Module-1

Role of OB in Management: Definition and Meaning of OB: Behaviour Vs

OB: Evolution of OB: Key elements of OB: Principles of OB: Models and
Aspects of OB.

Henri Fayol's Principles of Management

Understanding Historical Administrative Theory

Organizations work best when everything is in balance.

As your career progresses, you may find you do fewer technical tasks and spend more time
guiding a team or planning strategy.

While that's often a given today, in the 19th century most companies promoted the best
technicians. But Henri Fayol recognized that the skills that made them good at their jobs didn't
necessarily make them good managers.

Who Was Henri Fayol?

Fayol was an engineer who worked his way up to become manager of the Compagnie de
Commentry-Fourchambault-Decazeville mining company in France, at the tail end of the
industrial revolution. Under his watch, the struggling firm prospered.

He wrote, "When I assumed the responsibility for the restoration of Decazeville, I did not rely on
my technical superiority... I relied on my ability as an organizer [and my] skill in handling men."
[1]

Fayol's 14 Principles of Management identified the skills that were needed to manage well. As
well as inspiring much of today's management theory, they offer tips that you can still implement
in your organization. Fayol also created a list of the five primary Functions of Management,
which go hand in hand with the Principles.

What Is Administrative Theory?

Fayol called managerial skills "administrative functions." In his 1916 book, "Administration
Industrielle et Générale," he shared his experiences of managing a workforce.

Fayol’s book – and his 14 Principles of Management – helped to form what became known
as Administrative Theory. It looks at the organization from the top down, and sets out steps for
managers to get the best from employees and to run a business efficiently.
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What Are Fayol's 14 Principles of Management?

It was the reality of Fayol's day-to-day managing, seeing what worked and what didn't, that
informed his 14 Principles of Management. By focusing on administrative over technical skills,
the Principles are some of the earliest examples of treating management as a profession. They
are:

1. Division of Work – Assign each employee a task that they can become proficient at.
Productivity increases as employees become more skilled, assured and efficient.
Today, experts still warn against multi-tasking .
2. Authority – Managers must possess the authority to give orders, and recognize that
with authority comes responsibility. As well as rank, Fayol argues that a manager's
intelligence, experience and values should command respect.
3. Discipline – Everyone should follow the rules . To help, you can make agreements
between the organization and employees clear for all to see. [2]
4. Unity of Command – Fayol wrote that "an employee should receive orders from one
supervisor only." Otherwise, authority, discipline, order, and stability are threatened.
5. Unity of Direction – Teams with the same objective should be working under the
direction of one manager, using one plan. That, Fayol wrote, "is the condition
essential to unity of action, coordination of strength and focusing of effort."
6. Collective Interest Over Individual Interest – Individuals should pursue team
interests over personal ones – including managers.
7. Remuneration – Employee satisfaction depends on fair remuneration for everyone –
financial and non-financial. Fayol said pay should be fair and reward "well-directed
effort."
8. Centralization – Balancing centralized decision making (from the top) with letting
employees make decisions. Or as Fayol wrote, "A place for everyone and everyone in
his place."
9. Scalar Chain – Employees should know where they stand in the organization's
hierarchy and who to speak to within a chain of command. Fayol suggested the now-
familiar organization chart as a way for employees to see this structure clearly. [3]
10. Order – Fayol wrote that, "The right man in the right place" forms an effective social
order. He applied the same maxim to materials: right one, right place. Academics note
that this principle pre-empted the Just in Time (JIT) strategy for efficient production.
[4]
11. Equity – Managers should be fair to all employees through a "combination of
kindliness and justice." Only then will the team "carry out its duties with... devotion
and loyalty."
12. Stability of Tenure of Personnel – Organizations should minimize staff
turnover and role changes to maximize efficiency. If people are secure and good at
their jobs, they are happier and more productive.

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 13. Initiative – Employees should be encouraged to develop and carry out plans for
improvement. As Fayol wrote, "At all levels of the organizational ladder, zeal and
energy on the part of employees are augmented by initiative."
14. Esprit de Corps – Organizations should strive to promote team spirit, unity, and
morale.

Principles of Scientific Management by Taylor:

F.W. Taylor or Fredrick Winslow Taylor, also known as the ‘Father of scientific management’
proved with his practical theories that a scientific method can be implemented to management.
Taylor gave much concentration on the supervisory level of management and performance of
managers and workers at an operational level. Let’s discuss in detail the five principles of
management by F.W Taylor.

1. Science, not the Rule of Thumb-

This rule focuses on increasing the efficiency of an organisation through scientific analysis of
work and not with the ‘Rule of Thumb’ method. Taylor believed that even a small activity like
loading paper sheets into boxcars can be planned scientifically. This will save time and also
human energy. This decision should be based on scientific analysis and cause and effect
relationships rather than ‘Rule of Thumb’ where the decision is taken according to the manager’s
personal judgement.

2. Harmony, Not Discord-

Taylor indicated and believed that the relationship between the workers and management should
be cordial and completely harmonious. Difference between the two will never be beneficial to
either side. Management and workers should acknowledge and understand each other’s
importance. Taylor also suggested the mental revolution for both management and workers to
achieve total harmony.
Additional Reading: Difference Between Fayol and Taylor Theory of Management

3. Mental Revolution-
This technique involves a shift of attitude of management and workers towards each other. Both
should understand the value of each other and work with full participation and cooperation. The
aim of both should be to improve and boost the profits of the organisation. Mental Revolution
demands a complete change in the outlook of both the workers and management; both should
have a sense of togetherness.

4. Cooperation, not Individualism-

It is similar to ‘Harmony, not discord’ and believes in mutual collaboration between workers and
the management. Managers and workers should have mutual cooperation and confidence and a
sense of goodwill. The main purpose is to substitute internal competition with cooperation.

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5. Development of Every Person to his Greatest Efficiency-
The effectiveness of a company also relies on the abilities and skills of its employees. Thus,
implementing training, learning best practices and technology, is the scientific approach to brush
up the employee skill. To assure that the training is given to the right employee, the right steps
should be taken at the time of selection and recruiting candidates based on a scientific selection.
Case Study

TACKLING BEHAVIOURAL ISSUES AT PRESTIGE CONSULTANTS

Prestige consultants commenced its operations in 2007 when five consultants from different
organisations came together to com-bine their intellectual talents and entrepreneurial skills to
deliver innovative solutions at a strategic level to clients in the financial services sector. With
the growth of the organisation, their roles had changed. The organisation had employed 112
consultants or-ganised into unions of 10 to 15 people managed by a divisional leader

Michael Brook, a self-driven, extremely motivated individual had been recruited to Prestige
about a year ago. He had completed his Masters in Information Technology. The Managing
Director of Prestige, Sue Parker had personally interviewed Brook and re-cruited him in the
Customer Relationship Management System. Although Brook was unfamiliar with the CRM
system at Prestige, but he learnt the intricacies of the department by working long hours for his
initial six months. This impressed Parker, and she soon understood that she did not have to
spend much time with Brook, who could deliver well with little guidance or instruction.

However, Sue Parker had often tackled complaints about Brook’s self-centeredness and failure
to work with other team members. Although Brook was keeping the customers satisfied, the
people in the team appeared to dislike him. A meeting was called to ad-dress the issue as Sue
did not intend to lose any of her team mem-bers. On one hand, the teammates were requested to
be patient with Brook. On the other hand, Brook was counselled for his be-haviour and
encouraged to work in teams, which brought about unexceptional change in his attitude and
behaviour in dealing with people.

Definition

Stephen P. Robins defines “Organisational behaviour as a systematic study of the actions and
attitudes that people exhibit within organisations.”

organisational behaviour (OB) is the study of human behaviour at work. It examines the human
behaviour in an organisation with regard to the interactions among individuals and group of
individuals. It assesses the political, psychological and commercial conditions that affect the
performance of an employee in an organisation. It provides a humanistic approach to an
organisation by focusing on the human processes within the organisation rather than restrict-ing
the focus to the functional or structural aspects of the organisation.

Three Levels of OB Study

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There are broadly three levels of organisational behaviour, which define the unique set of roles,
responsibilities, and goals of people at each level of the organisation.

Organisational level

Group level

Individual level

Individual Level: This level forms the base of the organisational behaviour and is related to the
individuals working in an organisation. It includes the study of organisational behaviour at the
individual level and deals with the perception, personality, learning, motivation and attitudes of
the employees in an organisation.

Group Level: The next level in organisational behaviour is the group level, which includes the
study of group formation, team conflict, leadership, power and politics. It helps in gaining
information on how to improve the team work, motivate the employees, etc.

Organisational Level: The third level in organisational behaviour is the organisational level,
which includes the changes in organisation’s culture, management and their effect on the group
and individuals. The working conditions and stress-management techniques are also discussed at
this level.

Evolution of OB

Organisational behaviour is a key concept that is considered as fundamentally new practice in the
field of management, but is rather an adaptation of existing management facts. In fact,
organisational behaviour has its origins right from the start of human civilization when people
began living in groups. Several scholars contributed to the field of OB through their studies and
research, such as the concept of scientific management in organisations given by Frederick. W.
Tay-lor (1856-1915). The Scientific management theory evolved to specify the role of managers
in the Administrative management proposed by Henri Fayol (1841-1925). Later, Max Weber
(1864-1920) proposed the Bureaucratic management, which focused on organisational structure,
dividing organisations into hierarchies with clear lines of authority and control.

However, after the industrial revolution, OB gained importance with the development of new
management concepts and practices. Elton Mayo is considered the initiator of OB owing to the
series of Hawthorne experiments conducted by him and his team at Western Electrical Works in
the US, from 1924 to 1932.

The Hawthorne experiments: The first experiment was carried out in 1924-27, to assess the
effect of different levels of illumination (lighting) on productivity of labour. The brightness of
light was increased and decreased to discover its effect on the productivity level of the test
group. It was observed that labour productivity increased even with low levels of lighting, which
meant that there were other factors affecting the productivity apart from lighting. These factors
were identified as follows:

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 • The social and psychological factors that affected the labour productivity and job
satisfaction.
• The informal relations between employees that influenced the employees’ behaviour and
performance in the organisation.
• The level of participation in organisational decision-making process.
• The belief amongst employees that the management was inter-ested in their welfare.
• The fact that employees were treated with respect and dignity.
• Proper communication between superiors and subordinates.
• Freedom of expression to workers.

The second experiment, which began in 1927, was carried out in the relay assembly department,
where electromagnetic switches for telephone connections were produced. Western Electric
manufactured about 7 million relays in a year. As the speed of workers determined the overall
production levels, the effects of factors, such as rest periods and work hours, were assessed in the
experiment.

The third experiment was carried out in a separate test room with 6 women. 1 of the women
prepared parts for the remaining 5 women to assemble. The women released the finished relays
into a shaft, where a recording device punched a hole in the moving paper tape. The number of
holes revealed the production rate for each worker.

These conclusions led to the emphasis on the human factor in the attainment of organisational
goals and objectives. The Hawthorne experiments created a Hawthorne effect in the
organisations. These experiments stressed on the fact that the production increased or decreased
not only due to the change in the working conditions, but also due to the general feeling among
workers that they were part of a team and that their welfare was important to the organisation. It
was in the late 1940s that organisational behaviour emerged as a separate field of study. Several
approaches to organisational behaviour were proposed in the course of time, which have been
discussed later in the unit.

SCOPE OF ORGANI ATIONAL BEHAVIOUR

The scope of OB is continuously expanding owing to the rapid changes in the organisational set-
up and the world economy. The field of OB is being applied to all areas that deal with human
behaviour. The study of human behaviour not only includes how an individual be-haves in a
certain situation, but also why he or she behaves so and what would be the impact of his or her
behaviour on other individuals, organisation and the society as a whole. The scope of OB could
be better explained by the contributions made by various disciplines, to understand human
behaviour, which are given as follows:

Psychology: It is the scientific study of mental functions and behaviour of human beings.
Human psychology helps in understand-ing motivation at work, interpersonal relationships,
training needs and effect of personality traits on behaviour.

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Social psychology: It is the scientific study to understand and explain how the behaviour of
individuals is affected by the actual, imagined or implied presence of other human beings around
them. Social psychology helps to gain an understanding of group behaviour, social perception,
prejudices, leadership, conflict, etc., in a group.

Industrial psychology: It is the study of human behaviour as employees. Industrial psychology

helps in investigating workplace issues, such as employee selection, employee performance and
employee productivity.

Sociology: It is the scientific study of the development, structure and functioning of human
society. Sociology helps in understanding the effect of industrialisation on social behaviour of
humans, labour as a class, etc.

Cultural anthropology: It is the study of human cultures, beliefs, values, ideas, practices, etc.,
in the past and present. It is based on the knowledge gained from social sciences, biological
sciences, humanities and the natural sciences. Anthropology helps in un-derstanding the effect of
culture on organisational behaviour.

Political Science: It is a social science discipline related to the study of the state and systems of
government; the scientific anal-ysis of political activity and behaviour. Political science helps in
providing insights to the information regarding the organisational structure, hierarchy, power and
politics, individual and group con-flicts and administration in an organisation.

Economics: It is the study of the production, consumption, and transfer of wealth in nations.
Economics helps in understanding the process of deciding among alternatives, effect of
economic pol-icies on the growth of the organisation, allocation of resources, etc.

Semantics: It is the study of the meanings of words and or phras-es used in a language.
Semantics helps in understanding and im-proving the communication process in an organisation.

Physiology: It is the study of the functions of living organisms and their body parts. It helps to
understand the reasons for monotony, boredom, lethargy among employees in an organisation.

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APPROACHES TO ORGANISATIONAL BEHAVIOR

CLASSICAL APPROACH

The classical approach to organisational behaviour emphasised on the planning of work,

technical necessities of an organisation, principles and concepts of management and the
assumption of logical behaviour. The classical approach of organisational behaviour was based
on the management theories laid down by various scholars, such as Taylor, Fayol, Urwick,
Mooney and Reiley and Brech in the early years of the 20th century. The philosophy of the
classical approach is based on the following statements:

Many classical writers gave several principles governing organisational behaviour. Of these
principles, the following three (Mooney and Reiley) apply to all types of organisations:

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The principle of co-ordination: This principle emphasises on the need for people to act together
with unity of action (Esprit De Corps), and the need for authority and discipline in organisations.

The scalar chain principle: This principle emphasises on the hierarchical structure of an
organisation and represents the line of authority at all levels of management. The scalar chain
involves the flow of communication from top to bottom level of the organisational hierarchy.
The principle states that information in an organisation should pass through the scalar chain.

The functional principle: This principle emphasises on the specialisation and the distinction
between different kinds of duties. It states that work in an organisation should be divided among
employees as per their skills and abilities in order to increase the efficiency of employees.

The Classical approach comprises of the following management theories:

Scientific Management: This is based on the concept of planning of work to achieve efficiency,
standardisation, specialization, and simplification. F.W. Taylor suggested four principles of
scientific management in 1947, which are:

No rule-of-thumb at workplace
Scientific selection of the worker
Cooperation of management and labour rather than conflict scientific training of workers

Bureaucratic Management: This theory considers the organisation as a part of the broader
society. Bureaucratic management is based on the principles of:

Structure
Specialisation
Predictability
Stability
Rationality
Democracy
Administrative Management: This theory was proposed by Hen-ry Fayol and is based on
several principles of management. Some of them are:

Division of work
Authority and responsibility
Discipline
Unity of command
Unity of direction
Subordination of individual interest
Remuneration of personnel

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Centralization
Scalar chain
Order
Equity

Moreover, according to this theory, management was considered a set of planning, organising,
training, commanding, and coordinating functions.

NEO-CLASSICAL APPROACH

The Hawthorne Experiment formed the basis of the neo-classical approach to organisational
behaviour. Most views of neoclassical thinkers are human centric as against the authority
centered views of the classical organisational theory. The neo-classical approach emphasises on
the point that organisation is a social system in which individuals work together to achieve major
objectives. This approach is people-oriented and can be referred to as the human resource
approach. The basics of the classical approach focusing on unity and scalar chain principles are
retained in the neo-classical approach. However, the neo-classical approach is basically a
behavioural science approach and lays emphasis on the human relations in organisations. The
essence of the neo-classical theory can be summarised with the help of the following:

Organisation situation should be viewed in social as well as economic and technical terms.

The social process of group behaviour should be understood while organising the structure.

The neo-classical theory states that the fulfilment of employee needs with regard to recognition,
role in decision making and overall satis-faction is essential to improve employee efficiency.
The main postulates of the neo-classical approach are given as follows:

The neo-classical theory suggests that the organisational structure should be developed in such a
way that it helps in achieving the basic propositions of the theory.

Let us discuss the significance of these elements in the following section:

Flat organisational structure: The neo-classical theory advocates the formation of flat
organisational structures over tall structures. As against the tall organisational structure, a flat
structure has relatively less number of layers of middle management. This implies that the chain
of command from top to bottom is short, and the span of control (number of employees under a
manager) is wide. Moreover, the flat structure is less expensive and minimizes hierarchical
control.

Decentralisation: Decentralisation refers to the conscious effort to delegate the power of

decision making to the lowest levels in the organisation. This is contrary to the centralised system
of decision making where power is restricted in the hands of top management only. It brings about
a sense of belongingness and participation among the employees, which motivates them to
perform better

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 Informal organisation: This element of the neo-classical theory differentiates it from the
classical theory. The neo-classical theory suggests that an informal organisation exists within
the formal organisation. The informal organisation is formed to fulfil the social and
psychological needs of the employees in an organisation. The satisfaction of these needs affects
the employee behaviour significantly

MODERN APPROACH

The modern approach of organisational behaviour seeks to overcome the limitations of the
traditional approaches (classical and neo-classical). The modern approach is based on the
scientific explanations of the complexities of organisational structure. The modern approach can
be further divided into two separate approaches

The Systems Approach: This approach is also referred as the system organisation theory. This
approach was postulated in the 1950s and considered the organisation as a system of consciously
coordinated activities of various individuals in an organisation. Organisations are viewed as
purposely unified systems consisting interrelated parts or subsystems, such as the technical
system, managerial subsystem, production system, marketing system, social and political system,
which are mutually dependent. Each of these systems affects the other systems and thus, shares a
complex relationship with organisational functioning. For example, an incident that affects the
technical subsystem may have a significant impact on the production subsystem of the
organisation. Therefore, the interdependency of these subsystems is critical to the
accomplishment of organisational objectives. There are three basic interlinks that connect one
subsystem to another. These interlinks are:

Communication process
Decision-making process
Balancing process
The Contingency Approach: According to the classical approach, one best way of managing
things can be applied across all organisations under all circumstances. However, circumstances
across organisations vary in structure and complexity as they depend on different variables.
Thus, each situation must be analyzed careful-ly to determine the significant variables in order to
establish the most effective organisational practices. The contingency approach argues that the
external environment and the internal environment of an organisation form the basis of the
organisational structure. Organizational behaviour varies in different situations depending on the
individual and groups in the organisation, technology, structure and the environment facing the
organisation. For example, if the employees are eager to take more responsibility, managers may
give freedom to their employees to encourage innovation at the work-place. Whereas, managers
may adopt the directive management styles in case employees are unwilling of taking
responsibility.

Diversity

Diversity refers to the ways in which people are similar or different from each other. It
may be defined by any characteristic that varies within a particular work unit such as

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gender, race, age, education, tenure, or functional background (such as being an
engineer versus being an accountant.

Benefits of Diversity

What is the business case for diversity? Having a diverse workforce and managing it
effectively have the potential to bring about a number of benefits to organizations.

Higher Creativity in Decision Making

An important potential benefit of having a diverse workforce is the ability to make higher
quality decisions. In a diverse work team, people will have different opinions and
perspectives. In these teams, individuals are more likely to consider more alternatives
and think outside the box when making decisions. When thinking about a problem, team
members may identify novel solutions. Research shows that diverse teams tend to
make higher quality decisions.McLeod, P., Lobel, S., & Cox, T. H. (1996). Ethnic
diversity and creativity in small groups. Small Group Research, 27, 248–264. Therefore,
having a diverse workforce may have a direct impact on a company’s bottom line by
increasing creativity in decision making.

Better Understanding and Service of Customers

A company with a diverse workforce may create products or services that appeal to a
broader customer base. For example, PepsiCo Inc. planned and executed a successful
diversification effort in the recent past. The company was able to increase the
percentage of women and ethnic minorities in many levels of the company, including
management. The company points out that in 2004, about 1% of the company’s 8%
revenue growth came from products that were inspired by the diversity efforts, such as
guacamole-flavored Doritos chips and wasabi-flavored snacks. Similarly, Harley-
Davidson Motor Company is pursuing diversification of employees at all levels because
the company realizes that they need to reach beyond their traditional customer group to
stay competitive. Hymowitz, C. (2005, November 14). The new diversity: In a global
economy, it’s no longer about how many employees you have in this group and that
group; It’s a lot more complicated—and if you do it right, a lot more effective. Wall Street
Journal, p. R1. Wal-Mart Stores Inc. heavily advertises in Hispanic neighborhoods
between Christmas and The Epiphany because the company understands that
Hispanics tend to exchange gifts on that day as well.Slater, S. F., Weigand, R. A., &
Zwirlein, T. J. (2008). The business case for commitment to diversity. Business
Horizons, 51, 201–209. A company with a diverse workforce may understand the needs
of particular groups of customers better, and customers may feel more at ease when
they are dealing with a company that understands their needs.

More Satisfied Workforce

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When employees feel that they are fairly treated, they tend to be more satisfied. On the
other hand, when employees perceive that they are being discriminated against, they
tend to be less attached to the company, less satisfied with their jobs, and experience
more stress at work.Sanchez, J. I., & Brock, P. (1996). Outcomes of perceived
discrimination among Hispanic employees: Is diversity management a luxury or
necessity? Academy of Management Journal, 39, 704–719. Organizations where
employees are satisfied often have lower turnover.

Higher Stock Prices

Companies that do a better job of managing a diverse workforce are often rewarded in
the stock market, indicating that investors use this information to judge how well a
company is being managed. For example, companies that receive an award from the
U.S. Department of Labor for their diversity management programs show increases in
the stock price in the days following the announcement. Conversely, companies that
announce settlements for discrimination lawsuits often show a decline in stock prices
afterward.Wright, P., Ferris, S. P., Hiller, J. S., & Kroll, M. (1995). Competitiveness
through management of diversity: Effects on stock price valuation. Academy of
Management Journal, 30, 272–287.

Lower Litigation Expenses

Companies doing a particularly bad job in diversity management face costly litigations.
When an employee or a group of employees feel that the company is violating EEOC
laws, they may file a complaint. The EEOC acts as a mediator between the company
and the person, and the company may choose to settle the case outside the court. If no
settlement is reached, the EEOC may sue the company on behalf of the complainant or
may provide the injured party with a right-to-sue letter. Regardless of the outcome,
these lawsuits are expensive and include attorney fees as well as the cost of the
settlement or judgment, which may reach millions of dollars. The resulting poor publicity
also has a cost to the company. For example, in 1999, the Coca-Cola Company faced a
race discrimination lawsuit claiming that the company discriminated against African
Americans in promotions. The company settled for a record $192.5 million.Lovel, J.
(2003, May 2). Race discrimination suit targets Coke bottler CCE. Atlanta Business
Chronicle. Retrieved January 29, 2009,

Higher Company Performance

As a result of all these potential benefits, companies that manage diversity more
effectively tend to outperform others. Research shows that in companies pursuing a
growth strategy, there was a positive relationship between racial diversity of the
company and firm performance.Richard, O. C. (2000). Racial diversity, business
strategy, and firm performance: A resource-based view. Academy of Management
Journal, 43, 164–177. Companies ranked in the Diversity 50 list created
by DiversityInc magazine performed better than their counterparts.Slater, S. F.,
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Weigand, R. A., & Zwirlein, T. J. (2008). The business case for commitment to
diversity. Business Horizons, 51, 201–209. And, in a survey of 500 large companies,
those with the largest percentage of female executives performed better than those with
the smallest percentage of female executives.Weisul, K. (2004, January 28). The
bottom line on women at the top. Business Week Online. Retrieved November 14,
2008, from http://www.businessweek.com/.

Challenges of Diversity

If managing diversity effectively has the potential to increase company performance,

increase creativity, and create a more satisfied workforce, why aren’t all companies
doing a better job of encouraging diversity? Despite all the potential advantages, there
are also a number of challenges associated with increased levels of diversity in the
workforce.

Similarity-Attraction Phenomenon

The similarity-attraction phenomenon may explain some of the potentially unfair

treatment based on demographic traits. If a hiring manager chooses someone who is
racially similar over a more qualified candidate from a different race, the decision will be
ineffective and unfair. In other words, similarity-attraction may prevent some highly
qualified women, minorities, or persons with disabilities from being hired. Of course, the
same tendency may prevent highly qualified Caucasian and male candidates from being
hired as well, but given that Caucasian males are more likely to hold powerful
management positions in today’s U.S.-based organizations, similarity-attraction may
affect women and minorities to a greater extent. Even when candidates from minority or
underrepresented groups are hired, they may receive different treatment within the
organization. For example, research shows that one way in which employees may get
ahead within organizations is through being mentored by a knowledgeable and powerful
mentor. Yet, when the company does not have a formal mentoring program in which
people are assigned a specific mentor, people are more likely to develop a mentoring
relationship with someone who is similar to them in demographic traits.

Why are we more attracted to those who share our demographic attributes?
Demographic traits are part of what makes up surface-level diversity. Surface-level
diversity includes traits that are highly visible to us and those around us, such as race,
gender, and age. Researchers believe that people pay attention to surface diversity
because they are assumed to be related to deep-level diversity, which includes values,
beliefs, and attitudes. We want to interact with those who share our values and
attitudes, but when we meet people for the first time, we have no way of knowing
whether they share similar values. As a result, we tend to use surface-level diversity to
make judgments about deep-level diversity. Research shows that surface-level traits
affect our interactions with other people early in our acquaintance with them, but as we
get to know people, the influence of surface-level traits is replaced by deep-level traits
such as similarity in values and attitudes. Age, race, and gender dissimilarity are also

14
stronger predictors of employee turnover during the first few weeks or months within a
company. It seems that people who are different from others may feel isolated during
their early tenure when they are dissimilar to the rest of the team, but these effects tend
to disappear as people stay longer and get to know other employees.

Figure 2.3 Individuals often initially judge others based on surface-level diversity. Over time, this effect tends to
fade and is replaced by deep-level traits such as similarity in values and attitudes.

As you may see, while similarity-attraction may put some employees at a disadvantage,
it is a tendency that can be managed by organizations. By paying attention to
employees early in their tenure, having formal mentoring programs in which people are
assigned mentors, and training managers to be aware of the similarity-attraction
tendency, organizations can go a long way in dealing with potential diversity challenges.

Faultlines

A faultline is an attribute along which a group is split into subgroups. For example, in a
group with three female and three male members, gender may act as a faultline
because the female members may see themselves as separate from the male
members. Now imagine that the female members of the same team are all over 50
years old and the male members are all younger than 25. In this case, age and gender
combine to further divide the group into two subgroups. Teams that are divided by
faultlines experience a number of difficulties. For example, members of the different
subgroups may avoid communicating with each other, reducing the overall
cohesiveness of the team

15
Figure 2.4 The group on the left will likely suffer a strong faultline due to the lack of common ground. The
group to the right will likely only suffer a weak faultline because the men and women of the different groups will
likely identify with each other.

Stereotypes

An important challenge of managing a diverse workforce is the possibility that

stereotypes about different groups could lead to unfair decision making. Stereotypes are
generalizations about a particular group of people. The assumption that women are
more relationship oriented, while men are more assertive, is an example of a
stereotype. The problem with stereotypes is that people often use them to make
decisions about a particular individual without actually verifying whether the assumption
holds for the person in question. As a result, stereotypes often lead to unfair and
inaccurate decision making. For example, a hiring manager holding the stereotype
mentioned above may prefer a male candidate for a management position over a well-
qualified female candidate.

Specific Diversity Issues

Different demographic groups face unique work environments and varying challenges in
the workplace. In this section, we will review the particular challenges associated with
managing gender, race, religion, physical ability, and sexual orientation diversity in the
workplace.

Gender Diversity in the Workplace

In the United States, two important pieces of legislation prohibit gender discrimination at
work. The Equal Pay Act (1963) prohibits discrimination in pay based on gender. Title
VII of the Civil Rights Act (1964) prohibits discrimination in all employment-related
decisions based on gender. Despite the existence of strong legislation, women and men
often face different treatment at work. The earnings gap and the glass ceiling are two of
the key problems women may experience in the workplace.

Earnings Gap

16
There are many potential explanations for the earnings gap that is often reported in the
popular media. One explanation is that women are more likely to have gaps in their
résumés because they are more likely to take time off to have children

In fact, research shows that men and women have somewhat different preferences in
job attributes, with women valuing characteristics such as good hours, an easy
commute, interpersonal relationships, helping others, and opportunities to make friends
more than men do. In turn, men seem to value promotion opportunities, freedom,
challenge, leadership, and power more than women

If the earnings gap could be traced only to résumé gaps, choice of different
occupations, or differences in negotiation behavior, the salary difference might be
viewed as legitimate. Yet, these factors fail to completely account for gender differences
in pay, and lawsuits about gender discrimination in pay abound. In these lawsuits,
stereotypes or prejudices about women seem to be the main culprit. In fact, according
to a Gallup poll, women are over 12 times more likely than men to perceive gender-
based discrimination in the workplace.

Glass Ceiling

Another issue that provides a challenge for women in the workforce is the so-
called glass ceiling. While women may be represented in lower-level positions, they are
less likely to be seen in higher management and executive suites of companies. In fact,
while women constitute close to one-half of the workforce, men are four times more
likely to reach the highest levels of organizations.

Ursula Burns became president of Xerox Corporation in 2007. She is responsible for the company’s global
R&D, engineering, manufacturing, and marketing.

One explanation for the glass ceiling is the gender-based stereotypes favoring men in
managerial positions. Traditionally, men have been viewed as more assertive and
confident than women, while women have been viewed as more passive and
submissive.

Race Diversity in the Workplace

Race is another demographic characteristic that is under legal protection in the United
States. Title VII of the Civil Rights Act (1964) prohibits race discrimination in all
employment-related decisions. Yet race discrimination still exists in organizations. In a
Korn-Ferry/Columbia University study of 280 minority managers earning more than
$100,000, 60% of the respondents reported that they had seen discrimination in their
work assignments and 45% have been the target of racial or cultural jokes.

17
Ethnic minorities experience both an earnings gap and a glass ceiling. In 2008, for
every dollar a Caucasian male employee made, African American males made around
79 cents while Hispanic employees made 64 cents.Bureau of Labor Statistics.
(2008). Usual weekly earnings summary.

Age Diversity in the Workplace

The workforce is rapidly aging. By 2015, What happens to work performance as

employees get older? Research shows that age is correlated with a number of positive
workplace behaviors, including higher levels of citizenship behaviors such as
volunteering, higher compliance with safety rules, lower work injuries, lower
counterproductive behaviors, and lower rates of tardiness or absenteeism.

Despite their positive workplace behaviors, employees who are older often have to deal
with age-related stereotypes at work. For example, a review of a large number of
studies showed that those between 17 and 29 years of age tend to rate older
employees more negatively,

What are the challenges of managing age diversity beyond the management of
stereotypes? Age diversity within a team can actually lead to higher team performance.
In a simulation, teams with higher age diversity were able to think of different
possibilities and diverse actions, leading to higher performance for the teams. Kilduff,
M., Angelmar, R., & Mehra, A. (2000). Top management-team diversity and firm
performance: Examining the role of cognitions. Organization Science,

Religious Diversity in the Workplace (Give in Indian Context)

In the United States, employers are prohibited from using religion in employment
decisions based on Title VII of the Civil Rights Act of 1964. Moreover, employees are
required to make reasonable accommodations to ensure that employees can practice
their beliefs unless doing so provides an unreasonable hardship on the employer.Equal
Employment Opportunity Commission. (2007). Religious discrimination. Retrieved
November 7, 2008,

Employees with Disabilities in the Workplace

Employees with a wide range of physical and mental disabilities are part of the
workforce. In 2008 alone, over 19,000 cases of discrimination based on disabilities have
been filed with the EEOC. The Americans with Disabilities Act of 1990 (ADA) prohibits
discrimination in employment against individuals with physical as well as mental
disabilities if these individuals are otherwise qualified to do their jobs with or without
reasonable accommodation.

Finally, supportive relationships with others seem to be the key for making these
employees feel at home. Particularly, having an understanding boss and an effective
18
relationship with supervisors are particularly important for employees with disabilities.
Because the visible differences between individuals may act as an initial barrier against
developing rapport, employees with disabilities and their managers may benefit from
being proactive in relationship development.

19
Module Two: Individual Aspects of Organizational Behaviour 9 hours
1. Role of individual aspects in OB: Individuals Differences: Constituents of Individual Behaviour:
2. Cognition, Emotions and Moods: Personality- Formation, Types and influence:
3. Perception-Process, Factors, Application and Improvement:
4. Attitude and Values- Nature,
5. Formation. Types and Modification: Cognitive Dissonance: Job Related Attitudes:
6. Learning- Definition, Principles, Types, Decision Making and Relation with behavior:
7. Motivation- Concepts, theories and Applications.

Individual behaviour is the response of an individual towards an action, environment, person or stimulus. It
not only affects the way an individual behaves at the workplace, but also impacts his/her work.

For example, an individual who does not take things seriously also takes deadlines at the workplace
casually and does not put the required amount of effort to meet them.
Thus, it is important for the manager of an organisation to understand the individual behaviour of the
employees working with him/her to delegate job responsibilities so as to obtain the best outcome. In ad-
dition, it also helps managers develop a positive and result-oriented work attitude among
individuals/employees. This can be done by pro-viding training, rewards, recognition and involving
employees in decision making.

Individual Behhaviour

aviour

Personal Factor Enviornment Organizational

Behaviour

Personal Factors: These factors are either inherited in an individual or acquired during his/her life. Thus,
these factors include biographical attributes and learned attributes.
Environmental Factors: The environment around an individual also plays a major role in building his/her
behaviour. Some of the environmental factors affecting individual behaviour are as follows:

Economic Factors: These include the economic conditions prevalent in a state or a country, which may
positively or negatively affect the behaviour of an individual. Some of these conditions are:

Employment Level: A situation where employment opportunities are less in a state or a country can lead to
negative thoughts in the minds of individuals. Such negative thoughts further reflect in the behaviour of
individuals at the work-place. This can lead to reduction in their confidence, their ability to take risks and
their innovation capabilities because their main focus remains on the security of jobs.

Wage Rates: If wage rates are low in a state or a country, individuals either start migrating from the place
or do not perform their best (if they work at the same place).
Technological Development: It is observed that ambitious people always try to work at a place where they
can gain new knowledge. The technology automates business processes and thus, helps organisations to
work smoothly. If an organisation does not have the required technology, its employees find it difficult to
work effectively. This further reduces the confidence level of employees and increases irritation and
frustration among them.

Socio-cultural Factors: Socio-cultural environment includes the family or society in which an individual
resides, and the culture followed in that society. The socio-cultural environment has a direct impact on the
behaviour of an individual. For example, an individual belonging to an educated family and a high society is
likely to behave formally with command over his/her words and activities, at the workplace. On the other
hand, an individual from an uneducated background is likely to behave in a different manner.

Political Factors: The political conditions of a country affect individual behaviour, because they impact the
employment level, wage rates, and investment options in the country.
Organisational Behaviour: Individual behaviour is also impacted by the internal environment of an
organisation. This environment includes the policies, physical facilities (such as ventilation, noise level,
furnishing, light and the number of people), and the flow of communication, the reporting system and the
reward system of an organisation. All these aspects have a considerable impact on the individual behaviour.
If these aspects are not favourable to individuals, they may become irritated and unsatisfied, which in turn
affects the performance of the individuals negatively.

Personality

There are a number of personality traits that helped Steve Jobs become one of the most successful
entrepreneurs of our time. Entrepreneurs can learn a lot from him. Many entrepreneurs all over the world
follow several of Jobs’ principles and personality traits.
One of the most important personality traits of Steve Jobs was his creativity, which was born from his
imagination. His creativity helped Apple to grow as a company, winning market share from other
competitors. Jobs’ far-sightedness helped him envision that the company’s products and services will
change the way people communicate, work, and live their lives. He built his company with the vision that
Apple`s products and services would change the world.
Another important aspect of Steve Job’s persoanlity was his adaptibility. This trait led him to emphasise
innovation. Jobs be-lieved innovation can make the difference between a leader and a follower. He was
successful in inculcating innovation in the cul-ture of Apple. Today, Apple’s products stand for
innovation.
Jobs had tremendous focus. He focused on designs, and insisted that they should be absolutely perfect.
This is the reason Apple could develop technological products with excellent designs.
In addition, Jobs was extremely passionate and fearless when it came to growing Apple as a company. He
took many controversial decisions and, at certain points, risked the future of the company. As a leader, he
was capable of pushing his company and employ-ees to the limits without pushing them over the edge.
Moreover, he was very persuasive, which made him an efficient salesperson. He could sell his ideas and
products to millions of customers.

In simple words, personality refers to a set of traits possessed by an individual that makes him/her distinct
from others.
Personality determines the behaviour of an individual. In an organisation, a person requires certain skills
and character traits to successfully execute his/ her roles and responsibilities. Therefore, personality plays a
crucial role in determining whether an individual is capable of executing or-ganisational activities or not.
For example, individuals with leadership and interpersonal skills are able to lead better and thus, are able to
work with others. This is the reason why the study of personality is important in Organisational Behavior
(OB).

McClelland views personality as “the most adequate conceptualization of an individual’s behaviour in all
its details, which the scientist can provide at a moment in time”.

Elements of Personality
Freedom: It is the state of being free and able to act according to one`s own wishes. A free individual does
not experience any constraints or restrictions in expressing emotions, feelings, ideas and desires.
Behaviour: It refers to the way an individual reacts in response to external or internal stimuli in the
environment.
Peculiarity: It refers to the uniqueness of each individual. Each in-dividual possesses varied characteristics
and wishes. For example, the manner in which an individual talks, reacts or behaves may be entirely
different from any other individual’s manner.

Physical, Mental and Moral Qualities: These imply that every individual has unique physical, mental and
moral orientations. Some people may be fair, tall and intelligent, whereas others may be different. Mental
qualities deal with intelligence and logic, while moral qualities refer to trustworthiness, honesty and other
abstract qualities.

Adaptability to the Environment: This refers to the varied capabilities of individuals to adjust in different
environments. It has been observed that different individuals behave differently in different situations. They
also have varied capabilities of adjusting with different social groups.

Psychological Systems: These refer to the set of components or parts of the body that help in thinking,
analysing and reacting. The psychological system determines the kind of personality an individual may
have.
DETERMINANTS/FACTORS OF PERSONALITY
The determinants of personality are briefly explained as follows:
Heredity: This factor is inherited by individuals from their biolog-ical parents. The heredity factors, also
known as biological factors, determine the nature and characteristics of a person. Some of the examples of
heredity factors include stature, height, temperament and muscle composition of a person.
Environment: This factor consists of various factors, which are mentioned as follows:
Cultural Factor: This refers to the social, religious and intel-lectual beliefs of an individual. Cultural
factors affect the be-haviour of an individual to a great extent. For example, an indi-vidual interested in any
form of art behaves in a more elegant way as compared to those who do not have any interest in art.
Family Factor: It contributes to one’s ethics and moral values. The principles and ideologies of family
members are influ-enced by the family to a great extent.
Social Factor: This includes the religious and social associa-tions of an individual. Naturally, society
influences the person-ality of an individual. For example, an individual`s personality gets affected by the
peer group he/she belongs to.

Situational Factor: The behavioural pattern of an individual depends on the situation he/she is in at a
particular point of time. In addition, the behaviour of a person in a particular sit-uation also influences
his/her behaviour in similar situations in the future. For example, if a person successfully handles a stressful
situation, he/she is in a better position to handle simi-lar situations in the future.
Other Factors: These refer to factors such as law, condition of the economy, influence of information and
published literature that can influence the personality of an individual. For example, a dete-riorating
economic condition of the country causes the situation of unemployment. Sometimes, such a situation
persuades educated but unemployed individuals to indulge in certain criminal or un-ethical activities that
change their personalities altogether.

Habits: They are the unconscious and recurring behavioural pat-terns that an individual acquires through
continuous and repeti-tive processes, for example, the habit of smoking.

Personality Theory

TRAIT THEORY
A personality trait refers to a long-lasting attribute of a person that emerges in different situations. We can
differentiate the personality of an individual from the personality of another person through traits.
According to the trait theory, every person has a specific and unique set of features. Following are some of
the other assumptions of the theory:
It allows variations in traits of different individuals.
It presumes traits to be relatively stable.
It measures traits by using behaviour indicators.
In addition, according to the trait theory, learning is perpetual in na-ture, and it brings changes in the
personality of an individual from one time to another. Moreover, it attempts to establish a relationship
between a set of personality characteristics and the behaviour of an individual. This theory is descriptive in
nature, and it elaborates the traits and characteristics of an individual. However, the theory lacks an
analytical framework, because it does not elaborate the reason why and how particular traits affect an
individual’s personality.

SOCIAL LEARNING THEORY

“Learning would be exceedingly laborious, not to mention hazardous, if people had to rely solely on the
effects of their own actions to inform them what to do. Fortunately, most human behaviour is learned
observational-ly through modeling: from observing others one forms an idea of how new behaviours are
performed, and on later occasions this coded information serves as a guide for action.”
-Albert Bandura, Social Learning Theory, 1977
This theory was proposed by Albert Bandura. This is one of the most influential theories of personality. The
basis of this theory is that people can learn new information and behaviour by watching other peo-ple. This
theory is used to explain a wide variety of behaviours.

There are three core concepts of the social learning theory.

These are as follows:
People can learn by observing others.
The internal mental condition of an individual is an essential part of the learning process.
An individual’s learning does not necessarily result in a change in his/her behaviour.

SELF THEORY
Carl Rogers (1902-1987), an influential American psychologist, is the proponent of this theory. There are
nineteen propositions in Rogers’ theory of personality development. However, the central focus of the
theory is the concept of ‘self’. According to Rogers, ‘self’ is central to human personality. He believed that
when a child is born, the concept of self is present in him like a tiny dot that grows bigger as the child
grows. The concept of self can be defined as an organised and com-plex system of learned beliefs that each
person holds to be true about his/her personal existence. According to Rogers, self is a social prod-uct that
develops from social and interpersonal relationships.
BIG FIVE PERSONALITY THEORY

Many contemporary personality psychologists believe that there are five basic dimensions of personality,
often referred to as the "Big 5" personality traits. The five broad personality traits described by the theory
are extraversion, agreeableness, openness, conscientiousness, and neuroticism.

What Are the Big Five Dimensions of Personality?

Today, many researchers believe that they are five core personality traits. Evidence of this theory has been
growing for many years, beginning with the research of D. W. Fiske (1949) and later expanded upon by
other researchers including Norman (1967), Smith (1967), Goldberg (1981), and McCrae & Costa (1987).

The "big five" are broad categories of personality traits. While there is a significant body of literature
supporting this five-factor model of personality, researchers don't always agree on the exact labels for each
dimension.

You might find it helpful to use the acronym OCEAN (openness, conscientiousness, extraversion,
agreeableness, and neuroticism) when trying to remember the big five traits.

It is important to note that each of the five personality factors represents a range between two extremes. For
example, extraversion represents a continuum between extreme extraversion and extreme introversion.

In the real world, most people lie somewhere in between the two polar ends of each dimension.

These five categories are usually described as follows.

Openness

This trait features characteristics such as imagination and insight, and those high in this trait also tend to
have a broad range of interests. People who are high in this trait tend to be more adventurous and creative.
People low in this trait are often much more traditional and may struggle with abstract thinking.

People who are high on the openness continuum are typically:

 • Very creative
• Open to trying new things
• Focused on tackling new challenges
• Happy to think about abstract concepts

Those who are low on this trait:

• Dislike change
• Do not enjoy new things
• Resist new ideas
• Not very imaginative
• Dislikes abstract or theoretical concepts

Conscientiousness

Standard features of this dimension include high levels of thoughtfulness, with good impulse control and
goal-directed behaviors. Highly conscientiousness tend to be organized and mindful of details.

Those who are high on the conscientiousness continuum also tend to:

• Spend time preparing

• Finish important tasks right away
• Pay attention to details
• Enjoy having a set schedule

People who are low in this trait tend to:

• Dislike structure and schedules

• Make messes and not take care of things
• Fail to return things or put them back where they belong
• Procrastinate important tasks
• Fail to complete the things they are supposed to do

Extraversion

Extraversion is characterized by excitability, sociability, talkativeness, assertiveness, and high amounts of

emotional expressiveness. People who are high in extraversion are outgoing and tend to gain energy in
social situations. People who are low in extraversion (or introverted) tend to be more reserved and have to
expend energy in social settings.

People who rate high on extraversion tend to:

• Enjoy being the center of attention

• Like to start conversations
• Enjoy meeting new people
• Have a wide social circle of friends and acquaintances
• Find it easy to make new friends
• Feel energized when they are around other people
• Say things before they think about them

People who rate low on extraversion tend to:

• Prefer solitude
• Feel exhausted when they have to socialize a lot
• Find it difficult to start conversations
• Dislike making small talk
 • Carefully think things through before they speak
• Dislike being the center of attention

Agreeableness

This personality dimension includes attributes such as trust, altruism, kindness, affection, and
other prosocial behaviors. People who are high in agreeableness tend to be more cooperative while those
low in this trait tend to be more competitive and even manipulative.

People who are high in the trait of agreeableness tend to:

• Have a great deal of interest in other people

• Care about others
• Feel empathy and concern for other people
• Enjoy helping and contributing to the happiness of other people

Those who are low in this trait tend to:

• Take little interest in others

• Don't care about how other people feel
• Have little interest in other people's problems
• Insult and belittle others

Neuroticism

Neuroticism is a trait characterized by sadness, moodiness, and emotional instability. Individuals who are
high in this trait tend to experience mood swings, anxiety, irritability and sadness. Those low in this trait
tend to be more stable and emotionally resilient.

Individuals who are high in neuroticism tend to:

• Experience a lot of stress

• Worry about many different things
• Get upset easily
• Experience dramatic shifts in mood
• Feel anxious

Those who are low in this trait are typically:

• Emotionally stable
• Deal well with stress
• Rarely feel sad or depressed
• Don't worry much
• Very relaxed

Are the Big Five Traits Universal?

McCrae and his colleagues have also found that the big five traits are also remarkably universal. One study
that looked at people from more than 50 different cultures found that the five dimensions could be
accurately used to describe personality.

Based on this research, many psychologists now believe that the five personality dimensions are not only
universal; they also have biological origins. Psychologist David Buss has proposed that an evolutionary
explanation for these five core personality traits, suggesting that these personality traits represent the most
important qualities that shape our social landscape.
What Factors Influence the Big Five Traits?

Research suggests that both biological and environmental influences play a role in shaping our personalities.
Twin studies suggest that both nature and nurture play a role in the development of each of the five
personality factors.

One study of the genetic and environmental underpinnings of the five traits looked at 123 pairs of identical
twins and 127 pairs of fraternal twins. The findings suggested that the heritability of each trait was 53
percent for extraversion, 41 percent for agreeableness, 44 percent for conscientiousness, 41 percent for
neuroticism, and 61 for openness.

Longitudinal studies also suggest that these big five personality traits tend to be relatively stable over the
course of adulthood. One study of working-age adults found that personality tended to be stable over a four-
year period and displayed little change as a result of adverse life events.

Studies have shown that maturation may have an impact on the five traits. As people age, they tend to
become less extraverted, less neurotic, and less open to experience. Agreeableness and conscientiousness,
on the other hand, tend to increase as people grow older.

A Word From Very well

Always remember that behavior involves an interaction between a person's underlying personality and
situational variables. The situation that a person finds himself or herself in plays a major role in how the
person reacts. However, in most cases, people offer responses that are consistent with their underlying
personality traits.

These dimensions represent broad areas of personality. Research has demonstrated that these groupings of
characteristics tend to occur together in many people. For example, individuals who are sociable tend to be
talkative. However, these traits do not always occur together. Personality is a complex and varied and each
person may display behaviors across several of these dimensions.

Myers–Briggs Type Indicator -MBTI

The Myers–Briggs Type Indicator

ISTJ ISFJ INFJ INTJ

ISTP ISFP INFP INTP

ESTP ESFP ENFP ENTP

ESTJ ESFJ ENFJ ENTJ

(MBTI) is an introspective self-report questionnaire with the purpose of indicating differing psychological
preferences in how people perceive the world around them and make decisions.
 Myers Briggs Personality Types
Myers-Briggs Types
Myers-Briggs Theory
Myers-Briggs theory was developed by the mother-daughter partnership of Katharine Briggs and Isabel
Briggs Myers. One way to discover your closest Myers-Briggs type(s) is to complete the Myers-Briggs
Type Indicator® instrument and go through a validation process under the supervision of a qualified
MBTI® practitioner.

Myers-Briggs theory is an adaptation of the theory of psychological types produced by Carl Gustav Jung. It
is based on 16 personality types, which Jung viewed as stereotypes (Jung 1921, p. 405). They act as useful
reference points to understand your unique personality (Jung 1957, p. 304). At the heart of Myers Briggs
theory are four preferences. Do you prefer to deal with:

▪ People and things (Extraversion or "E"), or ideas and information (Introversion or "I").
▪ Facts and reality (Sensing or "S"), or possibilities and potential (Intuition or "N").
▪ Logic and truth (Thinking or "T"), or values and relationships (Feeling or "F").
▪ A lifestyle that is well-structured (Judgment or "J"), or one that goes with the flow (Perception or "P").

In Myers Briggs theory, for each pair you prefer one style more than the other. Jung also allowed a middle
group where you like an equal balance of the two. You combine the letters associated with your preferences
to get your Myers Briggs personality type. For example, having preferences for E, S, T and J gives a
personality type of ESTJ. Although you have preferences, you still use all eight styles - in the same way that
most people are right-handed but they still use both hands.
Extraversion and Introversion - The first pair of styles is concerned with the direction of your energy. If
you prefer to direct your energy to deal with people, things, situations, or "the outer world", then your
preference is for Extraversion. If you prefer to direct your energy to deal with ideas, information,
explanations or beliefs, or "the inner world", then your preference is for Introversion.
Extrovert (E)-Energy Direction is towards Outer World
Introvert-(I) Energy Direction is toward Inner World

Sensing and Intuition - The second pair concerns the type of information/things that you process. If you
prefer to deal with facts, what you know, to have clarity, or to describe what you see, then your preference is
for Sensing. If you prefer to deal with ideas, look into the unknown, to generate new possibilities or to
anticipate what isn't obvious, then your preference is for Intuition. The letter N is used for intuition because
I has already been allocated to Introversion.

Sensing(S)-Type of Information one process is towards Facts

Intuition (N)-Type of information one process is towards idea and creativity

Thinking and Feeling - The third pair reflects your style of decision-making. If you prefer to decide on the
basis of objective logic, using an analytic and detached approach, then your preference is for Thinking. If
you prefer to decide using values - i.e. on the basis of what or who you believe is important - then your
preference is for Feeling.
Thinking (T)-Decision Making Style based on logic and analytics
Feeling (F) Decision Making Style based on Emotion, Values , Believe
Judgment and Perception - The final pair describes the type of lifestyle you adopt. If you prefer your life
to be planned and well-structured then your preference is for Judging. This is not to be confused with
'Judgmental', which is quite different. If you prefer to go with the flow, to maintain flexibility and respond
to things as they arise, then your preference is for Perception.
When you put these four letters together, you get a personality type code. Having four pairs to choose from
means there are sixteen Myers Briggs personality types.
To learn more about your personality, or Myers-Briggs and Jungian typology, complete our free online
personality questionnaire. It shows how your unique personality relates to the 16 stereotypes. It also
matches your personality with careers and leadership positions, based on unique research into career
enjoyment and what makes a good leader.

Judgement (J) Type of Lifestyle one adopt is planned and well structured
Perception (P) Type of Lifestyle one adopt is Flexible and respond to things as it arise

PERCEPTION

Perception is the organization, identification, and interpretation of sensory information in order to represent and
understand the presented information, or the environment.

Perception is a cognitive process, which involves the interpretation of stimuli in the environment and
comprehending its meaning. Perception guides human behaviour in general. The importance of perception
can be explained with the help of the SOBC (Stimulus-Organism-Behaviour-Consequence) Model of
organisational behaviour given by Fred Luthans. The SOBC model helps to understand, predict, and control
organisational behaviour on the basis of managing the contin-gent environment.

Let us briefly discuss the elements of the SOBC model in the following section:

Stimulus: An organism perceives a stimulus from the environ-ment. A stimulus potentially influences
behaviour. There are two types of stimuli:

Overt Stimuli: These are signals in the environment that are observable. For example, other individuals,
and objects in the environment are overt stimuli.

Covert Stimuli: These are signals in the environment that are not consciously observed. For example, cold
weather stimulat-ing an individual to light a fire is a covert stimulus.
Organism: The organism uses his senses (sight, hear, touch, smell, and taste) to perceive the stimulus.
Behaviour: The sensory data is interpreted in the human brain which marks the human behaviour towards
the stimulus. The re-sponse to a stimulus is a particular instance of behaviour. The be-haviour can be of the
following types:
Overt behaviour: It is an open and observable behaviour.
Covert behaviour: It is a hidden, concealed, or secretive be-haviour.
Consequence: All types of behaviours result in an outcome. These outcomes can be of two types based on
the effect they produce on an individual:
Positive Consequence: A positive consequence results in satis-faction and a desire to repeat the behaviour.
For example, get-ting recognition for efficiency motivates an employee to contin-ue to deliver good work.

Negative Consequence: A negative consequence results in dis-satisfaction and a desire to not repeat the
behaviour. For ex-ample, being punished for disturbing the class discourages a student from doing so in the
future.
The SOBC model, when applied to organisations implies that the events, individuals, teams, etc. act as
stimuli for the employee which determines his behaviour and the organisational behaviour on the whole.
The behaviour of each individual in the organisation has a certain consequence which could be positive or
negative depending on his or her experience.

PERCEPTION PROCESS
The process of perception is multifaceted and includes several sub-processes. These sub-processes are the
cognitive processes occurring within an individual and can be classified into four parts
Let us discuss each sub-process in detail in the following section:
Stimulus: The process of perception begins when an individual is confronted with a stimulus. For example,
personal interaction with the manager works as stimulus for employees to work more efficiently.
Registration: The stimulus is perceived by individuals using their sensory organs. This is referred to as
registration of stimulus. In the above example, the employee registers the advice of his man-ager using his
ears.
Interpretation: Interpretation involves attaching a certain mean-ing to the registered stimulus. Individual’s
attitude, personality, values and beliefs play a major role in interpreting a stimulus. In the above example,
the employee interprets the advice of his man-ager by attaching some meaning to it.
Reaction: The final sub-process is the resultant behaviour of an in-dividual after interpreting a stimulus.
The response may be overt in nature such as an action, or it may be covert in nature such as a change in the
attitude.

PERCEPTUAL SELECTIVITY

An individual in an organisation is exposed to various stimuli such as the ringing phone, tapping of keys on
a computer key board, sound of other employee`s chatting and other different sounds, etc. However, the
individual’s brain only responds to the stimuli that he is interested in. How does the individual decide which
stimulus to respond to and which ones to ignore? The answer lies in perceptual selectivity.
Perceptual selectivity refers to the tendency of an individual to select certain objects in the environment and
disregard the others. Without the ability to select among different stimuli, an individual cannot interpret the
information required to initiate behaviour.
Perceptual selectivity is mainly governed by two aspects.
1. An individual’s senses are activated by certain stimuli in the environment while others are unnoticed by
human senses.
For example, the light from a bulb might not catch the attention of an individual, but if a torch
light is flashed directly over him or her, the individual would blink his or her eyes.

2. The second point is concerned with individuals’ ability to adapt to certain stimuli to which they are
constantly exposed referred to as sensory adaptation.
For example, an individual who has just shifted near the railway line will get disturbed by the
constant noise of passing trains. On the other hand an individual who has been living there for
long might not be bothered by the noise of passing trains. Perceptual selectivity is affected by a
number of factors which can be classified as follows:

External factors: External factors affect the individual’s percep-tual selectivity by accentuating the stimuli.
These can be further classified as follows:
Intensity: Intensity accentuates the stimuli making it more no-ticeable. For example, a loud noise is more
noticeable.
Size: The larger the object, the more noticeable it is. For example, a full page advertisement in a newspaper
catches more attention.
Contrast: The stimulus is made more noticeable in contrasts with its background. For example, bold text is
more noticeable in a document.

Repetition: The more a stimulus is repeated, the more notice-able it becomes. For example, repetitive
alarms help to wake people up in the mornings.
Motion: A moving object gains more attention that the one which is static. For example, a moving car is
more noticeable over the static trees in its background.

Status: The status of the people also influences the perception of an individual. For example, employees are
able to easily re-member the names of the Heads of the Department than their co-workers.
Internal factors: These factors are based on the psychological make-up of an individual. These can be
further classified as fol-lows:

Personality: The personality of an individual affects the way they perceive things. Generally, optimistic
people perceive things more favourably than pessimistic individuals.
Learning and experience: Learning and experience affects what an individual expects from the stimuli.
This is dependent on the cognitive awareness of an individual. Managers dele-gate responsibilities to
employees based on their past performances.

Motivation: Individuals generally prefer to perceive things that would satisfy their needs and desires.
Therefore, motivation influences selectivity. An employee tends to recall the praises rather than the negative
feedback provided by the manager.

FACTORS INFLUENCING PERCEPTION

Let us discuss the effect of each of these factors in detail in the follow-
ing section:
External factors affecting perception:
Perceiver: When an individual perceives stimuli and attempts to interpret it, the interpretation is heavily
influenced by the individu-al’s personal characteristics. These characteristics include an indi-vidual’s
attitudes, personality, motives, interests, past experiences, and expectations. For example, if an individual
expects youngsters to be lazy, policemen to be authoritative, he or she would perceive them as such without
paying heed to their actual traits.
Target: The characteristics of the stimuli also affect how an indi-vidual perceives it. For example, vocal
employees are more like-ly to be noticed in a team meeting than the non-vocal employees. Uniqueness,
motion, sound, size, and other characteristics of a tar-get affect the way in which it is perceived by
individuals. This is because individuals don’t observe targets (stimuli) in isolation. The relationship of a
target to its background influences perception. Moreover, individuals tend to group together persons,
objects, or events that are similar to each other. The more similarity between the targets, the more an
individual tends to perceive them as a collective group. For example, individuals tend to perceive people
belonging to a nation as alike in more than one category, irrespec-tive of their individual characteristics
being clearly distinguish-able from one another.

Situation: The situation or context related to the stimuli also af-fects its perception. The time or location, at
which an individual sees an object or event, influences the attention he or she gives to the object or event.
Similarly, light, heat, background and a num-ber of other situational factors affect the perception of an
object or event. For example, an individual might not notice a particu-lar dancer in a group performance.
However, the same individual might notice the same dancer in a solo performance. Neither the perceiver nor
the object changed, but the situation is very differ-ent each time.

Internal factors affecting perception:

Sensory limits and thresholds: The human sensory organs have nerves, which respond to different forms
of energy they receive in different ways. For instance, the eyes receive light rays and convert them into
electrical energy. The electrical energy is transmitted to the brain creating the sensation of vision leading to
perception. Each sense receptor needs a minimum level of energy for percep-tion to take place. This level is
called the absolute threshold, which refers to the point below which sensory organs do not perceive en-ergy.
The differential threshold is the minimum amount by which two like stimuli should differ in order to be
perceived as distinct. Therefore, sensory limits and differential threshold affect the per-ception process.

Psychological factors: Psychological factors include personality traits, past experiences, learning and
motivation that affect an in-dividual’s perceptual process considerably. These factors increase an
individual’s sensitivity to the stimuli which he or she consid-ers as relevant. Psychological factors determine
why individuals select and respond to a particular stimulus or situation over the others. Objects, events, etc.
compatible to an individual’s learning, interest, needs, attitude and personality are likely to gain more at-
tention over others. For example, while traveling, people convers-ing over a topic that interests a person is
surely gong to gain his or her attention. This happens because of an individual’s strong association to a
particular thing, or event. Similarly, an individu-al’s past experiences and learning affect the perception
process considerably. Individuals are often able to perceive things subjec-tively. For example, on hearing a
droning sound, individuals infer that there is an aeroplane up in the sky. However, individuals may commit
errors in their perception of things based on learning and experience.
Attribution theory of perception.

The purpose behind making attributions is to achieve COGNITIVE CONTROL over one's environment by
explaining and understanding the causes behind behaviors and environmental occurrences.  Making
attributions gives order and predictability to our lives; helps us to cope.

Distinctiveness
Consensus
Consistency
Shortcuts in judging others- Perceptual Errors

Selective Perception :
People selectively interpret what they see on the basis of their interests, background, experience and
attitudes.
Halo Effect :
Drawing a general impressions about an individual on the basis of a single characteristics.
Contrast Effect :
Evaluation of a person’s characteristics that are effected by comparisons with other people recently
encountered who rank higher or lower on the same characteristics.

Projection :
Attributing one's own characteristics to other people.
Stereotyping :
Judging someone on the basis of one’s perception of the group to which that persons belongs.

VALUES

Rajesh Nagar and Amar Joshi are two sales executives of a car manufacturing organisation, which offers
free maintenance services on the purchase of a car, but only during the office hours. When a customer asks
Rajesh about the free maintenance services, he replies that the services are only available during office
hours. However, when any customer asks Amar about these services, he replies that the services are
available whenever needed (or 24*7), as such a reply attracts more customers.
In the above scenario, how will you interpret the behaviour of Amar from his reply?
In our day-to-day life, individuals come across various situations where they have to decide between moral
and immoral courses of action. This decision depends on the values possessed by an individual. Values refer
to an individual’s inherent principles, which predetermine his/her reaction in a particular situation. Thus, in
the scenario, Amar Joshi’s values lean towards immorality, which prompt him to lie in the given
professional situation?

The values of an individual are built on the basis of his/her family background, culture, past experiences,
and ethical standards. They form the base of an individual’s attitude, perception, and behaviour.
The different types of values
Terminal Values: These values represent the end-state of an individual’s efforts. Such values consist of
goals that individuals set for themselves in their lives.
For example, being a top performer can be an individual’s terminal value. The 18 values included in
terminal values are:

True friendship (close companionship)

Mature love (sexual and spiritual intimacy)
Self-respect (self-esteem)
Happiness (contentedness)
Inner harmony (freedom from inner conflict)
Equality (brotherhood, equal opportunity for all)
Freedom (independence, free choice)
Pleasure (an enjoyable, leisurely life)
Social recognition (respect, admiration)
Wisdom (a mature understanding of life)
Salvation (saved, eternal life)
Family security (taking care of loved ones)
National security (protection from attack)
A sense of accomplishment (lasting contribution)
A world of beauty (beauty of nature and the arts)
A world at peace (free of war and conflict)
A comfortable life (a prosperous life)
An exciting life (a stimulated, active life)
Instrumental Values: These values work as a means to achieve terminal values.

For example, to achieve the terminal value of being a top performer, a person requires instrumental
values such as ambition, intellect and capability. The 18 instrumental values are:
Cheerfulness (light-hearted, joyful)
Ambition (hard-working, aspiring)
Love (affectionate, tender)
Cleanliness (neat, tidy)
Self-control (restrained, self-disciplined)
Capability (competent, effective)
Courage (standing up for your beliefs)
Politeness (courteous, well-mannered)
Honesty (sincere, truthful)
Imagination (daring, creative)
Independence (self-reliant, self-sufficient)
Intellect (intelligent, reflective)
Broad-mindedness (accepting, open-minded)
Logical (consistent, rational)
Obedience (dutiful, respectful)
Helpfulness (working for the welfare of others)
Responsibility (dependable, reliable)
Forgiveness (willing to pardon others)

Thus, terminal values represent the overall goals of an individual’s life that he/she wants to achieve through
his/her behaviour. On the other hand, instrumental values are the methods an individual adopts to achieve
the terminal values
ATTITUDES
Attitude refers to the tendency of an individual to respond in a specific set of situations. It plays an
important role in framing individual behaviour. According to various social psychologists, the attitude of an
individual includes three main components, which are:
Cognitive Component: It is an evaluative component that is devel-oped in an individual on the basis of
his/her past experiences and memories. This component plays an important role in developing a perception
about an incident before it happens.
For example, a person who has been betrayed by his/her friends and relatives may not trust anyone
easily in future.

Affective Component: It is a component that is responsible for building up the emotional set-up of an
individual. The affective component expresses an individual’s likes or dislikes.
For example, individuals may like their superior so much that it might be a motivating factor for
them to work hard.

Behavioural Component: It is a component that changes the way a person behaves in a situation.
For example, individuals having feelings of hatred and dislike for their organisation may show
irritation and frustration on others.

The different types of job attitude are discussed as follows:

Job Satisfaction: It is a positive feeling that employees acquire in their jobs. An employee with high levels
of job satisfaction feels happy to work in an organisation. The productivity of such an em-ployee is also
high.
Job Involvement: It is the degree to which an individual finds himself associated with a particular job.
Individuals generally re-late their self-worth with the degree to which they are involved with their jobs.
Organisational Commitment: It is a situation wherein employees become associated with a particular
organisation and accept its vi-sion, mission, philosophy, and goals. In such an organisation, em-ployees
want to fulfil their duties in a very dedicated way to main-tain a healthy relationship with the organisation.
Organisational commitment is of three types, which are explained as follows:

LEARNING
Learning is the process of acquiring new or modifying existing knowledge, behaviors, skills,
values, or preferences.

As per the National Adult Learning Survey, DfEE, 1998, “95% of people think that learning about new
things boosts your confidence. In addition, 92% of people think that learning about new things is
enjoyable.”

According to Attitudes to Learning, Campaign for Learning/ MORI, 1996, “Seven in ten adults (71%)
think that learning can lead to a better quality of life.”
According to Campaign for Learning Website, “93% of us believe that it’s never too late to learn. 83%
of us believe that learning will become more important in the next millennium.72% of us think we should
devote more time to personal development.”

THEORIES OF LEARNING
Classical Conditioning Theory
Operant or Instrumental Conditioning Theory
Social Learning Theory
Classical Conditioning Theory

Before Conditioning
Meat- Uncontrolled Stimulus --------------------------- Salivation ----Uncontrolled Response
Bell- Neutral Stimulus --------------------------------------No Response

During Conditioning
Meat (Uncontrolled Stimulus)
Bell- Controlled Stimulus----------- Salivation----Uncontrolled Response

After Conditioning
Bell (Controlled Responce) Salivation----controlled Response

when Pavlov observed dogs before conditioning them, he found that they salivated whenever they saw
bones. Pav-lov’s aim was to find out if he could make dogs salivate without their even seeing the bones.
That is, he wanted to generate the response of the dogs without the actual stimulus. For this, Pavlov tried to
under-stand the events that could be linked to make dogs salivate without even seeing the bones, with the
help of an experiment.
To conduct this experiment, Pavlov, while presenting a dog to the bone, also rang a bell. He kept repeating
this stimulus. Initially, the dog would not salivate when presented with only the bell. However, after some
time, Pavlov observed that the dog started salivating when only the bell was rung. The dog had formed a
relation between the presence of the bell and the bone, which produced the conditioned response of saliva-
tion. The dog learned to relate the ringing of the bell with food. Thus, Pavlov found the reason for
generating a response, even when the actual stimulus was not present. He also concluded that an individual
or an animal can learn reflex behaviour. A reflex is an involuntary reaction,
which is not in the conscious control of an individual.

For example, if an individual has dust in his/her eyes, he/she will blink his/her eyes automatically.
However, classical conditioning is not found applicable in the organisational setting, because
individuals in an organisation do not have involuntary reactions to any situation.
OPERANT OR INSTRUMENTAL CONDITIONING THEORY
The operant conditioning theory was provided by B.F. Skinner. He defined operant conditioning as a
process through which individuals learn voluntary behaviour. It can also be defined as the behaviour of an
individual or an animal in an environment. It uses the consequences of a particular behaviour to modify that
behaviour. Operant conditioning is different from classical conditioning, because it deals with the
modification of voluntary behaviour. On the other hand, classical conditioning only explains the relationship
between the stimulus and the response. The operant conditioning theory is also called the reinforcement
theory,

Skinner started experimentation on operant learning theories in the 1930s. He wanted to have better control
over the learning process that enabled organism to operate freely in an environment. For this purpose, he
developed a box, which is called the Skinner box or the operant chamber. n this box, a device delivers food
pellets into a tray (or food cup) at random by pressing a lever situated inside the box.
For his experiment, Skinner left a hungry rat in the box. The rat performed some random activities to
explore the box. During these activities, the rat pressed the lever accidentally, and a pellet of food was
delivered in the food cup. The first time the rat did not learn the connection between the lever and the food
pellets. However, with time, it understood and learned that on pressing the lever, a food pellet appeared in
the food cup.
After his success in training rats, Skinner applied the same experiment to pigeons by replacing the lever
with a key. When the pigeon in the Skinner box pecked the key, a food-delivery mechanism activated.
When repeated pecking resulted in food, the pigeon learnt the process.

The basic principle of operant conditioning is that the probability of occurrence of a particular response
depends on its consequence.
For example, if the rat presses the lever and does not get food, the response rate will decrease
gradually and eventually disappear.
SOCIAL LEARNING THEORY
People observe and learn through attitudes, behaviour, and outcomes of other people around them.
According to Bandura, a renowned psychologist who specialised in social cognitive theory, social
learning is defined as follows:

“Most human behaviour is learned observationally through modelling: from observing others, one forms an
idea of how new behaviours are per-formed, and on later occasions this coded information serves as a
guide for action”.
The social learning theory encompasses the cognitive, behavioural, and environmental influences.

Attention

Retention

Reproduction

Motivation

Let us discuss these factors further:

Attention: It is the interest an individual pays to factors such as distinctiveness, simplicity, prevalence,
functional value, and complexity. The attention of an individual is affected by his/her experience, sensory
capacities, level of arousal, perceptual set, and perceptual accuracy.
Retention: It involves remembering the subject or object to which an individual pays attention. Knowledge
retention can take place in various forms such as symbolic coding and mental images.
Reproduction: It involves reproducing or projecting the image through physical capabilities and self-
observation.
For example, Ronit is a new worker in an organisation, while Sujit has been working in the
organisation for a long time. Ronit observes Sujit working on a particular machine. When the Ronit
needs to work on the same machine, he reproduces the image of the Sujit working on that machine.
This guides Ronit to proceed with his work.
Motivation: It depicts the positive influence of remembering a positive event leading to a desirable
outcome. The event may have been experienced by the individual, or the individual may have observed it
with someone else. However, the positivity of the event ensures a positive effect on the psychological set-up
of the individual.
For example, an employee observes how his/her manager tackles a difficult situation so efficiently.
This positively impacts the behaviour of the employee and he/she also tries to handle such situations
efficiently.
Thus, social learning continuously influences an individual throughout his/her life span.

Motivation
Motivation- Concepts, theories and Applications

According to Dale S. Beach, “motivation can be defined as a willing-ness to expand energy to achieve a
goal or a reward”.
According to Dubin, “motivation is the complex of forces starting and keeping a person at work in
organisation”.
According to Michael J. Jucius, “motivation is the act of stimulating someone or oneself to get a desired
course of action, to push the right button to get a desired reaction”.
According to W.G. Scott, “motivation means a process of stimulating people to action to accomplish
desired goals”.
According to Dalton E. cFarland, “the concept of motivation is main-ly psychological. t relates to those
forces operating with the individual employee or subordinate, which impel him to act or not to act in certain
ways”.
According to Vance, “motivation implies any emotion or desire, which so conditions one’s will that the
individual is properly led into action”.

Concept of Motivation (Importance)

Motivation refers to an internal feeling that helps individuals in achieving their personal and professional
goals in an efficient manner. Motivation generates a drive to move in a certain direction and achieve certain
goals. Following are some of the important characteristics of motivation:
The source of motivation for different people is different; it de-pends on their age, status, cultural
background, etc.
Motivation is a psychological concept. Therefore, it comes from within an individual. Human behaviour is
influenced more by inner motivation than external influences.
Motivation is a complex phenomenon, because it cannot be observed directly. In addition, motives being
dynamic, add to the complexity of motivation.
Motivation is different from satisfaction, inspiration, and manipulation.
Motivation positively influences the behaviour of individuals. This helps an organisation in achieving its
goals through its employees.
Motivation strengthens employees’ interest in work, which helps in reducing absenteeism.
Motivation encourages employees to fulfil their own unsatisfied personal goals.
Motivation helps employees to achieve individual, group, and organisational goals.
In the scenario, the award motivates both Richa and Deepa to aim for the same award. However,
their motives for wanting it are different. Motivation originates from underlying human motives. The
cause of doing something or exhibiting certain type of behaviour is known as motive. In other words,
motives are the fundamental functions that regulate the behaviour of individuals. Various types of motives
are shown in Figure 6.1:

Primary Motive

General Motive

secondary Motive

PR MARY MOTIVES

There is a significant amount of disagreement among psychologists on how to classify different human
motives. However, almost everyone agrees that some motives are unlearned and physiologically based.
Such motives are called physiological, biological, unlearned, and primary motives. These motives are called
‘primary’ because these are more tangible than other motives and originate from the basic physiological
level. However, the term ‘primary’ does not mean that these motives always take precedence over other
types of motives.
For a motive to be classified as ‘primary’ it needs to meet at least two criteria, which are as follows:
It must be unlearned. In other words, these motives are inherent in a human being.
It must be physiologically based. In other words, these motives originate from the biological system of a
human being.
Some of the most common primary motives are hunger, thirst, avoidance of pain, sleep, sex, and material
concern. Primary motives have different potential roles in the workplace. For example, material concerns
can motivate employees to perform better at their work.

GENERAL MOTIVES
There are a number of motives that lie between primary and secondary motives. These motives are partially
learned and partially biologically inherent. For example, affection is a motive that is partially biological and
partially learned from the environment. These motives are termed general motives. General motives are
unlearned, but they are not physiologically based. General motives are also called ‘stimu-lus motives’,
because they induce a person to increase the amount of stimulation. Some examples of general motives are
curiosity, manipulation, and affection.

SECONDARY MOTIVES
Secondary motives are the most important of the three types of mo-tives, because these are learned motives.
As a society develops, the primary and general motives give way to secondary motives. For ex-ample, in a
primitive society, primary motives, such as hunger and sex, were very dominant. However, as society
developed, motives, such as power and achievement, took precedence. To be classified as a secondary
motive, the motive must be learned. Some common ex-amples of secondary motives are power,
achievement, and affiliation. In addition, in relation to the workplace, security and status are also important
secondary motives.

THEORIES OF MOTIVATION

Motivation refers to encouraging individuals to direct their actions to-wards the realisation of organisational
goals. Numerous researchers and theorists, such as David Clarence McClelland, Abraham Maslow, and
Douglas M. McGregor, provided their views on motivation. Some of the theories provided by eminent
theorists are as follows:
Content Theories: The “what” aspects of motivation are includ-ed in content theories. In other words,
content theories deal with “what” motivates individuals. Therefore, content theories are concerned with
individual needs and goals. Maslow, Alderfer, Herz-berg, and McClelland studied motivation from a
“content” perp-sective.

Maslow’s Hierarchy of Needs

Theory X and Theory Y
Herzberg’s Two Factor Theory/ Motivation-Hygiene Theory
McClelland’s Theory of Needs Goal Setting Theory
Process Theories: The process theories deal with the “how” of motivation. In other words, the process
theories deal with how motivation occurs. Vroom, Porter and Lawler, Adams and Locke studied motivation
from a “process” perspective.

Equity Theory
Vroom’s Expectancy Theory
ERG Theory
Cognitive Evaluation Theory
Cognitive Dissonance Theory
Behaviour Modification Theory
MASLOW’S NEED HIERARCHY THEORY
The most famous need hierarchy theory of motivation has been given by psychologist Abraham Maslow. He
classified human needs into five categories. Following are the levels of human needs:
1. Physiological Needs: Include needs for hunger, thirst, shelter, sex, and other physical needs
2. Safety Needs: Include need for safety and protection from physical and emotional harm
3. Social Needs: Include need for affection, belongingness, acceptance, and friendship
4. Esteem Needs: Include need for internal esteem factors, such as self-respect, autonomy, and
achievement; as well as external esteem factors, including status, recognition, and attention
5. Self-actualisation Needs: Include need for the drive to realise one’s potential, self-growth, and self-
fulfilment
All 6.
these needs of an individual must be satisfied in a hierarchical manner.
The7.diagrammatic representation of these needs is

8. Growth
Needs
Self-actualization Needs
Higher
Esteem Needs Order
Needs
Social Needs

Deficiency Safety Needs Lower

Needs Order
Physiological Needs Needs

Maslow divided the five types of needs in two categories. He consid-ered physiological and safety needs as
lower-order needs; whereas the social, esteem, and self-actualisation needs as higher-order needs. Higher-
order needs are satisfied by internal factors, such as growth and development; whereas, lower-order needs
are satisfied by exter-nal factors such as salary or work tenure.
Often, the physiological, safety, and social needs are considered as de-ficiency needs, because they are
concerned with the needs that the individual lacks. Similarly, the esteem and self-actualisation needs are
considered as the growth needs, because the individual works for their development by satisfying these
needs.
However, it should be noted that the lower-order needs should be ful-filled for an individual to move to the
higher-order needs.
For instance, if managers follow Maslow’s hierarchy for satisfying their employees, it is essential for them
to know the current state of desire of their employees.
Maslow’s theory became popular among psychologists, but it has some drawbacks:

It is now always possible to follow a hierarchy, because an individual’s needs might fall into two levels of
needs simultaneously. For example, an individual’s physiological and social needs may be dominant at the
same time.

Measuring some needs, for example, the self-actualisation needs, re-mains difficult.
However, in spite of the preceding drawbacks, this theory is assumed to be the most famous one and is
useful for modern managers.

HERZBERG TWO-FACTOR THEORY

This theory was proposed by psychologist Frederick Herzberg, who was one of the most influential names
in business management. The Herzberg two-factor theory investigates people’s expectations from their jobs.
Herzberg asked people to describe the situations in their jobs; when they felt good or bad. From the
responses, Herzberg ar-rived at the conclusion that the following two factors are related with job satisfaction
and job dissatisfaction:
Intrinsic Factors/ Motivators: These factors represent people’s perception about their jobs. Some
examples of intrinsic factors are the sense of responsibility and desire for growth and advance-ment, which
increase job satisfaction of employees.
Extrinsic Factors/Hygiene Factors: These are the factors in the absence of which dissatisfaction is created
among employees. Some examples of extrinsic factors are rules and regulations and supervision.

According to Herzberg, people feel good about their jobs because of intrinsic factors; whereas, they feel bad
about their jobs because of ex-trinsic factors. Thus, Herzberg named the intrinsic factors ‘motivators’ and
the extrinsic factors ‘hygiene factors’. Extrinsic factors should be regulated to keep employees motivated.
An appropriate combination of motivators and hygiene factors leads to better employee satisfac-tion. The
limitations of Hertzberg’s two-factor theory are as follows:
Determining the reliability of the two-factor theory is difficult due to lack of clear understanding about
intrinsic and extrinsic factors.
Using the two-factor theory is inflexible.

ALDERFER ERG THEORY

This theory was proposed by Clayton Alderfer to address some of the limitations of Maslow’s need
hierarchy theory. The letters ERG stand for three levels of needs, which are explained as follows:
In spite of all the criticism, the Herzberg two-factor theory is an extensively used and well-known theory of
motivation.
Existence: Existence needs correspond to the physiological and safety needs of Maslow’s hierarchy.
Existence needs include the physiological and physical needs of individuals, such as needs for food, shelter,
and safe working conditions.
Relatedness: Relatedness needs correspond to Maslow’s belong-ingness needs. Relatedness needs include a
person’s needs to mix and interact with other people, be publicly recognised, and feel secure among people.

Growth: Growth needs correspond to Maslow’s esteem and self-actualization needs. Growth needs involve
a person’s self-esteem through personal achievement as well as the concept of self-actualization presented in
Maslow’s model.
MCCLELLAND NEEDS THEORY
David McClelland was the proponent of this theory. According to this theory, every individual is driven by
the following three motivators:
Achievement
Power
Affiliation
These three motivators exist in all individuals in varying degree. How-ever, most people are not aware of
what drives them. Let us discuss these motivators as follows:
Achievement: People who are driven by achievement are driven by complex challenges, and they want to
find solutions of prob-lems. In addition, they are goal oriented and desire feedback to improve further.
These people are motivated by standards of ex-cellence, precise goals, and clear roles. They are concerned
about achieving excellence through individual efforts.

Power: These people want to have control over a situation, and they are very influential. It has been
observed that executives are strongly motivated by power. Power motivation is also strong in case of
influential leaders.
Affiliation: Affiliation-oriented people have a strong desire to belong. They are deeply concerned about
relationships, and they strive to reduce uncertainty. In addition, they are good team play-ers. Affiliation-
oriented people tend to be less assertive and de-pend on others. These people are motivated by what they
can ac-complish with people they know and trust

Let us study some of the process theories.

GOAL SETTING THEORY

The goal setting theory, propounded by Edwin Locke, explains that specific and difficult goals lead to higher
performance. It constantly motivates employees by helping them to keep their goals in mind and improve
their performance. According to this theory, feedback and commitment lead to higher performance and
bridge the gap between the actual and expected performance of individuals. In addition, it suggests that for
self-improvement, an individual should have goals that are specific (S), measurable (M), attainable (A),
relevant (R), and time-bound (T), known as SMART goals. The goal setting theory is based on five basic
principles, which are as follows:

Clarity: Implies that goals of individuals should be measurable and unambiguous. Goals should also be
communicated clearly, so that employees know what is expected from them.
Challenge: Implies that goals should be somewhat difficult to at-tain. However, goals must not be so
challenging that they sound unrealistic. Goals should also not be non-challenging, because that can
demotivate employees. Therefore, an optimum level of chal-lenge is required in goals.

Commitment: Refers to the dedication of employees to achieve their goals. When goals are challenging,
they increase the commit-ment of employees. High commitment levels ensure improvement in the
performance of employees.
Feedback: Helps employees understand goals clearly and over-come the obstacles in achieving these goals.
Task Complexity: Refers to the level of difficulty involved in a task. A challenging task keeps employees
motivated. However, a highly-challenging task may be burdensome for employees.

VROOM’S EXPECTA CY THEORY

This theory is one of the most widely-accepted theories of motiva-tion. It was given by Victor Vroom, who
has studied organisational behaviour with a focus on motivation, decision making, and leader-ship. The
expectancy theory suggests that employees are motivated to apply effort when they believe that their efforts
will result in perfor-mance appraisals and rewards such as bonus, incentives, and promo-tion. The theory
focuses on the following three relationships:
Effort-Performance Relationship (Expectancy): Refers to the perception of an individual that a particular
amount of effort will lead to a certain level of performance. For example, an individual may expect that
working extra hours in office may increase his/her performance by a significant margin.

Performance-Reward Relationship (Instrumentality): Refers to the perception of individuals that if they

perform in a particular way, they might get certain rewards. For example, an employee may expect that
he/she may have a batter salary increment if he/ she increases the performance level.
Rewards-Personal Goals Relationship (Valence): Refers to the perception of individuals regarding
whether the rewards provided by the organisation are able to fulfil their personal goals or not. For example,
the personal goal of an employee is to increase his/ her wealth. Thus, if the employer rewards him/her with
some cash, then the award will be able to fulfil his/her personal goals.

Individual
effort
Effort-
Performance
Relationship
Individual
Performance
Performance
Rewards
Relationship
Organisational
Rewards
Rewards-
Personal Goals
Relationship
Personal
Goals

EQUITY THEORY
This theory was proposed by John Stacey Adams. The theory calls for a fair balance to be struck between
the inputs of an employee, such as hard work, skills, tolerance, and enthusiasm, and the outputs such as
compensation, benefits, and recognition. According to this theory, a balance between the inputs and outputs
creates a strong and productive relationship between the employees and employers.
Following are some of the inputs considered in this theory:
Hard work
Commitment
Loyalty
Effort
Adaptability
Skill
Flexibility
Ability
Tolerance
Determination
Enthusiasm
Trust in superiors and colleagues
Personal sacrifice
Trust

Some of the outputs considered in this theory are:

Salary
Benefits
Reputation
Recognition
Praise
Sense of achievement
Responsibility
Job security
The theory recognises that various factors influence the perceptions of individuals about their employers. If
employees think that their in-puts are greater than their outputs, the employees feel demotivated. In such
cases, employees may start putting fewer efforts into work. On the other hand, if employees feel that their
inputs are lesser than their outputs, they feel motivated and start putting in more efforts into their work.

REINFORCEMENT THEORY
This theory was proposed by B.F. Skinner and his associates. This the-ory proposes that an individual’s
behaviour is a function of its conse-quences. In other words, an individual’s behaviour follows a “law of

This theory proposes the following methods for controlling behaviour of employees:
Positive Reinforcement: It implies giving a positive response when an individual shows positive and
required behaviour. For ex-ample, if an employee is immediately praised for arriving early to a job, the
probability of the employee repeating the behaviour will increase.
Negative Reinforcement: This involves rewarding an employee by removing negative or undesirable
consequences. This method can be applied to increase the frequency of a desired behaviour.
Punishment: It involves removing positive consequences to lower the probability of repeating undesirable
behaviour in the future. In other words, punishment involves applying undesirable con-sequences for
undesirable behaviour. For example, deducting an employee’s salary for late coming.
Extinction: It is the absence of any kind of reinforcement. In oth-er words, it involves lowering the
probability of undesirable be-haviour by removing rewards for that kind of behaviour.

MOTIVATION IN PRACTICE
An organisation finds it a complex and challenging task to keep its employees motivated. In an
organisational set up, multiple techniques are used to keep employees motivated in their respective jobs.
Some of the common motivational techniques in practice are shown in

The following points explain these motivational techniques further:

Monetary and Non-monetary Benefits: Refer to salary components, which include money and other
fringe benefits (non-mone-tary benefits) provided to the employees as compensation for their work. Some
examples of monetary benefits are incentives, com-missions, and bonus, while examples of non-monetary
benefits are gift vouchers and electronic gadgets. It is commonly accepted that monetary motivational tools
have better results in comparison to non-monetary ones. However, we cannot ignore the importance of non-
monetary measures, because certain needs cannot be fulfilled by money.
 Job
Enrichment

Upgrading the Goal

Skills of Setting
Employees

Motivation
Techniques

Alternative
Flexi-hours Working
Schedules

onetary and
Non-Monetary
Benefits

Job Enrichment: This technique involves making a job more competitive by asking employees to share
responsibilities of their superiors. When employees are given additional responsibilities, they feel
themselves to be an integral part of the organisation. In addition, this increases the confidence level of
employees and maintains their interest in work, which in turn leads to increase in productivity.
Job Rotation: Refers to assigning different roles and responsibilities to employees at different times to
increase their interest in their jobs. It enhances the performance level of employees by keeping them
motivated. In addition, it reduces the monotony of work. However, this practice should be followed for
employees who have covered a particular tenure in the organisation, because if an employee without
experience keeps getting assigned to new roles, he/she will not be able to gain expertise in any role.
Goal Setting: In this technique, certain goals are assigned to employees to invoke their participation. If
employee participation is invoked while setting goals, they feel more committed towards the attainment of
goals.
Alternative Working Schedule: Refers to flexible work timings offered by various organisations to help
their employees select the desired shift of work. This way, employees can work as per their convenience to
strike a work-life balance in their lives. Alternative working schedules motivate employees to give better
performance.
Employees’ Skills Up-gradation: Refers to improving skills of employees from time to time and providing
them training to increase their competency.
Module Three: Group Aspects of Organizational Behaviour 6 hours
Group Behaviour Vs Individual Behaviour: Group: Typre and Norms: Decision Making in Groups: Group
Vs Team: Team Work and Team Spirit: Basic Approaches to Leadership, Contemporary Issues in
Leadership: Conflicts- Source, Types and Resolution: Role of Interpersonal Communication and
Motivation in Group Process.

Group Behaviour Vs Individual Behaviour

The word ‘group’ or a ‘team’ is often used for one another. Is there a difference between the two? Consider
this example.
What would you call a bunch of people gathered together in the evening kicking a football in a
parking lot?
It can be called a group, as there is no format or structure to the activity; it is just some people behaving in
an unorganized, uncoordinated manner. This bunch of people might be together for a simple reason that
they are friends and like spending time together after office hours.

However, taking the same bunch of individuals and turning them into a football team would be a
challenging task. Once they are made into a team, then their tasks would have to clearly defined, and as a
team they will have a well-defined objective, for instance, winning 5 out of 7matches. This team will have
to perform in an organized and coordinated manner and will have to be trained for achieving the team
objectives. Thus, a team is a group of individuals, which are united towards achieving a common goal.

In simple words, a group refers to a collection of two or more individuals who come together to accomplish
their common objectives. For example, in an organisation, people eating lunch together form a group to
fulfill their social need of interaction. On the other hand, a team refers to a set of two or more individuals
who come together to realize their pre-determined goals. For example, in an organisation, people belonging
to a particular department form a team, such as all the members of the quality department form a quality
assurance team. The success and failure of an organisation depends on how effectively it manages its groups
and teams to optimize the output.

The formation of groups and teams plays an important role in the decision-making process of an
organisation. It helps in maintaining co-ordination among various activities of an organisation and carry ing
out day-to-day operations. In addition, group behavior and team culture influence the overall environment
of an organisation.

In general, a group is described as a gathering of people at a particular place and time. For example, people
travelling in a bus or employ-ees gathered in a training programme organized by the organisation will be
considered as a group. However, in organisational settings, the definition of a group is quite different.
Organisational behaviour, defines a group as the collection of two or more independent individuals
interacting with each other to achieve a common goal. For example, heads of different departments of an or-
ganisation gathered in a meeting with the CEO to identify the causes of the problem faced by the
organisation.

According to D. H. Smith, “a group is the largest set of two or more individuals who are jointly
characterised by a network of relevant communications and shared sense of collective identity and one or
more shared dispositions with associated normative strength.”
According to Edgar H. Schien, “a group may be defined as a social phenomenon in which two or more
persons decide to interact with
FEATURES OF GROUPS
Some of the features of a group are as follows:
1. Groups’ emphasize on the development and accomplishment of common goals of the group
members rather than individual goals.
2. In groups, full participation of all the members is expected.
3. Groups mainly focus on behavioural changes instead of personal-ity changes.
4. Groups’ emphasise on the impact of behaviours, rather than their intent.
5. Groups help in determining the reasons for less participation by the members in a group activity.
6. Groups facilitate the efforts of people to establish reasonable boundaries with colleagues.
7. In groups, power or authority is not used for resolving the problems.
8. In groups, all the members feel vulnerable despite of their positions in the organisation.

IMPORTANCE OF GROUPS
Groups are important for an organisation as they provide an opportunity for the employees to interact freely
with other employees having similar goals.
Groups provide a sense of becomingness among the employees: Employees feel satisfied if they get a
common platform where they can share their views, ideas, and feelings. Thus, they feel comfort-able in
their group as it satisfies their urge of becomingness as well as the need for affiliation.
Groups act as a source of warmth and support for the employees: It means that no individual can live in
isolation and it has been observed that individuals perform better in a group. According to Elton Mayo,
“employees who are isolated from each other because of plant layout find their jobs less satisfying than
those group members who are able to socialise on the job.”
Groups provide a power/authority to the group members: Power is the result of authority provided to
group members. On the other hand, group itself can be so powerful that its association provides power to its
members.
Groups provide security to the employees: An individual feels se-cure after being a part of a group.
Groups offer recognition and status to the employees: If individ-uals enjoy high status within the group,
they get respect and rec-ognition from their group members. In addition, if a group enjoys superior status in
the society, it provides social status, recognition, and appreciation to its members.
TYPES OF GROUPS
Various types of group exist within an organisation depending upon their nature and purpose. Some of the
groups found most commonly in the organisations are depicted in Figure 8.1:
 Secondary
Group
Command
Group
Formal
Task Group
Group

Committee

Membership
Types of Group
Groups
Primary
Group
Interest
Group
Informal
Group
Friendship
Group
Reference
Group

Formal and informal groups are discussed in the next sections.

FORMAL GROUPS

Formal groups are the groups formed by the organisation for accomplishing a particular task.
For example, a group is formed for organizing an event on a particular occasion in the organisation.
Formal groups can be further categorized as follows:
Secondary Group: It is a formal, general, and remote group. The members of this group do not form
personal associations. They are more concerned with formal communication and relationship. The members
of these groups may not necessarily have a face-to-face interaction with each other.
Command Group: It is a group where subordinates directly re-port to one superior only. The
organisational chart provides detail about the reporting relationships that exist in an organisation.

For example, departmental heads are clearly mentioned in the chart, making it easy for a
subordinate to know about his/her reporting head. The size of the command group increases with
increase in the span of control of departmental heads.
Task group: It is a group of employees who work together to complete a particular task, project, or job. In
a task group, employees work in coordination with each other to get the work done.

Committee: It is a group of individuals working together to solve certain problems. This group explores,
analyses, and discusses various problems to find their solutions.
Models of Communication in formal groups

Chain Model: In this model, the hierarchy of an organisation needs to be followed for communication. The
chain model is followed in traditional or bureaucratic organisations.

Wheel Model: It is a model wherein group members report to a single superior. In this model the team
members are not allowed to communicate amongst themselves; all communication is done by the superior.
In such a model coordination amongst the group members becomes a challenging task

Circular Model: In this model, information flows from one group member to another. In the circular
model, generally the communication among the group takes a lot of time.

Free Flow Model: t is a model in which each group member is free to communicate with other members.
The free flow model facilitates faster communication; however, coordination amongst the group may be a
problem in this type of model.
Inverted V Model: It is a model that facilitates the communication of a group member, not only with his/
her own superior, but also with his/her superior’s superior. In the inverted V model, communication takes
place at a much faster pace among group members.

INFORMAL GROUPS
Informal groups are the groups that people form to satisfy their social needs. People belonging to informal
group have a common interest. Informal groups are classified as follows:
Primary Group: It is a group wherein intimate interaction, infor-mal communication, and cooperation
among members take place. For example, a group of friends is a primary group.
Interest Group: It consists of members who have some common interests, such as sports, social awareness
and politics.
Friendship Group: It is a group of individuals who share some common characteristics, such as age or
religion.
Reference Group: It is a more influential group that shapes the behaviour of its members; therefore, it has
great significance in the study of organisational behaviour. It is a group with which the individual identifies
or draws a feeling of becomingness.

Models of Communication in Informal groups

Single Strand Model: It is an informal group model in which one individual communicates with another
individual through other individuals. Figure 8.7 shows single strand model:
Gossip Model: In a gossip model a person transfers a piece of in-formation about a person to as many
people as possible

UNDERSTANDING GROUP PROCESSES

In every group, there are certain inherent processes, which are called group processes. After the formation
of a group, it is assumed that stable relationships, bonds of intimacy, appropriate behaviours for individual
members have been established. This results in a definite structure of the group along with some important
processes, which characterise the dynamics within groups. Some of the important dynamics of the group are
as follows:
Important Process and dynamics of the group

Roles: It is the positions assigned to different members of a group. There are various other dimensions of
roles, which are discussed as follows:

Identity: It is the different attitudes or behaviours that are specific to a role. The identity of an individual
may change according to the role. For example, a peon would have an attitude change, when he/she is
promoted to a clerical level in a government organisation.

Expectation: It is the level of achievement that an individual aspires to reach to fulfill his/her roles and
responsibilities. For example, creative head in an organisation needs to have an ar-tistic bend of mind, to
fulfill his/her responsibilities effectively.
Perception: It is the pre-assumed way of thoughts of an indi-vidual about how he/she should react in a
particular situation. An individual’s perception might be different from the actual roles and responsibilities
that he/she has to perform.
Conflict: It represents the difference in perceived and actual role. An individual has preconceived notions
about his/her role in the organisation, which may not be in synchronisation with his/her actual roles and
responsibilities. In such a situation, the conflict of role occurs in the group.
Ambiguity: It is the confusion between the perceived role and actual role of any member of the group.
Norms: These are the acceptable standards or expectations shared by group members. The norms may
differ from one group to an-other.

Status: It indicates a prestige grading, position, or rank of members within a group. It refers to the respect
and recognition that is associated with a group.
Free Rider Tendency: It is a group phenomenon in which individual members reduce their individual
efforts and contributions as the group expands.
Group Cohesiveness: It is the degree to which group members feel connected to one another and be a part
of the group as a whole.

FORMATION OF GROUPS
The stages of group development are explained as follows:
1. Forming: In this stage, the group members are introduced to each other. It is the initial stage where
group members behave very cautiously and try to understand each other.
2. Storming: It is a stage wherein group members start interacting and enquiring about each other. The
feelings, such as disagreements, resentment, and anxiety, develop as members start interacting with
each other. In this stage, power struggle can also occur wherein the members decide the informal
leader of the group. This stage is also known as the confrontation stage.
3. Norming: In this stage, all the disagreements are worked out within the group. The group members
set norms, try to attain cohesiveness, and understand their goals.
4. Performing: It is the stage wherein group members’ performance is at the maximum and they trust
each other completely. In this stage, the performance of group members are evaluated as well as
communicated to them.
5. Adjourning: It is the final stage of group development in which the group dissolves after
accomplishing desired goals.
CONCEPT OF TEAMS
Team can be defined as a formal group comprising interdependent individuals who are responsible for the
attainment of common goals. Quality assessment team, testing team, and production team are some of the
examples of teams in an organisation. In the organisation, teams play a very crucial role in completing the
work within the deadlines.
According to Katzenbach and Smith, “a team is a small number of people with complementary skills who
are committed to a common purpose, performance goals, and approach for which they hold themselves
mutually accountable.”

Features of Team
1. In a team the members interact freely with each other.
2. In a team, the members depend on each other to complete tasks.
3. A team provides support to all its team members willingly.
4. A team encourages collective decision-making.
5. A team creates an environment of trust and support among team members.
6. A team provides opportunity to the team members to give sugges-tions.
7. In teams, regular feedback is provided to members for improving their performance by the leader or
supervisor.
8. It requires commitment from team members for the achievement of organisational goals

In contemporary organisations most of the work project-based, where-in forming a team and allocating
tasks among the members helps in completing the project on-time and with accuracy. Project completion
would have been a difficult proposition if a single employee was handling the entire work.

For building a strong team, it is important to carefully study the behavioural patterns of individuals and
create the right blend of team members. For example, in a project requiring six individuals, two people can
be selected for their creative skills, two people for analytical skills, and the remaining two for their
entrepreneurship or leadership skills.

IMPORTANCE of TEAMS
Team makes the members loyal to each other when they unite to accomplish common organisational
objectives.
Team increases the performance of individual members by utilizing the collective knowledge, skills, and
ideas of team members. This further helps in enhancing the overall performance of an organisation.

Team provides an opportunity to team members to show their potentials by delegation of work. This will
further encourage team members to bring innovation and creativity to their work, which ultimately helps
organisation to get excellence in performing certain tasks.

Team increases flexibility among the members of the team. This is due to the fact that when people in a
team come together from different background for a common purpose then they become more tolerant, open
for discussions, and eager to learn. This further helps the organisation to use its workforce in diverse fields.

Types of TEAMS
Functional Team: It involves a manager and his/her subordinate who belongs to the same functional area,
such as the finance de-partment or the marketing department.
Cross Functional Team: It comprises employees from the same hierarchical level, but different work areas
or departments. These teams are formed for special purposes and after the completion of the task, they get
disbanded. For example, when an organisation wishes to enter to enter a new market, the heads of the
different departments of the organisation, such as production, marketing, and finance, work together in
order to identify the feasibility of the organisation in that market.
Self-Managed Team: It is a team that is considered capable enough to handle routine problems; therefore,
does not require reporting to its team leader on a daily basis.
Supervised Team: It is a team that works under direct supervision of a manager.
Virtual Team: It may not exist physically, yet works with the help of teleconferencing and
videoconferencing. Such teams gained im-portance due to globalisation where the team members located at
different places were not able to physically gather at a single place.
Problem-Solving Team: It is a team formed by a few employees of the same department who meets once a
week to solve the work-related problems, such as quality issues.

DIFFERENCE BETWEEN GROUPS AND TEAMS

PROBLEMS IN TEAMWORK
A team is like a chain which can only remain strong and effective if all of its links (i.e. team members) are
strong (i.e. equipped with the required skills, knowledge, and expertise). If any of the link (or team member)
is weak, then it may lead to major problems for the entire team. Some of these problems are discussed as
follows:
Communication: This implies that if there are gaps and barriers in communication among team members,
it will hamper the team-work.
Personal Variables: This refers to variables, such as personality and the value system of an employee.
Personal variables may lead to individual differences that may act as a source of conflict.
Unrealistic Expectations: This refers to impractical expectations of managers from employees. Unrealistic
expectations may de-motivate employees and create conflict between managers and employees.

Change: It indicates that individuals or groups might be resistant to adapt to any new change in an
organisation, thus, giving rise to conflict.

Goal Conflict: It indicates that the goals of two or more individuals or groups collide with one another,
leading to conflict.
Difference in Values: It indicates that people have a different value system to which they are emotionally
attached and uncompromising. In such a scenario, the values of one individual may collide with another that
may lead to conflict in a team.
Behaviour: It indicates that any extreme action of an individual, whether defensive or offensive, can be a
cause of conflict in a team environment.

A manager needs to resolve the abovementioned problems in team-work to accomplish the given projects
on time and with efficacy. Most of these problems are related with the behaviour and self-focused attitude
of the team members. Thus, while forming a team, a manager needs to identify and involve only those
people in the team who are passionate about the team goal and wish to work as a team member. For
example, if a team member is not interested in the goals of the team or rather did not believe that the team is
accomplishing anything useful; he/she will never work effectively and can also discourage oth-er members
from working hard.

Basic Approaches to Leadership, Contemporary Issues in Leadership

"Leaders are individuals who establish direction for a working group of individuals who gain commitment
from these group of members to this direction and who then motivate these members to achieve the
direction's outcomes.”
Conger, J.A. ‘Learning to Lead’ San Francisco: Jossey-Bass (1992, p18)

Leadership is the ability of an individual to persuade other individuals to behave in a particular way,
willingly. It is the process of influencing individuals to work to achieve a desired result. Leadership
involves developing and communicating a vision for the unforeseen future, encouraging other individuals
and assuring their involvement in the achievement of an objective
Leaders are able to define and achieve challenging targets by motivating others for their accomplishment.
He/she is able to take immediate yet effective decisions in difficult situations. Leaders attempt to out-
perform their competitors, take calculated risks, and persist during times of failure. Also, leaders are
futuristic, have strong communication skills, confidence, an ability to manage others, and a willingness to
embrace changes.

Required Skills in Leader

Assertive Skills: Effective leadership requires the ability to assert how individuals behave in certain
situations as objectively as possible. Leaders should be able to use their assertive skills to identify the
reasons for individual behaviour in a particular situation to interact with them, empathetically. A leader’s
assertive skill not only helps in emphasising his/her rights but also helps in maintaining a positive
professional relationship with other individuals.

For ex-ample, an employee who habitually arrives late to the office needs to be communicated the
same. An assertive manager would tend to empathize by saying, "We are supposed to be at work by
9:00 A.M. and it is already 10:50 A. . Was there some problem?" in-stead of being rude and using
words such as, “You’re always late!”
Communication Skills: Leaders should develop strategies to communicate their ideas and views
effectively. Communication skills help in exchange of ideas that lead to problem solving and decision
making, both of which are required for efficient leadership.
For example, while introducing a new idea to followers, leaders should communicate the benefits that
favour the followers to persuade them.
Motivation Skills: Communication alone may not encourage people to follow a leader. Individuals are
interested in knowing the benefits that a certain decision or strategy offers to them. That is when the
motivational skills of a leader are required to highlight the incentives of accomplishing a task.

For example, a captain of a cricket team motivates his/her teammates to introspect their
performance in case of failures, so that they can play and perform better in the future.

Adaptive Skills: An efficient leader is aware that no two individuals are the same, and they do not have the
same needs. Therefore, leadership requires having adaptive skills to adjust the communication and
motivation techniques while meeting an individual’s needs.
For example, two team members in a manager’s team are completely different in nature. While one is an
aggressive career person, the other is a sensitive family-oriented person. Here, the manager has to use
different approaches to motivate or communicate with both the team members.

SIGNIFICANCE OF LEADERSHIP
Effective leaders constantly motivate employees to work towards the accomplishment of immediate goals as
well as innovation through new ideas. A good leader should be able to set an example for others to follow.
He/she must be able to inspire, motivate, and provide clear directions to other individuals. Leadership
provides many advantages to an organisation, leading to the achievement of success and stability. The
absence of effective leadership often slows down the growth of an organisation, because employees tend to
lose direction and competitiveness. Some reasons why leadership is important to organisational
development are as follows:

Leadership Provides Clear Vision: Leaders communicate a clear vision to employees of an organisation
by presenting the bigger picture. They are the connection between the organisation and the employee. Thus,
employees remain focused regarding the organisational direction and do not stray from their roles and
responsibilities. For example, before starting a new project, a manager presents the goals and organisational
benefits of the project to his/ her team members.

Leadership Leads to Effective Planning: Leaders provide a structured approach to generate a plan of
action to achieve organisational goals. Planning helps employees to identify, contribute to, and understand
their roles in achieving defined objectives. For example, when a new project starts, a manager defines the
role of each team member.

Leaders Inspire and Motivate: If a leader shows commitment and enthusiasm towards organisational
goals, he/she provides inspiration and motivation for employees to perform at a high level. For example, a
manager always reaches work on time to set an example of punctuality.

Leaders Build Employee Morale: High-employee morale signifies wilful dedication of employees towards
their work. Leaders build employee morale to maintain that dedication. This helps in encour-aging
employees to perform with perseverance as they work to achieve the goals. For example, a manager
constantly participates in the team’s activities and is involved in every problem, which sends the message
that he/she is always there for his/her team members.
Leaders Encourage New Ideas: Leaders encourage employees to contribute and discuss new ideas and
innovative techniques by creating a positive environment. This helps in using employees’ diverse
experiences and ideas to improve business. For example, a manger holds brainstorming sessions with
his/her team members before launching a new project.

Leaders Improve Employee-organisation Relationship: An effective relationship between a leader and

the employees in an organisation validates that employees are considered valuable and integral to the
organisation. This creates a sense of ownership among employees and builds a favourable relationship
between employees and the organisation. For example, a manager gives due credit to team members who
have put in extra efforts in a project.
Leaders Help in Management of Crisis: Leadership helps in motivating employees to remain focused
during a crisis. During difficult times, leaders can remind employees of their achievements and encourage
them to define achievable goals. For example, during unforeseen project delays, a manager discusses a new
de-livery plan with his/her team members.
Therefore, leaders direct, encourage, motivate, and inspire individ-uals to achieve organisational success.
On the other hand, managers coordinate individuals’ efforts and allocate resources to maximise ef-ficiency
in achieving identified goals. Table 7.1 shows the main points of differences in the characteristics of
leadership and management:

TABLE 7.1: DIFFERENCE BETWEEN LEADERSHIP

AND MANAGEMENT
Leadership Characteristics Management Characteristics
Strategic and people-oriented focus Tactical and organisational focus
Setting of organisational direction Planning coordinated activities
and goals
Motivating and inspiring people Administering and maintaining
systems
Establishing principles Formulating policies
Building a team and development Allocating and supporting human
of talent resources
Developing new opportunities Solving logistical problems
Promoting innovation and invention Ensuring conformance to standards
and procedures
Empowering and mentoring people Instructing and directing people
Risk engagement and instigation of Management and containment of
change risks
Long-term, high-level perspective Short-term, detailed perspective

LEADERSHIP THEORIES
The three main leadership theories

Trait Theories
Behavioural Theories
Contingency Theories

TRAIT THEORIES (Popular in the 1940s and 1950s)

Assumptions
Individuals inherit certain traits that make them suitable for leadership.
Leaders are born, not made.
Several scholars and researchers, such as Stogdill, cCall and Lombardo, Bennis and Thomas, have studied
the trait theories to understand the qualities and abilities of a leader.
According to the trait theories, leaders have common personalities or behavioural characteristics. These
theories attempt to explain the distinctive characteristics accounting for leadership effectiveness.

Identified Traits common for successful leadership.

The physiological and psychological qualities common to leaders.
High level of energy,
Aggressiveness,
Self-reliance,
Pleasant appearance,
Persuasiveness, and dominance

Leaders were considered different from their common counterparts in their drive, desire to lead, morality
and integrity, knowledge, awareness, and cognitive ability.

Shortcoming of Trait theory

All effective leaders not having all qualities mentioned
Theory have not discussed about the required skills and abilities

However, the theory failed to explain how certain leaders, who are effective, lack one or more of the
qualities mentioned in these theories. Also, the theory failed to explain that leaders require certain skills and
the ability to implement their vision. These skills are necessary to transform leadership traits into leadership
behaviour.
For example, an individual may be persuasive but may lack the ability to gain the attention of the
people.

The trait theory has more historical than practical relevance for administrators and managers in an
organisation. The trait theorists believe that to understand both a leader and leadership in a better way, the
individual and the situation need to be considered more than the traits. From an organisational point of
view, there are certain qualities that managers are expected to possess, such as vast knowledge about

The organisation and its competitors, good interpersonal relations, excellent reputation in the industry,
integrity, high energy, and dedication, among others. However, these qualities alone do not make for an
efficient manager. Rather, the making of an efficient manager depends on how these traits are transformed
while decision making, handling situations, and motivating employees

BEHAVIOURAL THEORIES (during the 1950s)

The limited scope of the trait theory to predict leadership behaviour led researchers to shift their focus to
the behavioural theories of leadership, during the 1950s. Several studies and researches have been
conducted on behavioural theories by Kurt Lewin and his colleagues, Dr Rensis Likert, etc., to assert the
behavioural traits of leaders. Behavioural theories of leadership are based upon the belief that it is not the
personal traits of an individual but his/her behaviour that makes him/her an effective leader.

Kurt Lewin and his colleagues, Dr Rensis Likert

Assumptions
it is not the personal traits of an individual but his/her behaviour that makes him/her an effective leader.
Great leaders are made, not born
Focuses on the actions of leaders and not their cognitive abilities or personal attributes
According to the theory, individuals can learn to become leaders through learning, experience, and
observation
Contrary to the trait theory, behavioural theories support the ideology that great leaders are made, not born.
The theory focuses on the actions of leaders and not their cognitive abilities or personal attributes.
According to the theory, individuals can learn to become leaders through learning, experience, and
observation. As per behavioural theories, leadership behaviour can be categorized into the following two
types:

Production-oriented: This leadership behaviour is also referred to as concern for production, initiating
structure, or task-focused leadership. Production-oriented behaviour typically involves act-ing to get a task
done. Such leaders focus on completing a task, irrespective of personal consequences. For example, a school
principal who commands teachers to prepare the course curriculum in a day without considering their
limitations is a product-oriented leader. Such leaders are usually autocratic and fail to involve employees in
the decision-making process.

Employee-oriented: This leadership behaviour is also referred to as concern-for-people leadership.

Employee-oriented leadership behaviour focuses on supporting employees in getting their tasks done. Such
a leader empathises towards his employees’ needs and involves them in the decision-making process. For
example, if the school principal considers the problems of teachers and supports them in the preparation of
the course curriculum, he/she demonstrates employee-oriented leadership.

Therefore, behavioural theories attempt to explain the distinctive styles of behaviour used by effective
leaders or to define the nature of their work.
Mintzberg’s Ten Management Roles
According to management expert and professor, Henry Mintzberg, managers’ work behaviour can be
categorised into three types of roles: informational (managing through information), interperson-al
(managing through people), and decisional (managing through action). These roles are further divided into
ten common roles, which are shown in the following figure:
In reality, these management roles overlap, and a manager should be able to balance between them to
manage effectively. As per 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”.

• Figurehead
Provide
Interpersonal • Leader
Information
• Liaison

• Monitor
Process
Feedback Informational • Disseminator
Information
• Spokesperson

• Entrepreneur
• Disturbance Handler Use
Decisional
• Resource Allocator Information
• Negotiator

CONTINGENCY THEORIES
According to the contingency theories, no leadership style is suited for all situations. Successful leadership
depends upon particular variables, such as the leadership style, abilities of the followers, and the situation.

In the 1960s, Fred Fielder proposed the first theory using the contingency theory of leadership. The theory
states that leadership effectiveness is a function of two variables:
The tasks or interpersonal relationships that motivate a leader is the situation is which a leader can be
assessed with the help of a Least Preferred Co-worker (LPC) scale. The LPC scale is used by managers
to rate the least preferred co-worker in the organisation. To use this scale, the leaders recall a co-worker
they work with, to rate him/her on a series of eight-point bipolar adjectives, such as friendly-unfriendly,
pleasant-unpleasant, and so on.
Higher LPC scores signify more positive descriptions of the least preferred co-worker, while low LPC
scores signify more negative description of the co-worker.
Fielder stated that workers with high LPC scores are motivated to maintain harmonious interpersonal
relationships, while workers with low LPC scores are driven to perform better and focus on
interpersonal skills. The LPC scale used in organisations is shown in

TABLE 7.2: LPC SCALE

Unfriendly 1 2 3 4 5 6 7 8 Friendly
Unpleasant 1 2 3 4 5 6 7 8 Pleasant
Rejecting 1 2 3 4 5 6 7 8 Accepting
Tense 1 2 3 4 5 6 7 8 Relaxed
Cold 1 2 3 4 5 6 7 8 Warm
Boring 1 2 3 4 5 6 7 8 nteresting
Backbiting 1 2 3 4 5 6 7 8 Loyal
Uncooperative 1 2 3 4 5 6 7 8 Cooperative
Hostile 1 2 3 4 5 6 7 8 Supportive
Guarded 1 2 3 4 5 6 7 8 Open
Insincere 1 2 3 4 5 6 7 8 Sincere
Unkind 1 2 3 4 5 6 7 8 Kind
Inconsiderate 1 2 3 4 5 6 7 8 Considerate
Untrustworthy 1 2 3 4 5 6 7 8 Trustworthy
Gloomy 1 2 3 4 5 6 7 8 Cheerful
Quarrelsome 1 2 3 4 5 6 7 8 Harmonious

Types of Leader according to contingency Theory

Task-oriented Leaders: These leaders usually see their LPCs more negatively, resulting in lower scores.
Task-oriented leaders were referred to as low-LPC leaders by Fiedler. Low-LPC leaders are effective in
organising a group to get tasks and projects done. However, building interpersonal relationships is a low
priority for such leaders.

Relationship-oriented Leaders: These leaders usually see their LPCs more positively, resulting in higher
scores. Relationship-oriented leaders were referred to as high-LPC leaders. High-LPC leaders focus on
building interpersonal relationships, while avoid-ing and managing conflict.
PITFALLS IN LEADERSHIP
Personal Pitfalls: Several obstacles may appear in the way of ini-tiatives taken by a leader. For
example, individuals in disagree-ment may cause obstructions for a leader. A leader should be
pre-pared to face difficult times and continue to persuade and motivate others. A leader can face
or be involved in the following personal pitfalls:

Criticism: This is one of the major personal pitfalls faced by a leader. For example, a leader
works to direct an organisation by taking several initiatives. However, in the midst of new
initiatives, prior initiatives are left behind. In such a situation, people associated with the prior
initiatives experience a sense of loss and attempt to make it a personal issue for the leader.
Leaders need to be pre-pared to face such situations. Criticism should be handled by the leader
keeping in view the role he/she has without being personal.

Dictatorship: A personal pitfall in leadership may also arise if leaders become dictatorial in their
approach rather than being collaborative. Such leaders may tend to keep their personal objectives
above those of the followers and lay unrealistic targets for them. A leader should collaborate
with one and all to yield the out-comes of an initiative.

Role Confusion: A leader’s role is to serve others and work for their welfare. However, in their
passion to accomplish a task, leaders often ignore the other individuals associated with him/her.
For example, a manager who neglects his employees’ work capacities in his passion to be the top
performer is a leader who confuses passion with purpose.

Organisational Pitfalls: Sometimes, leaders do not understand the culture of the organisation
he/she is associated with, thereby not realising the goals and objectives of the organisation. The
rules and principles driving an organisation should be well versed by a leader to understand the
ramifications of not abiding by them. A leader who misses to comprehend the cultural clues may
face obstructions in leading the organisation towards a new direction. For example, an
organisation that focusses on Corporate Social Re-sponsibility (CSR) hires a new manager who
tends to ignore CSR in his decisions. Such a manager may not be able to lead employees in the
long run.

Another common organisational pitfall is experiencing changes in leadership. It can be

challenging when an organisation’s founding leader changes. People in the organisation are
commit-ted to the previous leader and may resist the new leader. The new leader should view
this as a developmental process and attempt to win the trust of the people. Consider an
organisation whose CEO has been replaced with a new one. Employees may not be inclined
towards the new CEO owing to their faith and liking for the former CEO.

Environmental Pitfalls: Organisations and their external environment change constantly. These
changes can be legislative, social and political, economic, etc. Organisations need to respond to
these changes by adopting new policies and plans. New services or products may need to be
developed to overcome competition. Bud-get restructuring, merging of departments, etc. are a
few examples of organisational response to external influences. Depending on the external
influence, a leader needs to bring about changes in his/her strategies and work procedures. It can
be challenging to keep employees motivated during times of crisis or change. A leader should set
an example by leading the team through the change and inspire others to follow suit.

STYLES OF LEADERSHIP AND THEIR IMPACT ON EMPLOYEES

“Leadership style is defined as the pattern of behaviours that leaders display during their work
with and through others”.
-Hersey and Blanchard, 1993
A leadership style includes the techniques and methods used by leaders to motivate other
individuals to follow their instructions. There are basically three factors that influence the kind of
leadership an individual follows:

Characteristics of the leader

Characteristics of the subordinates
Characteristics of the organisational environment
Moreover, the personal background of leaders and employees both affects the style of leadership
followed. These factors include personality, knowledge, values, and experiences and learning,
which shape an individual’s feelings.

For example, employees who are knowledgeable and experienced may perform well under a
democratic leadership style, whereas employees with lesser experience and expectations may
require an autocratic leadership style.

Leadership has a direct impact upon employees and organisational success. Leaders determine
the organisational values, culture, and work ethics, which reflect the work style, behaviour, and
motivation of the employees. A broad classification of leadership styles are as follows

1. Autocratic Leadership
2. Bureaucratic Leadership
3. Democratic Leadership
4. Charismatic Leadership
5. Situational Leadership
6. Transactional Leadership
7. Transformational Leadership
8. Laissez Faire Leadership

.
Autocratic Leadership: This leadership style is also referred to as authoritarian leadership.
• Autocratic leaders make decisions with little or no involvement of employees.
• Leaders who follow the autocratic style are extremely confident of their decision-making
abilities, organising abilities, and capacity to formulate strategies and plans.
• Autocratic leadership style works well when decisions need to be taken promptly,
• Autocratic leaders are generally less creative as compared to other leaders.
 • Employees may feel disassociated with the leader and his/her decisions in this style of
leadership.
• There is a lack of shared vision and motivation among employees.
• Autocratic leadership eliminates commitment, creativity, and innovation on the part of
employees.

Steve Jobs, co-founder and former CEO of Apple Inc., is an ex-ample of this leadership style.
Jobs was expelled from Apple after a power struggle with the-then top management. Later, he
was asked to join back, and today, Jobs is the best example of how total control and innovation
can transform an organisation.
Bureaucratic Leadership:
• Leaders following this style rely on a stated policy to meet organisational goals.
• Bureaucratic leaders believe that policy dictates direction.
• They are strongly committed to procedures and processes instead of employees’ needs
and objectives.
• The disadvantage of this style of leadership is that the most important characteristics of
leadership, such as motivation and development of employees, are generally ignored.
• Policies are not always adequate to motivate and seek commitment from people.
• Bureaucratic leaders often do not empathise with people and lack creativity and
innovation at work, which often results in resistance or disinterest from employees.

Joseph Stalin, the leader of the erstwhile USSR, is one of the many bureaucratic leaders in
history. He helped to transform communism in the USSR from an egalitarian, revolutionary
movement into an authoritarian, bureaucratic governmental system.

Democratic Leadership:
• This style of leadership is also referred to as participative style of leadership.
• Leaders offer guidance to people and accept inputs from individuals to make decisions.
• Democratic leaders reserve the right to make the final decision, but they encourage
feedback, ideas, and suggestions from all employees.
• Democratic leaders usually have more satisfied followers. Limitations,
• Increased chances of poor decision-making and implementation,
• Slow processing of strategies, and greater efforts to bring out workable results.

This style of leadership is also referred to as participative style of leadership. Contrary to

autocratic leadership, the democratic leadership style emphasises that leaders of-fer guidance to
people and accept inputs from individuals to make decisions. Democratic leaders reserve the
right to make the final decision, but they encourage feedback, ideas, and suggestions from all
employees. Democratic leaders usually have more satisfied followers. However, this leadership
style has certain limitations, for example, increased chances of poor decision-making and
implementation, slow processing of strategies, and greater efforts to bring out workable results.
One of the best examples of a democratic leader is Dwight D. Eisenhower, the 34th President of
the US, who was also a military leader. He was faced with the difficult task of convincing the
Alliance forces to agree on a common strategy. Eisenhower worked hard to motivate everyone to
work together to achieve a common understanding.

Charismatic Leadership: Leaders following charismatic style of leadership have a vision and
personality that motivate people to execute the vision.
Charismatic leadership offers opportunities for creativity and innovation, because it is highly
motivational. Employees tend to follow such leaders and are usually content with their roles and
tasks in the achievement of organisational objectives.
Issues with charismatic leadership.

If the leader leaves, a replacement is hard to find, because charismatic leadership is based upon
an individual’s strong personality.
In the absence of such a leader, employees may feel demotivated, disoriented, and without
direction.

One of the most charismatic leaders in history is John F. Kennedy, the 35th President of the US,
who hailed from a powerful family and was blessed with pleasant looks, which added to his
personal charisma.

Situational Leadership: The situational leadership theory states that there is no ideal style of
leadership to suit every situation. Accordingly,
An effective leader constantly adapts to different styles of leadership for different situations or
outcomes. Experienced and seasoned leaders, who are aware of organisational and employee
needs, tend to adopt the situational leadership style.
Employees are content, because there is freedom to choose the best strategy for every situation,
which offers scope for innovation, development, and learning.
Situational leadership provides leaders with the opportunity to test and develop different styles
for various situations, resulting in learning and experience for both leaders and employees.
Dr Paul Hersey, author of ‘The Situational Leader’, and Ken Blanchard, author of ‘One-Minute
Manager’, proposed the Hersey-Blanchard situational leadership theory, which states that
successful leaders should change their leadership styles according to the maturity of the
individuals they lead and the situational aspects.

An example of situational leadership is George Bush, the 43rd President of the US, who
responded and took decisions after the suicide bomb attacks at the World Trade Center,
Wasington D.C. on September 11, 2001 (9-11 Tragedy).

Transactional Leadership: This style of leadership is also referred to as managerial leadership.

Leaders following this style tend to adopt a system of rewards and punishments for employees.
For example, when employees are successful, they are rewarded, and when employees fail, they
are reprimanded or punished. Rules, policies, procedures, and standards are strictly followed in
transactional leadership.

An example of transactional leadership is Indra Nooyi, CEO of PepsiCo Inc. She quoted, “You
give a team of people a set of objectives and goals and get them all to buy into it, and they can
move mountains”. Nooyi topped the Fortune’s 2009 list of Most Powerful Women in Business.

However, employees may not feel content in this style of leadership, because they are not
encouraged to be creative or to find new solutions to problems. Moreover, employees may feel
less motivated to work towards a goal, if the rewards and compensation do not appeal to them.

Transformational Leadership: Leaders following the transformational leadership style attempt

to transform their followers.
• These leaders are usually energetic, enthusiastic, and passionate towards employees.
• Transformational leaders represent the most valuable form of leadership,
• Employees are offered fair opportunities to change, transform, and develop themselves as
contributors. Structurally, this style results in the best leadership outcome, because
transformational leaders develop people.
• Such a leadership style is most suitable for modern organisations, facing constant
external changes that demand creative problem solving and employee commitment.
Mahatma Gandhi was a transformational leader, who led by example and empowered his
followers to gain Indian independence, following the principle of non-violence.
Laissez Faire Leadership: Leaders following this style believe that people excel when they are
left alone to respond to their re-sponsibilities and obligations on their own. Therefore, Laissez
faire leaders extend the least possible guidance to employees and attempt to control them through
less obvious means. The laissez faire leadership style is suitable for organisations where employ-
ees are highly skilled and motivated to work on their own. This leadership style offers enough
opportunity to employees to devel-op their problem-solving skills and exhibit their creativity.
Warren Buffett, the CEO of Berkshire Hathaway, employs the laissez faire leadership style,
allowing his managers full autonomy. However, in situations where employees are unable to
accomplish tasks with-out guidance, laissez faire leadership may lead to delays in work and
disoriented employees.

Dr Paul Hersey, author of ‘The Situational Leader’, and Ken Blanchard, author of ‘One-Minute
Manager’, proposed the Hersey-Blanchard situational leadership theory, which states that
successful leaders should change their leadership styles according to the maturity of the
individuals they lead and the situational aspects.

Conflicts- Source, Types and Resolution

The success of a business organisation depends on team work. However, where there is a team,
conflict is bound to arise. In simple words, conflict refers to the actual and perceived
disagreement among needs, values, and interests of individuals and groups. t is an unavoidable
phenomenon occurring in every facet of life. n an organisational set-up, conflict occurs because
of a number of reasons, including opinions, attitudes, and perceptions of employees.

The productivity of employees can be influenced by conflicts in a negative way.

For example, an employee may feel a sense of injustice and decide to change his/her job.
Therefore, it is crucial for organisations to reduce conflicts through conflict management.

Conflict management can be successfully implemented by the management if it is well aware of

the behaviour of employees. Therefore, conflict management is a powerful tool in organisational
behaviour, which manages and controls the behaviour of employees. It can be implemented
through negotiations that aim at resolving conflicts in a constructive way and through mediation
and arbitration.

According to Chung and Meggison, “Conflict is the struggle between incompatible or opposing
needs, wishes, ideas, interests, or people.” Ac-cording to them conflict arises when individuals
or groups encounter goals that both parties cannot attain satisfactorily.
According to Pondy, conflict has been defined as “the condition of ob-jective incompatibility
between values and goals; as the behaviour of deliberately interfering with another’s goal
achievement; and as emo-tionally in terms of hostility.”
Descriptive theorists have explained conflict behaviour in terms of objective conflict of interest,
personal styles, reactions to threats, and cognitive distortions. Therefore, conflict can be defined
as the friction, which results from perceived or actual differences that exist among individuals or
groups.

Conflict is perceived in many different and unique ways, three of them being the most
significant. They are as follows:
Traditional View: According to this view, all types of conflicts are harmful to an organisation.
Therefore, conflicts should be avoided at any cost. According to this view, managers should try
to sup-press all types of conflicts within the organisation.
Human Relations View of Conflict: In this view, conflict is a natu-ral phenomenon. This view
states that conflict is essential for suc-cess and progress in an organisation. This is because
conflicts help individuals in overcoming obstacles and performing duties more effectively.

Interactionist View of Conflict: According to this view, conflict is necessary for a group to
perform efficiently. This is because con-flicts lead to positive results.
According to Stephen P. Robbins, “the harmonious, passive groups are prone to become
stagnant and non-responsive towards the needs for change and innovation, which can be a major
hindrance in the progress of the organisation.”
Following are some of the main characteristics of conflict:
It occurs when two or more individuals pursue incompatible goals.
In a conflict, individuals try to prevent others from attaining their goals.
It arises due to a dilemma within an individual to select the right course of action.
It occurs when there is a mismatch between the actual and expect-ed role.
It arises when the goals of one individual or department clashes with the goals of another
individual or department.

SOURCES OF CONFLICTS
In an organisational setting, individuals from diverse backgrounds, cultures, and personalities
integrate to form teams. These diversities major sources of conflicts in organisations:

Communication: Conflict arises because of ineffective communication or lack of

communication. If the employees of an organisation do not have the correct information, there
may be conflict. For example, a manager forgets to inform a team member of a meeting taking
place. The team member may feel that he/she is being omit-ted on purpose.

Personal Variables: Personality and value system of different em-ployees are diverse. This
diversity in individuals leads to conflicts. For example, an outspoken individual may appear rude
to his/her colleagues.

Unrealistic Expectations: It refers to the impractical expectations that management bears from
employees. Employees may feel de-motivated due to unrealistic expectations. This may lead to
con-flict between managers and employees. For example, a manager asks a team member to
complete an entire day`s task within cou-ple of hours.

Change: It is a common tendency of employees to resist organisa-tional change. Resistance to

change leads to conflict. For example, introduction of new machines in a manufacturing
company lead to feelings of insecurity among the workforce regarding their jobs.
Goal: Goals of two or more individuals or departments may col-lide and lead to conflicts. For
instance, the aim of a production department is on-time delivery, while the quality department
aims at flawlessness of the product.
Difference in Values: These indicate that people have different value systems, to which they are
emotionally attached and uncom-promising. In such a scenario, the values of one individual may
collide with another that may lead to conflict. For example, two salespersons are selling a
product. One salesperson believes that it is acceptable to lie while persuading a customer to buy a
product. However, the other only believes in using honest means.
Behaviour: This indicates that an extreme action of an individual, whether defensive or
offensive, can be a reason for conflict. For example, on receiving negative feedback from a
superior, an em-ployee aggressively accuses his superior of bias.
POSITIVE AND NEGATIVE ASPECTS OF CONFLICTS
Organisational conflict arises due to differences in opinions among individuals or groups.
However, the consequences of conflicts can be negative as well as positive. Following are some
of the negative conse-quences of conflicts:
Performance Degradation: Conflicts consume significant energy of the individuals involved as
well as the organisation. These lead to degradation in performance.

For example, an employee who spends time arguing with a colleague is not able to deliver tasks
within time.

Low Employee Retention: Conflicts create demotivation among employees. This increases
employee turnover and leads to low re-tention.

For example, employees who think they are the victims of conflicts may bear negative
perceptions about the organisation and try to find opportunities in other organisations.

Some of the positive consequences of conflict are as follows:

Change in Organisational Culture: Conflicts help in identifying the potential problem areas in
an organisation. Dealing with the problems leads to change in organisational culture.

For example, after an employee raises an issue of bias in an HR policy, the policy is changed,
benefitting all other employees.
Competition: Conflict may induce healthy competition in an or-ganisation. This helps in
increasing productivity and quality.

For example, competition to deliver better among two departments leads to both departments
performing well.
Creativity: Increasing competition due to conflicts may spur creativity among employees.

For example, an employee tries to show that he/she is better than a colleague and thus forms
profitable ideas for the entire team.
 FUNCTIONAL CONFLICTS

Gayatri and Neeraj work in an advertising company. In a brain storming session for a client’s
product, Gayatri and Neeraj both come up with good ideas. Their supervisor is unable to decide
which idea is better. He gives them a week’s time to improve further and declares that the idea
that is better will be presented to the client. Gayatri and Neeraj start competing with each other
aggressively, causing several conflicts between them. A week later, however, their supervisor is
still unable to decide the better idea. Both Gayatri and Neeraj are asked to present their ideas to
the client. The client is very pleased and decides to accept both the ideas for separate products.
This leads to double profits for the company.

The conflict between Gayatri and Neeraj is called a functional conflict. Here, two employees
have a difference of opinions regarding new ideas and they strive to generate better ideas for
fulfilling organisational goals.

Functional conflicts refer to constructive conflicts that support the goals of the organisations and
improve its performance. Functional conflicts involve people genuinely interested in solving
problems and listening to one another. A great way to improve a team’s performance is
stimulating functional conflicts and hence generating innovative ideas. Stimulating functional
conflicts involves leading team members to defend or criticise ideas on the basis of relevant facts
rather than personal preferences. Following are the two methods of stimulating functional
conflicts:
Devil’s Advocacy: It involves assigning a team member the role of a critic. This person will
always criticise an idea that the team may have. This helps in creating an environment of critical
thinking. However, the role of the critic should be revolved in the team, so that no particular
individual develops the reputation of being negative.
Dialectic Method: It involves conducting a debate of opposite views before taking any decision.
After hearing the pros and cons of different ideas, the team has greater success in making sound
decisions.

DYSFUNCTIONAL CONFLICTS

In a software company, the development team, headed by Mayank, and the testing team, headed
by Rohit, are always in conflict. The delivery head, Sheetal, has been encouraging this functional
conflict. However, after some time, some members in the development team start picking fights
with members in the testing team. The fights disrupt work, spread rumours, and lead to a few
resignations.

In the scenario, a functional conflict has turned into a dysfunctional conflict.

A dysfunctional conflict consists of various disputes and dis-agreements that hinder the
performance of the company. It involves people unwilling to work for a common goal and solve
a particular problem. In a workplace, there are various methods of dealing with dysfunctional
conflicts. Some of these methods are as follows:

Integrating: This method is also known as the problem-solving method. t involves encouraging
opposing parties to face the issue collectively, generate a solution, and select the most
appropriate action. Various misunderstandings can be resolved with the help of this method.

For example, in the scenario, Sheetal calls a meeting of both the teams in which both teams
realise that they were fighting over a non-issue or a misunderstanding.

Obliging: In this approach, a party neglects their own concern to satisfy the concern of the
opposing party. It emphasises common-alities and plays down differences.

For example, in the scenario, Mayank’s team realises that the conflict has gone too far, and they
agree to apologise to Rohit’s team.

Dominating: People with an I-win-you-lose mentality follow this approach. It involves relying
upon formal authority to force compliance. It is also used when unpopular but necessary
solutions need to be implemented.
17 organizational politics and Culture
18. Organizational Change and OD
19.. Organizational Structure Organizational Theories and Approaches
20. 7S McKinsey 7-S Framework
21. OB Challenges & increasing scope
22.23. India and International Context
24. International Issues of OB

ORGANISATIONAL POLITICS
According to Farrell and Peterson, politics in an organisation refers to those
activities that are not required as part of one’s formal role in the organisation,
but that influence, or attempt to influence, the distribution of advantages and
disadvantages within the organisation.

REASONS FOR POLITICAL BEHAVIOUR

Individual traits: It refers to the intrinsic traits of individuals that compel them to get involved
in politics. Such traits include greediness, selfishness, dishonesty, callousness, etc.
Scarcity of resources: Organisations usually have limited resources that needed to be allocated
optimally.
Personal impression: to make an impression on their seniors or managers..
Lack of trust and bonding: lack of trust and bonding between individuals belonging to
different groups encourage politics.
Role ambiguity: Organizational politics because of a lack of clarity about their roles in the
organisation.
Promotions increments and Rewards: Desire of quick promotions and bigger
increments.
Stress to perform well: Pressure prevailing among individuals in an organisation
to perform well.

MANAGING POLITICAL BEHAVIOUR

Clear job descriptions and role definition: Every individual in an organisation

must be clear about their Key Responsibility Areas (KRAs) and roles.Avoid
confusion about the job role it leads to politics..

Open communication: Managers must communicate to individual member of

their team and listen and understand their problems

Set examples: It implies that managers can avoid the situation of politics
Demonstrate ethical practices: Ethical practices of manager deliver a clear
message to all the employees in the organisation.

Promote team spirit: It leads to cooperation and better understanding between

employees; thereby reducing politics.

Allocate resources and rewards wisely: Allocate resource as per the situation
and employees’ requirements, and rewards should be given on the basis of
employees’ performance.

Organisational culture
Organisational culture can be defined as a pattern of shared values, beliefs,
attitudes, behaviours and assumptions of people in an organisation.
Strong culture enhance organisational performance and motivating people to
perform efficiently.

Formation of sustenance of organisational culture

Founders’ philosophy
Employee selection criteria
Top management

OB Challenges for the 21st Century”

1. Change Management

Everybody has accepted by now that change is unavoidable. But that still implies
that change is like death and taxes — it should be postponed as long as possible
and no change would be vastly preferable. But in a period of upheaval, such as
the one we are living in, change is the norm.

Organizational Change
Peter Drucker, in “Management Challenges for the 21st Century” (1999),
Everybody has accepted by now that change is unavoidable. But that still implies
that change is like death and taxes — it should be postponed as long as possible
and no change would be vastly preferable. But in a period of upheaval, such as
the one we are living in, change is the norm.

Steps of Change
Stages of Change Process

Forces of Change
• Internal forces exist within an organisation and are under the control of the
organisation. These include implementation of new technology or changes
in employee profile.
• External forces are present outside the organisation and are beyond the
control of the organisation. These include government policies,
competition or social pressure.

LEVEL OF CHANGE
• Individual level change: Change occurs at the personal level
• Group level change: Change occurs at the group/department/team level
because most activities in an organisation, are managed as groups.
• Organisational level change: Change that influences the entire
organisation. These changes involve major programmes that affect both
individuals and groups. Decisions regarding these changes are generally
made by the senior management.
TYPES OF CHANGE
 • Planned change: A conscious change that occurs as a result of logic can
be categorized as planned change. Such changes are implemented in an
organized manner and are well thought out and communicated in advance
to the stakeholders of the organisation.
• Emergent change: This is a spontaneous occurrence arising out of factors
beyond the reach of a change implementer. Emergent changes may be
implemented by the top management of an organisation at the time of
crisis. Such changes are generally temporary in nature.
• Episodic change: This is a change that does not occur on a daily basis.
Episodic changes occur only for a particular time period. These changes
are often termed as second order changes.

• Continuous change: A continuous change is one that occurs on a daily

basis. It is often termed as a first order change and does not influence an
organisation significantly.
• Remedial change: This refers to a change that calls for transformation in
a particular situation, task, procedure or policy. This type of change is
focused on corrective measures.
• Developmental change: This refers to a change that is taken up for the
improvement of employees as well as organisational performance.
RESISTANCE TO CHANGE:

Fear of technological up-gradation: It refers to the fear of unemployment

among people due to technological up-gradation.
Undesirability of skills: With transformation, people often start thinking that
their present skills would get obsolete and they would not be able to master the
new skills required in the changed environment..
Inherent liking for status quo: Some people just want to continue the way they
are working, and any kind of change is unacceptable to them.
Poor communication: Changes made in an organisation may not be
communicated clearly to every level of the organisation. This may lead to a
feeling of dissatisfaction among the employees.
Lack of training: Some changes to be successfully implemented within an
organisation may require extensive training of its employees. If such training is
not imparted by the organisation, the employees may resist the change

2. Organizational Development
According to Warren Bennis, Organisation Development (OD) is a complex
strategy intended to change the beliefs, attitudes, values, and structure of
 organisations so that they can better adapt to new technologies, markets, and
challenges
According to Burke(1994),“Organization Development is a planned process of
change in an organization’s culture through the utilization of behavioural science
technologies, research, and theory.’

3. Organizational Structure: Organizational Theories and Approaches

Meaning and Type of the Organization, and Their impact on OB:

Organizational Structure: Organizational Theories and Approaches: Role
of Power and Politics: Organizational Culture Change Management and
OD:

Organisation

According to Stephen P Robbins, organisation is a consciously coordinated social

entity with a relatively identifiable boundary that functions on a relatively
continuous basis to achieve a common goal or set of goals.
An organisation is a group of people working together to achieve defined goals
and objectives through shared interests, values and rules.

Organisations are formed because it is difficult to achieve bigger and complex

goals individually that require different skill sets.
In an organisation, individual goals are foregone for the group goals and the group
goals are compromised for organisational goals so the maximum benefit can be
derived by using limited available resources.

FEATURES OF AN ORGANISATION

TYPES OF ORGANISATIONS
• Bureaucratic Organisation
• Decentralised Organisation
• Participative Organisation
• Pyramid Organisation
• Matrix Organisation
• Strategic Business Unit (SBU)
• Virtual Organisation

Bureaucratic organisation: Bureaucratic organisations follow a set of formal

and rigid rules and regulations. Such organisations have a centralised decision-
making process. In such organisations, organisational charts are designed for
every department with an aim to make more organised decisions. Examples of
bureaucratic organisations include prisons, police departments, colleges and
universities.

Participative organisation: This type of organisation takes the middle path and
adopts the positive features of both bureaucratic and democratic organisations. In
a participative organisation, all employees get involved in the decision-making
process. A participative organisation practices specialisation but not very rigidly.
It is more flexible than a bureaucratic organisation but less flexible than a
democratic organisation.

Pyramid organisation: This type of organisation follows a hierarchical structure

containing top-level, middle-level and low-level management. In a pyramid
organisation, the decision-making process is highly centralised. Top-level
managers make major decisions. The concern for employees is low in a pyramid
organisation.

Matrix organisation: In this type of organisation, dual lines of authority are

formed. An employee working on a particular project could report to different
managers. For example, an employee may have to report to the head of a financial
department and the head of the production department. In this case, the financial
head would be the primary reporting authority, while the production head would
be the secondary reporting authority, whom the employee reports for a particular
time period.

Strategic Business Unit (SBU): It refers to a small part of an organisational

arrangement that performs a specific task. An SBU forms its own business
strategies and objectives, which are different from the SBU’s parent organisation.
In addition, it is a separate organisation with its own product lines and geographic
markets.

Virtual organisation: This type of organisation focuses on out- sourcing its

operations so that assets can be reduced to minimum. In a virtual organisation,
various functions, such as production, supply chain or logistics operations are
managed through a network of contacts. Moreover, a virtual organisation does
not have any physical location; therefore, it is cost effective. However, a major
drawback of such kind of organisation is that the management’s control is
reduced.
Bureaucratic theory

This theory was given by Weber. According to this theory, organisations should
have a clearly defined hierarchy. In addition, the roles of employees at different
levels should be defined clearly. There should be strong lines of authority (rules
of system), division of labour, specialisation, control and interpersonal relations
in organisations.

McKinsey 7-S Framework

Making Every Part of Your Organization Work in Harmony

• Do you know how well your organization is positioned to achieve its goals?
Or what elements influence its ability to implement change successfully?
• Models of organizational effectiveness go in and out of fashion, but the
McKinsey 7-S framework has stood the test of time.
• The model was developed in the late 1970s by Tom Peters and Robert
Waterman, former consultants at McKinsey & Company. They identified
seven internal elements of an organization that need to align for it to be
successful.
• learn how it can be used to improve performance or manage change in
organizations by ensuring that they all work in harmony.
• Also, we provide a worked example and a downloadable template that you
can use to apply the model.

When to Use the McKinsey 7-S Model

• it can help you to improve the performance of your organization, or to

determine the best way to implement a proposed strategy.
• The framework can be used to examine the likely effects of future changes
in the organization, or to align departments and processes during a merger
or acquisition. You can also apply the McKinsey 7-S model to elements of
a team or a project.
•
•
The three "hard" elements include:
• Strategy.
• Structures (such as organization charts and reporting lines).
• Systems (such as formal processes and IT systems.)
 • The four "soft" elements, on the other hand, can be harder to describe, and
are less tangible, and more influenced by your company culture. But they're
just as important as the hard elements if the organization is going to be
successful.
Hard and Soft Elements

• Strategy: this is your organization's plan for building and maintaining a

competitive advantage over its competitors.
• Structure: this is how your company is organized (how departments and
teams are structured, including who reports to whom).
• Systems: the daily activities and procedures that staff use to get the job
done.
• Shared Values: these are the core values of the organization and reflect its
general work ethic. They were called "superordinate goals" when the
model was first developed.
• Style: the style of leadership adopted.
• Staff: the employees and their general capabilities.
• Skills: the actual skills and competencies of the organization's employees.
Using the McKinsey 7-S Model

• The model is to identify which elements of the 7-S' you need to realign to
improve performance or to maintain alignment and performance during
other changes. These changes could include restructuring, new processes,
an organizational merger, new systems, and a change of leadership.
Application of 7S

• To apply the McKinsey 7-S Model in your organization, follow these

steps:
1. Start with your shared values: are they consistent with your structure,
strategy, and systems? If not, what needs to change?
2. Then look at the hard elements – your strategy, structure and systems. How
well does each one support the others? Identify where changes need to be
made.
3. Next, look at the soft elements – shared values, skills, (leadership) style,
and staff. Do they support the desired hard elements? Do they support one
another? If not, what needs to change?
4. As you adjust and align the elements, you'll need to use an iterative (and
often time-consuming) process of making adjustments, and then re-
analyzing how that impacts other elements and their alignment. The end
result of better performance will be worth it.
 • Figure 2 shows a template matrix that you can use

Challenges and Opportunities of Organizational Behavior

Total Quality Management (TQM)

It is a philosophy of management that is driven by the constant attainment of

customer satisfaction through the continuous improvement of all organizational
process.
The components of TQM are;

(a)Customer focus
,(b) Concern for continual improvement,
(c) Improvement in the quality on all aspects
(d) Accurate measurement and,
(e) Empowerment of employees.

Managing Workforce Diversity

 Diversity means employing different categories of employees who are

heterogeneous in terms of gender, race, ethnicity, relation, community,
physically disadvantaged, elderly people etc.
 Heterogeneous category of employees is to tap the talents and
potentialities, harnessing the innovativeness, obtaining synergetic effect
among the diverce workforce.
 In general, employees wanted to retain their individual and cultural
identity, values and life styles even though they are working in the same
organization with common rules and regulations.
 The challenge for organizations is to become more accommodating to
diverse groups of people by addressing their different life styles, family
needs, and work styles.
 Categorising employees based on gender, race, ethnicity, relation, etc.
 Main factors: To harness innovativeness, bring out the best talent and
potentialities.

Responding to Globalization
  Wherever the demands exist irrespective of distance, locations, climatic
Conditions, the business
 Operations are expanded to gain their market share and to remain in the top
rank etc. Business operations are no longer restricted to a particular locality
or region.
 Company’s products or services are spreading across the nations using
mass communication, the internet, faster transportation etc.
 More than 95% of Nokia (Now Microsoft) hand phones are being sold
outside of their home country Finland.
 Japanese cars are being sold in different parts of the globe. Sri Lankan tea
is exported to many cities around the globe.
 Garment products of Bangladesh are exporting in USA and EU countries.
Executives of Multinational Corporation are very mobile and move from
one subsidiary to another more frequently.

Empowering People
 More power and responsibility to the lower level cadre of employees and
assigning more freedom to make choices about their schedules, operations,
procedures and the method of solving their work-related problems.
 Encouraging the employees to participate in work related decision will
sizable enhance their commitment to work.
 Empowerment is defined as putting employees in charge of what they do
by eliciting some sort of ownership in them.
 Managers are doing considerably further by allowing employees full
control of their work.
 Delegating more power to the lower levels of employees.
 More participation.
 Increases confidence levels.
 Improved manager and employees relationship.

Emergence of E-Organisation & E-Commerce

It is a dramatic change in the way a company relates to its customers. At present

e-commerce is exploding. Globally, e-commerce spending was increasing at a
tremendous rate.

Stimulating Innovation & Change :

Successful organisations must foster innovation & be proficient in the art of
change. Victory will go to those organisations that maintain flexibility
,continually improve their quality and beat the competition to the market place
with constant stream of innovative products and services.
Improving customer service
OB can contribute to improve an organizational performance by showing how
employees attitude & behaviour are associated with customer satisfaction.
In that case, service should be the first production oriented by using
technological opportunities like computer, internet etc.

Improving Quality and Productivity

❑ Performance
❑ Features
❑ Reliability
❑ Durability
❑ Services
❑ Response
❑ Reputations

Improving ethical behavior

The complexity in business operation is forcing the workforce to face ethical

dilemmas , where they are required define right and wrong conduct in order to
complete their assigned activities