Matrix is a structure that assigns specialists

Complexity of assigning
from different functional areas to work on
people to projects
projects but who return to their areas when

Task and personality

the project is completed. Project is a
conflicts
structure in which employees continuously
work on projects. As one project is

completed, employees move on to the next

project
Boundaryless
A structure that is not defined by or limited
Highly flexible and
Lack of control
to artificial horizontal, vertical or external
responsive

Communication
boundaries; includes virtual and networked
Draws on talent
difficulties
types of organizations
wherever its found
(Robbins, Coulter, & Langton, 2009)
Every organization is different and therefore there is no set best organizational structure for a company. It is important
to note when establishing a company that how you structure the organization will have implications on how responsive the
organization can be to change
CONCEPT OF ORGANIZATIONAL DESIGN
Organizational design is the overall configuration of structural components that defines jobs, groupings of jobs, the hierarchy,
patterns of authority, approaches to co-ordination and line-staff differentiation into a single and unified organizational
system. Consider, for example, the differences in organizational design that might exist between a computer manufacturer
and university. Since the computer manufacturer has to respond to frequent technological breakthroughs and changes in its
competitive environment, it is likely to have a relatively flat and decentralized design whereas the university has a more
stable environment and is less affected by technology. Therefore, it has a more centralized structure with numerous rules and
regulations.
DETERMINANTS OF ORGANIZATIONAL DESIGN
The key situational determinants of organizational design are technology, organizational environment, and organization size
and life cycle.

Technology: Technology is the set of processes that an organization uses to transform various resources such as
materials and labor into products or services. Joan Woodward was the first person to see the link between
technology and organizational design

Environment: The environment also influences the type of design an organization is likely to adopt. The
environment of an organization consists of all the factors and conditions outside the organization that might affect it.
Organizational Size and Life Cycle: Organization size refers to how large :
the organization is, usually, in terms of
the number of its full-time employees. Life cycle refers to organization's maturity relative to that of other organizations .
The following figure 17.1 shows the organization cycle.

CONTEMPORARY FORMS OF ORGANIZATIONAL DESIGN

Every organization has its own unique design depending on its technology. limits and potentials of" its environment and the
life cycle stage it follows. Following are the various forms of an organization based on their design:

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The U-Form Organization: In the U-form organization. U stands for Unity, It is also called as "functional design as
it relies exclusively on the functional approach to departmentalization. Members of the organization who perform the
same functions arc grouped together into departments.
The H-Form Organization: In the H-form organization, H stands for Hybrid and is also known as conglomerate.
The design relics on product departmentalization with the various products constituting different businesses. This
design usually results from the corporate strategy of unrelated diversification of the products.

The M-Form Organization: In the M-form organization M stands for Multi-divisional and it is called the divisional
design. It is similar to the H-form design but has one notable distinction. Most of its businesses are in the same or
related industries. For example, an organization with an M-form design might own one business that manufactures
automobile batteries, other that manufactures lyre and still another that manufactures car polish.
The Matrix Organization: A matrix organization is created by overlaying product-based departmentalization on lo
a functional structure. A matrix design is seldom used for an entire organization and is often used for a portion of it.
Figure 17.3 shows the matrix organization.

A matrix design allows an organization to capitalize on the advantages of both functional and product
departmentalization. It has also some drawbacks such as an organization lacks a clear chain of command thereby
'resulting into confusion about which manager lies authority over a given employee. The organization also has to
devote more resources to coordination because of high levels of interdependence that result from a matrix.
Global Organization: An organization, which has assets in more than one country other than its home country is
called as global organization. Such companies have offices and/or factories in different countries and usually have a
centralized head office where they coordinate the global management. These organizations have centralized head
office in their home country that controls their various office in other parts of the world.

It is to be remembered that there is no one best form of design that all organizations should adopt. Each
organization has to carefully assess its own strategy, its strengths and weaknesses, its history, its technology, environment,
life cycle and size. It must then choose a design that fit these elements most effectively.
ORGANIZATION CULTURE AND ETHICAL BEHAVIOR
What is culture?
The attitude, traits and behavioral patterns which govern the way an individual interacts with others is termed as
culture. Culture is something which one inherits from his ancestors and it helps in distinguishing one individual from
the other.
What is organization culture?
Every human being has certain personality traits which help them stand apart from the crowd. No two individuals
behave in a similar way. In the same way organizations have certain values, policies, rules and guidelines which
help them create an image of their own.
Organization A
In organization A, the employees are not at all disciplined and are least bothered about the rules and regulations.
They reach their office at their own sweet time and spend their maximum time gossiping and loitering around.
Organization B
This organization follows employee friendly policies and it is mandatory for all to adhere to them. It is important for
the employees to reach their workplace on time and no one is allowed to unnecessarily roam around or spread
rumors.
Which organization do you feel would perform better? Obviously organization B
Broadly there are two types of organization culture:

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Strong Organization Culture: Strong organizational culture refers to a situation where the employees
adjust well, respect the organizations policies and adhere to the guidelines. In such a culture people enjoy
working and take every assignment as a new learning and try to gain as much as they can. They accept
their roles and responsibilities willingly.
Weak Organization Culture: In such a culture individuals accept their responsibilities out of fear of
superiors and harsh policies. The employees in such a situation do things out of compulsion. They just treat
their organization as a mere source of earning money and never get attached to it.
Factors affecting organizational Culture
There are several factors which affect the organization culture:
Individual working with the organization.
The sex of the employee
The nature of the business
The culture of the organization is also affected by its goals and objectives.
The clients and the external parties
The management and its style of handling the employees
FACTORS SHAPING ORGANIZATIONAL CULTURE- CREATING AN ETHICAL CULTURE
An organization is formed when individuals from different backgrounds and varied interests come together on a
common platform and work towards predefined goals and objectives.
Employees are the assets of an organization and it is essential for them to maintain the decorum and ambience of
the workplace.
Creating organization Ethics
The way an organization should respond to external environment refers to organization ethics.
Organization ethics includes various guidelines and principles which decide the way individuals should behave at the
workplace.
It also refers to the code of conduct of the individuals working in a particular organization.

No organization should depend on unfair means to earn money.

Childhood is the best phase of ones life and no child should be deprived of his childhood.
Employees should not indulge in destruction or manipulation of information to get results.
There must be absolute fairness in monetary transactions and all kinds of trading.
Organizations must not discriminate any employee on the grounds of sex, physical appearance,
age or family background.
Organization must not exploit any of the employees
Organization must take care of the safety of the employees.
Never lie to your customers.

UNIT- IV

MOTIVATION- EARLY AND CONTEMPORARY THEORIES OF MOTIVATION

Motivation is the word derived from the word motive which means needs, desires, wants or drives within the
individuals. It is the process of stimulating people to actions to accomplish the goals. In the work goal context the
psychological factors stimulating the peoples behaviour can be desire for money
success
recognition
job-satisfaction
team work, etc
One of the most important functions of management is to create willingness amongst the employees to perform in
the best of their abilities. Therefore the role of a leader is to arouse interest in performance of employees in their
jobs. The process of motivation consists of three stages:1. A felt need or drive
2. A stimulus in which needs have to be aroused
3. When needs are satisfied, the satisfaction or accomplishment of goals.
Therefore, we can say that motivation is a psychological phenomenon which means needs and wants of the
individuals have to be tackled by framing an incentive plan.
Importance of Motivation
Motivation is a very important for an organization because of the following benefits it provides:1. Puts human resources into action
2. Improves level of efficiency of employees
3. Leads to achievement of organizational goals
4. Builds friendly relationship
5. Leads to stability of work force
Motivation is important to an individual as:
1. Motivation will help him achieve his personal goals.

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2. If an individual is motivated, he will have job satisfaction.
3. Motivation will help in self-development of individual.
4. An individual would always gain by working with a dynamic team.
Similarly, motivation is important to a business as:
1. The more motivated the employees are, the more empowered the team is.
2. The more is the team work and individual employee contribution, more profitable and successful is the
business.
3. During period of amendments, there will be more adaptability and creativity.
4. Motivation will lead to an optimistic and challenging attitude at work place.
Classical Theories of Motivation
The motivation concepts were mainly developed around 1950s. Three main theories were made during this period.
These three classical theories are Maslows hierarchy of needs theory
Herzbergs Two factor theory
Theory X and Theory Y
These theories are building blocks of the contemporary theories developed later. The working mangers and learned
professionals till date use these classical theories to explain the concept of employee motivation.
Maslows Hierarchy of Needs Theory
Abraham Maslow is well renowned for proposing the Hierarchy of Needs Theory in 1943. This theory is a classical
depiction of human motivation. This theory is based on the assumption that there is a hierarchy of five needs within
each individual. The urgency of these needs varies. These five needs are as follows1. Physiological needs- These are the basic needs of air, water, food, clothing and shelter. In other words,
physiological needs are the needs for basic amenities of life.
2. Safety needs- Safety needs include physical, environmental and emotional safety and protection. For
instance- Job security, financial security, protection from animals, family security, health security, etc.
3. Social needs- Social needs include the need for love, affection, care, belongingness, and friendship.
4. Esteem needs- Esteem needs are of two types: internal esteem needs (self- respect, confidence,
competence, achievement and freedom) and external esteem needs (recognition, power, status, attention
and admiration).
5. Self-actualization need- This include the urge to become what you are capable of becoming / what you
have the potential to become. It includes the need for growth and self-contentment. It also includes desire
for gaining more knowledge, social- service, creativity and being aesthetic. The self- actualization needs
are never fully satiable. As an individual grows psychologically, opportunities keep cropping up to continue
growing.
According to Maslow, individuals are motivated by unsatisfied needs. As each of these needs is significantly satisfied,
it drives and forces the next need to emerge. Maslow grouped the five needs into two categories - Higher-order
needs and Lower-order needs. The physiological and the safety needs constituted the lower-order needs. These
lower-order needs are mainly satisfied externally. The social, esteem, and self-actualization needs constituted the
higher-order needs. These higher-order needs are generally satisfied internally, i.e., within an individual. Thus, we
can conclude that during boom period, the employees lower-order needs are significantly met.

FIGURE: Maslows Need Hierarchy Model

Implications of Maslows Hierarchy of Needs Theory for Managers

As far as the physiological needs are concerned, the managers should give employees appropriate
salaries to purchase the basic necessities of life. Breaks and eating opportunities should be given to
employees.

As far as the safety needs are concerned, the managers should provide the employees job security, safe
and hygienic work environment, and retirement benefits so as to retain them.

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Herzbergs 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: Herzbergs view of satisfaction and dissatisfaction

Herzberg classified these job factors into two categoriesa. 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.
b. 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.
c. Limitations of Two-Factor Theory
The two factor theory is not free from limitations:
1. The two-factor theory overlooks situational variables.
2. Herzberg assumed a correlation between satisfaction and productivity. But the research conducted by
Herzberg stressed upon satisfaction and ignored productivity.
3. The theorys reliability is uncertain. Analysis has to be made by the raters. The raters may spoil the
findings by analyzing same response in different manner.
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
employees 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.
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 selfdirection 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.
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 Maslows
theory, we can say that Theory X is based on the assumption that the employees emphasize on the physiological

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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 selfdirection. Employees should be given opportunities to contribute to organizational well-being.

Modern Theories of Motivation

We all are familiar with the classical theories of motivation, but they all are not empirically supported. As far as
contemporary theories of motivation are concerned, all are well supported with evidences. Some of the
contemporary / modern theories of motivation are explained below:
ERG Theory
McClellands Theory of Needs
Goal Setting Theory
Reinforcement Theory
Equity Theory of Motivation
Expectancy Theory of Motivation
ERG Theory of Motivation
To bring Maslows need hierarchy theory of motivation in synchronization with empirical research, Clayton Alderfer
redefined it in his own terms. His rework is called as ERG theory of motivation. He recategorized Maslows hierarchy
of needs into three simpler and broader classes of needs:
Existence needs- These include need for basic material necessities. In short, it includes an individuals
physiological and physical safety needs.
Relatedness needs- These include the aspiration individuals have for maintaining significant
interpersonal relationships (be it with family, peers or superiors), getting public fame and recognition.
Maslows social needs and external component of esteem needs fall under this class of need.
Growth needs- These include need for self-development and personal growth and advancement. Maslows
self-actualization needs and intrinsic component of esteem needs fall under this category of need.

The significance of the three classes of needs may vary for each individual.
Difference between Maslow Need Hierarchy Theory and Alderfers ERG Theory

ERG Theory states that at a given point of time, more than one need may be operational.

ERG Theory also shows that if the fulfillment of a higher-level need is subdued, there is an increase in
desire for satisfying a lower-level need.

According to Maslow, an individual remains at a particular need level until that need is satisfied. While according
to ERG theory, if a higher- level need aggravates, an individual may revert to increase the satisfaction of a lowerlevel need. This is called frustration- regression aspect of ERG theory. For instance- when growth need
aggravates, then an individual might be motivated to accomplish the relatedness need and if there are issues in
accomplishing relatedness needs, then he might be motivated by the existence needs. Thus,
frustration/aggravation can result in regression to a lower-level need.
While Maslows need hierarchy theory is rigid as it assumes that the needs follow a specific and orderly hierarchy

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and unless a lower-level need is satisfied, an individual cannot proceed to the higher-level need; ERG Theory of
motivation is very flexible as he perceived the needs as a range/variety rather than perceiving them as a
hierarchy. According to Alderfer, an individual can work on growth needs even if his existence or relatedness
needs remain unsatisfied. Thus, he gives explanation to the issue of starving artist who can struggle for growth
even if he is hungry.
McClellands Theory of Needs
David McClelland and his associates proposed McClellands theory of Needs / Achievement Motivation Theory. This
theory states that human behaviour is affected by three needs - Need for Power, Achievement and Affiliation. Need
for achievement is the urge to excel, to accomplish in relation to a set of standards, to struggle to achieve success.
Need for power is the desire to influence other individuals behaviour as per your wish. In other words, it is the
desire to have control over others and to be influential. Need for affiliation is a need for open and sociable
interpersonal relationships. In other words, it is a desire for relationship based on co-operation and mutual
understanding.
Goal Setting Theory of Motivation
In 1960s, Edwin Locke put forward the Goal-setting theory of motivation. This theory states that goal setting is
essentially linked to task performance. It states that specific and challenging goals along with appropriate feedback
contribute to higher and better task performance. In simple words, goals indicate and give direction to an employee
about what needs to be done and how much efforts are required to be put in. The important features of goalsetting theory are as follows:
The willingness to work towards attainment of goal is main source of job motivation. Clear, particular and
difficult goals are greater motivating factors than easy, general and vague goals.
Specific and clear goals lead to greater output and better performance. Unambiguous, measurable and
clear goals accompanied by a deadline for completion avoids misunderstanding.
Advantages of Goal Setting Theory
Goal setting theory is a technique used to raise incentives for employees to complete work quickly
and effectively.
Goal setting leads to better performance by increasing motivation and efforts, but also through
increasing and improving the feedback quality.
Limitations of Goal Setting Theory
At times, the organizational goals are in conflict with the managerial goals. Goal conflict has a
detrimental effect on the performance if it motivates incompatible action drift.
Very difficult and complex goals stimulate riskier behaviour.
If the employee lacks skills and competencies to perform actions essential for goal, then the goalsetting can fail and lead to undermining of performance.
There is no evidence to prove that goal-setting improves job satisfaction.
Reinforcement Theory of Motivation
Reinforcement theory of motivation was proposed by BF Skinner and his associates. It states that
individuals behaviour is a function of its consequences. It is based on law of effect, i.e, individuals
behaviour with positive consequences tends to be repeated, but individuals behaviour with negative
consequences tends not to be repeated.
The managers use the following methods for controlling the behaviour of the employees:

Positive Reinforcement
Negative Reinforcement
Punishment

Extinction
Implications of Reinforcement Theory
Reinforcement theory explains in detail how an individual learns behaviour. Managers who are making
attempt to motivate the employees must ensure that they do not reward all employees simultaneously.
They must tell the employees what they are not doing correct. They must tell the employees how they
can achieve positive reinforcement.
Equity Theory of Motivation
The core of the equity theory is the principle of balance or equity. As per this motivation theory, an
individuals motivation level is correlated to his perception of equity, fairness and justice practiced by
the management. Higher is individuals perception of fairness, greater is the motivation level and vice
versa. While evaluating fairness, employee compares the job input (in terms of contribution) to
outcome (in terms of compensation) and also compares the same with that of another peer of equal
cadre/category. D/I ratio (output-input ratio) is used to make such a comparison.

Choose a different referent

Quit the job

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Change self perception

Change perception of others

Assumptions of the Equity Theory

The theory demonstrates that the individuals are concerned both with their own
rewards and also with what others get in their comparison.
Employees expect a fair and equitable return for their contribution to their jobs.

Employees decide what their equitable return should be after comparing their inputs
and outcomes with those of their colleagues.
Employees who perceive themselves as being in an inequitable scenario will attempt
to reduce the inequity either by distorting inputs and/or outcomes psychologically, by
directly altering inputs and/or outputs, or by quitting the organization.
Expectancy Theory of Motivation
The expectancy theory was proposed by Victor Vroom of Yale School of Management in
1964. Vroom stresses and focuses on outcomes, and not on needs unlike Maslow and
Herzberg. The theory states that the intensity of a tendency to perform in a particular manner
is dependent on the intensity of an expectation that the performance will be followed by a
definite outcome and on the appeal of the outcome to the individual.
The Expectancy theory states that employees motivation is an outcome of how much an
individual wants a reward (Valence), the assessment that the likelihood that the effort will
lead to expected performance (Expectancy) and the belief that the performance will lead to
reward (Instrumentality). In short, Valence is the significance associated by an individual
about the expected outcome. It is an expected and not the actual satisfaction that an
employee expects to receive after achieving the goals. Expectancy is the faith that better
efforts will result in better performance. Expectancy is influenced by factors such as
possession of appropriate skills for performing the job, availability of right resources,
availability of crucial information and getting the required support for completing the job.
Instrumentality is the faith that if you perform well, then a valid outcome will be there.
Instrumentality is affected by factors such as believe in the people who decide who receives
what outcome, the simplicity of the process deciding who gets what outcome, and clarity of
relationship between performance and outcomes. Thus, the expectancy theory concentrates
on the following three relationships:
Effort-performance relationship: What is the likelihood that the individuals effort be
recognized in his performance appraisal?
Performance-reward relationship: It talks about the extent to which the employee
believes that getting a good performance appraisal leads to organizational rewards.
Rewards-personal goals relationship: It is all about the attractiveness or appeal of
the potential reward to the individual.
Vroom was of view that employees consciously decide whether to perform or not at the job.
This decision solely depended on the employees motivation level which in turn depends on
three factors of expectancy, valence and instrumentality.
Advantages of the Expectancy Theory
It is based on self-interest individual who want to achieve maximum satisfaction and
who wants to minimize dissatisfaction.
This theory stresses upon the expectations and perception; what is real and actual is
immaterial.
It emphasizes on rewards or pay-offs.
It focuses on psychological extravagance where final objective of individual is to
attain maximum pleasure and least pain.
Limitations of the Expectancy Theory
The expectancy theory seems to be idealistic because quite a few individuals perceive
high degree correlation between performance and rewards.
The application of this theory is limited as reward is not directly correlated with
performance in many organizations. It is related to other parameters also such as
position, effort, responsibility, education, etc.
Implications of the Expectancy Theory
The managers can correlate the preferred outcomes to the aimed performance levels.

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The managers must ensure that the employees can achieve the aimed performance levels.
The deserving employees must be rewarded for their exceptional performance.

LEADERSHIP- EARLY AND CONTEMPORARY THEORIES OF LEADERSHIP

Leadership is a process by which an executive can direct, guide and influence the behavior and work of others
towards accomplishment of specific goals in a given situation. Leadership is the ability of a manager to induce the
subordinates to work with confidence and zeal.
Characteristics of Leadership
1. It is a inter-personal process in which a manager is into influencing and guiding workers towards
attainment of goals.
2. It denotes a few qualities to be present in a person which includes intelligence, maturity and personality.
3. It is a group process. It involves two or more people interacting with each other.
4. A leader is involved in shaping and moulding the behaviour of the group towards accomplishment of
organizational goals.
Some of the important leadership theories are as follows:
Blake and Moutons Managerial Grid
Houses Path Goal Theory
Great Man Theory
Trait Theory
Transformational Leadership
Transactional Leadership
Continuum of Leadership Behaviour
Likerts Management System
Hersey Blanchard Model
Blake and Moutons Managerial Grid
The treatment of task orientation and people orientation as two independent dimensions was a major step in
leadership studies. Many of the leadership studies conducted in the 1950s at the University of Michigan and the Ohio
State University focused on these two dimensions.
Building on the work of the researchers at these Universities, Robert Blake and Jane Mouton (1960s) proposed a
graphic portrayal of leadership styles through a managerial grid (sometimes called leadership grid). The grid
depicted two dimensions of leader behavior, concern for people (accommodating peoples needs and giving them
priority) on y-axis and concern for production (keeping tight schedules) on x-axis, with each dimension ranging
from low (1) to high (9), thus creating 81 different positions in which the leaders style may fall. (See figure 1).

The five resulting leadership styles are as follows:

1. Impoverished Management (1, 1): Managers with this approach are low on both the dimensions and
exercise minimum effort to get the work done from subordinates. The leader has low concern for employee
satisfaction and work deadlines and as a result disharmony and disorganization prevail within the
organization. The leaders are termed ineffective wherein their action is merely aimed at preserving job and
seniority.

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2.

Task management (9, 1): Also called dictatorial or perish style. Here leaders are more concerned about
production and have less concern for people. The style is based on theory X of McGregor. The employees
needs are not taken care of and they are simply a means to an end. The leader believes that efficiency can
result only through proper organization of work systems and through elimination of people wherever
possible. Such a style can definitely increase the output of organization in short run but due to the strict
policies and procedures, high labour turnover is inevitable.
3. Middle-of-the-Road (5, 5): This is basically a compromising style wherein the leader tries to maintain a
balance between goals of company and the needs of people. The leader does not push the boundaries of
achievement resulting in average performance for organization. Here neither employee nor production
needs are fully met.
4. Country Club (1, 9): This is a collegial style characterized by low task and high people orientation where
the leader gives thoughtful attention to the needs of people thus providing them with a friendly and
comfortable environment. The leader feels that such a treatment with employees will lead to selfmotivation and will find people working hard on their own. However, a low focus on tasks can hamper
production and lead to questionable results.
5. Team Management (9, 9): Characterized by high people and task focus, the style is based on the theory
Y of McGregor and has been termed as most effective style according to Blake and Mouton. The leader feels
that empowerment, commitment, trust, and respect are the key elements in creating a team atmosphere
which will automatically result in high employee satisfaction and production.
Advantages of Blake and Moutons Managerial Grid
The Managerial or Leadership Grid is used to help managers analyze their own leadership styles through a
technique known as grid training. This is done by administering a questionnaire that helps managers
identify how
they stand with respect to their concern for production and people. The training is aimed at basically helping
leaders reach to the ideal state of 9, 9.
Limitations of Blake and Moutons Managerial Grid
The model ignores the importance of internal and external limits, matter and scenario. Also, there are some more
aspects of leadership that can be covered but are not.
Houses Path Goal Theory
The theory was developed by Robert House and has its roots in the expectancy theory of motivation. The theory
is based on the premise that an employees perception of expectancies between his effort and performance is
greatly affected by a leaders behavior. The leaders help group members in attaining rewards by clarifying the
paths to goals and removing obstacles to performance. They do so by providing the information, support, and
other resources which are required by employees to complete the task.
Houses theory advocates servant leadership. As per servant leadership theory, leadership is not viewed as a
position of power. Rather, leaders act as coaches and facilitators to their subordinates. According to Houses
path-goal theory, a leaders effectiveness depends on several employee and environmental contingent factors
and certain leadership styles. All these are explained in the figure 1 below:

Figure 1: Path-Goal Leadership Theory

Leadership Styles
The four leadership styles are:

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Directive: Here the leader provides guidelines, lets subordinates know what is expected of them, sets
performance standards for them, and controls behavior when performance standards are not met. He
makes judicious use of rewards and disciplinary action. The style is the same as task-oriented one.
Supportive: The leader is friendly towards subordinates and displays personal concern for their needs,
welfare, and well-being. This style is the same as people-oriented leadership.
Participative: The leader believes in group decision-making and shares information with subordinates. He
consults his subordinates on important decisions related to work, task goals, and paths to resolve goals.
Achievement-oriented: The leader sets challenging goals and encourages employees to reach their peak
performance. The leader believes that employees are responsible enough to accomplish challenging goals.
This is the same as goal-setting theory.
According to the theory, these leadership styles are not mutually excusive and leaders are capable of selecting more
than one kind of a style suited for a particular situation.
Contingencies
Great Man Theory
Are some people born to lead? If we look at the great leaders of the past such as Alexander the Great, Julius
Caesar, Napoleon, Queen Elizabeth I, and Abraham Lincoln, we will find that they do seem to differ from ordinary
human beings in several aspects. The same applies to the contemporary leaders like George W. Bush and Mahatma
Gandhi. They definitely possess high levels of ambition coupled with clear visions of precisely where they want to
go. These leaders are cited as naturally great leaders, born with a set of personal qualities that made them effective
leaders. Even today, the belief that truly great leaders are born is common.
Top executives, sports personalities, and even politicians often seem to possess an aura that sets them apart from
others. According to the contemporary theorists, leaders are not like other people. They do not need to be
intellectually genius or omniscient prophets to succeed, but they definitely should have the right stuff which is not
equally present in all people. This orientation expresses an approach to the study of leadership known as the great
man theory.
Assumptions
The leaders are born and not made and posses certain traits which were inherited
Great leaders can arise when there is a great need.
Theory
Much of the work on this theory was done in the 19th century and is often linked to the work of the historian
Thomas Carlyle who commented on the great men or heroes of the history saying that the history of the world is
but the biography of great men. According to him, a leader is the one gifted with unique qualities that capture the
imagination of the masses.
Earlier leadership was considered as a quality associated mostly with the males, and therefore the theory was
named as the great man theory. But later with the emergence of many great women leaders as well, the theory
was recognized as the great person theory.
Criticism
Many of the traits cited as being important to be an effective leader are typical masculine traits. In contemporary
research, there is a significant shift in such a mentality.
Conclusion
Prompted by the great man theory of leadership, and the emerging interest in understanding what leadership is,
researchers focused on the leader - Who is a leader? What are the distinguishing characteristics of great and
effective leaders? This gave rise to the early research efforts to the trait approach to leadership.
Trait Theory
The trait model of leadership is based on the characteristics of many leaders - both successful and unsuccessful and is used to predict leadership effectiveness. The resulting lists of traits are then compared to those of potential
leaders to assess their likelihood of success or failure.
Among the core traits identified are:
Achievement drive: High level of effort, high levels of ambition, energy and initiative
Leadership motivation: an intense desire to lead others to reach shared goals
Honesty and integrity: trustworthy, reliable, and open
Self-confidence: Belief in ones self, ideas, and ability
Cognitive ability: Capable of exercising good judgment, strong analytical abilities, and conceptually
skilled
Knowledge of business: Knowledge of industry and other technical matters
Emotional Maturity: well adjusted, does not suffer from severe psychological disorders.
Others: charisma, creativity and flexibility
Transformational Leadership
Creating high-performance workforce has become increasingly important and to do so business leaders must be
able to inspire organizational members to go beyond their task requirements. As a result, new concepts of
leadership have emerged - transformational leadership being one of them.

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Transformational leadership may be found at all levels of the organization: teams, departments, divisions, and
organization as a whole. Such leaders are visionary, inspiring, daring, risk-takers, and thoughtful thinkers. They
have a charismatic appeal. But charisma alone is insufficient for changing the way an organization operates. For
bringing major changes, transformational leaders must exhibit the following four factors:

Figure 1: Model of Transformational Leadership

Inspirational Motivation: The foundation of transformational leadership is the promotion of consistent vision,
mission, and a set of values to the members. Their vision is so compelling that they know what they want from
every interaction. Transformational leaders guide followers by providing them with a sense of meaning and
challenge. They work enthusiastically and optimistically to foster the spirit of teamwork and commitment.
Intellectual Stimulation: Such leaders encourage their followers to be innovative and creative. They encourage
new ideas from their followers and never criticize them publicly for the mistakes committed by them. The leaders
focus on the what in problems and do not focus on the blaming part of it. They have no hesitation in discarding
an old practice set by them if it is found ineffective.
Idealized Influence: They believe in the philosophy that a leader can influence followers only when he practices
what he preaches. The leaders act as role models that followers seek to emulate. Such leaders always win the trust
and respect of their followers through their action. They typically place their followers needs over their own,
sacrifice their personal gains for them, ad demonstrate high standards of ethical conduct. The use of power by such
leaders is aimed at influencing them to strive for the common goals of the organization.
Individualized Consideration: Leaders act as mentors to their followers and reward them for creativity and
innovation. The followers are treated differently according to their talents and knowledge. They are empowered to
make decisions and are always provided with the needed support to implement their decisions.
The common examples of transformational leaders are Mahatma Gandhi and Obama.
Criticisms of Transformational Leadership Theory
Transformational leadership makes use of impression management and therefore lends itself to amoral self
promotion by leaders
The theory is very difficult to e trained or taught because it is a combination of many leadership theories.
Followers might be manipulated by leaders and there are chances that they lose more than they gain.
Implications of Transformational Leadership Theory
The current environment characterized by uncertainty, global turbulence, and organizational instability calls for
transformational leadership to prevail at all levels of the organization. The followers of such leaders demonstrate
high levels of job satisfaction and organizational commitment, and engage in organizational citizenship behaviors.
With such a devoted workforce, it will definitely be useful to consider making efforts towards developing ways of
transforming organization through leadership.
Transactional Leadership
The transactional style of leadership was first described by Max Weber in 1947 and then by Bernard Bass in 1981.
This style is most often used by the managers. It focuses on the basic management process of controlling,
organizing, and short-term planning. The famous examples of leaders who have used transactional technique
include McCarthy and de Gaulle.
Transactional leadership involves motivating and directing followers primarily through appealing to their own self-

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interest. The power of transactional leaders comes from their formal authority and responsibility in the organization.
The main goal of the follower is to obey the instructions of the leader. The style can also be mentioned as a telling
style.
These exchanges involve four dimensions:
Contingent Rewards: Transactional leaders link the goal to rewards, clarify expectations, provide necessary
resources, set mutually agreed upon goals, and provide various kinds of rewards for successful performance.
They set SMART (specific, measurable, attainable, realistic, and timely) goals for their subordinates.
Active Management by Exception: Transactional leaders actively monitor the work of their subordinates,
watch for deviations from rules and standards and taking corrective action to prevent mistakes.
Passive Management by Exception: Transactional leaders intervene only when standards are not met or
when the performance is not as per the expectations. They may even use punishment as a response to
unacceptable performance.
Laissez-faire: The leader provides an environment where the subordinates get many opportunities to make
decisions. The leader himself abdicates responsibilities and avoids making decisions and therefore the group
often lacks direction.
Assumptions of Transactional Theory
Employees are motivated by reward and punishment.
The subordinates have to obey the orders of the superior.
The subordinates are not self-motivated. They have to be closely monitored and controlled to get the work
done from them.
Implications of Transactional Theory
The transactional leaders overemphasize detailed and short-term goals, and standard rules and procedures. They do
not make an effort to enhance followers creativity and generation of new ideas. This kind of a leadership style may
work well where the organizational problems are simple and clearly defined. Such leaders tend to not reward or
ignore ideas that do not fit with existing plans and goals.
The transactional leaders are found to be quite effective in guiding efficiency decisions which are aimed at cutting
costs and improving productivity. The transactional leaders tend to be highly directive and action oriented and their
relationship with the followers tends to be transitory and not based on emotional bonds.
The theory assumes that subordinates can be motivated by simple rewards. The only transaction between the
leader and the followers is the money which the followers receive for their compliance and effort.
Difference between Transactional and Transformational Leaders
Transactional leadership

Transformational Leadership

Leadership is responsive

Leadership is proactive

Works within the organizational culture

Work to change the organizational culture by implementing new

ideas

Transactional leaders make employees achieve Transformational leaders motivate and empower employees to
organizational objectives through rewards and achieve companys objectives by appealing to higher ideals and
punishment
moral values
Motivates followers by appealing to their own Motivates followers by encouraging them to transcend their own
self-interest
interests for those of the group or unit
Conclusion
The transactional style of leadership is viewed as insufficient, but not bad, in developing the maximum leadership
potential. It forms as the basis for more mature interactions but care should be taken by leaders not to practice it
exclusively, otherwise it will lead to the creation of an environment permeated by position, power, perks, and
politics.

Hersey Blanchard Model

According to this model, the leader has to match the leadership style according to the readiness of subordinates
which moves in stage and has a cycle. Therefore, this theory is also known as the life-cycle theory of leadership.
The theory, developed by Paul Hersey and Kenneth Blanchard, is based on the readiness level of the people the
leader is attempting to influence. Readiness is the extent to which followers have the ability and willingness to
accomplish a specific task. Ability is the knowledge, experience, and skill that an individual possesses to do the job
and is called job readiness. Willingness is the motivation and commitment required to accomplish a given task. The
style of leadership depends on the level of readiness of the followers.
The readiness(R) is divided into a continuum of four levels which are:

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R1 - low follower readiness - refers to low ability and low willingness of followers i.e. those who are unable
and insecure
R2 - low to moderate follower readiness - refers to low ability and high willingness of followers i.e. those
who are unable but confident
R3 - moderate to high follower readiness - refers to high ability and low willingness of followers i.e. those
who are able but insecure
R4 - high follower readiness - refers to high ability and high willingness of followers i.e. those who are both
able and confident
The direction is provided by the leader at the lower levels of readiness. Therefore, the decisions are leader directed.
On the other hand, the direction is provided by the followers at the higher levels of readiness. Therefore, the
decisions in this case are follower directed. When the followers move from low levels to high levels of readiness, the
combinations of task and relationship behaviors appropriate to the situation begin to change.
For each of the four levels of readiness, the leadership style used may be a combination of task and relationship
behavior.
Task behavior: Extent to which the leader spells out the duties and responsibilities of a follower which
includes providing them direction, setting goals, and defining roles for them. Usually a one-way
communication exists which is meant to provide the direction to the followers.
Relationship behavior: Extent to which the leader listens to the followers, and provides encouragement
to them. Here, a two-way communication exists between the leader and the follower.
By combining the task and the relationship behavior, we arrive at the following four different styles of leadership
which correspond with the different levels of readiness as shown in the Figure 1.
S1 - Telling: This style is most appropriate for low follower readiness (R1). It emphasizes high task behavior
and limited relationship behavior.
S2 - Selling: This style is most appropriate for low to moderate follower readiness (R2). It emphasizes high
amounts of both task and relationship behavior.
S3 - Participating: This style is most appropriate for moderate to high follower readiness (R3). It emphasizes
high amount of relationship behavior but low amount of task behavior.
S4 - Delegating: This style is most appropriate for high follower readiness (R4). It emphasizes low levels of
both task and relationship behavior.
Leadership Effectiveness
The leaders effectiveness is determined by the interaction of the leaders style of behavior and the favorableness of
the situational characteristics. The most favorable situation is when leader-member relations are good, the task is
highly structured, and the leader has a strong position power.
Research on the contingency model has shown that task-oriented leaders are more effective in highly favorable (1,
2, 3) and highly unfavorable situation (7, 8), whereas relationship-oriented leaders are more effective in situations
of intermediate favorableness (4, 5, 6).
Fiedler also suggested that leaders may act differently in different situations. Relationship-oriented leaders generally
display task-oriented behaviors under highly favorable situations and display relationship-oriented behaviors under
unfavorable intermediate favorable situations. Similarly, task-oriented leaders frequently display task-oriented in
unfavorable or intermediate favorable situations but display relationship-oriented behaviors in favorable situations.
GROUPS AND GROUP DEVELOPMENT
GROUP DYNAMICS are the interactions and forces among group members in social situation.
Types of groups
Formal- hierarchical.These groups are formed by the organizations to carry out specific tasks.
Informal-interest groups or cliques-horizontal, vertical or random.
These are the groups formed by employees themselves.

Virtual Groups- facilitated through I. T. (a)

Information Sharing
(b) Decision Making
(c ) Solving Complex Problems
Psychological Group-we feeling, sensitivity, affinity, understanding of individual strengths
and personalities, sense of belonging and loyalty
Other types of Groups
1. (a)Interacting- assembly-line
(b) Co-acting- work independently
(c ) Counter-acting- union/ management
2. (a)Open-Matrix
(b) Closed- Fixed Roles
3. (a)Membership- belongs
(b)Referent-Would like to belong
4. (a)In and Out groups- Gang Wars, rivalry, competition,politics

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Stages of Small Group Development

Teams are becoming a key tool for organizing work in todays corporate world. Teams have the potential to
immediately amass, organize, relocate, and disperse. But, teams are an effective tool of employee motivation. It is
essential to consider the fact that teams develop and get mature over a period of time.Team development
creates a captivating atmosphere by encouraging co-operation, teamwork, interdependence and by
building trust among team members.
FORMING
STORMING
NORMING
PERFORMING
ADJOURNING
The stages of team development are:
Stage 1: Forming
During this stage, group members may be anxious and adopt wait-and-see attitude. They will be formal towards each other. There wo
idea of goals or expectations. Besides, they may not be sure why they are there.
This is the stage where the team needs to write its own charter or mission statement as well as clarify goals. The most important thin
goals must have a personal buy-in.
Stage 2: Storming
During this stage, team members are eager to get going. Conflict can arise as people tend to bring different ideas of
how to accomplish goals. At this time, they notice differences rather than similarities. This leads to some members
dropping out mentally or physically.
Stage 3: Norming
This stage is when people begin to recognize ways in which they are alike. They realize that they are in this
together. Hence, they tend to get more social and may forget their focus in favour of having a good time. This is the
time to help with training if applicable
Stage 4: Performing
This stage is when team members are trained, competent, as well as able to do their own problem-solving. At this
time, ways need to be looked at in order to challenge them as well as develop them. The team is mature now. The
members understand their roles and responsibilities.
Forming an Effective Team
This is the general approach to forming a successful work team. But not all will take the same steps as discussed
above. Success is usually hinged on taking all of the steps just discussed. We have a tendency to want to surround
ourselves with people who are just like us
Group Structure:
1) Formal leadership
2) Roles
3) Norms
4) Status
5) Size
6) Composition
Difference between Group and Team
A group is not necessarily a team. A group can have individuals with varied interests, attitude as well as
thought processes. It is not necessary that the group members would have a common objective or a common
goal to achieve.
What happens in a political rally ? The political leader appeals to the individuals to cast the votes in his favour only.
Do you think all of them would cast the votes in favour of the leader ? There would always be some individuals who
would support his opponent. This is example of a group. All individuals gathered on a common platform but had
dissimilar interests and likings. Some were in favour of the leader while some against.
A team must have individuals with a common objective to achieve. They should all work together and strive
towards the achievement of a common goal.

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Understanding Team - What is a Team ?

Let us first go through a simple real life situation.
John was working as a key accounts head with a leading advertising firm. He had four members reporting to him.
Unfortunately he always under estimated his team members and fought with them constantly. He could never trust
them and always thought they were incapable of doing good work.

An individual cannot perform all tasks on his own.

A team is a group of individuals, all working together for a common purpose.
The individuals comprising a team ideally should have common goals, common objectives and
more or less think on the same lines.
A group can have individuals with varied interests, attitude as well as thought processes.

TURNING GROUPS INTO EFFECTIVE TEAMS

Team Size
The team size depends on the complexity of the task to be accomplished. Ideally a team should consist of 7-10
members. Too many members also lead to confusions and misunderstandings.
It is not always that we require a team. Teams should be formed when the task is a little complicated. A single brain
can sometimes not take all critical decisions alone, thus a team is formed where the team members contribute
equally making the task easy. A team can actually create wonders if all the team members work in unison.
Team Models - Different types of teams
Teams are the principal building blocks of the strategy of successful organizations. The focus of your organization
may be on service, quality, cost, value, speed, efficiency, performance, or any other similar goals, but teams remain
the central methodology of most organizations in the private, non-profit, as well as government sectors.
There are various types of teams. In this article we are going to discuss the five most common ones.
1. The Traditional Model
2. The Team Spirit Model
3. The Cutting Edge Model
4. The Task Force Model
Types of Teams
When individuals with a common interest, goal, attitude, need and perception come together, a team is formed.
Individuals need to come and work together to form a team for the accomplishment of complicated tasks. In a
team, all team members contribute equally and strive hard to achieve the teams objective which should be
predefined.
In any organization, no one works alone. Every employee is a part of a team and works in close coordination with
the team members to perform his level best and in turn benefit the organization. The team members should
complement each other and come to each others need whenever required.
Teams can be formed anywhere, anytime whenever the task is little difficult and complicated. Let us understand the
various types of teams in detail.
1. Permanent teams2. Temporary teams
3. Task Force
4. Committee
5. Organization/Work Force
6. Self Managed Teams
7. Cross Functional Team
8. Virtual Teams

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Building an Effective Team
Having goals or a clear purpose is important to each of us. In fact, people who set goals are always more successful
than the others.
For leaders who are serious about setting goals, some things are to be kept in mind. These goals need to be
Specific, Measurable, Attainable, Realistic, and with Timelines. Besides, for any organization, goals should also be
expressed positively. And for a team, goals need to be personalized for each member of the team. All these goals
should be put in writing, where you as well as the team can see them often.
Once you sit down with your team and set some goals, it can be very useful to develop some kind of action plan for
accomplishing that goal.

Informality as well as Participation: In order to build an effective team, the climate has to be informal,
comfortable, as well as relaxed. There should be no tension or any signs of boredom. Teams enjoy getting
together, they interact easily. There should be lots of good-natured kidding and laughter. Have seating
arrangements in order to facilitate this. A circle is the best seating arrangement usually, while a typical
classroom arrangement is the worst.
Listening: A highly efficient team has team members who use effective listening techniques. These include
questioning, paraphrasing, as well as summarizing in order to get out ideas. Listening is the most effective
factor that distinguishes effective teams from ineffective teams. This is a highly important subject which
needs to be discussed in detail in another article.

MANAGING CHANGE- PROCESS, TYPES AND CHALLENGES

Change Management - Meaning and Important Concepts
The business landscape of the 21st century is characterized by rapid change brought about due to technological,
economic, political and social changes. It is no longer the case that the managers and employees of firms in this
decade can look forward to more of the same every year. In fact, the pace of change is so rapid and the degree of
obsolescence if organizations resist change is so brutal that the only way out for many firms is to change or perish.
In this context, it becomes critical that organizations develop the capabilities to adapt and steer change in their
advantage.
It goes without saying that he who rejects change is the architect of decay and the only human institution
that rejects progress is the cemetery. With this axiom in mind, it is critical to understand that unless change is
actively embraced, organizations in the 21st century risk obsolescence.
Kinds of Change and the Barriers to Change
There are different kinds of change that an organization might undertake or be forced to undertake because of
internal and external factors. The internal factors for change include reorganization and restructuring to meet the
challenges of the future and also to act proactively to initiate change as a means of staying ahead of the
competition. The external factors include change that is forced upon the organization because of falling revenues,
changing market conditions and the need to adapt to the ever changing business landscape.
Change can be organic which means that it evolves slowly and is like meandering up the gentle slope of
a mountain. In this case, the organization and the management have enough time to prepare for change and
reorient themselves accordingly. This is the kind of change that is adaptive meaning that firms have the opportunity
to adapt themselves to the change.
Change can be radical which is rapid, sudden and uncertain
Overcoming Barriers to Change
Research has shown that the best way to get the senior managers at all levels interested in the change initiatives is
by engaging them and seeking their buy-in for the change management process. Studies have proved that the
managers in the upper echelons buy into the change from a strategic perspective where the accent is on
performance and hence radical or disruptive change is seen as part and parcel of an organizations development.
Managers at the middle level can be made to see the value inherent in change and hence they can be brought on
board. The frontline managers views and inputs can be sought and thereby their cooperation and participation in
the change obtained. These are the broad outlines and the following detailed sets of approaches can be pursued as
well.
Make Them the Hero
By making the managers the change drivers and change initiators is often the best way of securing their buy-in. The
point here is that by getting the managers to be the ones who are implementing change and by giving them centre
stage, it is possible to secure their participation.
Show them the potential of Change
By selling change and the value of such change to the organizations and themselves the senior managers can be
persuaded to accept change.
Painting the Alternatives
This is the stick part of the carrot and stick approach wherein senior managers are told of the urgent need for
change and by indicating to them what the consequences for themselves and the organization would be if the
change does not succeed.
Involving Them in the Change
By adopting a hands on approach that would involve all hands and including all the stakeholders, senior
managers can be brought on board. The point is that by adopting an inclusive approach and giving a sense of

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ownership to the senior managers and taking their inputs and feedback would ensure that the key aspect of
engagement is achieved.

UNIT- V

POWER AND POLITICS

Power is easy to feel but difficult to define. It is the potential ability of a person or group to influence another person
or group. It is the ability to get things done the way one wants them to be done. Both formal and informal groups
and individuals may have power; it does not need an official position or the backing of an institution to have power.
Influence can take many forms. One person has influenced another if the second person's opinions, behavior or
perspectives have changed as a result of their interaction. Power is a factor at all levels of most organizations. It can
be a factor in almost any organizational decision.
POWER AND AUTHORITY
Sometimes power and authority is used synonymously because of their objective of influencing the behavior of
others. However, there is difference between the two. Power does not have any legal sanctity while authority has
such sanctity. Authority is institutional and is legitimate. Power, on the other hand, is personal and does not have
any legitimacy. But stilt, power is a crucial factor in influencing the behavior in organizational situation.
SOURCES OF POWER
John R. P. French and Bertram Raven identified five bases or sources of power: legitimate, reward, coercive, expert
and referent power.

Legitimate Power

Reward Power

Coercive Power

Expert Power

Referent Power
HOW PEOPLE USE POWER
An individual manager may have power derived from any or all of the five bases of power and the manager may use
that power in different1 ways. Therefore, good managers must try to analyse the sources of their power and be
careful how they use that power.
PONDY'S 5 STAGE MODEL OF CONFLICT
Pondy's model of Organizational Conflict
The model highlights 5 main steps of conflict progression. These are :
1.
Latent conflict- or the existence of an underlying source of conflict.
2.
Perceived conflict- or the recognition of this conflict by one or more parties.
3. Felt conflict- or the personalization of the conflict.
4. Manifest conflict- where one or more parties engage in covert or overt behavior to bring about
the conflict.
5. Conflict aftermath -where the issues are dealt satisfactorily and the issue resolves.
Stage 1: Latent = conditions which provide potential for conflict
A. Competition for scarce resources
B. Drive for autonomy
C. Differing goals of subunits (e.g. Athletics vs. Recreation)
Stage 2 : Perceived Conflict = 1 or more parties becomes aware of conflict potential
Stage 3: Conflict is felt = e.g. Anger, frustration, hostility
Stage 4: Conflict is manifested = exhibition of adversarial behavior ( apathy; rigid rules adherence; violence)
Stage 5 : Conflict aftermath = conflict resolution/ basis for future conflict

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Conflict at Workplace - Why Conflict Should be Avoided ?
Differences in interest, thought process, perception as well as need lead to a conflict. When individuals do not agree
to each others opinions, a conflict arises. Conflict can occur at any place be it organizations, groups and
even at our homes.
Preventing Conflict - How to avoid Conflict ?
A difference in the opinions, values, understandings and thought processes of individuals lead to a conflict. When
individuals strongly oppose each others ideas and concepts, a conflict starts. It has been observed that when people
think in dissimilar ways and are not willing to compromise at all, conflict arises.
Conflict can start anytime and at any place when individuals are not ready to accept the middle path approach. A
conflict results in verbal arguments, abuses, tensions and also spoils relationships.
Before starting any conflict one should take some time out to think, How will this fight benefit me? Is
it going to provide me any solution ?

First learn to keep a control on your emotions.

Never be rigid on any point, instead be flexible and try to find out an alternative.
Learn to keep a control on your tongue.
Misunderstandings also lead to conflicts,
Effective communication goes a long way in preventing conflicts
A small sorry can work wonders and prevent conflicts and unnecessary tensions.
No one wins in a fight and you gain nothing out of it.

Tips for Conflict Management for Professionals

Make sure your communication is effective and impressive:

Be a good and a patient listener:
Dont always depend on verbal communication at workplace:
Professionals must develop the habit of using planners, organizers and desk calendars at work:
The pitch and the tone have to be taken great care of:
Adopt a positive attitude:
Never criticize anyone or make him feel small:
Prefer the conference room, board room or any suitable place for presentations, seminars and
discussions:
A professional must avoid blame games at work
The superiors must ensure that the team members are assigned responsibilities according to
their key responsibility areas and specializations
Be impartial at work:
Never discuss your work and responsibilities with others and learn to keep things a little
confidential:

Importance of Conflict Management

A conflict arises when individuals have varied interests, opinions and thought processes and are just not willing to
compromise with each other. It is always wise to adjust to some extent and try to find a solution to the problem
rather than cribbing and fighting. Conflicts and disagreements only lead to negativity and things never reach a
conclusion. It only adds on to the tensions and makes life hell. It actually leaves you drained and spoils your
reputation. Every individual should try his level best to avoid conflict at the first place rather than resolving it later.
Precautions must be taken at the right time to avoid a conflict.
Imagine yourself constantly fighting with your fellow worker. Would you ever feel going to office?
Conflict management goes a long way in strengthening the bond among the employees and half of the
problems automatically disappear.
Conflict management also plays an important role in our personal lives.
Conflict management helps to find a middle way, an alternative to any problem and successful
implementation of the idea.
Conflict Management is very important because it is always wise to prevent a fight at the first place
rather than facing its negative consequences.
Strategies to avoid Conflicts at the Workplace
It is rightly said that organizations are individuals first home as one spends the maximum time here. Employees
must treat their fellow workers as a part of one big family and must work together to achieve the goals of the
organization. Conflicts must be avoided at the workplace to ensure that the employees give their best for maximum
productivity.
Let us understand the strategies to avoid conflicts at the workplace.

Never leave any problem unattended as a small problem can eventually become a major reason
to worry later on.

Official communications must be preferably through emails marking a CC to all the participants
as it is more reliable and transparent.

Communication also plays a very important role in avoiding conflicts at work places.

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Develop the habit of using planners to avoid forgetting important dates and tasks.
Never carry your problems to work as it never allows you to concentrate in your work.

ELEMENTS OF NEGOTIATION
Negotiation

Process + Behaviour + Substance (Agenda)

Process- The way individuals negotiate with each other is called the process of negotiation. The process
includes the various techniques and strategies employed to negotiate and reach to a solution.
Behaviour- How two parties behave with each other during the process of negotiation is referred to as
behaviour. The way they interact with each other, the way they communicate with each other to make their
points clear all come under behavior.
Substance- There has to be an agenda on which individuals negotiate. A topic is important for negotiation.
In the first situation, going for the late night movie was the agenda on which you wanted to negotiate with
your parents as well as your friends.
To conclude, negotiation is simply a technique, a discussion among individuals to reach to a mutual agreement
where everyone gains something or the other and conflicts are avoided.
Models of Negotiation
Negotiation is defined as a discussion among individuals to reach to a conclusion acceptable to one and all. It is a
process where people rather than fighting among themselves sit together, evaluate the pros and cons and then
come out with an alternative which would be a win win situation for all.
Let us go through various models of negotiation:
1.
2.
3.
4.

Win Win Model - In this model, each and every individual involved in negotiation wins. No body is at loss
in this model and every one is benefited out of the negotiation. This is the most accepted model of
negotiation.
Win Lose Model - In this model one party wins and the other party loses. In such a model, after several
rounds of discussions and negotiations, one party benefits while the party remains dissatisfied.
Lose Lose Model - As the name suggests, in this model, the outcome of negotiation is zero. No party is
benefited out of this model.
RADPAC Model of Negotiation
RADPAC Model of Negotiation is a widely used model of negotiation in corporates.
Let us understand it in detail
Every alphabet in this model signifies something:
R - Rapport
A - Analysis
D - Debate
P - Propose
A - Agreement
C - Close
R - Rapport: As the name suggests, it signifies the relation between parties involved in
negotiation. Share a good rapport with each other.
A - Analysis: One party must understand the second party well. It is important that the individual
understand each others needs and interest.
D - Debate: Nothing can be achieved without discussions. This round includes discussing issues
among the parties involved in negotiation. The pros and cons of an idea are evaluated in this
round.
P - Propose: Each individual proposes his best idea in this round. Each one tries his level best to
come up with the best possible idea and reach to a conclusion acceptable by all.
A - Agreement: Individuals come to a conclusion at this stage and agree to the best possible
alternative.
C - Close: The negotiation is complete and individuals return back satisfied.

Negotiation Skills - How to Negotiate Effectively

What is negotiation ?
Negotiation is defined as a discussion among individuals, each one trying to present his best idea to come to a
conclusion benefiting all. An individual gains nothing out of conflict and misunderstanding; instead it leads to stress
and anxiety. It is always advisable to compromise to the best extent possible and try to find out an alternative which
satisfies all.
An individual needs to adopt certain skills for a successful negotiation. Let us understand them in detail:
An individual before starting with the negotiation must be very clear with the agenda (topic) of the negotiation. Ask
yourself - why this negotiation? What is the objective of the negotiation? One must be well informed. Try to find out
more about the competitors products or services.
Before any important deal, do make it a habit to go through as many details as you can. The second party might ask
you anything, you must be well prepared to clear all their doubts and convince them. If you yourself are confused,
he would never bother to listen to you.

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React sensibly
Patience
Confident
The only mistake he did was he made it very obvious that there was no way he could afford to miss this
opportunity.
Be dignified
Be very clear in your communication
Be a good listener Be reasonable COMMUNICATING EFFECTIVELY IN ORGANIZATIONS
Communication is neither transmission of message nor message itself. It is the mutual exchange of
understanding, originating with the reciever. Communication needs to be effective in business. Communication is
essence of management. The basic functions of management (Planning, Organizing, Staffing, Directing and
Controlling) cannot be performed well without effective communication. Business communication involves constant
flow of information. Feedback is integral part of business communication. Organizations these days are verly large.
It involves number of people.,
Business Communication can be of two types:
1.
Oral Communication - An oral communication can be formal or informal. Generally business
communication is a formal means of communication, like : meetings, interviews, group discussion,
speeches etc. An example of Informal business communication would be - Grapevine.
2.
Written Communication - Written means of business communication includes - agenda, reports,
manuals etc.
Components of Communication Process
Communication is a process of exchanging verbal and non verbal messages. It is a continuous process. Pre-requisite
of communication is a message. This message must be conveyed through some medium to the recipient. It is
essential that this message must be understood by the recipient in same terms as intended by the sender. He must
respond within a time frame. Thus, communication is a two way process and is incomplete without a feedback from
the recipient to the sender on how well the message is understood by him.

Communication
Process
The main components of communication process are as follows:
1.
Context - Communication is affected by the context in which it takes place. This context may be
physical, social, chronological or cultural.
2.
Sender / Encoder - Sender / Encoder is a person who sends the message. A sender makes use
of symbols (words or graphic or visual aids) to convey the message and produce the required response.
3.
Message - Message is a key idea that the sender wants to communicate. It is a sign that elicits
the response of recipient.
4.
Medium - Medium is a means used to exchange / transmit the message. The sender must choose
an appropriate medium for transmitting the message else the message might not be conveyed to the
desired recipients.
5.
Recipient / Decoder - Recipient / Decoder is a person for whom the message is intended /
aimed / targeted.
6.
Feedback - Feedback is the main component of communication process as it permits the sender
to analyze the efficacy of the message.
Oral Communication - Meaning, Advantages and Limitations
Oral communication implies communication through mouth. It includes individuals conversing with each other, be it
direct conversation or telephonic conversation. Speeches, presentations, discussions are all forms of oral
communication. Oral communication is generally recommended when the communication matter is of temporary
kind or where a direct interaction is required. Face to face communication (meetings, lectures, conferences,
interviews, etc.) is significant so as to build a rapport and trust.
Advantages of Oral Communication

There is high level of understanding and transparency in oral communication as it is interpersonal.

There is no element of rigidity in oral communication. There is flexibility for allowing changes in
the decisions previously taken.

The feedback is spontaneous in case of oral communication. Thus, decisions can be made quickly
without any delay.

Oral communication is not only time saving, but it also saves upon money and efforts.

Oral communication is best in case of problem resolution. The conflicts, disputes and many
issues/differences can be put to an end by talking them over.

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Disadvantages/Limitations of Oral Communication

Relying only on oral communication may not be sufficient as business communication is formal and
very organized.

Oral communication is less authentic than written communication as they are informal and not as
organized as written communication.

Oral communication is time-saving as far as daily interactions are concerned, but in case of
meetings, long speeches consume lot of time and are unproductive at times.

Written Communication - Meaning, Advantages and Disadvantages

Written communication has great significance in todays business world. It is an innovative activity of the mind.
Effective written communication is essential for preparing worthy promotional materials for business development.
Speech came before writing. But writing is more unique and formal than speech. Effective writing involves careful
choice of words, their organization in correct order in sentences formation as well as cohesive composition of
sentences. Also, writing is more valid and reliable than speech. But while speech is spontaneous, writing causes
delay and takes time as feedback is not immediate.
Advantages of Written Communication

Written communication helps in laying down apparent principles, policies and rules for running of an
organization.
It is a permanent means of communication. Thus, it is useful where record maintenance is required.

It assists in proper delegation of responsibilities. While in case of oral communication, it is impossible to fix
and delegate responsibilities on the grounds of speech as it can be taken back by the speaker or he may
refuse to acknowledge.
Disadvantages of Written Communication
Written communication does not save upon the costs. It costs huge in terms of stationery and the manpower
employed in writing/typing and delivering letters.
Also, if the receivers of the written message are separated by distance and if they need to clear their doubts,
the response is not spontaneous.
Written communication is time-consuming as the feedback is not immediate. The encoding and sending of
message takes time.
Non Verbal Communication - Actions Speak Louder than Words
Scenario 1 You are sitting in front of an interview panel with arms crossed. So far you have not been asked a
single question; however, your crossed arms have spoken louder than the words.
Tip 1 Never keep your arms crossed especially during formal one-on-one meetings. It suggests you are not open
to feedback and could also suggest that you are trying to dominate the situation.
Scenario 2 You are giving a presentation to a group of 20 people. You keep your gaze fixed at the centre of the
class / room through the presentation your gaze has spoken louder than your words.
Tip 2 Your gaze at one person should not be more than 4 - 5 seconds while delivering a presentation /
communicating with a large group unless you are addressing an individual.
Scenario 1 and 2 clearly demonstrate the importance of Non Verbal Communication.
Importance of Communication in an Organization
Effective Communication is significant for managers in the organizations so as to perform the basic functions of
management, i.e., Planning, Organizing, Leading and Controlling. Communication helps managers to perform their
jobs and responsibilities.
Thus, we can say that effective communication is a building block of successful organizations. In other
words, communication acts as organizational blood.
The importance of communication in an organization can be summarized as follows:
1.
Promotes motivation
2.
Source of information
3.
Altering individuals attitudes
4.
Helps in socializing.
5.
Assists in controlling process.
Grapevine Communication (Informal Business Communication)Grapevine is an informal channel of business
communication. It is called so because it stretches throughout the organization in all directions irrespective of the
authority levels. Man as we know is a social animal. Despite existence of formal channels in an organization, the
informal channels tend to develop when he interacts with other people in organization. It exists more at lower levels
of organization.
Examples of Grapevine Network of Communication
1.
Suppose the profit amount of a company is known. Rumor is spread that this much profit is there
and on that basis bonus is declared.
2.
CEO may be in relation to the Production Manager. They may have friendly relations with each
other.

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Advantages of Grapevine Communication
Grapevine channels carry information rapidly. As soon as an employee gets to know some confidential
information, he becomes inquisitive and passes the details then to his closest friend who in turn passes it to
other. Thus, it spreads hastily.
Disadvantages of Grapevine Communication
The grapevine carries partial information at times as it is more based on rumors. Thus, it does not clearly
depict the complete state of affairs.
Feedback Communication
Receivers are not just passive absorbers of messages; they receive the message and respond to them. This
response of a receiver to senders message is called Feedback. Sometimes a feedback could be a non-verbal smiles,
sighs etc. Sometimes it is oral, as when you react to a colleagues ideas with questions or comments. Feedback can
also be written like - replying to an e-mail, etc.
COMMUNICATION BARRIERS - REASONS FOR COMMUNICATION BREAKDOWN
Communication is a process beginning with a sender who encodes the message and passes it through some channel
to the receiver who decodes the message. Communication is fruitful if and only if the messages sent by the sender
is interpreted with same meaning by the receiver. If any kind of disturbance blocks any step of communication, the
message will be destroyed. Due to such disturbances, managers in an organization face severe problems. Thus the
managers must locate such barriers and take steps to get rid of them.
Following are the main communication barriers:
1.
Perceptual and Language Differences:
Value means different in different sentences. Communication breakdown occurs if there is wrong
perception by the receiver.
2.
Information Overload.
3.
Inattention:
4.
Time Pressures:
5.
Distraction/Noise:
6.
Emotions:
7.
Complexity in Organizational Structure:
8.
Poor retention:.
Effect of Communication Barriers in Business Communication
An organization is an individuals first home as one spends the maximum time here only. No organization runs for
charity, it is really important that the organization achieve its goals. How does an organization become successful ?
How will an organization achieve its goals ?.
The poor communication can actually cost you your job.

Let us now understand how barriers in communication effect business communication.

Noise acts as a devil in business communication

Unorganized and Haphazard thoughts also lead to ineffective communication in organizations.

During any business meeting, presentation or seminar, the speaker has to be very careful about
his pitch and tone.

Difference in thought process also results in a poor communication in business areas

OVERCOMING COMMUNICATION BARRIERS
There are a lot of communication barriers faced these days by all. The message intended by the sender is not
understood by the receiver in the same terms and sense and thus communication breakdown occurs. It is essential
to deal and cope up with these communication barriers so as to ensure smooth and effective communication.
As, in the previous section we have discussed the major barriers of communication. Lets talk about how to
overcome these barriers of communication.

Eliminating differences in perception:

Use of Simple Language:

Reduction and elimination of noise levels

Active Listening:

Emotional State:

Avoid Information Overload:

Give Constructive Feedback:

Proper Media Selection:

Flexibility in meeting the targets:

Guidelines for Effective Communication
Effective communication is a part and parcel of any successful organization. A communication should be free from
barriers so as to be effective. Communication is a two way process where the message sent by the sender should be
interpreted in the same terms by the recipient. The characteristics of effective communication are as follows :

Clarity of Purpose:

Completeness:

Conciseness:

Feedback:

Empathy:

Modify the message according to the audience:

Multiple Channels of communication:

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Make effective use of Grapevine (informal channel of communication):

EFFECTIVE PERSUASIVE COMMUNICATION

Know Your Audience

Get the Audience's Attention

Establish Credibility

Tailor the Message to the Medium

Convey Benefits

Body Language
COMMUNICATION IN CRISIS SITUATION
What is Crisis?
A sudden and unexpected event leading to major unrest amongst the individuals at the workplace
is called as organization crisis. In other words, crisis is defined as any emergency situation which disturbs
the employees as well as leads to instability in the organization. Crisis affects an individual, group,
organization or society on the whole.
Characteristics of Crisis
Crisis is a sequence of sudden disturbing events harming the organization.
Crisis generally arises on a short notice.
Crisis triggers a feeling of fear and threat amongst the individuals.
Why Crisis ?
Crisis can arise in an organization due to any of the following reasons:
Technological failure and Breakdown of machines lead to crisis. Problems in internet, corruption in the
software, errors in passwords all result in crisis.
Crisis arises when employees do not agree to each other and fight amongst themselves. Crisis arises
as a result of boycott, strikes for indefinite periods, disputes and so on.
Violence, thefts and terrorism at the workplace result in organization crisis.
Crisis Management
The art of dealing with sudden and unexpected events which disturbs the employees, organization
as well as external clients refers to Crisis Management.
The process of handling unexpected and sudden changes in organization culture is called as crisis management.
Need for Crisis Management
Crisis Management prepares the individuals to face unexpected developments and adverse conditions
in the organization with courage and determination.
Employees adjust well to the sudden changes in the organization.
Employees can understand and analyze the causes of crisis and cope with it in the best possible way.
Crisis Management helps the managers to devise strategies to come out of uncertain conditions and
also decide on the future course of action.
Crisis Management helps the managers to feel the early signs of crisis, warn the employees against the
aftermaths and take necessary precautions for the same.
Essential Features of Crisis Management
Crisis Management includes activities and processes which help the managers as well as employees to
analyze and understand events which might lead to crisis and uncertainty in the organization.
Crisis Management enables the managers and employees to respond effectively to changes in the
organization culture.
It consists of effective coordination amongst the departments to overcome emergency situations.
Employees at the time of crisis must communicate effectively with each other and try their level best
to overcome tough times. Points to keep in mind during crisis.

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