Chapter

5
As per JNTUK R19 Syllabus
Introduction to Management
Organizational conflict - causes and
consequences-conflict and Negotiation Team
Building, Conflict Resolution in Groups and
problem-solving Techniques – Organizational
change - change process - resistance to change
- Creating an Ethical Organization.

Prepared by

P.B.Narendra Kiran – M.B.A, M.Phil., (Ph.D.)

Department of Management STUDIes
BITS VIZAG
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Organisational Conflict:

Organisational conflict is a disagreement between two or more organisation members or groups

arising from the fact that they must share scarce resources or work activities and/or from the fact
that they have different statuses, goals, values or perceptions. Organisation members or sub-
units in disagreement, attempt to have their own cause or point of view prevail over that of
others. Conflicts may be at individual level, group level and at organisational level. Conflicts
affect the work efficiency of the individual and of the group; as a result productivity is reduced.

Stages of Organisational Conflict:

Organisational conflict can be more readily understood if it is considered as dynamic process.
Process here indicates a series of events. Each conflict is made up of a sequence of inter-locking
conflict episodes.

Five stages of a conflict episode may be identified as:

1. Latent conflict: Latent conflict provides the necessary antecedent conditions for conflict in
organisation. Here participants only anticipate conflict.
Four basic types of latent conflicts are:
a. Competition for scarce resources,
b. Drive for autonomy,
c. Divergence of subunit goals, and
d. Role conflict.

2. Perceived conflict: Perceived conflict is due to the parties’ misunderstanding of each other’s
true position. Such a conflict can be resolved by improving communication between the parties.

3. Felt conflict: A person X may be aware that he is in serious disagreement with Y over some
policy. If this makes X tense and affects his relationship with Y then, the conflict is felt by the
two. Conflict arises only after the differences become personalized or internalized (felt).

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4. Manifest conflict: This is the stage for open conflict. It takes the form of open aggression,
sabotage, apathy, withdrawal etc.

5. Conflict aftermath: The aftermath of a conflict may be either positive or negative for the
organisation depending on how the conflict is resolved. If conflict is resolved to the satisfaction
of all the parties involved, the basis for a more cooperative relationship may be laid. On the other
hand, if the conflict is merely suppressed (but not resolved), the latent condition of conflict may
be aggravated and explode in a more serious and violent form at a later stage.

Classes of Organisational Conflict:

Organisational conflicts may be classified as follows:
1. Individual conflict:
Intra Individual conflict is internal to the person and is probably the most difficult type to analyse
non-satisfaction of needs frustrates an individual and it leads to behaviour that negatively affects
job performance. When two individuals are in confrontation with each other, it may be said an
inter-individual conflict. For example, two individuals competing for the same promotion may
develop inter- individual conflict.

2. Group level conflict:

Conflicts at the group (formal and informal) level may be classified as:–
i. Intragroup conflict : It arises when differences over an issue crop up between the members of
the group. Such a conflict may divide the group into two further groups.

ii. Intergroup conflict : Every group is in at least partial conflict with every other group it
interacts with. They differ in goals, work activities, power, prestige, resource allocation, reward
systems etc.

3. Organisational conflict:
The inter-organisational conflicts are assumed between two organisations or between a business
organisation and the government. The Intra-organisational conflicts comprise of all intra-

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individual, inter individual, intra-group and intergroup conflicts because they are the parts of the
same organisation. Such conflicts may turn into hierarchical conflicts, line and staff conflicts,
management versus shop floor conflicts, union versus union conflicts etc.

Consequences of conflict

Sources of Organisational Conflict:

Sources of organisational conflict are found in some degree of actual or perceived divergence of
interests. Conflict is rooted in a sharp incompatibility of interests. Any victory for one party
means dissatisfaction or defeat for the other, thereby leading to a conflict. People disagree over
facts, goals, methods and values because they have different interests and perceptions.

a. Facts: Sometimes the disagreement occurs because individuals have different definitions of a
problem, are aware of different pieces of relevant information etc.
b. Goals: Sometimes the disagreement may be about what should and what should not be
accomplished.

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c. Methods: Sometimes the disagreement may be about the procedures and strategies to follow
to achieve the desired goal.
d. Values: Sometimes the disagreement is over ethics, the way power should be exercised or
assumptions about justice, fairness and so on. Conflicts may arise due to economic, social and
psychological reasons. Psychological factors no doubt contribute predominantly. For instance,
feeling of insecurity is a potent cause of tension and conflict. Conflicts may also arise due to lack
of consideration, lack of appreciation, misunderstanding or bad handling of situation and
problems.

Conflict process in organization: Conflict is a vibrant process. In contemporary organization

some conflict can be helpful to enhance organizational effectiveness. Tosi, Rizzo and Carroll
(1986) described the stages involved in the conflict process, from inception to end, as sequential
in nature, namely:

1. The conflict situation,

2. Awareness of the situation,
3. Realization,
4. Manifestation of conflict,
5. Resolution or suppression of conflict, and
6. After-effects of a conflict situation.

Conflict process:

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Major benefits of functional conflict are that it surfaces important problems so they can be
addressed. It causes careful consideration of decisions and causes reconsideration of decisions. It
increases information available for decision making and provides opportunities for creativity. At
the same time, there are numerous disadvantages of dysfunctional conflict. Conflict in
organization can diverts energies, harms group cohesion, promotes interpersonal hostilities,
creates overall negative environment, can decrease work productivity and job satisfaction. And
can contribute to absenteeism and job turnover.

CAUSES AND CONSEQUEMCES OF CONFLICTS:

“Employee conflict in the workplace is a common occurrence, resulting from the differences in
employees’ personalities and values. Dealing with employee conflict in a timely manner is
important to maintaining a healthy work environment. Believing that a small conflict will
simply disappear is an inaccurate assumption to make because simple conflicts can grow into
major problems if not dealt with appropriately. Managers should understand the common
causes of employee conflicts, so that a solution is found before the issues become
unmanageable.” Conflict occurs in the workplace on a regular basis. Disagreements arise
between colleagues. Rifts come between a manager and his employee. There are many
situations, such as these that can cause conflicts among groups within an organization.

Poor Communication
Poor communication is one of the main causes of conflict between employees in the workplace.
This can result in a difference in communication styles or a failure to communicate. For
example, a manager reassigned an employee’s task to the employee’s co- worker but failed to
communicate the reassignment to the employee. This may cause the employee to feel slighted,
which can transform into animosity among the two employees and the manager. Failing to
communicate in the workplace may cause employees to make incorrect assumptions and breeds
workplace gossip. Poor communication in the workplace not only causes conflict but also
decreases productivity and employee morale.

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Difference in Personalities
A difference in personalities among employees is another cause of workplace conflict.
Employees come from different backgrounds and experiences, which play a role in shaping
their personalities. When employees fail to understand or accept the differences in each other's
personalities, problems arise in the workplace. For example, an employee may possess a
straightforward personality that results in him speaking whatever is on his mind, even if the
timing is inappropriate. The employee with the straightforward personality may offend a co-
worker that does not possess the same type of personality. The co-worker may feel as if the
employee is rude or lacks the authority to deal with her in such a straightforward manner.

Lack of Resources to Share Equally

The principle of sharing is long recognized as being central to resolving the organizational
crisis and improves management performance. There should be an administrative policy on how
to share the available resources more equitably and sustainably in order to avoid conflict in
organizations.

Stress

Stress is the feeling of being under too much mental or emotional pressure. Pressure turns into
stress when you feel unable to cope. People have different ways of reacting to stress, so a
situation that feels stressful to one person may be motivating to someone else.Stress can affect
how you feel, think, behave and how your body works. In fact, common signs of stress include
sleeping problem, sweating, loss of appetite and difficulty in concentrating on thework.
Therefore, it causes conflict among employee – employer relationship.

Sexual Harassment
Sexual harassment is unwelcome behavior that happens to you because of your sex. Some types
of behavior that can be considered sexual harassment are unwelcome sexual advances, request
for sexual favors, orverbal or physical conduct of a sexual nature. Many different kinds of
conduct that are of a sexual nature may be sexual harassment, if the behavior is unwelcome
and if it is
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severe or pervasive. However, courts have resisted adopting what they consider a workplace
"code of conduct" or nature of behavior that is automatically considered to be sexual
harassment. As a result, if the conduct is not unwelcome or not severe or pervasive, courts will
not necessarily consider each type of conduct listed earlier to be sexual harassment. It causes
conflict in organization if there is no proper code of conduct in workplace.

Implication of Labor Conflicts to Productivity and Survival of Organization

As organizations strive to achieve their goals, they are often met with challenges they must
overcome as a team. Challenges leave room for conflict between members, other organizations,
communities and other parties involved in the organization’s mission. While “conflict” often
has a negative connotation, the effects of conflict within an organization can be positive and
negative, (Brookins and Media, 2002).

Members Leave Organisation

Organization members who are increasingly frustrated with the level of conflict within an
organization may decide to end their membership. This is especially detrimental when members
are a part of the executive board or heads of committees. Once members begin to leave, the
organization has to recruit new members and appoint acting board members. In extreme cases,
where several members’ leave or an executive board steps down, organizations risk dissolution.

Decrease in Productivity
When an organization spends much of its time dealing with conflict, members take time away
from focusing on the core goals they are tasked with achieving. Conflict causes members to
focus less on the project at hand and more on gossiping out conflict or venting about
frustrations. As a result, organizations can lose money, donors and access to essential resources.

Mental Health Concerns

Conflict within an organization can cause members to become frustrated if they feel as if there’s
no solution in sight, or if they feel that their opinions go unrecognized by other group members.

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As a result, members become stressed, which adversely affects their professional and personal
lives. Organization members may have problems sleeping, loss of appetite or overeating,
headaches and become unapproachable. In some instances, organization members may avoid
meetings to prevent themselves from experiencing stress and stress related symptoms.

Violence
When conflict escalates without mediation, intense situations may arise between organization
members. It’s unfortunate, but organizational conflicts may cause violence among members,
resulting in legal problems for members and possibly the organization.

Inspire Creativity
Fortunately, some organization members view conflict as an opportunity for finding creative
solutions to solve problems. Conflict can inspire members to brainstorm ideas, while examining
problems from various perspectives.

Share and Respect Opinions

As organization members work together to solve conflict, they are more willing to share their
opinions with the group. Conflict can also cause members to actively listen to each as they
work to accomplish the organizational goals.

Improve Future Communication

Conflict can bring group members together and help them learn more about each other, from
learning each other’s opinions on topics relevant to the organization’s growth to understanding
each member’s preferred communication style. Conflict within an organization can give
members the tools necessary to easily solve conflicts in the future.

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STRATEGIES FOR MANAGING CONFLICTS IN ORGANISATION

According to Dontigney and Demand, (2008), in any situation involving more than one person,
conflict can arise. The causes of conflict range from philosophical differences and divergent
goals to power imbalances. Unmanaged or poorly managed conflicts generate a breakdown in
trust and lost productivity. For small businesses, where success often hinges on the cohesion of
a few people, loss of trust and productivity can signal the death of the business. With a basic
understanding of the five conflict management strategies, small business owners can better deal
with conflicts before they escalate beyond repair.

Accommodating
The accommodating strategy essentially entails giving the opposing side what it wants. The use
of accommodation often occurs when one of the parties wishes to keep the peace or perceives
the issue as minor. For example, a business that requires formal dress may institute a "casual
Friday" policy as a low-stakes means of keeping the peace with the rank and file. Employer
who uses accommodation and provision of good working condition as a primary conflict
management strategy, however, may keep track and promote quality management performance.

Career or Skills Development

Skill Development means developing yourself and your skill sets to add value for the
organization and for your own career development. Fostering an attitude of appreciation for
lifelong learning is the key to workplace success. Continuously learning and developing one's
skills requires identifying the skills needed for productivity and then successfully seeking out
trainings or on- the-job opportunities for developing those skills.

Collaborating

Collaboration works by integrating ideas set out by multiple people. The object is to find a
creative solution acceptable to everyone. Collaboration, though useful, calls for a significant
time commitment not appropriate to all conflicts. For example, a business owner should work

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collaboratively with the manager to establish policies, but collaborative decision-making
regarding office supplies wastes time better spent on other activities.

Compromising or Conflict Resolution Procedures

The compromising strategy or conflict resolution procedures typically calls for both sides of a
conflict to give up elements of their position in order to establish an acceptable, if not
agreeable, solution. This strategy prevails most often in conflicts where the parties hold
approximately equivalent power. Business owners frequently employ compromise during
contract negotiations with other businesses when each party stands to lose something valuable,
such as a customer or necessary service.

Compensation Policy
Compensation is a fundamental component of employment and one of the most critical HR
management policies. While compensation traditionally refers to employment wage, best
practice in today's workplace considers total compensation to include basic salary, bonus or
incentive plans, benefits, and non-cash compensation.
Organizations should establish and communicate clear principles by which employees are paid.
At a minimum, organizations need to ensure that their compensation policy adheres to
employment legislation. Elements of compensation that are regulated by provincial
employment standards acts include:
Minimum Wage Equal Pay Deductions & Gratuities
How often employees
Rate of holiday pay Payroll records
receive their pay
Overtime Pay How payment is made Vacation Pay

Additionally, many organizations adopt compensation principles that ensure fairness and equity
in pay rates and salary administration, and transparency in compensation practices. An effective
compensation policy is based on objective and up-to-date job descriptions, effective job
evaluation and performance management, and relevant salary administration. Salary

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administration encompasses establishing:
• Salary ranges
• Decision-making criteria for salary increase
• Time frames for salary review

Protect Employees from Health Hazard

It is imperative to put in place law that requires employers to provide their employees with
working conditions that are free from known dangers. The Act may create the Occupational
Safety and Health Administration (OSHA), which sets and enforces protective workplace safety
and health standards. OSHA also provides information, training and assistance to workers and
employers. Workers may file a complaint to have OSHA inspect their workplace if they believe
that their employer is not following OSHA standards or that there are serious hazards.

PROBLEM SOLVING TECHNIQUES

Some of the conflict resolution techniques are as follows:

1. Problem Solving / Collaboration / Confronting

In this method, people involved in the conflict or having a difference in opinion, they come
forward to discuss the problem at hand with a very open mind. They focus on resolving the
conflict and finding the best alternative/solution for the team. They discuss by rising above
personal emotions with the sole intention to finding what is best for the team. This leads to a
win-win kind of an outcome. Here everyone collaborates.

2. Compromising/Reconciling

Sometimes for certain conflicts, there will be a need for the involved parties to think of a middle
path wherein both parties decide to give up something and identify a resolution. This kind of

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solution will be temporary for that moment and are not long lasting solution. This leads to lose-
lose kind of an outcome as both parties may feel they have lost something.

3. Withdrawing/Avoiding

In some situation one of the parties in the conflict may decide to retract from the discussion and
allows going with the other person’s opinion. Or some situation, one of the parties may decide to
completely avoid the conflict by maintaining silence. This works well in situation where one of
the parties in the conflict is emotionally charged up or is angry. Hence avoiding any conflict
resolution provides a “cooling off” period to the people involved so that they can later come back
for meaningful resolution.

4. Forcing/Competing

In some situations, a person with authority and power can force his/her opinion and resolves the
conflict without giving any chance to the other party/person. This leads to a win-lose kind of an
outcome. Someone may end up feeling as a loser while the other person with authority may feel
as a winner. This technique can be used if we see the conflicts are unnecessary and mostly
destructive for the team.

5. Smoothing/Accommodating

This is a technique which is used when the atmosphere seems to be filled with
apprehension/distrust among the parties involved. And no one is coming forward for resolving
the conflict. In these kind of scenarios, one of the parties can take charge and tries to smooth the
surrounding by using nice words and by emphasizing on the points of agreements and playing
down on the points of disagreements. This can work as catalyst to break the discomfort between
the involved parties by creating a feeling of trust and encourages them to come forward and
resolve the conflict.

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NEGOTIATION:

Majority of companies have to negotiate in many areas of organizational conflict. Negotiation is

an open process for two parties to find a satisfactory solution to a complex conflict. Negotiation
is process in which two or more parties exchange goods or services and attempt to agree on the
exchange rate for them. In an organizational context, negotiations may take place between two
people, within a group, between groups and over the Internet. Negotiation can take extensive
forms from skilled negotiator acting on behalf of a particular organization or position in a formal
setting to an informal negotiation between friends. Negotiation can be contrasted with
intervention, where a neutral third-party listens to each side's arguments and attempts to help
craft an agreement between the parties. It can also be compared with arbitration, which
resembles a legal proceeding.

In arbitration, both sides make an argument as to the merits of their case and the arbitrator
decides the outcome. This negotiation is also called positional or hard-bargaining negotiation.
Basically, negotiation is a problem-solving procedure in which two or more people willingly
discuss their differences and try to reach a joint decision on their common concerns. Negotiation
requires participants to recognize issues, about which they differ, educate each other about their
needs and interests, generate possible settlement options and bargain over the terms of the final
agreement. Winning negotiations result in some kind of exchange or promise being made by the
negotiators to each other. The exchange may be tangible or intangible.

Negotiations are categorized by four elements:

1. Some disagreement or conflict exists, which may be perceived, felt or manifest.

2. There is some degree of interdependence between the parties.
3. The situation must be conducive to opportunistic interaction. Each party must have both
the means and in the inclination to attempt to influence the other.
4. There exists some possibility of agreement, without which the negotiation cannot bring
about a positive resolution.

There are many conditions that affect the success or failure of negotiations.

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Identifiable parties who are willing to participate: The people or groups who have a chance in
the result must be specific and willing to sit down at the bargaining table if productive
negotiations are to occur. If a critical party is either absent or is not willing to commit to good
faith bargaining, the potential for agreement will decline.

Interdependence: For prolific negotiations, the contributors must be dependent upon each other
to have their needs met or interests satisfied. The participants need either each other's assistance
or restraint from negative action for their interests to be satisfied. If one party can get his/her
needs met without the collaboration of the other, there will be little impetus to bargain.

Readiness to negotiate: Individuals must be ready to negotiate for conversation to begin. When
participants are not mentally equipped to talk with the other parties, when sufficient information
is not obtainable, or when a negotiation scheme has not been prepared, people may be unwilling
to begin the process.

Means of influence or leverage: For people to reach an agreement over issues about which they
differ, it is necessary that they must have some ways to influence the attitudes and behaviour of
other negotiators. Often influence is seen as the power to intimidate or inflict pain or unwanted
costs, but this is only one way to support another to change. There are numerous ways to
influence in negotiation over issue such as enquire thought-provoking questions, provide needed
information, to get the advice of experts, appealing to influential associates of a party, exercising
legitimate authority or providing rewards.

Agreement on some issues and interests: People must be able to agree upon some common
issues and interests for good negotiations. Generally, participants will have some issues and
interests in common and others that are of concern to only one party. The number and
importance of the common issues and interests influence whether negotiations occur and whether
they stop in agreement. Parties must have sufficient issues and interests in common to do
themselves to a joint decision-making process.

Will to settle: In order to have successful negotiations, contributors have to desire to settle. If
conflict is continued instead of settlement, then negotiations are bound to failure. Often parties

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want to keep conflicts going to preserve a relationship, to mobilize public opinion or support in
their favour, or because the conflict relationship gives meaning to their life. These factors
encourage continued division and work against settlement. The harmful consequences of not
settling must be more significant and greater than those of settling for an agreement to be
reached.

Unpredictability of outcome: People bargain because they need something from another
person. They also negotiate because the outcome of not negotiating is unpredictable. Chances for
a crucial and one-sided victory need to be unpredictable for parties to enter into negotiations.

A sense of urgency and deadline: Negotiations normally occur when there is pressure or it is
critical to reach a decision. Urgency may be imposed by either external or internal time
constraints or by potential negative or positive consequences to a negotiation outcome. External
constraints include; court dates, imminent executive or administrative decisions, or predictable
changes in the environment. Internal constraints may be artificial deadlines selected by a
negotiator to enhance the motivation of another to settle. For negotiations to be successful, the
participants must jointly feel a sense of urgency and be aware that they are vulnerable to adverse
action or loss of benefits if a timely decision is not reached. If procrastination is beneficial to one
side, negotiations are less likely to occur, and, if they do, there is less impetus to settle.

No major psychological obstacle to settlement: Strong expressed or unexpressed feelings

about another party can sharply affect a person's psychological willingness to bargain.
Psychological barriers to settlement must be lowered if triumphant negotiations are to occur.

Issues must be negotiable. For successful negotiation to occur, negotiators must believe that
there are acceptable settlement options that are possible as a result of participation in the process.
If it appears that negotiations will have only win/lose settlement possibilities and that a party's
needs will not be met as a result of participation, parties will be reluctant to enter into dialogue.

The people must have the authority to decide: In order to obtain successful outcome,
participants must have the power to make a decision. If they do not have a lawful and recognized
right to decide, or if a clear approval process has not been established, negotiations will be
limited to an information exchange between the parties.
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Willingness to compromise: It is found that all negotiations do not require compromise. On
occasion, an agreement can be reached which meets all the participants' needs and does not
require a sacrifice on any party's part. However, in other disputes, compromise willingness to
have less than 100 percent of needs or interests satisfied may be necessary for the parties to reach
a satisfactory conclusion. Where the physical division of assets, strong values or principles
preclude compromise, negotiations are not possible.

The agreement must be rational and be implemented: Some settlements may be substantively
acceptable but may be impossible to implement. Participants in negotiations must be able to
establish a realistic and workable plan to carry out their agreement if the final settlement is to be
acceptable and hold over time.

External factors favourable to settlement: Often factors external to negotiations hamper or

promote settlement. Views of associates or friends, the political climate of public opinion or
economic conditions may promote agreement or continued chaos. Some external conditions can
be managed by negotiators while others cannot. Favourable external conditions for settlement
should be developed whenever possible.

Resources to negotiate: Members in negotiations must develop interpersonal skills required for
bargaining and, where suitable, the money and time to engage fully in dialogue procedures.
Insufficient or imbalanced resources may block the beginning of negotiations or obstruct
resolution.

There are five steps to the negotiation process

Preparation and Planning: Before the start of negotiations one must be aware of conflict the
history leading to the negotiation the people involved and their perception of the conflict
expectations from the negotiations etc.

Definition of Ground Rules: Once the planning and strategy is developed, one has to begin
defining the ground rules and procedures with the other party over the negotiation itself that will
do the negotiation. Where will it happen? What time constrains, if any will apply? To what
issues will negotiations be limited? Will there specific procedure to follow in an impasse is
reached? During this phase the parties will also exchange their initial proposals or demands.
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Clarification and Justification: When initial positions have been exchanged, both the parties
will explain amplify, clarify, bolster and justify their original demands. This need not be
confrontational. Rather it is an opportunity for educating and informing each other on the issues
why they are important and how each arrived at their initial demands. This is the point where one
party might want to provide the other party with any documentation that helps support its
position.

Bargaining and Problem Solving: The essence of the negotiation process is the actual give and
take in trying to hash out an agreement. It is here where concessions will undoubtedly need to be
made by both parties.

Closure and Implementation: The final step in the negotiation process is formalization the
agreement that has been worked out and developing and procedures that are necessary for
implementation and monitoring. For major negotiations, this will require hammering out the
specifics in a formal contract.

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There is a major role of mood and personality traits in Negotiation. Positive moods optimistically
affect negotiations. Traits do not appear to have a considerably direct effect on the outcomes of
either bargaining or negotiating processes. There are also gender differences in Negotiations.
Women negotiate no differently from men, although men in fact negotiate better outcomes. Men
and women with similar power in organization use the same negotiating styles. Women’s
attitudes toward negotiation and their success as negotiators are less favourable than men.

TEAM BUILDING

To be effective people need to work together toward a common goal in a coordinated and
cooperative way. Therefore you could say that team building is a systematic process designed to
improve working relationships and team functioning such as problem solving, decision making
and conflict resolution that enables the group to overcome any goal blocking barrier.

For many this result orientated mission is the real purpose for team building. A team building
goal therefore could be simply to identify and develop effective communication. Another way of
looking at it is that team building is like coaching but for a collective group.

Why is team building important?

Team Building formalises the power of collaboration among what otherwise might be excluded
or often alienated individuals. For many team building is a way to blend talent, skills and the
creativity of a group. With collaboration at its heart, team building improves cooperation, time
and resource management for their benefit of an organisation or team. The consequence is that
effective team building produces better, faster results and provides a satisfying and motivating
experience for team members.

Some reasons why team building is so important are:

1. Most organisations are so complex and with de-layering there has to be team building for
them to succeed.

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2. Everyone needs to be working towards common goals (that team building will generate
and nurture) which need to be attainable and clearly communicated.
3. Team building environments will outperform none team based environments.
Let us consider further why is team building is so important – team building will make favourable
impact in six key areas:

1. Task Achievement – teams are not designed for dealing with simple, repetitive tasks, as
individuals will generally be quicker. However, team building comes into its own when
faced with complex tasks, and associated problems, where probably there is no single,
correct answer.
2. Quality of Decisions – team building can generate more ideas than any one individual
therefore, it has the choice of many possibilities before it and the ultimate quality of the
decision is likely to be better than an individual’s decision.
3. Accuracy of Decisions – judgments are far better through team building than through
individual assessment of tasks that involve random error because team deliberation tends
to purge ill-conceived notions and weak individual thinking.
4. Risk taking – it has been shown that team building creates confidence to take greater, but
measured, risks (and seize opportunities) than individuals would.
5. Motivation – team building enhances morale and spurs individuals on to perform
effectively at a higher level.
6. Speed of learning – team building creates a progressive, but nurturing, environment
enabling team members to learn faster than individuals working alone.

Team building goals

For many organisations team building has become an integral part of their organisational strategy.
Their specific team building goals are to provide team members with:

1. Clarification of mission and vision

2. Establishment of team members roles and responsibilities
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3. Faster start up for new teams or teams with new leaders
4. Mechanisms for resolving conflict and elimination of dysfunctional behaviour
5. An appreciation of differences in work styles and preferences
Team building roles
For team building to work the roles and duties contained within team working structures have to
be determined.

Teams could, for example, be:

 A small group (typically 5 to 15 employees) which “owns” a distinct part of the process
and whose members are flexible within the group
 Aware of its customer’s needs (both internal and external)
 The instrument for maintaining quality levels
 Responsible for its own housekeeping
 Left alone to undertake routine maintenance of plant and equipment
 Empowered to work out how its objectives fit in with the company’s mission
 Tasked with making decisions on issues affecting the group
 Trained in problem solving techniques
 Responsible for safety issues
 Part of the selection process
 Self-determining on manning assignments and covering absent members
 Involved in layout of plant and equipment
 Continually striving to improve the product, service and delivery process

ORGANISATIONAL CHANGE:
Organisational change refers to any alteration that occurs in total work environment.
Organisational change is an important characteristic of most organisations. An organisation must
develop adaptability to change otherwise it will either be left behind or be swept away by the
forces of change. Organisational change is inevitable in a progressive culture. Modern
organizations
highly areversatile and adaptive to the multiplicity of changes.
dynamic,

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Organisational change refers to the alteration of structural relationships and roles of people in the
organization. It is largely structural in nature. An enterprise can be changed in several ways. Its
technology can be changed, its structure, its people and other elements can be changed.
Organisational change calls for a change in the individual behaviour of the employees.

Organizations survive, grow or decay depending upon the changing behaviour of the employees.
Most changes disturb the equilibrium of situation and environment in which the individuals or
groups exist. If a change is detrimental to the interests of individuals or groups, they will resist
the change.

Causes of Organisational Change:

(A) External Pressures:
i. Change in Technology and Equipment:
Advancements in technology is the major cause (i.e., external pressure) of change. Each
technological alternative results in new forms of organization to meet and match the needs.

ii. Market Situation:

Changes in market situation include rapidly changing goals, needs and desires of consumers,
suppliers, unions etc. If an organization has to survive, it has to cope with changes in market
situations.

iii. Social and Political Changes:

Organisational units literally have no control over social and political changes in the country.
Relations between government and business or drive for social equality are some factors which
may compel for organisational change.

(B) Internal Pressures (Pressures for Change from Within the Organisation):
i. Changes in the Managerial Personnel:
One of the most frequent reasons for major changes in the organisation is the change of
executives at the top. No two managers have the same style, skills or managerial philosophies.

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ii. Deficiencies in the Existing Organization:
Many deficiencies are noticed in the organisations with the passage of time. A change is
necessary to remove such deficiencies as lack of uniformity in the policies, obstacles in
communication, any ambiguity etc.

iii. Other Factors:

Certain other factors such as listed below also demand a change in the organisation.

 Employee’s desire to share in decision-making

 Employee’s desire for higher wage rate
 Improvement in working conditions, etc.

Response to Organisational Change:

Every change is responded by the people working in the organisation. These responses may be
positive or negative depending upon the fact as how they affect people.

Before introducing a change, the manager should study and understand employee’s attitudes so
as to create a positive response. Three sets of factors-psychological, personal and social- govern
the attitude of people.

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Process of Organisational Change:
Unless the behavioural patterns of the employees change, the change will have a little impact on
the effectiveness of the organisation. A commonly accepted model for bringing change in people
was suggested by Kurt Lewin in terms of three phase process:-

(3) Unfreezing:
The essence of unfreezing phase is that the individual is made to realize that his beliefs, feelings
and 23ehavior are no longer appropriate or relevant to the current situation in the
23ehavior23zat. Once convinced, people may change their 23ehavior. Reward for those willing
to change and punishment for others may help in this matter.

(2) Changing:
Once convinced and ready to change, an individual, under this phase, learns to behave in new
ways. He is first provided with the model in which he is to identify himself. Gradually he will
accept that model and behave in the manner suggested by the model. In another process (known
as 23ehavior23zation), the individual is placed in a situation where new 23ehavior is demanded
of him if he is to operate successfully.

(3) Refreezing:
During this phase, a person has to practice and experiment with the new method of 23ehavior
and see that it effectively blends with his other behavioural attitudes. Reinforcement, for creating
a permanent set in the individual, is provided through either continuous or intermittent schedules.

Resistance to Organisational Change:

Resistance to change is perhaps one of the baffling problems a manager encounters because it
can take many shapes. People may resign, they may show tardiness, loss of motivation to
work,

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increased absenteeism, request for transfer, wild-cat strikes, shoddy work, reduction in
productivity etc.

Classification of Resistance to Change:

Resistance to change may be classified as:

1. Industrial Resistance
2. Organisational Resistance

1. Industrial Resistance:
Individual resistance may be there because of the following reasons:

A. Economic Reasons:
(a) Obsolescence of Skills: When a person feels that with the introduction of newer processes,
his skills will just become obsolete, he will resist the change. For example, a twenty years
experienced accountant is quite likely to resist the introduction of a computer for preparing the
wage bills because he feels that might affect his pay and position.
(b) Fear of Economic Loss: People resist change if it opens the possibility of lowering their
income directly or indirectly.

B. Personal Reasons:
(a) Ego Defensiveness: A sales manager may turn down the suggestions of a salesman simply
because the manager perceives that his ego may be deflated by accepting the suggestion.
(b) Status Quo: Most of the people feel comfortable with status quo and strongly resist change
as it may involve uncertainty and risk.
(c) Fear of Unknown: Change presents unknown and unknown poses a constant threat and sores
people. For fear of unknown, a manager may refuse promotion that requires his relocating in
another state.

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C. Social Reasons:
(a) Social Displacement:
Introduction of change (e.g., relocating) may result in breaking up of work groups and thus result
in disturbance of the existing social relationships of people.

(b) Peer Pressure:

Whenever change is unwilling to the peers, they force the individual subordinate employees who
are bent of accepting the change, to resist it.

2. Organizational Resistance:
Resistance may also be present at organizational level. Some organizations are so designed that
they resist innovations.

Some of the reasons of organizational resistance are:

(a) Threats to Power and Influence:
Some people (especially sitting at the top levels) resist change because they feel that a change
might affect their position, power and influence in the organization.

(b) Organizational Structure:

Some organization structures (e.g., bureaucratic structure) have inbuilt mechanism for resistance
to change.

(c) Resource Constraints:

Non-availability of financial, material and human resources may also act as a resistance to change.

(d) Sunk Cost:

In some companies, heavy capital is blocked in the fixed or permanent assets. If such an
organization wishes to introduce change, then difficulty arises because of these sunk costs.

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Overcoming Resistance to Organisational Change:
Change creates tension and emotional turmoil in the minds of employees. Change thus results in
resistance quite frequently, negative reactions doom the success of the change program
especially when a manager is unable to handle it properly.

Some of the techniques to handle the change properly and to deal with resistance to change
are:
(a) Education and Communication: One of the easiest techniques to overcome resistance to
change is to educate the people who resist it. In many cases, people do not properly understand
the change and hence become afraid of its consequences and resist change.
(b) Participation and Involvement: If subordinates are allowed to participate and involve
themselves in the change process (decision-making regarding the implementation of the change),
their misunderstandings about the consequences of change are cleared, they generally feel
satisfied and do not oppose change.
(c) Support: Support may be facilitative and emotional. Managers sometimes deal with potential
resistance by being supportive. This includes listening, providing emotional support, providing
training in new skills etc.
(d) Incentives: Offering incentive is another fruitful way to overcome resistance to change.
(e) Manipulation: Managers generally indulge in manipulation when all other tactics have failed
to overcome resistance to change.
(f) Coercion: At times, there is no way except to deal with resistance coercively. People are
forced to accept change by threatening them with loss of their jobs, promotion possibilities and
so forth.

CREATING AN ETHICAL ORGANIZATION

“Having an organizational culture that emphasizes ethical behavior can cut down on
misbehavior of organizations. Research shows that whether an organization develops a culture
that emphasizes doing the right thing even when it is costly comes down to whether leaders,
starting with the CEO, consider the ethical consequences of their actions. Leaders with a moral
compass set the tone when it comes to ethical dilemmas”.
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An ethical organization is a good institution. It is an institution that reflects active and concerned
citizenship by acting in myriad ways to advance society. The activities of the organization are
reflected by the activities and the decisions of its employees and especially those of its
management team. The way to create an ethical organization is to encourage and mentor
employees to put their best professional values to work.

One of the responsibilities of the management team and each manager is to contribute towards
creating an ethical organization. That is an organization that promotes the moral development of
its employees. How does it do this? Firstly, there needs to be organizational commitment to
make ethics apart and parcel of all decision making. Ethics needs to be understood as the fabric
of organizational life as opposed to it being a watch dog or compliance function. Management
needs to be clear that ethical behavior is a priority.

Since ethical considerations are part of decision making and taking effective action, managers
and employees should be encouraged to practice ethics. They need to operate in an environment
that seeks to promote trust and honesty, where questioning is encouraged and where the slavish
following of rules or behaviors that demonstrate lack of personal responsibility or accountability
are discouraged. Everyone in the organization should be impressed with the reality that they are
the organization, and that every one of their actions or decisions has an organizational impact.
They need to understand that silence is not golden and that their ability to take personal
ownership of their actions is vital to advancing the ethical culture of the organization.

Robbins and Judge (2009) offer a nice list of what management can do to create a more ethical
organizational culture. They suggest a combination of the following practices:

1. Be a role model and be visible. Your employees look to the behavior of top management as
a model of what’s acceptable behavior in the workplace. When senior management is
observed (by subordinates) to take the ethical high road, it sends a positive message for all
employees.
2. Communicate ethical expectations. Ethical ambiguities can be reduced by creating and
disseminating an organizational code of ethics. It should state the organization’s primary
values
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and the ethical rules that employees are expected to follow. Remember, however, that a code
of ethics is worthless if top management fails to model ethical behaviors.
3. Offer ethics training. Set up seminars, workshops, and similar ethical training programs. Use
these training sessions to reinforce the organization’s standards of conduct, to clarify what
practices are and are not permissible, and to address possible ethical dilemmas.
4. Visibly reward ethical acts and punish unethical ones. Performance appraisals of managers
should include a point-by-point evaluation of how his or her decisions measure up against the
organization’s code of ethics. Appraisals must include the means taken to achieve goals as
well as the ends themselves. People who act ethically should be visibly rewarded for their
behavior. Just as importantly, unethical acts should be punished.
5. Provide protective mechanisms. The organization needs to provide formal mechanisms so
that employees can discuss ethical dilemmas and report unethical behavior without fear of
reprimand. This might include creation of ethical counselors, ombudsmen, or ethical officers.

How Can We Create Ethical Organizations?

There are three key pieces of the ethical environment that work together to promote ethical
behavior: (1) ethical leadership, (2) ethical practices, and the (3) ethical climate.

Ethical leaders set the tone for how employees should behave in organizations. Ethical leaders
are both moral persons who have desirable characteristics and moral managers who influence
employees conduct directly:
 Moral Persons: listen to employees, conduct their personal lives in an ethical manner, have the
best interests of employees in mind, make fair decisions, can be trusted.
 Moral Managers: Discipline employees who violate ethical standards, discuss business ethics or
values with employees, set an example of how to do things the right way in terms of ethics,
define success not just by results but also the way they are obtained, ask “What is the right thing
to do?” when making decisions.

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Ethical practices are actions or activities related to ethics that are repeated and recognizable in
organizations—they are what organizations actually do rather than just what is touted. Research
demonstrates there are six critical organizational practices related to ethics:
 Recruitment and Selection: Using ethical hiring practices, hiring employees with strong ethical
values, emphasizing ethics when recruiting new employees, searching for ethical applicants
 Orientation and Training: Requiring attendance at ethics training, using the things employees
learn in ethics training when performing their jobs, discussing ethical issues with new employees
as part of their initial orientation
 Policies and Codes: Strictly following written codes of ethics, the ethics code serving as more
than just window dressing, enforcing all ethical behaviors—not just the ones that are high profile
 Reward and Punishment Systems: Providing positive feedback and rewards for making ethical
decisions, measuring and tracking ethical behaviors, disciplining employees who violate ethical
standards
 Accountability and Responsibility: Holding employees accountable for their actions, taking
responsibility for the outcomes of one’s own actions, questioning authority if unethical behavior
occurs
 Decision-Making: Taking ethical issues into account when making decisions, discussing ethical
concerns at meetings, talking about whether something is the “right thing to do”

Ethical climate is a general perception organizational employees have about whether the
organization is ethical. In an ethical climate you would see the following things:
 Employees have a lot of skill in recognizing ethical issues

 Success is defined not just by the results, but also the way they are obtained

 Employees continually strive to maintain high ethical standards

 Employees have a lot of knowledge regarding how to handle ethical issues

 Employees rarely feel pressured to compromise the organization’s ethical standards to

achieve business objectives.

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