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© Department of Distance and Continuing Education

ISBN: 978-81-19169-85-6
1st Edition: 2023
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© Department of Distance & Continuing Education, Campus of Open Learning,

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 Contents

PAGE

Lesson 1 : Introduction to Organizational Behaviour

1.1 Learning Objectives 2
1.2 Introduction 2
1.3 Meaning of Organization 3
1.4 Manager and Interpersonal Skills 3
1.5 What Do Managers Do? 4
1.6 Managerial Skills 9
1.7 Managerial Activities: Effective Versus Successful Manager 10
1.8 Organizational Behaviour 11
1.9 Major Disciplines that Contribute to the Domain of Organizational Behaviour 12
1.10 Level of Organizational Behaviour 14
1.11 Challenges and Opportunities in Organizational Behaviour 16
1.12 Managerial Implication 19
1.13 Summary 20
1.14 Answers to In-Text Questions 20
1.15 Self-Assessment Questions 21
1.16 References 21
1.17 Suggested Readings 22

Lesson 2 : Personality and Learning

2.1 Learning Objectives 23
2.2 Introduction 24
2.3 Personality 24
2.4 Learning 40
2.5 Summary 45

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2.6 Answers to In-Text Questions 46

2.7 Self-Assessment Questions 47
2.8 References 47
2.9 Suggested Readings 47

Lesson 3 : Perception and Individual Decision Making

3.1 Learning Objectives 48
3.2 Introduction 50
3.3 Perception 50
3.4 The Attribution Process 62
3.5 Perceptual Biases (Common Shortcuts in Judging Others) 66
3.6 Applications of Perceptual Biases (or Shortcuts) in Organizations 70
3.7 Individual Differences and Organizational Constraints 72
3.8 Ethics in Decision Making 74
3.9 Summary 75
3.10 Answers to In-Text Questions 76
3.11 Self-Assessment Questions 76
3.12 References 77
3.13 Suggested Readings 78

Lesson 4 : Interpersonal Relationship

4.1 Learning Objectives 80
4.2 Introduction 80
4.3 Transactional Analysis 81
4.4 Ego States 82
4.5 Types of Transactions 85
4.6 Need of Understanding Transactional Analysis 96
4.7 Life Positions 97
4.8 Stroke Analysis 99
4.9 Psychological Games 101

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4.10 Johari Window 102

4.11 Summary 107
4.12 Answers to In-Text Questions 107
4.13 Self-Assessment Questions 108
4.14 References 108
4.15 Suggested Readings 109

Lesson 5 : Power & Politics in Organization

5.1 Learning Objectives 110
5.2 Introduction 111
5.3 Organizational Power 112
5.4 Tactics to Gain Power in an Organization 118
5.5 Organizational Politics 121
5.6 Summary 127
5.7 Answers to In-Text Questions 128
5.8 Self-Assessment Questions 128
5.9 References 129
5.10 Suggested Readings 130

Lesson 6 : Motivation at Work

6.1 Learning Objectives 132
6.2 Introduction 134
6.3 Process of Motivation 134
6.4 Approaches to Motivation 136
6.5 Maslow’s Need Hierarchy Theory 138
6.6 McClelland’s Theory of Needs 141
6.7 Alderfer’s ERG Theory 142
6.8 Herzberg Two Factor Theory 143
6.9 Comparison Between Maslows’ & Herzbergs’ Theory of Motivation 147
6.10 Theory X and Theory Y 148

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6.11 Vroom’s Expectancy Theory 151

6.12 Equity Theory 152
6.13 Goal Setting Theory 155
6.14 Reinforcement Theory 155
6.15 Types of Motivation: Cognitive Evaluation Theory 159
6.16 Application of Motivation Concepts 161
6.17 Alternative Work Arrangements 162
6.18 Management by Objectives (MBO) 164
6.19 Employee Involvement Program 165
6.20 Summary 166
6.21 Answers to In-Text Questions 167
6.22 Self-Assessment Questions 168
6.23 References 168
6.24 Suggested Reading 169

Lesson 7 : Leadership
7.1 Learning Objectives 171
7.2 Introduction 171
7.3 What is Leadership? 171
7.4 University of Iowa Studies 173
7.5 Likert’s Management Systems by Rensis Likert 176
7.6 Theories of Leadership 179
7.7 Great Man Theory 180
7.8 Trait Theory 181
7.9 Behavioural Approach 184
7.10 Contingency Theories 191
7.11 Contemporary Theories 198
7.12 Summary 203
7.13 Answers to In-Text Questions 204

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7.14 Self-Assessment Questions 205

7.15 Suggested Readings 205

Lesson 8 : Work Teams and Groups

8.1 Learning Objectives 206
8.2 Introduction 206
8.3 Work Groups 207
8.4 Work Teams 213
8.5 Group Cohesiveness 219
8.6 Summary 227
8.7 Answers to In-Text Questions 228
8.8 Self-Assessment Questions 228
8.9 References 229
8.10 Suggested Reading 229

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9.1 Learning Objectives 230
9.2 Introduction 230
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9.5 Summary 246
9.6 Answers to In-Text Questions 246
9.7 Self-Assessment Questions 247
9.8 References 247
9.9 Suggested Readings 247

Lesson 10 : Stress and Well Being at Work

10.1 Learning Objectives 248
10.2 Introduction 249
10.3 Understanding Stress 249

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10.4 Sources of Stress 252

10.5 Consequences of Stress 257
10.6 Management of Stress 259
10.7 Well-Being 262
10.8 Summary 264
10.9 Answers to In-Text Questions 264
10.10 Self-Assessment Questions 265
10.11 References 265
10.12 Suggested Readings 265

Lesson 11 : Organizational Change

11.1 Learning Objectives 266
11.2 Introduction 268
11.3 What is Change? 268
11.4 Forces of Change 269
11.5 Change Agent and Planned Change 272
11.6 Resistance to Change 272
11.7 Models of Change 275
11.8 Summary 278
11.9 Answers to In-Text Questions 279
11.10 Self-Assessment Questions 279
11.11 References 279
11.12 Suggested Readings 280
Glossary 281

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L E S S O N

1
Introduction to
Organizational Behaviour
Dr. Reema Aggarwal
Assistant Professor
Department of Distance & Continuing Education,
Campus of Open Learning,
University of Delhi
Email-Id: [email protected]

STRUCTURE
1.1 Learning Objectives
1.2 Introduction
1.3 Meaning of Organization
1.4 Manager and Interpersonal Skills
1.5 What Do Managers Do?
1.6 Managerial Skills
1.7 Managerial Activities: Effective Versus Successful Manager
1.8 Organizational Behaviour
1.9 Major Disciplines that Contribute to the Domain of Organizational Behaviour
1.10 Level of Organizational Behaviour
1.11 Challenges and Opportunities in Organizational Behaviour
1.12 Managerial Implication
1.13 Summary
1.14 Answers to In-Text Questions
1.15 Self-Assessment Questions
1.16 References
1.17 Suggested Readings

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Notes 1.1 Learning Objectives

After reading this lesson, the student should be able to:
‹ Define organizational behaviour.
‹ Explain the importance of manager in an organization.
‹ Develop understanding of the functions of a manager and managerial
roles.
‹ Explain the Major disciplines that contribute to the domain of
organizational behaviour.
‹ Explain the level of the organization behaviour.
‹ Understand various challenges and opportunities in applying organisational
behaviour concepts.

1.2 Introduction
Organizational Behaviour (OB) is the domain that deals with understanding
people’s behaviour within an organization. The discipline deals with the
individual behaviour, group behaviour, and behaviour of employees at
the organizational level. In addition, the field investigates the impact of
various cognitive, affective and behavioural aspects of human resources
on the effectiveness of an organization (like what motivates employees,
what makes the manager a good leader, how to manage group dynamics,
etc.). Organizational behaviour is crucial in facilitating managers in dealing
with various organisational challenges and opportunities.
“Organizational behaviour is a field of study that investigates the
impact that individuals, groups, and structure have on behaviours
within the organizations to apply such knowledge towards improving
an organization’s effectiveness.”- Stephen P Robbins.
Before exploring the components of organizational behaviour or the
levels of analysis in organizational behaviour (Individual, Group, and
Organizational level), it is crucial to understand what we mean by these
three levels of analysis. How has the domain of Organization behaviour
formed? Furthermore, who are managers, and what functions and roles do
they perform in an organization? Finally, it is also essential to understand
managers’ present-day challenges and opportunities in organizational
behaviour.
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 ORGANIZATIONAL BEHAVIOUR

1.3 Meaning of Organization Notes

Organisation is a social unit that is structured and managed to pursue

collective goals. All organizations have a management “Structure” that
determines relationships between different activities and the members;
assigns roles, responsibilities, and authority among members to carry
out various tasks. Organizations are open systems--they affect and are
affected by their environment. Organizations are formed to achieve
some “Purpose”. An organisation’s purpose is stated through its vision,
mission, goal, and specific objectives. To fulfil the underlying goals,
organizations need “People”. People form part of structures that allow
them to collectively work and accomplish the set Purpose (Refer to the
last lesson to learn more about various types of structures). The purpose
or structure differs from organization to organization.

WƵƌƉŽƐĞ ^ƚƌƵĐƚƵƌĞ WĞŽƉůĞ

Figure 1.1: Features of an Organization

1.4 Manager and Interpersonal Skills

Managers are the coordinators responsible for managing units; these social
units help the organization achieve its goals. For managing people, a manager
needs technical, human, and conceptual skills (Refer to 1.6. section of this
lesson for more details). Earlier more focus was on technical skills and
less on interpersonal skills, but eventually, interpersonal or people skills
have become crucial; at times, they are preferred over technical skills.
Interpersonal skills or soft skills help a manager connect with others at
work. Managers are responsible for getting the job done through people.
Their main task is not to complete the task directly. Therefore, it becomes
essential for a manager to understand people’s behaviour and connect
with them. OB principles provide insights that help a manager develop
their interpersonal skills, which could yield various organizational-level

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Notes outcomes (like employee satisfaction with their respective jobs, employee
commitment to organization, employee engagement, stress levels, etc.).
Managers with high interpersonal skills can attract high-performing
employees and are also able to improve employee retention. Recently,
the organisations have been impacted by the “Great Resignation”, a
phenomenon that is used to describe situations in which huge numbers
of employees have quit organisations towards the end of the Covid-19
pandemic. Also known as Big Quit or Great Reshuffle, it has made
retaining employees critical to an organisation, as a process of hiring
them is both costly and time consuming.

1.5 What Do Managers Do?

Managers are the coordinators; they help an organization accomplish its
objectives through people effectively and efficiently. “Effectiveness” means
completing a given task within the planned time frame. The manager
should focus on “Doing The Right Things” to achieve goals on time.
“Efficiency” means achieving goals with minimum resources. To achieve
efficiency, managers should focus on “Doing Things Right” to minimize
wastage of resources. Both Effectiveness and Efficiency are essential to
accomplish organizational goals. Managers strive to achieve goals with
minimum wastage.

e s s E ff
i v en ici
f e ct ns) (En ency
Ef Mea d)
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Figure 1.2: Efficiency and Effectiveness

Henri Fayol and Henry Mintzberg gave a detailed description of various
functions and roles performed by a manager. Functions of management
are part of the classical approach provided by Henri Fayol (French
Industrialist). Later in the 1960s, Henry Mintzberg divided the diverse
responsibilities of a manager into ten roles performed by the manager.

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 ORGANIZATIONAL BEHAVIOUR

Notes
1.5.1 Management Functions
Henri Fayol identified five management functions: planning, organizing,
commanding, coordinating, and controlling. The manager performs various
tasks of similar nature within each function. The detailed description of
all five Functions of Management is as follows:—
Planning: The primary purpose of any organization is to achieve specific
goals. The manager needs to define these goals in line with the primary
purpose and vision of the organization. It is a complete process where
the manager explores various alternatives, builds a strategy for the
organization, and sets employee objectives. Later these goals become a
yardstick against which outcomes are measured. Fayol called this role
as “Planning”.
Organizing: The manager is also responsible for building the structures
in the organization. The organizing function includes identifying various
organisational tasks, grouping, and classifying similar-nature tasks and
designing reporting relationships.
Commanding: The manager is responsible for communicating planned
strategies, goals, or targets. In line with organizational goals and practices,
a manager should direct and lead subordinates. It is associated with
communicating clear instructions to employees in line with the company’s
mission and vision. In addition, a manager should be able to inspire and
motivate employees to achieve the company’s goals.
Coordination: Coordination is one of the crucial functions of management.
Setting goals, creating structures, and giving instructions to employees
will fail if all activities are not appropriately coordinated. It is important
to harmonize all activities in an organization. Managers should ensure that
various activities complement each other. Effective coordination reduces
conflicts and stimulates employees’ motivation.
Controlling: The manager sets standards/objectives at the planning stage.
However, the planning stage will remain incomplete unless the manager
compares the standards with actual performance. Therefore, a manager
should periodically compare the targets with the actual performance and
take corrective actions in case of any gap.

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Notes The five functions identified by Henri Fayol provide an overview of the
main functions of management; it may not cover all the complexities
that a manager is expected to deal with in their day-to-day functioning.

Planning

Controlling Organizing

Coordinating Commanding

Figure 1.3: Management Functions by Henri Fayol

1.5.2 Managerial Roles

The role of managers in an organization is multifold. Henry Mintzberg
defined Managerial Roles in 1960. Based on observation, Mintzberg
segregated all the roles of a manager into three broad categories, namely,
Interpersonal, Informational, and Decisional. He stated that these roles are
highly interrelated and reflect a set of behaviours followed by managers
in an organization. The detailed description of all three categories of
Managerial Roles is as follows—
Interpersonal role: Interpersonal role of a manager includes three subsets
within it. First is “Figurehead”, a symbolic role where the manager works
on routine level work of social and legal nature. This role inspires others
in the organization. Secondly, the manager acts as a “leader” responsible
for hiring, motivating, and directing employees. The third managerial role
within interpersonal is called “Liaison”; under this role; he builds his
network. He gathers the required information through networking with
people internal or external to the organization. Such contacts also provide
a manager with favours.

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Informational: The informational role is associated with a process where Notes

the manager gathers required information, transfers it into the organization,
and transmits it to the outside organization. This role includes three
subsets. The first subset is known as “Monitor”; under this role; the
manager collects information through various sources and analyses the
internal and external environment. Later the manager transmits relevant
information to other members of the organization; this role also defines
the second subset known as “Disseminator”. Finally, under the third
subset, the manager as a “spokesperson” transmits the information outside
the organisation.
Decisional Role: The manager is not only a symbolic head who
manages information or directs employees but also a decision-maker. As
an “Entrepreneur” manager searches for new opportunities and brings
new assignments/projects to the organization, a manager also initiates
change. The manager is responsible for “handling disturbance” in the
organization. For example, if there is some roadblock in the organization’s
functioning; the manager is responsible for handling it. The manager also
acts as a “Negotiator”, where he represents the organization in all the
major negotiations. Lastly, as a “resource allocator,” he is responsible
for procuring and allocating resources.
Interpersonal Informational Decisional
Role Role Role
Figurehead Monitor Disturbance Handler

Resource allocator
Leader Disseminator
Negotiator
Liaison Spokesperson Entrepreneur

Figure 1.4: Mintzberg’s Managerial Roles

Emerging Managerial Roles
What do managers do? Or what a successful manager is supposed to do? If
asked by a management student, the answer will be either associated with
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Notes But in the current scenario, in addition to these functions and roles, a manager
should change and get away with the traditional approach while dealing with
the employees. With growing competition and technological advancement,
a manager must change some commonly followed practices like limiting his
role to problem-solver, micromanagement, giving direction to employees, etc.
To meet the contemporary challenges in the workplace the manager must shift
from—
1. Directive to Instructive: The role of the supervisor has considerably
changed with the advent of technology. Robots driven by AI
(Artificial Intelligence) have already replaced manual & repetitive
work in the majority of industries. AI could impact the present
roles of the employees, but it won’t be able to exclude the need
for human resources. New roles are emerging and replacing the
old ones. The present-day manager needs to explore best practices
to shape the impact of AI on the industry.
2. Restrictive to Expansive: Present-day competitive business environment
needs employees to think and learn quick decision-making.
Centralization and micromanagement by managers could restrict
employees in the way they think. Therefore, it is important for
managers to delegate and motivate their employees to analyze the
market, and take decisions based on their analysis.
3. Exclusive and Inclusive: Managers should include employees in the
decision-making process especially while dealing with some new
situation (Like- WFH (Work from Home); Virtual organizations,
etc. during Covid-19). This adds diversity and helps in identifying
various perspectives around the problem. It also makes the “process
of change” easier in the organization.
4. Repetitive to Innovation: There is no best time for innovation,
rather it is an ongoing process. Innovation makes an organization
successful, and a successful organization needs innovation to
remain competitive.
5. Problem Solver to Challenger: The role of the present-day manager
is not limited to problem solver. He needs to be proactive in
understanding, analyzing, and solving upcoming challenges in the
industry.

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6. Employer to Entrepreneur: Present-day manager needs to think Notes

like an entrepreneur who facilitates development and helps others
in growth.
For more details on how roles of managers are changing Read
Pistrui, J., & Dimov, D. (2018). The role of a manager has to
change in 5 key ways. Harvard Business Review.

IN-TEXT QUESTIONS
1. Efficiency means achieving goals with _________.
2. Functions of management are part of the classical approach,
given by _________.
3. _________ means completion of given task within planned time
frame.
4. According to Mintzberg, the role of transmitting the information
outside the organisation, is termed as _________.
5. _________ is a symbolic role, where manager inspires the
employees.
6. The _________ stage will remain incomplete unless manager
will compare the standards formed at _________ stage with
actual performance.

1.6 Managerial Skills

According to Robert L. Katza manager needs the following skills to
accomplish their goals-

1.6.1 Technical Skills

Technical skills refer to the “Employees’ ability to apply specialized
knowledge or expertise while performing the given task”; in other words,
technical skills mean knowledge and ability to accomplish the given task.
For example, for a manager at ABC Ltd. (an audit firm), technical
skills could include knowledge about the fundamentals of accounting,
Indian Accounting Standard rules, and procedure for conducting an
audit. Education/and qualification are essential for technical skills (like

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Notes a chartered accountant degree), along with knowledge gained through

schooling/college and/or on the job experience.

1.6.2 Human Skills

The primary responsibility of managers is to communicate and coordinate
the work between employees. A manager should be able motivate and
lead employees to accomplish the organisation’s purpose. He/she should
be able to resolve conflicts in the organisation.
For example, an audit manager with a chartered accountant degree might
possess sound technical knowledge about the audit process. Still, he won’t
be able to manage a team or accomplish goals unless he has good human
skills (like- the ability to communicate, listen, and motivate; the ability to
create coordination between team and client to achieve the targets; etc.)

1.6.3 Conceptual Skills

The organisational environment today is highly Volatile, Uncertain,
Complex, and Ambiguous (VUCA). In such an environment, making a
decision based on only past knowledge is not possible. Therefore, to work
in the present-day environment, a manager should have the mental ability
to deal with complex problems, through “Conceptual skill”.
For example, to handle diverse client-specific queries or any challenge
posed by the external environment (like the pandemic), a manager needs
to analyze the problem, generate and choose the best alternative.

1.7 Managerial Activities: Effective Versus Successful

Manager
Fred Luthans and his associates found that all managers could be engaged
in four activities, namely:—
‹ Traditional Management: This includes planning, organizing, making
decisions, etc.
‹ Communication: This includes communicating information, handling
paperwork, and exchanging information.

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‹ Human Resource Management: This includes managing people Notes

using human skills (like motivation, training, handling conflicts, etc.).
‹ Networking: Building a social network and interacting with external
publics.
Luthans and his associates conducted an empirical study based on a
sample of 450 employees. Their study found that a successful manager
spends 48% of their time networking and hardly 13% of their time in
traditional management. In contrast, an effective manager spends 44%
of their time communicating and barely 11% of their time is spent on
networking. An average manager spends 19%-32% of their time in all
activities. In a nutshell, networking is an important activity that makes
a manager successful.

Figure 1.5: Allocations of Activities by Time

Source: Based on F. Luthans, R. M. Hodgetts, and S. A. Rosenkrantz,
Real Managers (Cambridge, MA: Ballinger, 1988).

1.8 Organizational Behaviour

Organisational Behaviour is that part of management which deals with
people. It develops behavioural theories about how and why people behave
in specific ways. Organizational behaviour is crucial in facilitating managers
in dealing with various organisational challenges and opportunities. It
studies the cause and effect of human behaviour, along with organisation
structure to meet individual and organisational goals.

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Notes “Organizational behaviour is a field of study that investigates the

impact that individuals, groups, and structure have on behaviours
within the organizations to apply such knowledge towards improving
an organization’s effectiveness.”- Stephen P Robbins.
The definition of OB suggests that it is a “field of study”, meaning it
is a distinct area with a common body of knowledge. Further, the field
of study investigates individuals or groups to apply this knowledge to
increase organizational effectiveness. The study focuses on the behaviour of
employees at the group, individual or organizational levels that impact the
performance of an organization. The study focuses on various interpersonal
skills that help to deal with employees effectively. Following are some
critical areas in OB-
‹ Motivation ‹ Group Dynamics ‹ Change process
‹ Leadership ‹ Conflict Manage- ‹ Interpersonal
ment communication
‹ Stress manage- ‹ Personality and Communication
ment Attitude
Organisational behaviour aims at making managers effective by-
‹ Describing behaviour: They describe how people behave in different
conditions.
‹ Understanding behaviour: They understand why people behave
differently in different situations.
‹ Predicting Behaviour: They predict behaviour of employees; whether
they contribute towards organisational goals or not.
‹ Controlling Behaviour: They control human behaviour at work
through team efforts, skill development, etc.

1.9 Major Disciplines that Contribute to the Domain of

Organizational Behaviour
OB is an applied behavioural science. It integrates knowledge from various
disciplines like psychology, social psychology, anthropology, sociology, etc.
Psychology: Psychology provides knowledge about factors that determine
human behaviour. It includes various sub-disciplines like clinical psychology,

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 ORGANIZATIONAL BEHAVIOUR

industrial psychology, etc. Psychology has contributed to understanding Notes

the individual behaviour of employees in an organization. Some key areas
in the domain of OB that are influenced by the knowledge of psychology
are motivation, perception, personality, work stress, employee happiness,
attitude, etc.
Sociology: Psychology deals with an individual’s behaviour whereas
sociology deals with the behaviour of a group. The domain of sociology
includes status, society, social groups, prestige, social behaviour, etc. Some
key areas in the domain of OB that are influenced by the knowledge of
sociology are formal and informal organization, group dynamics, etc.
Social Psychology: The blend of psychology and sociology is termed Social
Psychology. In simple words, it means the influence of group members
on individual members of the group. Some key areas in the domain of
OB that are influenced by the knowledge of social psychology are group
decision-making, change in attitude, behaviour, communication, etc.
Anthropology: Anthropology deals with the study of human culture.
It includes knowledge of various cultures and the impact of multiple
cultures on human behaviour. With globalization, workforce diversity
is inevitable, and employees from different cultures come together to
accomplish organizational goals. Therefore, it is essential to understand
the influence of culture on human behaviour. Some key areas in the
domain of OB that are influenced by the knowledge of anthropology are
cross-culture influences, values, etc.

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Notes

Figure 1.6: Major Disciplines that Contribute to the Domain of

Organizational Behaviour
Source: Robbins, S. P., Judge, T. A., & Vohra, N. (2019). Organizational
behaviour by Pearson 18e. Pearson Education India.

1.10 Level of Organizational Behaviour

There are three levels of analysis in organizational behaviour employee
behaviour can be analysed at three levels individual, group, and
organizational. The individual-level analysis is a micro-level analysis,
whereas the organizational-level analysis is a macro-level analysis. This
difference in the analysis is required because it has been observed that the
behaviour of employees is different when they work in groups compared
to when they work individually.

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Notes
1.10.1 Individual Level Analysis
Unlike static resources, humans as a resource differ from one another.
Organizations are made up of people, and every employee in an organization
is central to the study of OB. Individual-level analysis or micro-level analysis
helps in understanding individual differences. Integrating these individual
factors provides insights to a manager and facilitates an understanding
of human behaviour. Some factors that fall under this category could
be an input (like - personality, values, attitude, etc.) or a process (like
perception, learning, motivation of individual employees, etc.)

1.10.2 Group Level Analysis

Employees are expected to work in a group. Working in teams is essential
for surviving in a competitive environment. Individual employees perform
differently when they work in groups. The group-level analysis, also
known as meso-level analysis, it helps understand group dynamics. Areas
of interest in this category include group cohesiveness, teamwork, power,
politics, group dynamics, etc.

Ogranizational Level

Group Level

Individual
Level

Figure 1.7: Level of Analysis in Organizational Behaviour

1.10.3 Organization-Level Analysis

It is also known as macro-level analysis. Several groups/teams operate
within an organizational structure. They together form the culture. The

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Notes organizational level analysis consists of a study of culture, climate, cross-

culture analysis, etc., For example, it has been observed that employees
often resist change, and change is an inevitable process. OB helps deal
with resistance to change and facilitates a smooth change process.

IN-TEXT QUESTIONS
7. Level of organization could be broadly classified into __________
categories.
8. Individual level analysis is also known as micro level analysis.
(True/False)
9. Following title is not related to individual level analysis:
(a) Personality
(b) Attitude
(c) Values
(d) Culture
10. __________ is also known as meso level analysis.
11. Organization represents a set of arrangement by group of people
to accomplish __________.

1.11 Challenges and Opportunities in Organizational

Behaviour
Organizational behaviour has grown in importance as the work environment
has become more challenging, and the understanding of organisational
behaviour is being looked upon to provide solutions to the challenges.
The diversity in the workplace has increased, and now organizations
need more flexible employees. With technological advancement and
globalization, new employment opportunities have emerged, and managing
the workforce has become more challenging. The emerging gig economy
and use of artificial intelligence in all spheres of business are presenting
fresh challenges for managers. Following are emerging challenges where
the understanding of OB provides a solution to the manager.
Enabling Leaders to lead in a VUCA world: Leading in today’s VUCA
world (Volatile, Uncertain, Complex & Ambiguous) creates unprecedented
challenges that traditional leadership development fails to address. Leaders

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need to regain control of what they pay attention to and be capable of Notes
maintaining focus whilst experiencing feelings of fear, self-protection and,
uncertainty. By practising mindfulness, leaders can equip themselves with
the ability to feel calmer, be more present and develop clearer thinking
amidst these challenging external conditions.
Agility and Team Work: With the increasing need for organisations to
become more agile, teams are becoming the foundation of organisational
structure. Cisco, for example, already has more than 20,000 teams, with
people sitting on many teams simultaneously. Agile teaming as a work
practice requires agile minds, focusing more on “we and our priorities”
and less on “me and my priorities”. The pace of forming-to-performing
and team disbanding has now become a strategic advantage. As we
practice mindfulness, our default “all about me” thinking patterns become
less automatic and habitual, and we open up to more inclusive thinking.
Mindfulness also increases our cognitive flexibility, enabling us to think
about things in new ways, be that the new ways of working, new team
members, or a new project.
Responding to Globalization: Globalization refers to the integration
of various economies. Today businesses are no longer restricted to a
particular region. Companies have presence in multiple countries; for
example, Samsung a South Korean company has worldwide operations and
so does the Burger King Brazilian company. Companies hire employees
from other countries due to the cost of labour; like Apple Inc is an
American company, but most Apple employees are not from the US.
Even the production process is undertaken in a foreign land by some
companies like Honda cars are built in Ohio. The world has become a
“Global village”. Therefore, a manager needs to focus on global issues.
An expatriate manager must understand the cultural differences among
employees. Something that fits the culture of the homeland might not
work in other countries.
Managing Workforce Diversity: Workforce diversity means differences
and similarities between employees in terms of gender, ethnicity, race,
sexual orientation, age, value, etc. Organizations operating globally have
to deal with a diverse workforce. The heterogeneous workforce is essential
because it helps the organization understand the customer needs; it helps
in bringing innovative ideas to the organization and increases the morale

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Notes of other employees. But the diversified workforce is also a challenge for
management. It is difficult to resolve conflicts as people tend to stick to
their viewpoints which often centre around their values, belief, religion,
or ethnicity.
Improving customer service: Employees in front roles (directly dealing
with customers) play an essential role in ensuring customer satisfaction.
In addition, customer satisfaction plays a vital role in a competitive
environment. Therefore, there is a need for a “customer-responsive”
culture in an organization. Organizational behaviour helps managers bring
such a culture into the organization by working on employees’ attitudes
and behaviour.
Working in Networked Organization: Network organizations allow
employees to work together even when they are far away from each
other in terms of distance. Worldwide lockdown around 2020 due to the
pandemic (Covid-19), forced most organizations to move to the virtual
platform. Even today in 2023, many businesses are still working through
virtual platforms or have permanently adopted a hybrid mode. Managing
such an organization needs different set of skills. Virtually collaborating
and coordinating with employees is an emerging challenge for managers.
Helping Employees in Work-life Balance: Employees today find it
challenging to create a balance between their work and life. Long working
hours are one of the main reasons for work-life conflict. Today, employees
from all over the world are virtually connecting through online platforms.
It may be daytime for one employee and night for another employee.
So, the world never sleeps. Work is endless, and there is no specific
working time. Such conditions of present-day work lead to work-life
conflict. It can increase burnout and stress among employees and, could
drop productivity.
Creating a Positive Work Environment: The new wave of positivity
within the organization led to the growth of a new concept of positive
organizational behaviour (POB), a study that focuses on the strength of
employees. The earlier focus of managers was to work on the weakness
of the employees or correct what is wrong, but the field of POB suggests
that the focus needs to be deviation from what is wrong to what is right.
Therefore, a manager today needs to learn how to get the best from the
strengths of the employees.

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Improving Ethical Behaviour: It is not that employees always want to Notes

do something considered wrong on moral grounds for their benefit or that
they are not aware of what is right or ethical. It is just that people at
work face Moral Distress, i.e., they mostly know what is right, but due
to the limitations and fear of adverse outcomes, they fail to do the right
thing. There is no clear line between what is right and wrong. Still, a
manager needs to create an “ethically- healthy climate”, which minimizes
the vagueness between right and wrong behaviours. It is important to
promote integrity in the organization at all levels.
Economic Pressure: Managing employees in bad times, like Covid-19, is
more challenging than managing employees in good times. The Covid-19
pandemic besides impacting health conditions pushed organizations to
cost-cut. Therefore, COVID-19 brought about a sudden change in the
business environment and presented unprecedented challenges to most
businesses and their management. Under good economic conditions,
managers work on employee motivation through rewards, but under bad
economic conditions, managers need to deal with the growing stress
conditions at the workplace.
The above challenges provide various opportunities to present-day managers.
For instance, workforce diversity brings new ideas to the organization
but also leads to increased conflicts. Therefore, a manager must learn
how to convert these challenges into opportunities.
IN-TEXT QUESTIONS
12. To coordinate with employee’s manager needs ________ skills.
13. Role of manager is changing and becoming more challenging
due to the technological advancements. (True/False)
14. ________ suggests that the focus needs to be a deviation from
what is wrong to what is right.
15. A manager needs ________ to analyse complex nature problem.

1.12 Managerial Implication

The following are the implications for the managers-
1. Human behaviour is complex, and it is challenging to generalize
human behaviour. Though some provide insights for understanding
and generalizing human behaviour, most of them are erroneous.
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Notes 2. Managers often try to use intuition/idea/or feeling while explaining

cause-and-effect relationships. But sometimes feelings lead to
incorrect decisions. Therefore, it is important to use metrics and
rely on facts.
3. Managers should learn interpersonal skills. In a managerial role, soft
skills like empathy, communication, leadership skills, etc., are more
important than technical skills.
4. Work environment is changing continuously. Hence managers need
to upgrade their technical and conceptual skills. They must also
update themselves with the new OB trends like Big Data.
5. Concepts of OB provide various insights that help a manager resolve
conflicts, improve work-life balance, reduce stress, etc.

1.13 Summary
The lesson aims to highlight the meaning of organizational behaviour,
the need for interpersonal skills, and managerial functions and roles. The
present-day managerial roles have changed with technological advancement,
globalization, organizational structures, and changing employee lifestyles. A
manager needs to learn how to convert these challenges into opportunities.
Additionally, with increasing complexity in an organization, the skills
required by a manager also vary. The domain of organizational behaviour
integrates the knowledge drawn from various disciplines like psychology,
social psychology, anthropology, and sociology. It helps in understanding
people’s behaviour at individual, group, and organisational level and
applies knowledge that enhances organizational effectiveness.

1.14 Answers to In-Text Questions

1. Minimum Resources
2. Henry Fayol
3. Effectiveness
4. Spokesperson (or Informational role of manager)
5. Figurehead
6. Planning Stage

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7. Three Notes
8. True
9. (d) Culture
10. Group-level analysis
11. Purpose/goal (Both are correct)
12. Human skills
13. True
14. Positive Organisation Behaviour
15. Conceptual Skills

1.15 Self-Assessment Questions

1. Assume you are a bank manager. As per Mintzberg’s theory, what
roles do you think you will be required to play as a manager?
(BMS; Open book exam)
2. An effective manager may not be an efficient manager. Comment.
Explain the skills required by a manager to become successful.
3. Write short note on the functions of a manager. State how functions
of management are different from managerial roles.
4. Explain various challenges faced by present-day managers. Elaborate
on how the role of manager is changing with time.
5. “Management is a universal concept”. Do you agree? Comment.

1.16 References
‹ Robbins, S. P., & Coulter, M. (2017). Management 13E. Noida, India:
Pearson India.
‹ Robbins, S. P., Judge, T. A., & Vohra, N. (2019). Organizational
behaviour by Pearson 18e. Pearson Education India. (Chapter 1)
‹ Pistrui, J., & Dimov, D. (2018). The role of a manager has to change
in 5 key ways. Harvard Business Review.
‹ F. Luthans, R. M. Hodgetts, and S. A. Rosenkrantz, Real Managers
(Cambridge, MA: Ballinger, 1988).

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Notes ‹ Bartol, K. M., & Martin, D. C. (1994). Management (International

2nd ed.). New York: McGraw-Hill.

1.17 Suggested Readings

‹ Robbins, S. P., Judge, T. A., & Vohra, N. (2019). Organizational
behaviour by Pearson 18e. Pearson Education India.
‹ Kaul, V. (2011). Business Organization and Management: Text and
Cases. Pearson Education India.

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L E S S O N

2
Personality and Learning
Dr. Anupreet Kaur Mokha
Assistant Professor
SGTB Khalsa College
University of Delhi
Email-Id: [email protected]

STRUCTURE
2.1 Learning Objectives
2.2 Introduction
2.3 Personality
2.4 Learning
2.5 Summary
2.6 Answers to In-Text Questions
2.7 Self-Assessment Questions
2.8 References
2.9 Suggested Readings

2.1 Learning Objectives

After this lesson, you will be able to:
‹ Understand the concept of personality and the various factors that determine personality.
‹ Identify various types and theories of personality.
‹ Comprehend how personality develops from its infancy to maturity.
‹ Examine how personality traits influence organizational behaviour.
‹ Understand the concept of learning.
‹ Explain various theories of learning.

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Notes 2.2 Introduction

One of the crucial psychological components that affect an individual’s
behaviour is personality. Personality is the role that an individual performs
in public. The personality of an individual is distinct, personal and a major
determinant of his/her behaviour. Another important aspect is learning.
Learning is a fundamental psychological process that influences human
behaviour. The learning process impacts all human behaviours, either
directly or indirectly. Learning may be defined as the acquisition of new
behaviour in an interactional context. Hence, it is important to understand
the concept of personality and learning in shaping individuals’ behaviour.
This lesson is broadly divided into two parts – personality and learning.
The lesson on personality briefly discusses the concept and various factors
that determine personality. Then, various types and theories of personality
are identified and explained. The lesson also explores the development of
personality and examines how personality traits influence organizational
behaviour. The lesson also offers ways of measuring personality. The
next part of the lesson discusses the concept of learning. Consequently,
the lesson delineates various learning theories that are important in
organizational behaviour.
This lesson will help the learners to understand various traits and theories
of personality as well as theories of learning and also understand their
significant impact on organizational behaviour. This will assist them in
shaping their behaviour in real-life situations.

2.3 Personality

2.3.1 Concept of Personality

The English term “personality” has been originated from the Latin word
“persona,” which means “to speak through.” Originally, the Latin term
refers to the masks used by the actors. Personality may be defined as
the sum total of an individual’s reactions and interactions with others.
As a result, personality is the role that an individual performs in public.
Personality does not just refer to a person’s charm, appearance, smiling face,
and attitude toward life. However, it is a dynamic notion that represents

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the evolution and development of an individual’s entire psychological Notes

system. Traditionally, the idea of personality pertains to how individuals
affect others through their outer appearances and conduct. Therefore,
personality is a reasonably consistent set of characteristics that impact an
individual’s behaviour. Personality was interpreted differently by different
psychologists. Let us explore some definitions of personality that will
assist us in understanding personality in a much better sense.
According to Hilgard et al., personality is defined as “the characteristic
patterns of behaviour and modes of thinking that determine a person’s
adjustment to the environment”.
In the words of Gordon Allport, personality is defined as “the dynamic
organization within the individual of those psychological systems that
determine his unique adjustment to his environment”.
Fred Luthans has defined personality as “how a person affects others
and how he understands and views himself as well as pattern of inner
and outer measurable traits and the person-situation interaction.”
As per Floyd L. Ruch, “Personality includes external appearance and
behaviour, inner awareness of self as a permanent organizing force and
the particular pattern or organization of measurable traits, both inner
and outer”.
Thus, it is understood from the above definitions that the meaning of
personality is considerably more than just the part that an individual
performs in public. Integrating all of these definitions, one may say that
personality is the sum of various characteristics that are evident in an
individual and define his/her behaviour pattern.

2.3.2 Determinants of Personality

In this section, we shall try to understand what determines the personality
of an individual. Is an individual’s personality predetermined from birth
itself or is it the consequence of how they interact with their environment?
However, frankly speaking, there is no clear-cut answer to this question.
It is said that an individual is born with certain mental and physical
characteristics, but the personality is shaped by the environment in which
the person has been raised. Numerous factors determine personality which
is broadly characterized by four factors namely biological factors, family

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Notes and social factors, situational factors and environmental factors (Figure
2.1). Let us discuss them one by one.
Biological Factors
Biological factors are those factors that are related to the human body. It
includes three factors – Heredity, Physical attributes, and Human Brain.
(a) Heredity refers to the characteristics of an individual’s personality
that are passed down from parents to their children that are decided at
the time of conception. Physical stature, hair colour, facial attractiveness,
eye colour, temperament, sex, reflexes and energy level are examples of
heredity characteristics that are often inherited totally or partially from the
parents; (b) Physical attributes such as height, colour, facial attractiveness,
physical strength, etc., influences personality, and (c) Brain’s composition
and structure also have a significant impact on one’s personality.
Environmental Factors
Environmental factors are those factors that exist within and around an
individual. Culture creates rules, attitudes and values that are imposed
by various social groups. Individuals are obliged to adapt to the culture
that society has built. Every culture has its sub-cultures that further
specify success criteria, moral standards, appropriate style of dress, and
hygiene standards. These cultural subgroups have a large influence on an
individual’s personality development. For example, a girl born and raised
in a rich family in an urban region will act differently than a girl born
and raised in a poor family in a slum area. Thus, culture has a stronger
impact on an individual’s personality.
Family and Social Factors
Family and social factors have a vital role in developing an individual’s
personality. Personality is influenced by three key factors – Socialization,
Identification, and Birth Order. (a) Socialization refers to the process by
which a newborn acquires a wide variety of behaviour from the extremely
vast range of behavioural potentialities that are available to him at birth.
Those patterns of behaviour are considered acceptable and normal by his
family and social groups. (b) Identification process happens when a person
attempts to identify himself/herself with someone in the family who is
considered ideal. Normally, a child emulates his/her father or mother, and
(c) Another important factor determining an individual’s personality is

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birth order. For instance, firstborn children are more likely to be reliant, Notes
logical, ambitious, cooperative, diligent and less aggressive, as well as
more prone to anxiety and guilt.
Situational Factors
Situational factors have a significant impact on personality. In general, an
individual’s personality is constant and stable, yet it fluctuates depending
on the situation. Life is typically described as a series of experiences.
Every person goes through many situations in one’s life that have a
significant impact on the personality development. It sometimes boosts an
individual’s behaviour and sometimes exercises restrictions. For example,
a coward and a physically frail person might occasionally act bravely to
save the life of the close one.
Biological
Factors
Determinants of

Environmental
Personality

Factors
Family and
Social Factors
Situational
Factors
Figure 2.1: Determinants of Personality

2.3.3 Development of Personality

Two most prominent psychologists described the development of personality
namely Sigmund Freud and Erikson. Let us discuss them one by one.
Sigmund Freud’s Stages of Personality Development
Sigmund Freud proposed five universal stages of personality development
namely oral, anal, phallic, latency and genital. These stages are explained
below (Figure 2.2):

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Notes ‹ The Oral Stage (first year): During this stage, the child’s mouth
is the most sensitive area of the body and the primary source of
pleasure and joy. For instance, an infant’s thumb sucking or biting
when teeth erupt.
‹ The Anal Stage (one to three years): In this stage, the energy
transfers from the mouth to the anal area. Toilet training provided
by the parents to the child will have an impact on the child’s
adulthood.
‹ The Phallic Stage (three to six years): In this stage, the focus on
sexual enjoyment moves to the sex organs. During this time, children
found themselves inspecting and fondling with their genital organs.
‹ The Latency Stage (until puberty): At this stage, the child lacks
interest in sexual things. It is a stage of social development during
which the child gains information and abilities for interacting with
the outside world.
‹ The Genital Stage (Puberty to Adulthood): In this stage, there
is again the desire for sexual enjoyment as well as an enhanced
awareness of a desire for the opposite sex.

Genital
Latency
Phallic
Anal
Oral

Figure 2.2: Sigmund Freud’s Stages of Personality Development

Erikson’s Stages of Personality Development
Erikson criticized Freud’s emphasis on biological and social factors in
the development of personality. He believed that social concerns should
be given more consideration. Erikson established eight stages of life that
reflect a person’s continuous development. He described each stage by a
specific conflict that must be successfully resolved before moving on to
the next. These eight stages (Figure 2.3) are explained below:

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Notes

Figure 2.3: Erikson’s Stages of Personality Development

‹ Infancy (first year): In this stage, a child resolves the fundamental
problem of trust vs. mistrust. An infant who receives love and care
develops a sense of trust for other people whereas mistrust develops
from a lack of love and care. This period has a significant impact
on a child’s future events.
‹ Early Childhood (second and third year): At this stage, a sense
of autonomy will emerge if the child is permitted to govern those
parts of life that the child is capable of controlling. If the child often
faces rejection from adults, a sense of self-doubt and humiliation
is likely to emerge.
‹ Play Age (fourth and fifth year): At this stage, a child will acquire
a feeling of initiative if encouraged to try and attain appropriate
goals. If the child is controlled and made to feel incompetent, he
will develop remorse and a lack of self-confidence.
‹ School Age (between sixth and twelfth year): At this stage, a child
learns numerous new skills and develops social talents. A child will
acquire a sense of enterprise if he/she is able to acquire appropriate
skills and abilities whereas, in the opposite scenario, a child will
acquire a sense of inferiority.
‹ Adolescence (till nineteenth): The adolescent is simultaneously
attempting to identify himself or herself as socially distinct from
the parents.
‹ Early adulthood (twenties): The young adult in his or her twenties
faces the conflict of intimacy against isolation. The feeling of
identity acquired throughout the adolescent years permits the young
adult to build meaningful relationships.
‹ Adulthood: During this stage, adults must choose between generativity
and self-absorption. The generative individual perceives the world

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Notes as much larger than themselves and for them, workplace productivity
and societal growth become vital, whereas, self-absorbed individual
never learns to see beyond themselves and focus on maintaining
and advancing their careers.
‹ Mature Adulthood: In this stage, an individual is developed as a
mature individual (sense of wisdom or despair). He has gathered
enough knowledge and perspective for leading future generations.

2.3.4 Types of Personality

There are numerous personalities that differ in traits. Guilford (1959)
defined trait as “any distinguishable, relatively enduring way in which
one individual differs from another”. Personality qualities help people
understand their personality types. The personality types have been
discussed below:
Type A and Type B Personalities
Individuals are termed as Type A personalities who are impatient, highly
competitive and aggressive whereas Type B personality individuals are
easy going, non-competitive and laid-back. Type A individuals are likely
to be very productive as they work hard, however, they are more irritable,
not good team players, impatient and have poor judgment, whereas Type
B individuals perform better on complex tasks involving accuracy and
judgment rather than hard work and speed.
The Big Five Personality Model
The Big Five Personality Model identifies five essential personality
dimensions namely conscientiousness, emotional stability, extraversion,
agreeableness, and openness to experience. These factors are discussed
below:
‹ Conscientiousness: A person who is more trustworthy, reliable,
systematic, achievement-oriented and organized.
‹ Emotional Stability: A person who is usually calm, secure and self-
assured.
‹ Agreeableness: A person who is compassionate and cooperative.
‹ Extraversion: A person who is more talkative, friendly, social and
self-assured.

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‹ Openness to Experience: A person who is incredibly creative and Notes

is constantly open to new ideas.
Introversion and Extroversion
These terms are usually associated with the sociability and interpersonal
orientation of an individual. While extroverts are more gregarious, introverts
are more self-assured and driven by their own distinct thoughts. Extroverts
are reality-oriented, sociable individuals and are performers. Introverts,
on the other hand, are less risk-taking and more directive. They need
strong encouragement and clear instructions. While extroverts think in
terms of interactive and objective interactions, introverts think in terms
of their own philosophy and belief.
The Myers-Briggs Type Indicator (MBTI)
The MBTI is a personality assessment instrument that is widely used
across the world. This instrument consists of 100 statements on human
personality and asks individuals how they generally feel in specific
scenarios. Based on the responses provided by the individuals, they are
categorized as:
‹ Thinking vs. Feeling (T or F): Thinking individuals are more logical
and sensible in general whereas; feeling types of individuals often
base their decisions on their own morals and feelings.
‹ Extraverted vs. Introverted (E or I): Extraverted individuals are
outgoing, friendly, and self-assured, whereas introverted people are
calm and reserved.
‹ Judging vs. Perceiving (J or P): Judging personalities appreciate
order and organization in their surroundings and seek control,
whereas perceiving personalities are more adaptable and impulsive.
‹ Sensing vs. Intuitive (S or I): Sensing individuals are highly practical
and tend to stick to routines and orders. In contrast, intuitive
individuals are not practical and typically rely on unconscious
processes.
The individuals are categorized into 16 different personality types based on
the higher and lower scores in each of these characteristics. For instance,
Introverted/ Intuitive/ Thinking/ Judging (IITJ) persons are self-sufficient,
driven, excellent creative thinkers, and have a strong desire to pursue their
own ideas whereas, Extraverted/Sensing/Thinking/Judging (ESTJ) people

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Notes are effective organizers and decision makers because they are logical,
reasonable, and analytical. As a result, it can be stated that MBTI is a
highly effective instrument that is frequently used for employee selection,
enhancing self-awareness, and offering career direction.
IN-TEXT QUESTIONS
1. Height, colour, facial attractiveness, physical strength, etc., are
examples of which factor of personality?
(a) Biological
(b) Environmental
(c) Situational
(d) Social
2. When a person attempts to identify himself with someone in
the family who he considers ideal it is known as:
(a) Birth order
(b) Physical Attributes
(c) Identification
(d) Socialization
3. Which dimension of the Big Five Personality Model defines a
person who is usually calm, secure and self-assured?
(a) Conscientiousness
(b) Extraversion
(c) Emotional Stability
(d) Agreeableness
4. ________ individuals are highly practical and tend to stick to
routines and orders.
(a) Extraverted
(b) Sensing
(c) Thinking
(d) Feeling

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5. ________ are more self-assured and driven by their own distinct Notes
thoughts.
(a) Extraverts
(b) Introverts
(c) Judging
(d) Perceiving

2.3.5 Theories of Personality

There are so many definitions of personality and theories of personality.
But there is no consensus among the theorists regarding personality
theories. The most prominent personality theories among others are trait,
self-concept, psychoanalytic and socio-psychological theories. Let us
discuss them one by one.
Trait Theory
According to trait theory, an individual is made up of a set of traits. These
traits are identifiable and often long-lasting qualities of an individual that
set him apart from others. Furthermore, the traits remain constant over
time there are two main trait theories namely:
‹ Allport Trait Theory: This theory was proposed by Gordon Allport.
According to him, an individual’s personality may be examined by
distinguishing between common traits and personal dispositions. The
common traits are used to compare people based on six values i.e.
religious, economic, social, political, theoretical and aesthetic. Apart
from common traits, there are personal dispositions that are distinct
such as selflessness, friendliness, loyalty, kindness, agreeableness,
etc.
‹ Cattell’s Trait Theory: Raymond Cattell developed this trait theory.
According to him, a vast number of factors should be investigated
to have a good understanding of an individual’s personality. He
identified 16 key personality factors (Table 2.1).

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Notes Table 2.1: Cattell’s 16 Key Personality Traits

Traits
Abstractedness Imaginative vs. Practical
Apprehension Worried vs. Confident
Dominance Forceful vs. Submissive
Emotional Stability Calm vs. Anxious
Liveliness Spontaneous vs. Restrained
Openness to Change Flexible vs. Stubborn
Perfectionism Controlled vs. Undisciplined
Privateness Discreet vs. Open
Reasoning Abstract vs. Concrete
Rule-Consciousness Conforming vs. Non-Conforming
Self-Reliance Self-sufficient vs. Dependent
Sensitivity Tender vs. Tough
Social Boldness Uninhibited vs. Shy
Tension Impatient vs. Relaxed
Vigilance Suspicious vs. Trusting
Warmth Outgoing vs. Reserved
Self-Concept Theory
Carl Rogers has made substantial contributions to the self-concept theory.
The self-concept theory is described as a theory that talks about “I or
Me”. This theory focuses on an individual’s set of perceptions about
himself, as well as the perceptions of his interactions with others and
other areas of life. There are four factors included in self-concept theory:
(a) self-image (refers to as “what an individual perceives about himself”),
(b) ideal-self (refers to the “way an individual would like to be”), (c)
looking glass-self (refers to “an individual’s impression of how others
see his attributes or feel about him”), and (d) real-self (refers to “what
others show you in terms of your self-image”).
Psychoanalytic Theory
The psychoanalytic theory is yet another personality theory that is based
on the notion that an individual is more driven by unseen forces that are
influenced by conscious and logical thinking. There are three elements
included in psychoanalytic theory-Id, super-ego and ego. (a) Id is the
unconscious component of the mind that acts instantly and without

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giving any consideration to what is right and wrong, (b) Super-Ego is Notes
associated with the social or moral norms that an individual instills as he
gets older, and (c) Ego is the rational and conscious aspect of the mind
that is linked to the reality principle.
Socio-Psychological Theory
According to the socio-psychological theory, the person and society
are closely linked. This indicates that an individual seeks to satisfy the
demands of society and society assists him in accomplishing his goals.
An individual’s personality is formed as a result of this interaction.
Hence, the socio-psychological theory is a mix of social (family, religion,
society, money) and psychological (ideas, feelings, beliefs) factors that
are regarded to have a significant impact in determining an individual’s
personality.

2.3.6 Personality Assessment

There are numerous ways through which one can assess the personality
of individuals. Depending on the goal of the personality assessment, the
usage of assessment methods for understanding personality may change
from time to time and from circumstance to circumstance. The three most
significant ways that are extensively employed are assessment center,
personality inventories and projective tests. A brief discussion of each
is as follows:
Assessment Centre
An assessment center is a tool that is used to examine personality. The
primary goal of this approach was to evaluate applicants in a social setting.
Situational tests, management difficulties, business plan presentations,
in-basket exercises, scenario-based decision-making exercises and other
simulated activities are used to evaluate personality. Individuals are
required to take part in these activities. Multiple trained assessors, who
might be from inside or outside the business, monitor the applicants’
behaviour and grade them based on specified aspects considered significant
in their job. A job analysis is used to discover the critical aspects of a
job. Each assessor creates an evaluation report for each applicant in the
assessment exercises. Finally, all of the reports are combined to create the
employee’s profile. This approach is beneficial for both the organization

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Notes as well as employees. Organizations gather enough information about their

employees to determine their strengths and weaknesses which assists them
in planning the selection, training, career paths and promotions of their
employees. On the other hand, employees gather favourable impressions
about their jobs, chances of promotions and long-term loyalty to the
organization. Many Indian companies, including Hindustan Lever, Modi
Xerox, Crompton Greaves, Eicher, etc., have embraced this approach
of assessment. This approach, however, is not without limitations. One
is that many stimulating approaches could not accurately represent the
circumstance, and as a result, the applicant might not act genuinely.
Second, even if the employee will be evaluated by many assessors, the
halo effect in terms of personal abilities may affect the assessment.
Personality Inventories (Objective Tests)
Personality inventories (often known as objective tests) are the most
widely used method of measuring personality. They are standardized and
can be administered to a large group of people at the same time. It is a
questionnaire-based way of assessing personality that asks an individual
to express reactions or feelings in certain scenarios. Individuals are asked
to indicate their level of agreement or disagreement with each statement.
Sometimes even a simple yes or no answer pattern is required. However,
these replies are considered to have drawbacks such as faking a positive
reaction. This highlights the importance of taking corrective actions to
avoid and manage these drawbacks in order to generate a more and more
trustworthy personal inventory. One method is to ask both positive and
negative statements about the same aspects of personality, as well as to
reverse the degree of agreement or disagreement values. The most popular
personality inventories is the ‘Locus of Control’ developed by J. B. Rotter.
As per Rotter, locus of control is a method of personality assessment
that examines an individual’s internal and external orientation, as well
as his or her attitude toward control. On the basis of this, individuals are
usually categorized into two extremes i.e. internal and external locus of
control. People with an “internal locus of control” are those who think
they have total control over their destiny and luck, whereas, people with
an “external locus of control” are those who feel that what occurs to them
is completely at the mercy of forces outside their control. The locus of
control influences the individual’s behaviour and performance.

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Projective Tests Notes

Projective tests, as opposed to the inventory method of personality
measurement, are primarily used to determine the more subtle characteristics
of personality. As a result, these tests are predicated on the underlying
fundamental beliefs that an individual’s personality may be judged by
assessing some of his or her dormant feelings, ambitions, aspirations,
and hopes. Numerous projective tests for assessing personality have been
developed over time. Projective tests include the Inkblot Test, Sentence
Completion Test, Thematic Appreciation Test (TAT), Picture Frustration
Test and World Association Test. Among them, the most extensively used
projective test to measure personality is the Inkblot test, popularly known
as the Rorschach test, devised by the Swiss psychiatrist named Herman
Rorschach. In the Inkblot test, Rorschach employed ten ambiguous and
unstructured images termed inkblots, with one-half identical to the other.
The individuals are then shown these inkblots/images and asked to describe
what they perceive in the inkblots/images. The interpretations of these
inkblots/images represent their sentiments or feelings, which serve as the
foundation for their personality assessment. Whereas, Morgan and Murrary
devised the Thematic Appreciation Test (TAT) projective test, which is
also used to measure an individual’s personality. It is made up of twenty
images that depict various societal situations. Unlike the Rorschach test,
these images depict a more precise picture of a situation. Individuals are
then asked to compose a story about what may be happening in such a
social context.

2.3.7 Personality Traits Influencing Organizational Behaviour

By now, you have learned numerous personality types and theories that
help to determine one’s personality. The personality traits of employees
are used to analyze their behaviour and to build appropriate tactics to cope
with their behaviour. Some of the most important personality attributes
that impact organizational behaviour are:
Locus of Control
The belief about the results of their actions is termed the locus of control.
Some people feel that their talents and abilities have an impact on the
result of an activity. Others think that external factors such as fate or

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Notes chance impact their outcome. Individuals who feel they have control over
what happens to them are termed internals, whereas those who believe it
is governed by other forces such as luck or chance are called externals.
Internals are typically more satisfied with their jobs and are more active
in seeking out information to make decisions than externals. Externals
are more likely to be absent from their work, less satisfied and less
committed to their jobs than internals.
Machiavellianism
The term Machiavellianism is named after the works of Nicolo Machiavelli.
Machiavellianism refers to an individual’s tendency to manipulate others
in order to gain and achieve power. Such people are more inclined to
be active in organizational politics. Those individuals who exhibit this
attribute with greater intensity are known as high Machs.
High Machs are more realistic, emotionally stable, and willing to use
any means to attain their goals. They manipulate more and generally win
more. They are more likely to succeed in an environment with few rules
and restrictions and are more self-assured and have higher self-esteem.
They perform well in jobs that are more rewarding or that demands
bargaining skills.
Self-Esteem
A sense of liking or disliking oneself is referred to as self-esteem. A person
with a strong drive for achievement is said to have high self-esteem. He
feels he has the necessary skills to succeed in his work.
People who have high self-esteem are risk-takers. They like dangerous
and difficult tasks. They have an internal locus of control. They value
pride, flair, recognition, achievement, and independence and are fulfilled
with higher-order requirements over simple monetary motivation. People
with low self-esteem, on the other hand, are impacted by external factors.
They value and appreciate other individuals’ perspectives more. They do
not wish to be in an uncomfortable situation. As a result, they strive to
please.
Self-Monitoring
Self-monitoring is the capacity to adjust to the demands of the situation.
Individuals with a high self-monitoring score closely examine the behaviour
of others to change their own behaviour. They value professional mobility.

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They are more effective at performing opposing roles. These individuals Notes
can wear a mask that is more appropriate to the situation. As a result,
highly self-monitoring persons exhibit a high degree of behavioural
inconsistency.
Therefore, the self-monitoring attribute assists managers in understanding
their subordinates’ personalities and behaviours to guide, motivate,
communicate and control them on the job.
Risk Taking
People’s attitudes toward taking risks vary. The willingness to accept
risks impacts decision-making. Risk-takers are more inclined to make
quick decisions. Taking risks is also linked to job demands.
High risk-taking is more prevalent in some nationalities, religions and
gender groups. Risk-taking behavior in organizations is connected to
employees’ capacity to take up difficult jobs and possess a high level of
achievement motivation.

IN-TEXT QUESTIONS
. 6. Which theory is based on the notion of “I or Me” perception?
(a) Psychoanalytic Theory
(b) Self-Concept Theory
(c) Socio-Psychological Theory
(d) Trait Theory
7. Which element of mind in Psychoanalytic theory is conscious
of the realities of the external world?
(a) Id
(b) Ego
(c) Super Ego
(d) None of the above
8. Individuals who feel that they have control over what happens
to them are termed as:
(a) Internal Locus of Control
(b) Machiavellianism
(c) External Locus of Control
(d) Self-Esteem

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Notes 9. ________ refers to an individual’s tendency to manipulate others

in order to gain and achieve power.
(a) Machiavellianism
(b) Locus of Control
(c) Self-Esteem
(d) Self-Monitoring
10. Picture frustration tests is an example of ________.
(a) Projective Tests
(b) Personality Inventories
(c) Assessment Centre
(d) Regressive Tests

2.4 Learning

2.4.1 Concept of Learning

Learning is the transformation of one’s behaviour as a result of education,
training, practice and experience. It is accompanied by the accumulation
of relatively permanent knowledge, skills, and experience. The following
definitions will help you better understand the notion of learning:
E. R. Hilgard defined learning as “a relatively permanent change in
behaviour that occurs as a result of prior experience.”
According to W. McGehee, “learning has taken place if an individual
behaves, reacts responds as a result of an experience in a manner different
from the way he formerly behaved”.
Learning entails change, which can be positive or negative from the
perspective of organizations. Changes cannot always be attributed to
learning. Learning is the process through which an individual’s behaviour
changes in a relatively permanent way. Learning cannot be associated
with any temporary change. Individuals’ behaviour should reflect their
learning. Learning does not occur when a person’s beliefs, opinions, or
perceptions change without corresponding changes in their behaviour.

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2.4.2 Concept of Learning Notes

To explain the phenomena of learning, several theories and models of

learning have been developed. There are four theories that describe how
individuals acquire new behavioural patterns. These theories can be
categorized as:
‹ Classical Conditioning
‹ Operant Conditioning
‹ Cognitive Learning
‹ Social Behaviour
The following theories and their implications for enhancing an individual’s
learning and behaviour are discussed below:
Classical Conditioning
Classical conditioning is defined as the connection of one event with
another desired occurrence resulting in a desired behaviour or learning. It
is a type of conditioning wherein an individual responds to some stimulus
that would normally induce such a response. Famous Russian psychologist
Ivan Pavlov conducted the experiment on classical conditioning that has
received the greatest attention. Pavlov aimed to create a stimulus-response
relationship in a study with dogs. Pavlov was awarded the Nobel Prize
for his work in this area. Pavlov attempted to link dog salivation with the
ringing of a bell in his experiment on dogs. Using a surgical technique,
the quantity of saliva secreted by the dog was assessed. Initially, Pavlov
showed the dog a piece of meat as part of the experiment and he observed
a great deal of salivation. He termed the food an unconditional stimulus
and the salivation an unconditional response. So, when the dog saw the
meat, it salivated.
During the second stage, Pavlov withheld the meat and instead rang a bell
(neutral stimulus) in front of a dog. The dog did not salivate. In other
words, there was no response. In the following stage of the experiment,
he began ringing the bell when the meat was provided to the dog. In
doing so, he connected meat with the ringing of the bell. Thus, a link
between two stimuli i.e. meat and the bell was created. He repeated this
method for some time. After some time, he discovered that even without
the presence of meat, the ringing of the bell stimulated the saliva of the

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Notes dog. As a result, the bell became a conditioned stimulus, leading to a

learned or conditioned response. Thorndike termed this as the “law of
exercise” which states that behaviour can be learned through a repetitive
relationship between a stimulus and a response. Therefore, under classical
conditioning, learning is a conditioned response that involves creating a
relationship between a conditioned stimulus and an unconditioned stimulus.
Operant Conditioning
According to the theory of operant conditioning, behaviour is a result
of its consequences. B. F. Skinner, who practiced operant conditioning
theory, claimed that individuals emit rewarded behaviours and do not
emit non-rewarded or punished behaviours. The term ‘operant’ describes
the link between behaviour and consequences as a learning process that
develops over time in which a person alters his behaviour based on his
favorable or unfavourable outcomes.
Operant conditioning is defined as voluntary or learned behaviour that is
determined, sustained, and directed by its consequences. The behaviour is
more likely to be repeated when the results are positive and less likely to
be repeated when the results are negative. As a result, the link between
behaviour and its consequences is essential to operant conditioning. It is
a powerful tool for managing people in organizations. Management can
successfully employ the process of operant conditioning to control and
influence the employee’s behaviour by manipulating the reward system. If
a manager seeks to impact behaviour, he must also be able to influence
the consequences. Therefore, it can be concluded that the rate of responses
increases when the behavioural responses are rewarded whereas the rate
of responses decreases when the behavioural responses are aversive.
Cognitive Learning
The theory of cognitive learning relates to an individual’s knowledge,
ideas and understandings concerning himself and his surroundings. This
theory holds that individuals acquire the meaning of numerous objects
and events, as well as learned behaviours based on the meaning attributed
to the stimulus. A cognitive structure is established in an individual’s
memory that maintains and organizes knowledge about numerous events
that occurred throughout the learning process. Whenever the individual
encounters a circumstance or an event, he evaluates it against his memory

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to identify the best course of action. As a result, an individual’s action Notes

is determined by the cognitive structure recalled from memory.
Edward Tolman is considered the father of the cognitive theory of learning.
Tolman created this idea through carefully controlled experiments. He
carried out a scientific experiment on rats. He demonstrated how rats
learned to navigate a complicated maze in order to get to their target
of getting food. Rats formed expectations at every decision point in the
maze. As a result, individuals learned to anticipate that particular cognitive
clues associated with the choosing point would eventually lead to the
food. Finally, learning occurred when the association between cues and
expectancy was reinforced since cues led to predicted objectives.
Cognitive theory is not the same as classical conditioning (Stimulus
ĺ 5HVSRQVH OHDUQLQJ  DQG RSHUDQW FRQGLWLRQLQJ 5HVSRQVH ĺ 6WLPXOXV
learning) as they argue that learning is a function of the stimulus-
response connection while ignoring the involvement of the individual in
the learning process. As per Tolman, cognitive learning could be termed
DV 6WLPXOXV ĺ 6WLPXOXV OHDUQLQJ i.e. one stimulus leads to another. The
cognitive theory acknowledges an individual’s responsibility in receiving,
memorizing, recalling, interpreting, and reacting to stimuli. Now-a-days,
the cognitive approach to learning is quite important, and in organizational
behaviour, it is mostly applied to the theories of motivation. Attributions,
goal setting, locus of control and expectations are all cognitive concepts
and signify the purpose of organizational behaviour.
Social Behaviour
Bandura’s Modelling Theory is a well-known social learning theory.
The social learning theory emphasizes the necessity of observing and
modelling other individuals’ attitudes, behaviours, and emotional reactions.
According to the theory, most of what we learn comes from observing
and mimicking our role models, such as parents, teachers, classmates, or
celebrities. Social behaviour is learning attained through the reciprocal
connections between people, behaviour and their surroundings. The theory
believes that learning is a mix of both environmental determinism (i.e.
classical and operant conditioning views) and individual determinism
(i.e. cognitive theory). The impact of the role model serves as the focal
point of learning in observational learning. According to this theory, four
processes define a role model’s impact on an individual:

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Notes ‹ Attention Process: The attention process outlines how people

learn from role models when they pay close attention to their key
behaviours. As a result, individuals are influenced by models who
are more appealing and seem similar to them.
‹ Retention Process: The retention process states that learning from
the model is dependent on how effectively the individual maintains
the model’s actions and behaviours even when the model is no
longer available to the individual.
‹ Motor Production Procedure: This procedure entails recalling the
model’s behaviour and performing one’s own actions by aligning
them with those of the role model.
‹ Reinforcement Process: The reinforcement process explains why
people would repeat the same behaviour if it is rewarding. Reinforced
behaviours gain more attention and are carried out more frequently.
IN-TEXT QUESTIONS
11. ________ is the transformation of one’s behaviour as a result
of education, training, practice and experience.
(a) Personality
(b) Perception
(c) Learning
(d) Motivation
12. Which theory of learning claimed that individuals emit rewarded
behaviours and do not emit non-rewarded or punished behaviours?
(a) Classical
(b) Operant
(c) Cognitive
(d) Social Behaviour
13. The ________ process outlines how people learn from role
models when they pay close attention to their key behaviours.
(a) Retention
(b) Motor Production
(c) Attention
(d) Reinforcement

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14. Who is considered the father of the cognitive theory of learning? Notes

(a) Edward Tolman

(b) B. F. Skinner
(c) Ivan Pavlov
(d) Bandura
15. Which process of social behaviour theory explains that people
would repeat the same behavior if it is rewarding?
(a) Attention
(b) Retention
(c) Reinforcement
(d) Motor Production

2.5 Summary
‹ Personality is the role that an individual performs in public.
‹ Numerous factors determine personality which is broadly characterized
into four factors namely biological factors, family and social factors,
situational factors and environmental factors.
‹ Two most prominent psychologists described the development of
personality namely Sigmund Freud and Erikson. Freud proposed that
there are five universal stages of personality development namely
oral, anal, phallic, latency and genital whereas Erikson proposed
eight stages of life that reflect a person’s continuous development
namely infancy, early childhood, play age, school age, adolescence,
early adulthood, adulthood and mature adulthood.
‹ Personality qualities help people understand their personality types.
The following personality types have been classified as Type A and
Type B Personalities, The Big Five Personality Model, Introversion
and Extroversion and The Myers-Briggs Type Indicator (MBTI).
‹ Trait theory, self-concept theory, psychoanalytic theory and socio-
psychological theory are the four main theories of personality.
‹ According to trait theory, an individual is made up of a set of
defined predisposition characteristics known as traits.

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Notes ‹ The self-concept theory focuses on an individual’s set of perceptions

about himself, as well as the perceptions of his interactions with
others and other areas of life.
‹ The psychoanalytic theory is a personality theory that builds on the
notion that an individual is more driven by unseen forces that are
influenced by conscious and logical thinking.
‹ Socio-psychological theory indicates that an individual seeks to satisfy
the demands of society and society assists him in accomplishing
his goals.
‹ The three ways of assessing personality are personality inventories
(objective tests), projective tests and assessment centers.
‹ The personality traits of employees are used to analyze their behaviour
and to build appropriate tactics to cope with their behaviour. The
following are some of the attributes that impact organizational
behaviour: locus of control, Machiavellianism, self-esteem, risk-
taking and self-monitoring.
‹ Learning is the transformation of one’s behaviour as a result of
education, training, practice and experience.
‹ There are four theories that describe how individuals acquire
new behavioural patterns namely classical conditioning, operant
conditioning, cognitive processes and social behaviour.

2.6 Answers to In-Text Questions

1. (a) Biological
2. (c) Identification
3. (c) Emotional Stability
4. (b) Sensing
5. (b) Introverts
6. (b) Self-Concept Theory
7. (b) Ego
8. (c) Internal Locus of Control
9. (a) Machiavellianism
10. (a) Projective Tests
11. (c) Learning

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12. (b) Operant Notes

13. (a) Attention
14. (a) Edward Tolman
15. (c) Reinforcement

2.7 Self-Assessment Questions

1. What is personality? What are the various factors that determine
personality?
2. Briefly explain various theories of personality.
3. Write a short note on:
(a) Trait Theory
(b) Locus of Control
(c) Type A and Type B Personalities
(d) Erickson’s Stages of Personality Development
4. Discuss how personality can be assessed.
5. Explain the concept of learning. Discuss the various theories of
learning.

2.8 References
‹ Pareek, U. & Khanna, S. (2016). Understanding Organizational
Behaviour (4th Ed.). New Delhi: Oxford University Press.
‹ Robbins, S. P., Judge, T.A., & Vohra, N. (2015). Organizational
Behaviour (16th Ed.). New York: Pearson Education.

2.9 Suggested Readings

‹ Nelson, D. L., Quick, J.C., & Khandelwal, P. (2016). ORGB: A South
Asian Perspective (2nd Ed.). India: Cengage Learning India Pvt. Ltd.
‹ Robbins, S. P., Judge, T.A. & Vohra, N. (2015). Organizational
Behaviour (16th Ed.). New York: Pearson Education.
‹ Singh, K. (2015). Organizational Behaviour: Text and Cases (3rd Ed.).
New Delhi: Vikas Publication.

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L E S S O N

3
Perception and Individual
Decision Making
Veenu Shankar
Doctoral Scholar
Department of Management Studies
Indian Institute of Technology, Delhi
Email-Id: [email protected]

STRUCTURE
3.1 Learning Objectives
3.2 Introduction
3.3 Perception
3.4 The Attribution Process
3.5 Perceptual Biases (Common Shortcuts in Judging Others)
3.6 Applications of Perceptual Biases (or Shortcuts) in Organizations
3.7 Individual Differences and Organizational Constraints
3.8 Ethics in Decision Making
3.9 Summary
3.10 Answers to In-Text Questions
3.11 Self-Assessment Questions
3.12 References
3.13 Suggested Readings

3.1 Learning Objectives

The primary goal of this lecture is to comprehend perception and attribution theory in
depth. After going through this lesson, the learner will be able to comprehend the following:
‹ Perception and its process, biases in perception, and three stage perception process.
‹ The theory of attribution and its consequential determinants.

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‹ How to apply the rational framework of decision making. Notes

‹ Identify the shortcuts individuals use in making judgments about
others.
CASE STUDY
Buzz09’s Algorithm for Social Media Posting
Data Analysts differ from ordinary people in clear ways. They
frequently have particularly strong mathematical orientations and
don’t find it distressing to consider losing hundreds or even millions
of dollars on a poor wager. Depending on variables they have little
control over, their careers may advance or decline.
Ankit Kashyap stands out even with this unique group. He is the
CEO and co-chair of an agency based out in Delhi, and he is just 27
years old. Mr. Kumar launched Buzz09 - The Digital Ecosystem after
earning his MBA from Ambedkar University Delhi together with two
other recent college grads (Kushal Gupta and Ambuj Agarwal) and
a third partner (Veenu Kashyap), who was still a student. Of course,
Kumar and his fellow partners are too young to be running a Delhi
based social media agency. The method they’re using is much more
intriguing. Analytics are a skill that all social media managers possess.
Buzz09 stands out because of how far the company has gone with
them. To really make buy, sell, or hold choices and to learn from its
errors, the company has handed over computers to each of its employee
as well as access to Hootsuite, which automatically posts creative
on social media just by linking a client’s social media accounts to
it. According to Mr. Kumar, “it’s quite obvious that humans aren’t
becoming any better.” But technology and social media algorithms
are becoming more reliable.
Due of the profits Buzz09 was able to provide, other businesses like
RepDelhi’s and ABC Company’s Advisors decided to follow suit.
According to proponents, computers outperform people because they
can process schedules more rapidly, “learn” what functions, and change
more easily and objectively. To assess social media content, Buzz09’s
software examines more than ten years’ worth of social media data
as well as the most recent market trends. When the algorithm shows
that the number of impressions is declining, it automatically adjusts
the schedules of online posting. Also, based on the library of images

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Notes fed to the system, it automatically creates design for its client’s
social media accounts. Leaders of the Buzz09 have confidence in
their artificial intelligence (AI) strategy. Mr. Kashyap believes in
challenging AI as it purveys tech-innovative strategies to the company
and its clients.
Not just social media posting decision is being replaced by machines.
Computers are progressively replacing and even replacing human
judgment in a variety of tasks, including operating nuclear power
plants, hedge funds decision, piloting aeroplanes and making medical
judgments.
Not everyone believes AI always outperforms human reasoning
and decision-making. Some claim that the use of computers makes
complicated systems more prone to mistakes since no computer can
foresee every circumstance, and people perform worse as the passive
observers that AI transforms them into (Robbins & Judge, 2013).
“When the human has no participation in the activity, there is a far
larger risk of complacency,” observes the pilot of one complicated
system.

3.2 Introduction
The opening case study (Buzz09’s Algorithm for Social Media Posting-
mentioned above) demonstrates a few of the issues that people encounter
while seeking for strategies to improve their decision-making abilities.
One of the reasons why some individuals favour rational decision making
is the possibility that human decision makers may be biased or wrong
in many ways. This chapter examines some of these biases in human
decision-making as well as the possibility that people may outperform
computers, particularly in terms of innovation.

3.3 Perception
Through the process of perception, people organize and interpret their
sensory experiences to give their surroundings meaning. However, there
could be a significant discrepancy between what we perceive and what
is real. For example, the whole employees of a company may agree that

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it’s a great place to work because of the friendly office atmosphere, Notes
fascinating job assignments, competitive pay, first-rate benefits and
considerate management. However, as most of us are aware, it is rare
to see such unanimity. Why is perception important in OB research so
much? As opposed to reality, behaviour is dependent on one’s perspective
of reality.
Factors in the perceiver
‹ Attitudes
‹ Motives
‹ Interests
‹ Experience
‹ Expectations

Factors in the situation

‹ Time
Perception
‹ Work setting
‹ Social setting

Factors in the target

‹ Novelty
‹ Motion
‹ Sounds
‹ Size
‹ Background
‹ Proximity
‹ Similarity

Figure 3.1: Factors that Influence Perception

Source: (Robbins & Judge, 2013)
How can we explain the fact that various people may observe the same
thing and form quite different opinions about it? Many factors affect
perception, sometimes skew it as well. The perceiver, the object, target
being perceived, or the context in which the perception is produced may
all have these components (or a few of them) (see Figure 3.1).
Your attitudes, personality, aspirations, interests, prior experiences and
expectations all have a significant impact on how you interpret what you
see while trying to understand a target. Regardless of their real features,
you can see someone as authoritarian if you consider police officers to
be that way or as slow if you assume young people to be that way.

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Notes The target’s characteristics also influence how we see it. Silent individuals
are less likely to stand out in a crowd than loud individuals. The link
between a target and its backdrop, as well as our tendency to group
nearby items and those with similar characteristics together, all influence
perception since humans do not examine targets in isolation. Male and
female, as well as members of any other group that can be quickly classified
in other, unrelated ways, frequently have something in common. How
attentive we are can vary depending on the environment, including
the time of day, location, light, temperature and several other variables.

Saturday Versus Monday

On a Saturday night in a club, a young client “dressed to the nines”
might not be there. But if that individual were dressed that way, you
would see them in your management class on Monday morning (and
that of the rest of the class). The perceiver (the person about whom we
are projecting our perceptions) and the target are unaffected.
On the other hand, Saturday night and Monday morning are two
separate times.

3.3.1 Perception: Meaning

The core elements of the perception process are the choice, interpretation,
and usage of inputs and signals. The high error rate of the process used
to create perceptions is a serious drawback of perception. Think over the
photos for a while (Figures 3.2 and 3.3). Figure 3.2 shows the standard
physical perception assessments. Did you make the same mistakes that
most people do? We are unable to see pictures appropriately even when
we are aware of our error and can evaluate them objectively. Brand logos
in figure 3.3 have a hidden message that once understood, is difficult
to forget.
“Perception alters what we perceive. It is subject to error”
Another example that highlights the power of perception is shown in
Figure 3.3. The figure reflects “Closure”. It focuses on the gaps that
people fill in to comprehend a stimulus. Even though we know the lines
in forms like rectangles and triangles are crooked, we nonetheless fill
them in. Therefore, closure is essential to how perception works. Most

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of the time, we don’t know all the facts, so we fill in the blanks with Notes
assumptions. Closure enables us to analyse a blur (or faded) situation
by completing that incomplete picture with the help of our experiences.
Figures 3.2, 3.3 and 3.4 show the progression of perception. Social
perception does use similar techniques. We draw conclusions based on
our presumptions even when we cannot see everything.

Figure 3.2: Common Perception Illusion

Source: Suggested Readings

Figure 3.3: What do you perceive of these brands?

Source: Suggested Readings

Figure 3.4: Closure

Source: Suggested Readings

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Notes
What Would You Do?
Situation 1
You’re considering working for a company with extensive operations
in India and Japan. Understanding that having a strong command of
Japanese will benefit you. You are currently enrolled in Japanese-language
course that will improve your fundamental communication abilities. You
are thinking whether to list this as one of your abilities because you
anticipate being somewhat adept by the time you land the job. Would
you include it in your resume?

What Would You Do?

Situation 2
You are proficient in data science and analysis. One of your new
colleagues, who really want to learn this skill, has shown an interest
of finessing this skill from you. You think that the new joinee is not a
quick learner and unable to grasp technical things. Considering this as
one your perceptions about him/her, what would you do?

Think About How Closure Could Impact a Manager’s Perception of

a Worker!
A boss who oversees 25 employees seldom interacts with any of them.
The manager, however, personally witnessed a contentious conversation
between the employee and from a separate management department
during the preceding six months after one client complained about a
certain employee. However, during the previous six months, one client
has voiced a complaint on a certain employee, and the manager has
personally overheard a heated exchange between that employee and a
management from a different department. Based on these two instances
and the limited time available to gather further information, the manager
may use closure to round out the picture and infer that the employee has
a short attention span.

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CASE STUDY Notes

India Versus America

Consider the situation of American citizen Ms. Thompson, who starts
working for a major corporation in India. She meets with Mr. Roy, her
boss, on the first day. Mr. Roy greets everyone and then begins to
collect information about Ms. Thompson’s mother’s relatives, siblings,
father and grandfather’s jobs. He devotes a lot of his time to family
discussions that Ms. Thompson deems inappropriate and unimportant.
Ms. Thompson is an expert at conducting interviews and avoiding
personal questions, so she carefully avoids all these intrusive questions.
During the hour-long meeting, she doesn’t learn much about her duties
or Mr. Roy’s expectations. She is quite perplexed. Mr. Roy is unhappy
and concerned that Ms. Thompson is vague about her background
and won’t talk about her family from his perspective. How can she
expect to connect with others if they don’t know anything about her
or her family? Before knowing someone’s personal background, he
cannot trust them.
In this scenario, both sides evaluate the situation from their own
cultural vantage points. The Spanish social structure and ties to family
and friends hold the key.
Roy, on the other side, Ms. Thompson is used to working in an
American environment where private things are inappropriate and
unimportant. Given her cultural background, Ms. Thompson is
appropriately avoiding these personal challenges, but Mr. Roy is only
striving to show that his new employee has the necessary and core
family background to be trustworthy.
The cultural misconceptions in this scenario appear to be based
on a variety of cultural conventions and assumptions.

3.3.2 Perception: The Three Stages

The three stages of perception are presented in Figure 3.5
Perception is a multidimensional process, as seen in Figure 3.5. In this
section, we examine each of the three stages and consider the factors
that affect them.

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Notes
Schemas

Organization Interpretation
Attention
and Judgment

Perceptual Attributions
Filters
Perceptual
Social Cues Biases Behaviours

Figure 3.5: The Three Stages of Perception

Source: (Robbins & Judge, 2013)
1. Attention Stage
Paying attention to the surroundings is a necessary initial step in the
perception process. Understanding environmental cues is a crucial stage in
the process of perception. During the attentional phase of perception, we
select which stimuli, cues, and signals to focus on. What do we notice?
What grabs our attention? For instance, while your professor takes a brief
break from class to look over his notes, you could catch a glimpse of his
keys jingling in his pocket. You could then notice his unusually baggy
pants because of the noise that came out of his keys. In each of these
cases, an uncommon event draws attention and may cause individuals to
divert their focus from what they are doing.
In the attention stage of perception, we may choose consciously or
unconsciously what to focus on. The perceptual filter is a technique
for allowing certain information to pass while excluding others. Selective
attention, or the fact that we pay attention to some social and physical
cues but not others, is the core element of the perceptual filter. During
the attention stage, a multitude of factors determine what information
passes through our perceptual filter. In addition to culture, salience is
another factor. Salient cues are those that stand out in some way. Salient
elements and signals have a greater part in our perception process than
other signals do since we use them. In the samples, the jingling keys,
baggy clothing, Southern accent, tattoos and body piercings all stuck out.
The stimulus’s intensity is another factor that affects salience. You’re
likely to pay greater attention to someone who speaks loudly, wears a
striking apparel or applies a strong perfume. For instance, people who

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wear bright colours when they dress, are more likely to be remembered Notes
after a meeting—though not always favourably. Aside from that, cultural
differences may play a role in why some events remain in our recollections.
For instance, standing close to someone while speaking is normal in
Middle Eastern and Mediterranean cultures. These acts are not observed
in other cultures. In contrast, the same gesture is typically unheard of
in the United States, where people become uneasy if a co-worker speaks
to them too near or touches their arm or shoulder. That co-worker’s
actions are obvious, which increases the likelihood that you’ll see them
and recall them.
The people in each of these cases stand out, prompting us to remember
them and form opinions about them. They impede our perceptual filter
due to their prominence. This is not to argue that you must try to stand
out to be better remembered. People could recall you more vividly, but
they can also hold your harsher behaviour against you. We must organize
the cues and the material that draws our attention into sets that make
sense and that we may use later.
CASE STUDY
An Indo-American Woman CEO In India
When Malti, a 1975 passed out from Harvard Business School, who
spent her entire life in the United States since her childhood, joined
ABS in 1977, she questioned long-held views on both sides of the
Indian thinking (mostly bureaucratic and paternalistic society back
then), which was her ultimate glass ceiling-cracking moment. ABS,
an enterprise that owns the several educational institutions worldwide
was being operated by Malti, who also served as its first female
CEO. Around 17,000 individuals were employed at ABS at the time.
Malti’s credentials were out of the ordinary for a top executive of an
Indian corporation. Having no prior experience in control of a large,
multi-billion-dollar global organization while being a Texas native
born in India, a former attorney and a former journalist.
Following Malti’s arrival, ABS’s equity returns significantly lagged
those of its competitors. The successes of Malti’s predecessor, who
held the position for 15 years until retiring in 1977, included increasing
ABS’s workforce, doubling its profitability, experiencing a more than
80% increase in share prices, and converting a struggling company
into a global powerhouse.

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Notes How did this implausible “outsider” from another continent work for
a very conservative company in India and become one of the most
respected CEOs there?
Upon finishing business school in 1975, Malti relocated to West
Virginia and started working for the Associated Press. She then
created a Pulitzer-winning newspaper in Georgia with her husband.
The two relocated to India in 1977 when the newspaper went out of
business, becoming CEO of ABS, where she grew sales by 130 per
cent in just four years. Malti admits that she faced skepticism when
working at ABC: “I had analysts in on the first day, and I could
hear them asking, ‘Who is this person?’ Then I started to wonder,
“Who is this person?”
But she moved quickly to establish her reputation and grow the
company. During her first week on the job, she issued an introductory
email to all 17,000 employees. I function best in a workplace that is
upbeat, enthusiastic and full of comedy. “I do not want to be linked
with a firm that is not reputable and fair,” the employee said after
just seven months on the job.
When she stated that she wanted to double ABS’ market worth,
the company’s shares surged. She promised that more changes will
be made. However, for the time being, our objective is to enhance
overall corporate performance.
Malti usually wore khadi clothing to meetings and used Indian slangs.
It was clear that she had no reservations about grabbing attention.
She was referred to the ABS chairperson as “an enthusiast and
exuberant” because of her egalitarian viewpoint, which contrasted
with the traditional Indian thinking.
In her words, “I don’t even use that phrase because, first of all, that’s
what old people do, and second of all, it’s what you do after dinner”.
She expresses that she is not ready to retire at age 66. Through her
blunders, she discovered that “you may fail, but you don’t die.”
Malti’s issues and career serve as an illustration of how perceptions
affect businesses. To carry out her responsibilities as the leader of a
big company, she has had to contend with gender, cultural, and social
stereotypes as well as public perceptions. Her success has been greatly

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influenced by her capacity to understand herself, other people and Notes

her environment. Malti had to observe people and events, gather
knowledge, assess that knowledge, and generate opinions based on a
range of subjective interpretations as well as factual facts. All leaders
must act in this manner. To be effective, she needed to manage how
other people perceived her. That is significant.

IN-TEXT QUESTIONS
1. Perception is a ___________.
(a) Scientific process
(b) Mental process
(c) Both (a) and (c)
(d) None
2. Which process’ fundamental components are stimulus selection,
interpretation and use?
(a) Perception
(b) Organizational development
(c) Locus of Control
(d) Ethics
3. ___________ permits us to assess a fading circumstance by
filling that partial image based on our experiences.
(a) Closure
(b) Creativity
(c) Communication
(d) Connotation
2. Organization Stage
The second step of the perceptual process is organization. The data that
our filters have permitted through must now be organized. We group
information into sets that make sense, are practical, and are organized.
We create new sets, build new links between the various parts, classify
newly found information into pre-existing, well-known categories, and
combine things into bundles we can remember.

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Notes Schemas
At this level, the primary activity is the use of schemas. Schemas,
which are mental or cognitive models or patterns, are used by people
to understand and explain situations and events. They act as structures
that enable us to fill in the gaps in social contexts. For instance, during
the closure phase, people use schemas to help fill in gaps in incomplete
visualizations. Although some of our schemas may be conscious to us,
they usually operate subconsciously.
Schemas at work
Schemas are beneficial since they hasten the information processing. They
help us remember details and close gaps in our perception. Schemas greatly
facilitate the organization of knowledge, which enhances our capacity to
recall specifics about people and events. Because we use closure to fill
in information we don’t know and make snap decisions, schemas might
lead to mistakes.
Table 3.1 Advantages and Disadvantages of Schema
S. No. Advantages Disadvantages
1. Help us in recalling Hard to modify
2. Provides information ,JQRUHVLQIRUPDWLRQWKDWGRHVQRW¿W
3. Structure information May lead to over-interpretation
Culture and Schemas
When interacting with people, we must be aware of the likelihood that
our preconceived notions will affect how we see them. Since certain
information fits into pre-existing schemas, it may be quickly sorted
and saved. Additional information might not fit into a given structure.
This might lead to the creation of a new schema or cause things that
should not be remembered because they contradict our beliefs and may
not fit into any pre-existing categories. For instance, many women have
experienced having their male co-workers either forget their comments
or blame them on their male co-workers when they made suggestions
or comments during meetings. These assumptions were something Malti
(refer to the case study presented on page 57) had to cope with.
3. Interpretation and Judgment Stage
In the interpretation and judgment stage of social perception, which is
the third step, we interpret and translate the ordered information

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to establish its meaning (see Figure 3.5). Through interpretation, we Notes

create an opinion or judgment about the subject or circumstance and
ascertain the motivation behind the behaviour. In firms where a manager’s
responsibilities include evaluating their team members, clients, vendors,
and other business partners, this method is crucial. For instance, you see
that your new employee is pleasant and courteous to everyone she meets
and that she takes the time to get to know them. You ponder whether she
is simply behaving in a typical manner. Whether they begin a new job
or not, she is a very pleasant and sociable individual. To decide, you
must determine a justification for her actions, which is the process
(Attribution) we’ll explore next. Also, look at Figure 3.6 for more
specific information.
Attribution
Observation Interpretation
of cause
High
External
Distinctiveness
Low Internal

High
External
Individual
Consensus
behaviour Low
Internal

High
Internal
Consistency
Low
External
Figure 3.6: The Interpretation and Judgment Stage: Attribution
Source: (Nahavandi, Denhardt & Aristigueta, 2020)

IN-TEXT QUESTIONS
4. What comes last in the process of perception?
(a) Results
(b) Judgment and Interpretation
(c) Selection
(d) Consistency

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Notes 5. Which element enhance the process of processing information?

(a) Filters
(b) Schema
(c) Perception
(d) Prejudice
6. Choose the wrong option.
(a) Distinctiveness
(b) Consensus
(c) Consistency
(d) Selective Filters

3.4 The Attribution Process

The act of assuming a cause for a behaviour and presenting that
cause is known as the attribution process. One of the initial steps in
the attribution process is determining whether suggest that the person’s
actions are the result of something “inside” the person. These are either
more or less stable factors (such as personality, morality or intrinsic
skill) (such as effort or motivation). Internal attributions, which place a
strong emphasis on the individual, are occasionally referred to as personal
attributions.
When we think that factors “outside” of the person are the cause of
behaviour, such as “Mary is late for work because she is lazy” or
“Sergio did well on the test because he worked hard,” we establish
external attributions. These factors might include the surrounding
natural environment, the difficulty of the job, the workplace culture, the
presence, and behaviour of other people, or even luck. Since they link
behaviour to its environment, external attributions are often referred to
as situational attributions.
External attributions are mostly dependent on task difficulty and chance,
but internal attributions are based on ability and effort.

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Notes
Internal Versus External Attributions At Work
Like us all, managers are prone to apply internal attributions excessively
and external attributions insufficiently. For instance, supervisors who are
evaluating employees are more prone to conclude that low performance is
due to a lack of skill, effort or motivation. They are much less inclined
to attribute poor leadership to contextual factors, such as insufficient
training, insufficient support from co-workers, insufficient tools, or even
their own subpar performance.

3.4.1 Three Types of Information in Attribution

When determining internal or external attributions, we use three types
of information: uniqueness, consensus and consistency.
1. Distinctiveness
We initially consider if the behaviour is unique to a certain profession
or situation. Does the individual always behave in this way? If the
answer is yes, we’ll probably hold that person accountable for their
actions. If not, we can consider external influences. Consider how a
manager appraising his employees may consider how distinct each
employee’s performance histories are to illustrate how this component
functions in an organizational setting. Or are computer-related jobs
the only ones where they perform well? Do they perform similarly
across the board? If the performance is particular to one or a few
tasks and is therefore specific to a scenario, an external attribution
is more plausible.
2. Consensus
Is this a typical behaviour or is this person acting strangely? Is the
employee in question the sole member of the team that is having
issues with the new method after the bad performance was addressed?
If other individuals behave in a similar way, demonstrating that
there is agreement, we are more likely to assign something to the
outside world.
3. Consistency
Depending on what is constant, we can ascribe anything to either the
internal or external reality. Without consistency, we find it difficult

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Notes to make any kind of judgment; assigning responsibility calls for

extreme consistency. It would be challenging for management to
assign blame to a worker whose performance differs significantly
from month to month and from task to task.

3.4.2 Attribution Through Behaviours

Researchers have shown that even though we have more information
about ourselves than about others, we usually use the same approaches to
identify the root causes of our difficulties. We consider our actions and
behaviours and extrapolate our thoughts and aims from them to understand
why we operate in the manner that we do. Self-perception theory is
the name given to this theory. According to self-perception theory, when
asked to explain their own behaviour, people tend to search both inside
and outside of themselves for answers.
The self-perception theory of attribution has surprising findings.
Consider how we behave when we are recognized for our work and given
a reward. For instance, how would a professional basketball player justify
his performance if he received a significant bonus for playing well? Would
he say he loved the game so much or would he say the big bonus was
the reason he won? How would the worker who regularly lends a helping
hand to other workers without getting paid for it defend her actions?
It’s noteworthy that when we receive large monetary compensation or
positive public attention for our efforts, we are more likely to blame our
actions on the outside reward. Over-justification refers to the tendency
to blame our own behaviour on outside forces after getting an external
benefit. Over-justification has several negative effects on managers. It
suggests that giving people significant external incentives for finishing
pleasant tasks may reduce their internal motivation to complete the task.
If the reward is strong and meaningful enough, people are more likely to
make an external attribution—that is, to place blame for their actions on
something other than their own motivations. Because of this, employees
may become less motivated to achieve internally and may perform less
successfully unless they continue to get significant incentives. This practice
may provide one explanation for why some professional athletes perform
badly despite being paid well. Managers should emphasize internal features
and make them obvious whenever possible to maintain employees’ internal

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Motivation and interests. High amounts of praise and reward from the Notes
public may have an immediate effect, but they can have the opposite
effect in the long run.
IN-TEXT QUESTIONS
7. Assuming an explanation for a behaviour and advancing that
reason is known as:
(a) Attribution Process
(b) Distinctiveness
(c) Consistency
(d) Consensus
8. Personal attributions are related to?
(a) External attributions
(b) Internal attribution
(c) Societal attributions
(d) Physical attributions
9. Situational attributions are:
(a) External attributions
(b) Internal attribution
(c) Societal attributions
(d) Physical attributions
10. To understand why we behave in the way that we do, we consider
our actions and behaviours and extrapolate our attitudes and
aims from them. This concept is known as:
(a) Self-evaluation
(b) Self-role
(c) Self-organized
(d) Self-parameters
11. After earning an external incentive, we tend to blame outside
forces for our own conduct.
(a) Under-simplification
(b) Over-analysis

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Notes (c) Under-analysis

(d) Over-justification
12. ___________ is the final element of the attribution process.
(a) Conscience
(b) Concept
(c) Concordance
(d) None of the above
13. “We are inclined to attribute something externally if other people
act similarly, indicating that there is agreement”. This is related
to:
(a) Distinctiveness
(b) Consensus
(c) Consistency
(d) All of the above

3.5 Perceptual Biases (Common Shortcuts in Judging

Others)
We discussed how people often attribute other people’s behaviour by
exaggerating their own personal traits and underestimating external
factors. This tendency is known as the Fundamental Attribution Error.
For instance, if your boss is unresponsive, you are more likely to blame
his lack of people skills or propensity for being cold and distant than
you are to blame the expectations placed on him or the amount of work
he must do. In this way, you are more likely to attribute a co-worker’s
obstructionist behaviour to her personality than to a lack of communication.
These accusations make us less likely to see others favourably.
Table 3.2: Perceptual Biases
S. No. Perceptual Biases Description
1. Fundamental Undervaluing situational factors and overvaluing
Attribution Error personal factors while making attributions about
others’ actions
2. Actor-Observer An inclination to rely more on third-party explanations
Differences for our own behaviour

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S. No. Perceptual Biases Description Notes

3. Stereotypes “A generalization made about a person based on the
group they belong to”
4. Halo or Horn In multi attribute stimuli, use of a single attribute to
Effect LQÀXHQFHWKHRYHUDOODVVHVVPHQWSRVLWLYHRUQHJDWLYH
of the stimuli
5. Similar-to-Me A tendency to like someone who we think is like us
Effect and to dislike (or not like) someone who is different
6. Primacy and A propensity to place an excessive emphasis on either
Recency the most recent information—in the case of recency—
or the most recent information—in the case of primacy.
7. Self-Serving The propensity to give success credit and deny failure
Biases blame

CASE STUDY
Trayvon Martin

“The Trayvon Martin case featured a significant amount of perception

and prejudices in the Florida, United States. Martin was wearing a
hoodie the night he was shot, demonstrating how even something
so basic may affect how we perceive people.”
There might be negative consequences from the Fundamental Attribution
Error. Because of this propensity, we frequently internalize victims
mistakenly and blame them for their suffering. For instance, in the well-
publicized case of the Florida teenager who was shot by a self-appointed
neighbourhood watchman, the fact that Trayvon Martin was wearing a
hoodie became the focus point, obscuring many of the crucial issues.
When assessing people, we typically focus on internal factors.
The Fundamental Attribution Error, however, works in the other direction
when we try to justify our own behaviour. We rely more on external

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Notes justifications to support our own actions. This process is known as the
actor-observer difference. In addition to making internal attributions about
other people’s behaviour, which is a common fundamental attribution error,
we also commonly make external attributions about our own behaviour.
This differentiation is brought about by the numerous perspectives that
come from having access to different kinds of information. Contrary
to how others may see us, we are aware of our own history and how
we respond in different situations. As a result, we often have different
perspectives than observers on how distinctive and consistent our own
behaviour is. Because actors and observers have different perspectives,
actors are more likely to ascribe external causes because environmental
impacts are more apparent to actors than to observers.

Figure 3.7: Women taking part in Marathon in Pakistan

Source: Authors’ Research
“These young ladies (Figure 3.7) are participating in a recruitment
process for a police force in Peshawar, Pakistan. However, because the
profession is widely seen as a vocation that is exclusively for men, women
in America and European, Eastern European, Asian, and Latin American
nations complain that gender stereotyping makes it difficult for them to
enter the field. The stereotyped perception of women wrongly generalizes
them as being unfitted to carry out police work, even in nations like the
United States where the law demands employing police officers without
regard to gender. Women who wish to work in law enforcement, however,

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argue that they meet the physical standards and even offer unique attributes Notes
to the position, such as compassion and effective communication skills.”
A stereotype is a generalization made about a person based on their
membership in a certain group. Race, gender, sexual orientation, functional
area, and other categories may be among these groupings. Because of their
strength, stereotypes can make it difficult for us to recognize individual
distinctions and achievements. Consider the challenges that Malti, a ABS
employee, faced. Since her first day on the job, the British media has
questioned her credentials and aptitude for the role. How a mother of
three could run a big British firm was a concern for some. Her spouse
was mocked by others, who called him the “househusband.” Even more
than Malti’s creativity and strategic foresight, the company’s male leaders
were given credit for many of her excellent decisions. With her engaging
humour and deft people skills, Malti debunked the clichés.
The halo effect (also known as the horn effect) occurs when a general
opinion or assessment of one aspect of a person or circumstance results
in either a halo, which is a favourable impression, or horns, which is an
unfavourable impression, and which then serves as the focal point around
which all additional information is selected, arranged and interpreted. For
instance, a study done in the United Kingdom discovered that a person’s
first name might have a big impact on how they are seen. Another
example is when someone identifies themselves as a “Apple” or “Google”
employee. Because of the reputation of these companies, we are likely
to form an opinion of the person immediately away.
A strong element that might result in a halo or horn is the “similar-to-
me” effect. The similar-to-me effect occurs when we like someone we
believe to be similar to ourselves and dislike someone we believe to be
distinct from us. In a multicultural environment Lack of likeness may
be extremely problematic when the other person is likely to be different
and as a result, perhaps unlikable.
Do you believe that first impressions are important? If you say that, you
are correct! The importance of initial impressions is referred to as the
primacy effect. It speaks about a tendency to exaggerate fresh knowledge.
Early information is often recalled, and it frequently affects subsequent
perceptions. In contrast to the primacy effect, the recency effect leads
us to focus more on the latest information. The recency effect is most

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Notes prevalent when there is a temporal gap between the earlier and later
information.
The tendency to accept credit for our successes but reject accountability
for our errors is known as the self-serving bias. On the one hand, when
we do poorly on a test, fumble a presentation, lose a client, or fall
short of our objectives, we frequently attribute external blame rather
than internal attribution on our own lack of effort or skill. We blame
the unfair professor, the disinterested audience, the finicky client, or the
unachievable company goals.
The sum of all the prejudices makes the relationship between managers
and their employees fascinating. Stereotypes, halos-horns, and primacy-
recency may bias the data that managers gather. Additionally, managers
usually blame employees’ incompetence and lack of effort for poor
performance, whereas employees blame managers’ poor managing skills.
However, since they are so confident in their own abilities and commitment
to success, both sides frequently fail to recognize the contributions made
by the opposing party. Perceptual biases allow us to perceive social
situations quickly and accurately, but they can also result in errors.

3.6 Applications of Perceptual Biases (or Shortcuts) in

Organizations
People in companies are constantly evaluating one another. Managers
are required to evaluate the work of their staff. We assess the level of
effort each of our co-workers is putting out in their task. Members of
the team assess a newcomer right away. Our decisions frequently have
substantial ramifications for the organisation. Let’s examine the most
straightforward examples.
Employee Interview: Most hiring decisions involve an interview. However,
interviewers frequently form false perceptions and form hasty impressions
that stick with them. According to research, we establish opinions about
people in less than a tenth of a second based on our initial impressions. If
these initial thoughts are unfavourable, they frequently carry more weight
in the interview than if they were revealed later. After the first 4 or 5
minutes of an interview, many interviewers’ decisions don’t vary all that
much. Because of this, information gathered earlier in the interview is

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given more weight than information gathered later. A “good candidate” Notes
is therefore likely defined more by the absence of bad traits than by the
existence of favourable ones.
Performance Expectations: Even when their perceptions of reality are
flawed, people nonetheless try to justify them. The concepts of self-
fulfilling prophecy and the Pygmalion effect are used to illustrate how a
person’s conduct is influenced by the expectations of others. A manager
won’t likely be let down if she has high expectations for their staff. Like
this, if she merely expects mediocre performance, they will probably live
up to her low standards. Expectations are fulfilled. It has been discovered
that the self-fulfilling prophecy has an impact on how well accountants,
warriors and even students perform.
Performance Evaluation: Performance evaluations will be covered in
more detail later, but for now it is important to realise that they heavily
rely on the perceptual process. Promotion, wage increases, and continued
employment are some of the most evident results that are directly related
to an employee’s future and are determined by the evaluation. Many tasks
are evaluated subjectively, even though the assessment might be objective
(for instance, a salesperson is evaluated based on how much revenue he
earns in his region). Even though they are frequently important, subjective
assessments are troublesome since they are affected by all the flaws
we’ve covered so far, including selective perception, contrast effects,
halo effects and more. Ironically, performance reviews may reveal just
as much about the assessor as they do about the employee.
IN-TEXT QUESTIONS
14. Which sort of bias is the tendency to accept credit for our
successes but reject accountability for our failures?
(a) Self-error
(b) Self-recency
(c) Self-serving
(d) Self-primacy
15. A generalization about a person based on the group they are a
part of is:
(a) Prejudice
(b) Stereotype

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Notes (c) Assumption

(d) Observation

3.7 Individual Differences and Organizational Constraints

Here, we focus on the variables that affect people’s decision-making
processes and their susceptibility to biases and mistakes. We talk about
organisational and personal limitations.
1. Individual Differences
The use of intuition, frequent biases and mistakes, and bounded rationality
are characteristics of decision-making in practice. Individual variations
also lead to departures from the rational paradigm. We examine gender
and personality differences in this area.
Personality: Plays a critical role in defining perceptions. For instance,
people with high self-esteem tend to follow a self-serving bias. It means
that they accept the credit for success but blame others if they fail.
Therefore, personality allows individuals to perceive in some ways that
are limited to their personal traits.
Gender: Is another individual characteristic that influences decision
making. For instance, women ruminate more than men.
You may anticipate that those with greater levels of mental capacity
would be less prone to frequent judgment mistakes given that we know
they can process information more rapidly, solve problems more precisely
and learn quicker. However, it seems that only some of these may be
avoided by persons with mental capacity.
Time orientation, the value placed on reason, the conviction that individuals
can solve issues, and the propensity for group decision-making are all
cultural differences. We may better understand why Indian managers
make choices considerably more slowly and deliberately than American
managers by examining differences in time orientation. In India, reason
is respected, although this is not universally true.
2. Organizational Constraints
Employee Evaluation: The standards by which employees are judged
have a big impact on managers. We shouldn’t be shocked to discover

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that a division manager’s plant managers spend a significant portion of Notes

their time making sure that bad information doesn’t reach him if he feels
that the manufacturing facilities under his supervision operate best when
he hears nothing unfavourable.
All companies establish rules and regulations to guide choices and
influence behaviour. They naturally restrict the options for making
decisions as a result.

Figure 3.8: McDonald’s

Source: Authors’ Research
Employee decisions at McDonald’s locations across the world are influenced
by formal restrictions. Employees at McDonald’s restaurants, like the one
in this photo who is making Mc-Cafe Mocha, are expected to behave in
a certain way. To maintain the company’s high standards for food quality
and safety as well as dependable and welcoming service, McDonald’s
expects staff to abide by rules and regulations for food preparation and
service. For instance, McDonald’s mandates that every shop perform 72
safety-practices, as part of a daily monitoring schedule for restaurant
managers.

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Notes
3.8 Ethics in Decision Making

Tata Brings Back Air Indias

Tatas have recently taken over Air India. Air India was founded by
Dadabhoy Tata back in 1932. “In 1953, the Government of India
passed the Air Corporations Act to purchase a majority stake in
the airline carrier from Tata Sons. Its founder JRD Tata continued
as the chairman till 1977”. However, from 2006 onwards, Air India
started to incur heavy losses even after merging with Indian Airlines.
The combined losses for Air India and Indian Airlines were rising
exponentially every year. In January 2022, Tata bought back its one
of the ventures that were started by its Stalwarts.
Questions:
1. Are the perception of this acquisition negative or positive?
Explain why?
2. What type of individual and organizational constraints did Tata
face?
Utilitarianism, which promotes making decisions only based on their
outcomes in an effort to maximize the good for the greatest number
of people, is the first ethical standard. This view dominates business
decision-making. It is consistent with goals like great profitability,
productivity and effectiveness. Another ethical need is to make decisions
in conformity with the basic freedoms and rights contained in documents
like the Bill of Rights.

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The recognition and defence of essential liberties possessed by people, Notes

such as the right to due process, free expression, and privacy, are required
when placing a focus on rights in decision-making. This standard protects
whistle-blowers who make use of their freedom of speech to alert the
public or the media to an organization’s unethical behaviour.
A third need for laws to be justly or equitably distributed in terms of costs
and benefits is that they be applied in a fair and unbiased manner (also
known as Justice). Typically, this viewpoint is shared by union members.
It advocates paying everyone the same wage for a given post regardless
of differences in performance and relying heavily on seniority in layoff
decisions. Each criterion has advantages and disadvantages. A utilitarian
worldview may promote efficiency and production, but it also has the
potential to diminish some people’s rights, particularly those of people
of colour. Rights are used to safeguard individuals from damage and are
compatible with freedom and privacy, but they may also encourage a
legalistic environment that lowers productivity and efficiency. An emphasis
on justice protects the rights of the underrepresented and weaker, but it
may also encourage a sense of entitlement that hinders innovation, risk-
taking and productivity.

3.9 Summary
In this lesson, you have learned:
1. The process of perception is inherently flawed and skewed.
2. Because culture adds complexity and usually provides an unexpected
scenario, cross-cultural interactions are particularly susceptible to
perception errors.
3. Each person has predetermined ideas about a specific group. As a
result, give your stereotypes some thought.
4. Relying solely on recollection may cause us to make judgments that
are prejudiced in an organizational setting. To prevent biases and
inaccuracies from clouding your judgment and causing mistakes,
make notes on significant events and issues.
5. Role of perceptual biases are important to understand in managerial
decision-making and many other administrative situations.

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Notes
3.10 Answers to In-Text Questions

1. (c) Both (a) and (c)

2. (a) Perception
3. (c) Communication
4. (b) Judgment and Interpretation
5. (d) Prejudice
6. (a) Distinctiveness
7. (c) Consistency
8. (a) External attributions
9. (b) Internal attribution
10. (b) Self-role
11. (c) Under-analysis
12. (b) Concept
13. (c) Consistency
14. (b) Self-recency
15. (a) Prejudice

3.11 Self-Assessment Questions

Discussion Question:
1. What are perceptions? Describe all seven biases in detail.
2. Describe the differences between primacy effect and recency effect
with your real-life examples?
3. In the Trayvon Martin case, which perceptual bias became more
relevant (and irrelevant) at the same time?
Individual and Group Activity:
For complete understanding, please read the following brief case and repeat
it as many times as you feel necessary. As directed by your instructor,
you won’t be allowed to consult it until the end of the activity.
“A well-liked college instructor had just completed the final exam and
had turned off the lights in the office. Just then, a tall, dark, and broad
figure appeared and demanded the exam. The professor opened the drawer.

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Everything in the drawer was picked up and the individual ran down the Notes
corridor. The dean was notified immediately”
The First Stage: Individual Scores
Answer the following questions about the case you have just read without
referring to the case. Circle T if the statement is true or correct, F if it
is false, and? If you are not sure or cannot tell.
1. The thief was tall, dark and broad. T F ?
2. The professor turned off the light. T F ?
3. $WDOO¿JXUHGHPDQGHGWKHH[DPLQDWLRQ T F ?
4. The examination was picked up by someone. T F ?
5. The examination was picked up by the instructor. T F ?
6. $WDOOGDUN¿JXUHDSSHDUHGDIWHUWKHSURIHVVRUWXUQHGRIIWKH T F ?
light.
7. The man who opened the drawer was the professor. T F ?
8. The professor ran down the corridor. T F ?
9. The drawer was never actually opened. T F ?
10. Three people are referred to in this case. T F ?
The Second Stage:
Group Discussion (Next Page)
‹ Without turning back to the case or changing any of your answers,
compare your answers with those of your group members. Discuss
any discrepancies. The goal is not to come to an agreement and a
common group answer, but to explore areas of differences and their
causes.
‹ Now that you have discussed the case in your group, how many
questions do you think you answered correctly?
The Last Stage: Scoring and Discussion
Your instructor will provide you with the scoring key for the questions.
What explains your score? What processes are operating? What are the
implications?

3.12 References
‹ Nahavandi, A. M., Denhardt, R., & Aristigueta, M. P. (2020).
Organizational Behaviour. USA: Sage Publication.

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Notes ‹ Robbins, S. P., & Judge, T. A. (2013). Organizational Behaviour.

New York: Pearson.

3.13 Suggested Readings

‹ Casse, S., & S, T. (Vol. 8(1)). For Female Leadership: Who is the
winner. Business Leadership Review, pp. 1–7.
‹ Fung, K. (2012, March 23). Geraldo Rivera: Trayvon Martin’s ‘Hoodie
Is As Much Responsible For [His] Death As George Zimmerman’
(VIDEO). Retrieved from www.huffpost.com: https://www.huffpost.
com/entry/geraldo-rivera-trayvon-martin-hoodie_n_1375080.
‹ Nahavandi, A. M., Denhardt, R., & Aristigueta, M. P. (2020).
Organizational Behaviour. USA: Sage Publication.
‹ Robbins, S. P., & Judge, T. A. (2013). Organizational Behaviour.
Newyork: Pearson.

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L E S S O N

4
Interpersonal Relationship
Dr. Reema Aggarwal
Assistant Professor
Department of Distance & Continuing Education,
Campus of Open Learning,
University of Delhi
Email-Id: [email protected]

Ms. Manisha Yadav

Assistant Professor
Department of Distance & Continuing Education,
Campus of Open Learning,
University of Delhi
Email-Id: [email protected]

STRUCTURE
4.1 Learning Objectives
4.2 Introduction
4.3 Transactional Analysis
4.4 Ego States
4.5 Types of Transactions
4.6 Need of Understanding Transactional Analysis
4.7 Life Positions
4.8 Stroke Analysis
4.9 Psychological Games
4.10 Johari Window
4.11 Summary
4.12 Answers to In-Text Questions
4.13 Self-Assessment Questions
4.14 References
4.15 Suggested Readings

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Notes 4.1 Learning Objectives

At the end of this lesson, the student should be able to:
‹ Explain the concept of transactional analysis and the need to maintain
a healthy interpersonal relationship in an organisation.
‹ Differentiate between complementary and non-complementary transactions.
‹ Understand the concept of life positions and their importance in the
organisation.
‹ Understand the importance of stroke and the concept of psychological
games.
‹ Understand the importance of the Johari window as a tool for
improving interpersonal relationships.

4.2 Introduction
Organisations accomplish their objectives through their employees. It takes
collective efforts, which requires smooth interpersonal interactions among
employees. Globalization and technology improvements have made it more
critical for employees to interact with one another and ensure smooth
interpersonal communication to enhance organizational effectiveness.
As Aristotle said, “Man is a social animal” by extension, employees interact
with one another and work in close associations. Employees working
together share a special bond that makes them feel connected with one
another and the organisation itself. A healthy interpersonal relationship
makes employees more productive and positive and renders the entire
working environment more salubrious. An interpersonal relationship is a
dyadic relationship that is interactive, now this interaction can be on a
one-to-one basis, one-to-group basis, group-to-one basis or group-to-group
basis. Besides, these transactions can be cooperative or conflicting. The
cooperative transaction is a win-win scenario for both, the organization
and the members partaking in it.
Some skills that can help navigate an individual to these significant
transactions without a hitch are:- mutual trust, positive thinking, empathy
and courtesy.

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Accomplishing successful interpersonal relations in the context of Notes

organizational goals is a challenging and slow process. It requires a deep
psychological understanding of oneself as well as of others. Every manager
is responsible for managing interpersonal relations in his department in
such a way that everybody cooperates willingly in accomplishing the
organizational goals. Without good interpersonal relations, there will be
an atmosphere of misunderstanding and conflicts in the organization. After
a long time of research, several behavioural scientists recommended the
use of various tools for analysing and managing interpersonal behaviour
in an organization for the betterment of the organization and its people.
The present lesson explores some of these tools, like ego states, life
positions, psychological games, strokes, and the Johari window.

4.3 Transactional Analysis

Transaction refers to communication and exchange of dialogue between
two individuals. Transactions consist of two components - “Transaction
stimulus” (It is given by a person who starts communication) and “Transaction
response” (It is provided by a person who receives transaction stimulus).
When two individuals interact, one responds to the other; this is called a
social transaction. The study of these transactions is known as transactional
analysis (TA). Based on the ideas of Sigmund Freud’s Psychometric
theory of childhood experiences in the late 1950s, Eric Berne developed
transactional analysis theory. It is a psychoanalytic theory and a therapy
method that helps understand interpersonal behaviour and analyse social
interaction between people. Transactional Analysis is a theory to improve
interpersonal communication. Transactional analysis was initially thought to
be a simple model and was criticized. But eventually, the understanding of
transactional analysis increased, and many acknowledged it. Transactional
Analysis has wide applications in clinical, therapeutic, organizational
and personal development, encompassing communications, management,
personality, relationships and behaviour.
Today TA is used in organizations as psychotherapy. Eric Berne said that
verbal communication, particularly face-to-face communication, is at the
centre of human social relationships and psychoanalysis. His starting
point was that when two people encounter each other, one of them will

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Notes speak to the other, which he called the Transaction Stimulus. The reaction
from the other person he called the Transaction Response. The present
lesson includes the concept of ego states, life positions, psychological
games, strokes, and the Johari window that could help understand how
interpersonal relationships could become smooth.

4.4 Ego States

Humans are teeming with whims and fancies. Accordingly, when
employees interact, their conduct varies as per the situation. An employee
is cooperative at one time and grumpy at the other. He is cordial to one
colleague and gives a cold-shoulder to another. Such different actions
occur because of varying ego states.
At the core of transactional analysis are the Ego states. Paul Federn coined
the term Ego states. According to this, human personality comprises three
“ego states”. Ego states refer to a “pattern of behaviour”. As one grows
up, one develops a certain behaviour pattern known as the Ego State.
According to Dr Eric Berne, there are three ego states: parent ego, adult
ego, and child ego. Each ego state consists of some common behavioural
pattern an individual follows in various situations. Usually, their present-
day reactions are based on their past experiences and feelings. Following
is a brief detail on each ego state-

Ego Parent Adult Child

States (P) (A) (C)

Figure 4.1: Ego States

4.4.1 The Parent Ego State

Parent Ego refers to the personality attributes of values, attitudes, and
behaviour of parents like people, inherited by a person when he was a

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child. An individual assimilates such behaviour from parent figures like Notes
a teacher, father, mother, brother, or any other person who is elderly
and displays an advisory behaviour, which is copied by a child and
subsequently displayed in his life when such situations arise. Either
someone makes decisions for you, or they show protection and care.
Both types of behaviour represent the “Parent ego”. Parent ego can be
of the following two types-
(i) Nurturing Parent Ego: The nurturing parent ego state has attributes
like empathy, comfort, and protection towards others. In this state,
an individual tries to understand others and emanates empathy
towards them. Actions taken from this state instil confidence and
encourage others to go on and are full of appreciation for people
and their positive behaviours. For instance, a person in this ego
state will say, “What can I do to help you”?
(ii) Critical Parent Ego: The critical parent ego state is about blaming
others and giving unconstructive criticism. It includes actions like
– attacking other people, being extremely judgmental, not listening,
and not being interested in an explanation. The critical parent will
write you off as a person rather than deal with your behaviour.
However, they are always ready to respond with a ‘should or ought’
to almost anything that people tell them. For instance, an individual
in his critical parent ego state will say, “You must submit your
assignment by evening”.
ACTIVITY
Name that one friend in your friend circle-
(a) Who normally suggests place, fix time, and decides do’s and
don’ts for the whole group.
(b) Who says, “don’t worry, I am with you”, or “I’ll help you in
best possible manner” or shows care and concern.

4.4.2 The Adult Ego State

An adult’s ego state refers to a pattern of behaviour where an individual
behaves more logically. Past experiences do not influence such individuals
and they believe in seeking facts and tend to reflect problem-solving

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Notes behaviour. Their behaviour is inclined toward rational decision-making.

They analyze the situation after going through the available facts and
behave rationally. Logical thinking, thoughtful conversation and factual
discussion are the cornerstones of an adult ego state. The adult ego state
is stored by facts, not feelings and emotions.

4.4.3 The Child Ego State

The child ego state refers to a pattern of behaviour that could be
characterized by spontaneous, impulsive, creative, and emotional components
of personality. A child’s Ego state could take two types, one is a happy
child (no harm to anyone), and the second is a destructive child (behaviour
might harm others or themselves).
People operating in this state usually act as they did when they were a
child. The Child Ego State is primarily concerned with feelings though
that does not mean that when in the ‘here and now’ experience, the person
does not have access to attitudes and thinking, but it simply means that
when activated, feelings are usually the executive energy force. People
operating in this state act emotionally and make impulsive decisions.
Immature behaviour characterizes this state. Anxiety, dependence, fear,
hate, and conformity are other characteristics of a Child Ego State.
Physical and verbal cues such as giggling, compliance, seeking attraction
and coyness indicate the Child Ego State.
PARENT EGO ADULT EGO CHILD EGO
Teaching Rationality Spontaneous
Demonstrating Objective Impulsive
Rules & Laws Figuring out Fantasizing
Do’s and Don’ts Estimating Creativity
Truths Evaluating Experiencing joy/
frustration
Conclusion: There is no general rule regarding the effectiveness of any
ego state in any given situation. Each type of ego state may lead to
positive or negative behaviour. It is not only about words but also tone,
body postures, expressions, and gestures that reflect the ego state during
the communication exchange. From an organizational perspective, learning
and reflecting on the positive side of each ego state is essential.

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IN-TEXT QUESTIONS Notes

1. There are three types of Ego states, namely, _________,

_________, and _________.
2. The transactional analysis (TA) theory is coined by _________.
3. _________ coined the term Ego state.
4. Child Ego state is the pattern of behaviour that could be
characterized by:
(a) Impulsive
(b) Creative
(c) Spontaneous
(d) All of the above
5. Adult Ego state is the pattern of behaviour that could be
characterized by:
(a) Logical
(b) Protective
(c) Spontaneous
(d) Controlling

4.5 Types of Transactions

A transaction is a unit of social interaction consisting of an initiating

message called the stimulus (S), and a reply called the response (R). The
stimulus and response might be verbal or non-verbal, but they must be
received and acted upon by both parties. In other words, a transaction is
a relationship between two people in which one says or does something,
and the other reacts. A transaction may involve any combination of ego
states.
Transactions are forms of interactions that develop early in life, such as
Parent-Child, Child-Child, or Adult-adult. For instance, young children,

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Notes when ordered, become frightened or grumpy. Many years later, as grown-
ups, they may get into a rut and reply to the same transaction.
Following diagrammatic representations elucidate the exchange of
transactions between two people-

Figure 4.2: Transaction

An arrow passes from the ego state from which the stimulus (S) originates
to the ego state which receives the message. The arrow represented by
“R” shows the corresponding response (R).
Depending on the ego states of the persons involved in transactions, there
may be four types of transactions: Complementary, Non-Complementary,
Ulterior and Gallows.

4.5.1 Complementary Transactions

A stimulus invites a response; this response becomes a stimulus for further
response, and so on. Appropriate and Expected Transactions indicate
healthy human relationships. Successful communication takes place when
transactions are complementary.
Complementary Transaction = effective + complete communication
A transaction is complementary when a stimulus from one person gets
the predicted response from the other. The transaction is complementary
because both the interacting individuals act in the perceived and
expected ego state. In such a transaction, both persons are satisfied, and

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communication is complete. A complementary transaction occurs when Notes

the lines between the sender’s and receiver’s ego states are parallel.
Complementary transactions are of the following types:
(i) Adult-to-Adult transactions: This is the most satisfactory transaction
and leads to healthy communication. The individuals involved are
rational, logical, and objective. Therefore, it is an ideal transaction
within an organisation. It is the best type of communication, as
it is respectful and reduces conflicts. The key to recognizing the
Adult-to-Adult transaction is an unemotional exchange between the
individuals.

Figure 4.3: Adult-Adult Transaction

Supervisor: Have you finished your job? (A-A)
Employee: Yes. Sir, I finished it long back, and it has already
been delivered to the assembly section. (A-A).
The supervisor wanted to take stock of the work assigned to
the employee. The employee responded from his adult ego
state. As a result, both individuals had effective and complete
communication.
(ii) Adult-to-Parent Transaction: In this transaction, an individual
sends a transactional stimulus as an adult to another individual.
If the other individual responds from the nurturing parent’s ego
state, the communication will be smooth. On the other hand, if the
response comes from a critical parent ego state, it could give rise
to a conflict.

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Notes

Figure 4.4: Adult-Parent Transaction

Employee X: Have you seen my file? (A-P)
Employee Y: No, but I can help you find it. (P-A)
An employee X enquired about his missing file. Employee Y
responded from his nurturing parent ego state. As a result, both
individuals had effective and complete communication.
(iii) Adult-to-Child Transaction: In this transaction, an individual
may send a transactional stimulus as an adult to another individual
and gets a response from a child’s ego state. Such a transaction is
generally not seen on work premises.

Figure 4.5: Adult-Child Transaction

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Employee X: how are you? (A-C) Notes

Employee Y: Aww, thanks for asking. I am doing great. (C-A)
Employee X wanted a normal howdy do with employee Y. Employee
Y overwhelmed with emotions and responded from his Child ego
state. Since employee X expected such a response from employee
Y, the communication was successful.
(iv) Parent-to-Parent Transaction: In this transaction, the manager uses
rewards, criticism, rules, and admonitions. The transaction can be
beneficial if the employee supports him. Otherwise, the two may be
needless competition as the employees will try to push their ideas.

Figure 4.6: Parent-Parent Transaction

Superior: You must not unnecessarily experiment with things. (P-P)
Subordinate: Great things don’t happen without experiments. (P-P)
(v) Parent-to-Adult Transaction: In this transaction, an individual sends
a transactional stimulus as a parent to another individual and gets
a response from an adult ego state. The stimulus uses dogmatic
and overbearing language but gets countered with a logical reply.
Therefore, conflicts over trivial matters are staved off.

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Notes

Figure 4.7: Parent-Adult Transaction

Employee X: you should sit straight. (P-A)
Employee Y: I have a backache. (P-A)
Employee X called employee Y on his sitting posture. Instead of
snapping at him, Employee Y chose to reason with him and precluded
a conflict.
(vi) Child-to-Child transactions: In this transaction, an individual sends
a transactional stimulus as a child to another individual and gets a
response from a Child ego state only. Such a type of transaction is
not suitable for a workplace. Both individuals act on whims, fancies,
and emotions in this transaction. Therefore, the organization suffers
badly, and the situation cannot last long.

Figure 4.8: Child-Child Transaction

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Employee X: Management should always think in favour of their Notes

employees. (C-C)
Employee Y: If management does not think in our favour, we will
do the same towards them. (C-C)
Both employees are verklempt with emotion. In the short run, such
a transaction is smooth for the individuals involved, but in the long
run, it is not good for the organization.
(vii) Child-to-Parent transaction:
Employee: To whom should I submit the file after completing it?
(C-P)
Manager: You must always follow the chain of command for any
official work. (P-C)

Figure 4.9: Child-Parent Transaction

(viii) Parent-to-Child transaction: When the manager interacts from the
Parent Ego and the employee responds with the Child ego; this can
be satisfying for both in the short run. Conflict and pressure are
eliminated. But in the long run, the personality of the employee may
remain underdeveloped, which may create a feeling of frustration.

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Notes

Figure 4.10: Parent-Child Transaction

Employee X: I am feeling under the weather today. I must go and
see the doctor. (P-C)
Employee Y: Aww, I’ll take care of you! (C-P)
Employee X acted from a parent ego state and received a response
from Employee Y through a child ego state. The resultant transaction
is complete communication. Nevertheless, such transactions are not
preferred in a workplace since they may lead to the underdevelopment
of employee Y.

4.5.2 Non-complementary transaction

A Non-complementary or cross-transaction occurs when the person who
initiates the transaction does not get the response from the expected ego
state. In such transactions the stimulus-response lines are not parallel.

Figure 4.11: Cross Transaction

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Supervisor: How many units have you made till now? (A-A) Notes
Operator: Do not enquire frequently. I will inform you after completing
it. (P-C)
The supervisor expected a rational response; instead, the operator got worked
up and replied from a parent ego state. As a result, the communication
was not successful.
Such a transaction will ultimately result in a dispute. Once the transaction
is crossed, it results in unrest and dissatisfaction, leading to arguments
and conflicts between the interacting parties.

4.5.3 Ulterior Transactions

We all have been in a conversation where it is all about the ‘unsaid’.
The real message is hiding behind the veil of social interaction. There
is an overt and a covert message in such conversations. In transaction
analysis, we call these interactions ulterior transactions.
In ulterior transactions, two messages are conveyed simultaneously —
a social message on top and a psychological one at the bottom. So, it
appears like the person is saying one thing, but there is something else
he is trying to convey (left to the intelligence of the receiver).

Figure 4.12: Ulterior Transaction

Now, these can be both enthralling and excruciating. Flirtatious games are
a classic example of an exhilarating and enjoyable ulterior transaction.

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Notes Whereas, on other occasions, the existence of a sub-text is downright

unpleasant. Salespersons are usually adept at deploying ulterior transactions.
Following is an example of an ulterior transaction at play in an organisation:
Supervisor: What time is it, Kunal? (Kunal reached late to the office,
to which the manager asked him this question. On the surface, he is
confirming the time, but he intends to highlight that Kunal is late to the
office.)
Ulterior transactions occur when three or more ego-states interact at the
same time. The interaction is at two levels — what the person says (the
social message) and what he means (the psychological message).
Example:
Social Message (overtly spoken Psychological Message (covert
words): message):
Salesperson (S): This is the top-of- Salesperson (S): I don’t think you
the-range model. (A-A) can afford this. (A-C)
Customer (R): I’ll take a look at it, Customer (R): How dare you! I can
please. (A-A) buy this. (C-A)

4.5.4 Gallows Transaction

Gallows transactions include laughs or smiles on the heels of a statement
which is painful to the individual. The distinguishing mark of humour
in the gallows transaction is that it isn’t funny. Instead, the laugh serves
as tightening the noose, and the destructive behaviour gets reinforced.
Example: A teacher getting amused at the stupid behaviour of her student.
Conclusion: The adult-to-adult transaction is most effective in the
organization because it is problem-solving, treats people as equals and
improves understanding. Though the A-A transactions are the most
desirable yet, other complementary or parallel transactions are also
workable depending upon situations and the willingness of both superiors
and subordinates to develop a workable relationship.

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IN-TEXT QUESTIONS Notes

6. In __________ two messages are conveyed at the same time

__________ a social message on top and the psychological
message at the bottom.
(a) Ulterior Transactions
(b) Cross Transaction
(c) Complimentary Transaction
(d) Gallows Transaction
7. When manager speaks to a subordinate as Parent to Child and
subordinate respond as Child to Parent; then it is an example
of:
(a) Ulterior Transactions
(b) Cross Transaction
(c) Complimentary Transaction
(d) Gallows Transaction
8. When stimulus and response lines are not parallel it is known
as:
(a) Ulterior Transactions
(b) Cross Transaction
(c) Complimentary Transaction
(d) Gallows Transaction
9. “A mother smiling at a stupid behavior of her son” - Following
is an example of:
(a) Ulterior Transactions
(b) Cross Transaction
(c) Complimentary Transaction
(d) Gallows Transaction

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Notes
4.6 Need of Understanding Transactional Analysis
Transaction Analysis is a prominent tool for positive change and growth.
It is the study of how individuals introject certain behaviours, either
by accident or from their early caretakers or authority figures and then
continue to acquit themselves in that same behaviour pattern.
TA is a model for people to work towards ‘autonomy’, where they can
choose to live the way they want to and not act as if they are controlled
by past events or messages. Determination of one’s ego state through TA
helps them to be in the driver’s seat of their way of life. An understanding
of the TA can help the person change their life’s script and choose to
rewrite it without being hooked on to the inappropriate behaviours of
the past.
Before moving ahead, let us understand some commonly used jargon in
transactional analysis:
(a) Script: A story we have learned and internalized about ourselves.
Negative stories about us or others tend to result in dysfunctional
social outcomes. The script itself tends to be out of our conscious
awareness.
(b) Games: We all have our scripts and engage in various “games” that
generally involve winners and losers. Games in Transactional Analysis
have been defined as: “a series of duplex transactions which leads
to a ‘switch’ and a well-defined, predictable ‘payoff’ that justifies
a not-OK, or discounted (less-than) position”. In a transactional
game, we act out our internalized script and things go well for a
while. Then, we receive the “strokes” we expect to get from acting
out our script instead of being vulnerable and authentic until things
inevitably go south – the “switch” – and then we get the “payoff.”
(c) Strokes: The pleasant or familiar thoughts and feelings we receive
from playing social games with our internalized scripts.
(d) Switch: The moment when our internalized script’s utility breaks
down. This is usually when the script prevents us from expressing
our authentic identity at that moment. We begin to feel sad, confused,
and angry.

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(e) Payoff: The usual, expected result of our game, wherein we end up Notes
feeling a loser or less-than.

4.7 Life Positions

A child is like a clean slate. However, in the process of growing up, he
wades through a lot of experiences and emotions. These experiences lay
the groundwork for making assumptions about their self-worth and the
worth of significant people in the environment.
Thomas Harris has called these assumptions life positions, which tend
to be firmer than the ego states. During our formative years, we make
decisions about ourselves, our world, and the people around us. These
decisions get built upon the pattern of strokes we receive from our parents
and primary caregivers. These decisions lead us to accept one of our four
basic psychological life positions. Once a life position gets decided, it
drives our patterns of thought, emotion, and behaviour. The positions are
acquired very early, i.e., in childhood, and stay throughout our life. Life
positions develop an individual’s perception, which may be positive or
negative. In this way, four “Life Positions” may be generated as shown
in the following figure—
‹ I am OK-You are OK: This is the ideal life position. People with
this life position have healthy relationships and a positive outlook.
They are cordial, forthcoming and accepting of themselves and
others. Managers working from this life position feel comfortable
delegating authority as they have confidence in themselves and their
subordinates. This life position is based upon the adult ego state.
‹ I am OK-You are not OK: is occupied by those who project their
difficulties onto others. They are blaming and critical. Transactional
games that reinforce this position involve a self-styled superior (the
“I am OK”) who projects anger, disgust, or disdain onto a designated
inferior or scapegoat (the “You are not OK”). This position requires
someone to be ‘worse than’ to maintain the sense of self as OK.
Managers in this life position consider delegation of authority a
threat because they do not trust others. These are the individual
who possesses the rebellious child ego.

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Notes YOU ARE OK

I am OK I am not OK
You are OK You are OK
(The Healthy Position) (The One-down Position)

I AM NOT OK
I AM OK

I am OK I am not OK
You are not OK You are not OK
(The One-up Position) (The Hopeless Position)

YOU ARE NOT OK

Figure 4.13: Life Positions
‹ I am not OK-You are OK: People with this life position feel powerless
and keep grumbling. They think others are more competent and
have fewer problems. Managers working in this life position are
unpredictable and erratic in behaviour. They use their bad feelings
as an excuse to act out against others.
‹ I am not OK-You are not OK: Is a position of hopelessness,
futility, and frustration. From this position, life seems uninteresting
and hopeless. It may result in self-destructive or violent behaviour.
Managers in this life position neither take decisions on time nor
properly delegate authority.
Out of these positions mentioned above, the ideal one is “I am OK –
You are Ok”, this is because:
‹ It indicates healthy acceptance of self.
‹ It demonstrates respect for others.
‹ It is likely to result in better communication.
‹ It is expected to result in better performance behaviours.
The other three life positions are less mature and less effective. Thus,
the life positions talk about the individual developing his identity, sense
of worth and perception of others during childhood. Once a person has
decided on a life position, that will often remain fixed unless considerable

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effort is made to change the underlying beliefs and decisions about life. Notes
Transactional analysis psychotherapy aims to bring awareness, explore,
challenge, and change an ineffective life script. It is based on the belief
that because we were the original creators of our script, we have the
power to change it.
IN-TEXT QUESTIONS
10. ________ are more permanent than ________
(a) Life Positions; Ego States
(b) Ego States; Life Positions
(c) Ego States; Psychological Games
(d) Psychological Games; Life Positions
11. ________ is an ideal life position-
(a) I am Ok; you’re not OK
(b) I am Ok; you’re OK
(c) I am not Ok; you’re not OK
(d) I am not Ok; you’re OK
12. ________people tend to feel that whole world is miserable
(a) I am Ok; you’re not OK
(b) I am Ok; you’re OK
(c) I am not Ok; you’re not OK
(d) I am not Ok; you’re OK

4.8 Stroke Analysis

From our earliest beginnings, in utero, we depend on another person. We
are born needing and seeking contact, with an innate sense that we can’t
survive without it. Throughout our lives, we receive this contact through
various types of verbal and non-verbal communication:
‹ a smile
‹ a hug
‹ praise for something we do or who we are
‹ a challenge to something we do or who we are.

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Notes In transactional analysis, these modes of contact are called strokes. Eric
Berne described strokes as a unit of recognition, one person acknowledging
another by way of act or speech.

4.8.1 Types of strokes

‹ Positive and negative
‹ Verbal and non-verbal
‹ Conditional and unconditional.
Telling someone that we love them is an unconditional positive stroke (the
ultimate one) whereas telling someone that we love their cooking is
a conditional positive stroke. The former strokes the person’s entire
being, whilst the latter strokes one aspect of their being. Conversely,
telling someone, you don’t like their cooking is a conditional negative
stroke and telling someone you hate them is the ultimate unconditional
negative stroke.
Throughout life, this communication develops our personality, informs our
sense of self-worth, and defines our beliefs in ourselves, the world, and
others. Depending on the type of strokes we receive before adulthood,
we end up in one of four life positions, as defined in TA.
If the strokes we receive through childhood are appropriate to our age and
stage of development and are a balanced mix of positive and negative,
as needed, then we are likely to grow up with a sense of “I am OK-You
are OK”. In TA, this life position describes a balanced emotional and
cognitive outlook on life.
However, if the balance of strokes has veered far to the positive, contained
too many negatives or been an inappropriate mix, then we are likely to
struggle with a fair sense of self and the world.
Those brought up with too many positive strokes might hold the life
position of I am OK-You are not OK and struggle to see the others’ point
of view, having developed an over-inflated sense of self-worth.
On the other hand, children who receive too many negative strokes (or
not enough positive ones) can grow into adulthood believing others to
be more important than themselves; this life position is called I am not
OK- You are OK. Alternatively, they might hold the life position of “I

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am not OK. You are not OK” with little hope for themselves and seeing Notes
little good in the world.

4.9 Psychological Games

Games in Transactional Analysis are “a series of duplex transactions which
leads to a switch and a well-defined, predictable payoff which justifies
a not-OK, or discounted, position”.
Let us have a look at what that means. Firstly, what is a duplex transaction?
A duplex transaction is where we say one thing and mean another. Only
about 8% of our communication is through words; the rest is through tone,
body language and facial expressions. Berne observed that whenever we
say one thing (the social message) and mean another (the psychological
massage), it is always the psychological message that gets heard.
We tend to open games with duplex transactions, not saying what we
really mean. Then, the game will deliver positive strokes until the “switch”
clicks in. The switch is the point at which things suddenly feel like they
are going wrong. It is the point at which we may feel confused, scared,
angry, or whatever our racket feeling usually is. This leads quickly to us
taking a “payoff”. It confirms that whatever negative (untrue) thoughts
we have held onto about life are true.
Let us give an example of a game and take it apart using the language
introduced above. Let us take the game “Yes, But”. In this, one person
has a problem, and another is invited to solve it. Everything the other
person suggests is rejected with a “Yes, I could do that, but... (insert
reason for not doing that)”. We all know people who play this. We may
even play it ourselves.
Whilst it may appear the player is asking for help on the social level,
what they are really doing on the psychological level is proving that they
can’t help and no one else can control them. The switch comes when the
other person gives up trying. The payoff for the player is proof that no
one can help them even though they remain passive. Feelings of sadness
or anger may accompany this.
The other player in this game may feel helpless and frustrated that they
have been unable to help the starter of the game – these feelings are likely

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Notes to be very familiar too and reinforce a belief that they are not a very
good friend, problem solver, therapist, etc. It takes two to play a game.
Why do we play games?
Games are a way in which we can get strokes without risking intimacy
and confirm our beliefs (mostly wrongly held ones) about life.
How do we stop playing games?
The first thing we need to do is identify what games we are playing.
Ask yourself what patterns keep emerging in your life? What predictable
events occur? What feelings do you often end up having? Spot the games
and bring them into the light, where you can chew them over and decide
whether you want to keep on playing or do things differently, avoiding
the negative payoff.
IN-TEXT QUESTIONS
13. _____________ proposed the concept of life positions.
(a) Thomas Harris
(b) Eric Berne
(c) Paul Federn
(d) None of the above
14. _____________ is basic unit of motivation.
(a) Stroke
(b) Life Positions
(c) Ego States
(d) Script Analysis

4.10 Johari Window

Johari window is a framework developed by two psychologists, Joseph
Luft and Harrington Ingham, who combined their first names to name the
model. It is a widely used model to understand and train self-awareness
and biases for personal development and to improve communications,
group dynamics, team development, interpersonal relationships, and inter-
group relationships.

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People using the framework engage in two primary ideas, acquiring trust Notes
by revealing information about oneself to others and receiving feedback
to learn more about themselves. The Johari Window model captures
such information (feelings, attitudes, opinions, intentions, etc.) from four
perspectives, as shown in the four quadrants.
Known to self Not Known to self
Know to others

OPEN AREAN
or BLIND SPOT
ARENA
Not Known to others

HIDDEN AREA
Or UNKNOWN
FACADE

Figure 4.14: Johari Window

‹ Open Area (Anything about yourself that you’re willing to share
with others): This is the region where actions, behaviours, and
information are known to the individual and those around him. This
type of interaction is marked by openness and compatibility and
has a very little possibility for defensive feelings and behaviour.
An “Open Area” is desirable as a team because when we work in
this area with others, we are at our most effective and productive.
This is the space where good communications and cooperation
occur, free from distractions, mistrust, confusion, conflict, and
misunderstanding. Soliciting feedback can help increase this area
horizontally to reduce the blind spot while sharing one’s feelings,
and can extend the area vertically, reducing the hidden area.
‹ Blind Area (Anything about oneself that you are unaware of but
that others have become aware of): It reflects behaviour, feelings
and motivation known to other parties but not to self. A person’s

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Notes observable habits, manners, feelings, etc., may be unknown to

the self but known by others. Others may interpret these actions
differently than what one expects them to. In fact, an individual
may even annoy others unintentionally. This area could also be
referred to as ignorance about oneself or issues in which one is
deluded. Seeking feedback can help reduce this blind spot.
‹ Hidden Area (Anything about yourself that you are reluctant to
reveal to others is in the hidden area): It reflects behaviour, feelings
and motivation known to self but not known to others. In other
words, the individual understands themselves but does not know
about others. The individual tends to be hidden from others for fear
of their reactions. The true feelings or attitude of the individual
may remain a secret from others. It also includes sensitivities, fear,
hidden agendas, manipulative intentions, and secrets - anything that
person knows but does not reveal. Individuals are reluctant to share
such information as it may affect their relationships. Disclosing
information to others can help decrease the hidden area.
‹ Unknown Area (Any region that neither you nor anyone else is
familiar with is the unknown area): The information in this quadrant
is mysterious and has unknown potential. This includes subconscious
information such as early childhood memories, undiscovered talents,
etc. These feelings and motivations remain unclear till people
allow these to surface. Uncovering ‘hidden talents’ that is unknown
aptitudes and skills should not be confused with developing the
Johari ‘hidden area’. It is another aspect of developing the unknown
area and is not as sensitive as unknown feelings. The unknown
area could also include repressed or subconscious feelings rooted
in formative events and past traumatic experiences, which can stay
unknown for a lifetime.
There are two interpersonal processes of ‘disclosure’ and ‘feedback’,
which cause the redistribution of awareness and changes in the size
and form of the four quadrants. The model assumes that an ‘open self’
becomes larger, and the relationship tends to be more rewarding and
productive. Thus, the model is dynamic and sensitive, especially to the
interpersonal application of ‘disclosure’ and ‘feedback’. The ‘hidden self’
can be reduced, and the ‘open self’ can be increased through disclosure.

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The ‘blind area’ can be reduced by seeking feedback from others, thereby Notes
increasing the open area i.e., to increase self-awareness. Therefore,
managers must promote a climate of non-judgmental feedback and group
response to individual disclosure and reduce fear.
In the ‘hidden area’, relevant hidden information and feelings, etc., should
be moved into the open area through the process of ‘self-disclosure’ and
‘exposure’ process. The extent to which an individual discloses personal
feelings and information must always be at the individual’s discretion.
Organizational culture and working atmosphere significantly influence
team members’ preparedness to disclose their hidden selves.
The use of self-disclosure forms a mechanism for sharing awareness with
others. However, self-disclosure involves risk for the individual, and the
outcome must be worth the cost. Likewise, the ‘feedback’ process can
decrease ‘the blind self’ and simultaneously increase the ‘open self’. In
other words, others must give, and the individual must use the ‘feedback’
in social encounters. It forms the means whereby the individual encourages,
supports, and presents himself as open to the disclosure of others. In this
context, the active solicitation of feedback data in social interactions is
essential.

IN-TEXT QUESTIONS
15. ________ developed the model of Johari Window.
16. There are five quadrants in the model of Johari Window.
(True/False)
17. Undiscovered/or unknown self is also termed as mysterious.
(True/False)
18. Which process can cause change in the size & form of the four
Johari Window quadrants:
(a) Suppression
(b) Feedback
(c) Disclosure
(d) Both (b) & (c)

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Notes 4.10.1 Application of Johari Window in Business

The Johari window serves as an essential tool to analyse the employees’
potential, work on organizational relations, and improve team performance.
The other people associated with the business also contribute to
organizational improvement and development. These are the financial
institutions, shareholders, customers, suppliers, etc.
Taking into consideration the known and unknown facts by the company
and the customers, the Johari window provides us with four quadrants.
Let us see the various ways of modifying business relations using this
model:
Feedback to Reduce Blind Area
Taking constant feedback from the customers and knowing about the
competitive products the consumers may prefer; makes the company aware
of customer satisfaction level, product performance, consumer loyalty,
level of competition, etc.
Being updated with the market trend and response diminishes the blind
spot of the organization.
Move Out of your Comfort Zone to Decrease Unknown Area
Innovation leads to learning, and learning contributes to growth and
development.
Therefore, the organization must explore new possibilities or diversify
into new products or means of production through proper research and
development, to increase market share and profitability.
Exploring the untapped opportunities and developing new ideas can
maximize the open area by diminishing the unknown region and shrinking
the blind spot and the hidden area.
Disclosure to Reduce Hidden Area
At times, some strengths or positive traits of the product or the organization
are not promoted. As a result, these may not be known to the customers
creating a hidden area for the organization.
Therefore, the organization must reveal its strengths, like the premium
quality of raw materials used, the better shelf life of products, etc., to
develop customers’ trust and loyalty.

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Conclusion Notes
As we know that all four quadrants are unique but to maintain transparency
and cordial relations within a team, it is essential to maximize the open
area.
Thus, the Johari window aims to improve interpersonal relationships,
behaviour, attitude, and skills within an organization by continually
assessing the scope of growth.

4.11 Summary
Transactional Analysis is one of the most accessible theories of modern
psychology. In the 1950s, Eric Berne began developing his Transactional
Analysis theories. He said that verbal communication, particularly face-
to-face, is at the centre of human social relationships and psychoanalysis.
Transaction refers to the communication between two persons. The transaction
could be both Complementary and Cross in nature. Healthy communication
occurs when individuals follow Complementary Transactions, whereas
Crossed Transaction causes most difficulties in social situations. The
concept of ego states, life positions, psychological games, strokes, and the
Johari window could help us understand how interpersonal relationships
could become smooth. This life position influences our behaviour when
we interact with others. The Life Position refers to the specific behaviour
towards others that an individual learns based on certain assumptions
made very early in life. Life positions develop an individual’s perception,
which may be positive or negative. Johari Window Model is dynamic
to the interactive processes of disclosure and feedback. It assumes that
interpersonal relationships tend to be more productive and rewarding as
one’s “open self” expands.

4.12 Answers to In-Text Questions

1. Adult, Child, Parent

2. Eric Berne
3. Paul Federn
4. (d) All of the above
5. (a) Logical

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Notes 6. (a) Ulterior transactions

7. (c) Complementary Transaction
8. (b) Cross Transaction
9. (d) Gallows Transaction
10. (a) Life Positions; Ego States
11. (b) I am Ok; you’re OK
12. (c) I am not Ok; you’re not OK
13. (a) Thomas Harris
14. (a) Stroke
15. Joseph Luft and Harry Ingham
16. False
17. True
18. (d) Both (b) and (c)

4.13 Self-Assessment Questions

1. “Transactional analysis tends to improve interpersonal communication”.
Comment. Also, explain the utility of transactional analysis.
2. Explain three ego states with suitable examples.
3. Discuss the concept of Life Positions. Name the “ideal life position”.
Also, explain the utility of understanding life positions to a manager.
4. Explain the concept of the Johari Window. How can it help in
improving interpersonal relations?
5. State the implication of Johari Awareness Model.

4.14 References
‹ Eric Berne, (1961). Transactional Analysis in Psychotherapy, Grove
Press, New York.
‹ Thomas A, Harris, (1967). I’m O.K., Yor’re O.K., Harper & Row,
New York.
‹ Chhabra, T.N., (2017). Management Process & Organizational
Behaviour, Sun India Publication. Delhi.

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ORGANIZATIONAL BEHAVIOUR

Notes
4.15 Suggested Readings
‹ Eric Berne, (1961). Transactional Analysis in Psychotherapy, Grove
Press, New York.
‹ Chhabra, T.N., (2017). Management Process & Organizational
Behaviour, Sun India Publication. Delhi.
‹ Gupta, C.B., (2018). Management Process and Organizational Behaviour,
S. Chand & Company Limited, New Delhi.

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L E S S O N

5
Power & Politics in
Organization
Dr. Malavika Srivastava
Associate Professor
Institute of Information Technology & Management
GGSIPU
Email-Id: [email protected]

STRUCTURE
5.1 Learning Objectives
5.2 Introduction
5.3 Organizational Power
5.4 Tactics to Gain Power in an Organization
5.5 Organizational Politics
5.6 Summary
5.7 Answers to In-Text Questions
5.8 Self-Assessment Questions
5.9 References
5.10 Suggested Readings

5.1 Learning Objectives

After reading this lesson you will be able to:
‹ Get understanding of organizational power.
‹ Understand characteristics of power and people’s reaction to power.
‹ Identify and analyze the various bases or sources of power.
‹ Understand the dynamics of power.
‹ Analyze and understand the tactics to gain power in organizations.

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‹ Understand contributing factors, sources and responses to politics. Notes

‹ Understand ways to manage politics.

5.2 Introduction
Power is the function of dependency. If one depends on the other, the
other can have a higher degree of power over the one who is dependent.
It can be further explained with the help of a simple example, that, when
a child study in school or college and the studies are totally funded by
the child’s parents, they exercise higher control on the child because of
the financial dependency. Later, when the child grows up and gets a job
and start funding further studies and manage livelihood by self, parents
control decreases significantly. Similarly, acquiring and exercising power
is a natural phenomenon in an organization and it highly depends on
the capacity to influence other’s behaviours. In an organization the top
management holds the highest amount of power over others, this is so
because, the decisions they take, the strategies they develop, the approvals
they give, the investments they make are most crucial for the survival
of the whole organization.
But this whole concept of power is two faced. When used inappropriately
and in an inadequate manner, it can be hazardous and reflect as dirty
organizational politics. In contrast, if used wisely and thoughtfully, it may
be a great source of positive influence over others which may bind them
as a team and drive them to work collectively towards organizational
success. In an organization, power is the reality, and is inseparable. The
key to be successful and effective as a manager, one needs to learn how
to utilise power and in such a way that it completely contributes towards
organizational goal fulfilment. Another related factor is organizational
politics, which is even more important to be dealt consciously and with
greater care. A leniency towards which may lead to shaking of organizational
foundation and even complete failure. In the present lesson, we will be
having an understanding about of concept of power, its characteristics,
various sources of power, people’s response to power in the organization,
organization politics and its management in the organization.

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Notes
5.3 Organizational Power
In the words of White and Bednar, “Power is the ability to influence people
of things, usually obtained through the control of important resources”.
Talking about power in an organization, it can also be defined as the ability
to exert influence beyond authority. Power can be acquired both through
organizational as well as individual sources. In the organizations power
can be derived through the virtue of one’s position in the organization.
At the individual level, one can have power based on one’s expertise and
power to control behaviour. It may also include job knowledge, personal
influence, interpersonal skills, ability to influence and get result, persuasive
power as well as physical strength.
Other source of power can be information power. Those having access
to crucial information, have higher degree of power. Also, those who are
good communicators and have great convincing power also have an edge
over others as they may exercise better control over others.
Other sources can be developing pleasant and favourable personality,
updated knowledge, better strategizing ability and so on.
Therefore, it can be mentioned, that power is the ability to influence
the outcome of events. It involves bringing about an action by someone
against the will or desire of another. Other responses to influence can be
in the form of resistance, compliance and commitment.
When the influence doesn’t comply with the request or repels either
positively or negatively towards the influence attempts, in such cases
resistance occurs. In the other case when the influence obey to the
commands of the power holder, despite of having an unwillingness to
do so, compliance occurs.

5.3.1 Characteristics of Power

Specific: Not all in the organization possess power. It lies with specific
people and is exercised by them only in certain circumstances.
Dependence: Power is the function of dependence. If someone’s dependence
is high on you, higher is the power that you exert on them.

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Power is Elastic: Power can expand or contract. People having power Notes
will always be seeking opportunities to expand power, which they achieve
with achieving position with higher authority. On the other hand, it may
contract in case of demotion, transfers or job switches etc.
Reciprocal relationship: Power exists in an organization because of
the relationship between the influencer and the influence. Power will
be exercised by the influencer having power, on a person or a group of
people in certain circumstances.

5.3.2 How People react to Power

According to Herbert Kelmen, there exists three distinct types of reaction
towards power, i.e., compliance, identification and internalization.
Compliance is when people conform to the wishes of others in order to
acquire favourable outcomes. They comply to adopt new attitudes and
behaviour in expectation of favourable outcomes either as reward or as
to avoid something unfavourable, such as punishments.
Identification occurs in the process of maintaining relationship. Sometimes
we accept direction of other’s not always because we agree with it but
because we identify with them and seek to maintain relationship with them.
Internalization happens when people adopt power holder’s attitudes and
behaviours because they are congruent with their own personal values
and also satisfies their personal needs.
ACTIVITY
In an organization, what makes you powerful? While using power
how will you draw line between power and politics.

5.3.3 Bases/Sources of Power

Where does the power come from? What is its source? Is it acquired?
If yes, what is the process of the same? Many such questions need to
be answered to understand the power game better. As an answer to the
above questions, French and Raven identified FIVE interpersonal sources
of power. These can be bifurcated as formal and personal. Let us have
an understanding:

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Notes Coercive
Power

Formal Reward
Power Power

Legitimate
Bases of Power
Power
Expert
Power
Personal
Power
Referent
Power

Figure 5.1: Bases of Power

Formal Power: Also known as positional power and it rely on the position
that individual holds in an organization. Position enables a manager to
coerce or reward, gives formal authority to the position holder and also
provide access to important information. Hence, formal power is derived.
Various types of Formal Power are:
Legitimate Power: This is an important organizational concept. Legitimate
power comes with the position. The access to one or more of the sources
of power is through legitimate power. It embodies the formal authority
to control and use organizational resources and have influence on others’
behaviour based on structural position in the organizational hierarchy.
Due to having legitimate power, manager is empowered to take decisions
within a specific area of responsibility.
Coercive Power: The coercive power refers to a manager’s ability to
influence other’s behaviour by means of punishment for undesirable and
unpleasant behaviour. The basis of coercive power is fear of the negative
results from failing to comply. It highly depends on the application of
and the threat of application, of physical sanctions such as; infliction of
pain, frustration through restriction of movement, or the controlling by
force of basic physiological or safety needs, which may vary from major
to minor depending on the nature or severity of omission or commission.
Reward Power: Contrary to coercive power is reward power, with which
people comply because it produces positive benefits for them or it leads

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to the grant of rewards in the form of praise, promotion, salary increase, Notes
bonuses, time-off and so on. There wards can be like controlling pay
rates, raises and bonuses, which is financial in nature or like recognition,
promotions, interesting work assignments, friendly colleagues, and preferred
work shifts or sales territories, which is non-financial in nature.
Among all the three powers, legitimate power is the broader one as it
includes acceptance of the authority for the member in position.
Personal Power:
Power that exists in the form of unique characteristics, or expertise and
the respect and admiration of others forms the foundation of Personal
Power. Various types of personal powers are:
Expert Power: Reason why we visit a cardiologist in case of heart trouble
and dermatologist in case of skin related problems? It is so because they
are experts in their respective fields and are the only one to deal with
such problems. They enjoy Expert Power. In certain instances when job
becomes more specialized, our dependency on experts increases as in
such cases achievement of goals will highly depend on them.
Referent Power: Why in Covid times celebrities and established politicians
were made to endorse products to be used to prevent the spread of
disease. Why on television we witness almost all the advertisement with
celebrities. It is so because general public will admire them promoting
specific products and would want to use them too. Therefore, admiration
by others and their desire to be like them are the foundation of this power.
In such cases the celebrities exercise Referent Power.
Other Sources of Power:
Other than the above Formal and personal powers, managers exercise
power over subordinates due to many other reasons. It may be because
they possess an extraordinary knowledge about some important processes,
they may have an access to some crucial resources/information, they may
have an outstanding quality to lead or take rational decisions or have
extended and resourceful networks. In the following cases that power
holders enjoy power based on these aspects. Let us understand it in detail.
Knowledge as power: Organizations depend on the knowledge required
to run it. This is also a reason why human beings having knowledge
are called Intellectual assets. These assets are assets because they have

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Notes knowledge. The concept of knowledge is that those individuals, teams,

groups or departments having knowledge that is crucial in attaining
organizational goals can also provide competitive edge to the organization,
hence, they have power over others.
Resources/Information as Power: For achievement of organisational
goals, it needs a number of resources including finance, human resource,
machineries/equipment’s as well as some crucial data and information.
This power is comparatively contingent as the requirement varies from
time to time, information requirements also changes, also the same person
may not always have access to the required information. The source of
power also make a shift according to the shift in demand of resources
and source of information.
Decision making as power: What makes a manager successful, is their
ability to take the most appropriate decision at the correct time so that
it contributes to organisational goal achievement. Not everyone has this
ability and those who has, definitely has a considerable amount of power.
Such people are admired and appreciated for their decision making power.
Networks as Power: Essence of Management is Co-ordination. Unless it
is sought, management of organization is not possible. It is so because
management and organizational goal achievement requires efforts of many,
which needs synchronization. This process is called networking, which
absolutely is not everyone’s cup of tea. Therefore, those who are good
at it, enjoys and exercise power in the organization.
The key to successful and effective use of power is not to keep all the
powers in one’s hand but to use it judiciously and wisely. The usage
of power is highly contingent in nature and shall be used absolutely
according to the requirement.

5.3.4 Dynamics of Power

In an organization it is necessary to know about the nature and dynamics
of power as it is a core ingredient of management of an organization by
the people and of the people and for the people. It may be studied from
various perspectives, as:
Distribution of Power: Power is not something that is equally distributed
among organizational members, it is attained. Some may enjoy higher

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amount of power some may have less of it, it totally depends on the Notes
situation and the bases of power used by the power holder. A fact is that
those who have power would never want to loose it and those who do
not, will yearn for it.
Dependency: The greater A depends on B, greater is the power of B
over A. Power in fact is a dependency game. A very apt example is of
the situation we all witnessed during Covid, the druggists having higher
supply of medicines like chloroquine and fabiflu were most powerful
in the market as there was high dependency of consumers on them for
fulfilment of their demands. Similarly, in organisations, those having most
crucial knowledge, expertise, data, information are the most powerful, as
the organizational success highly depends on them.
Uncertainty: Managing an organization is managing uncertainties, and
anyone good at managing with them wield more power. Uncertainty
depends on the nature of the organization i.e. Marketing and sale dependent
organizations has higher instances of uncertainty, hence, people who can
deal with uncertainties are considered more powerful.
Compliance: In an organization people comply with legitimate power or
positional power. Employees consider coercive power or reward power
to be weak to comply with.
Power indicators: Power is most effective when it is invisible. It is a
human tendency to resist when they are being influenced, specially against
their desires. Therefore, usage of power should be humble and people
shouldn’t realise in most of the cases that they are being influenced with
power.
Determinants of power: There are various bases or sources that determine
power. Sometimes it’s the expert power, it can be access to some critical
information or resources or it can even be charisma of one’s personality.
Consequences of power: Consequences can be both positive as well as
negative. Positive in the sense that it leads to bring positive changes in
behaviours and events that results into goal achievement. In negative
sense, it may create resistance among people and they may repel back
from complying.
Symbols: There definitely are symbols of power, that is why, few people
in the organization get cabins whereas some sit in cubicle arrangements,

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Notes some enjoy special parking privileges, special eating facilities, sponsored
trips etc. This is all because of their positional power.
Reputation: Reputation is closely linked with power. People in the
organization with higher power, whether positional or charismatic, enjoys
a good image and reputation among all.
IN-TEXT QUESTIONS
1. Power is the function of ___________.
2. Elasticity is one of the characteristics of Power. (True/False)
3. What is not one of the forms of Formal Power:
(a) Legitimate Power
(b) Coercive Power
(c) Charismatic Power
(d) Reward Power
4. Celebrities are used in advertisement because of their ________.
5. The opposite of Reward Power is ___________.

5.4 Tactics to Gain Power in an Organization

Power is always attained it is never served readymade. Power is about
influencing others. The basis of influence is Trust, and this trust can be
gained in various ways. These can also be termed influence tactics.
Nine distinct influence tactics:
Legitimating Power: Based on legitimate authority/position power.
This tactic is based on compliance with rules, regulations, laws etc. The
intention of this tactic is not to motivate people but to align them with
a direction.
Rational persuasion: This tactic is based on factual data and logical
arguments to convince others to confirm to their point of views. This is
most commonly used influence tactics.
Inspirational appeals: When Subhash Chandra Bose said “You give
me blood I will give you freedom”, he used inspirational tactics as he
tapped into the citizen’s values, emotions and beliefs to gain support for
his mission. Authentic and enthusiastic are mostly effective.
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Consultation: Increasing the target’s belongingness at the time of decision Notes

making by involving them in the process, will also increase their efforts
at the time of execution. Consultation is most effective in organizations
and cultures where democratic decision making is followed.
Exchange: It refers to give-and-take. Rewarding the target with benefits
or favours in exchange of following a request. Rule of exchange also
says that “we should try to repay in kind what other person has provided
us”, Cialdini R. (2000). Influence: Science & Practice. Boston: Allan &
Bacon, p. 20.
Personal appeals: Attaining compliance due to friendship or loyalty is
called personal appeal. It is based on the belief that we cannot deny things
to those we know and like, and we mostly reply to them in agreement.
Ingratiation: Refers to making others feel good about themselves.
Using flattery, praise, or friendly behaviour prior to making a request.
For example, a study shows that resumes accompanied with a cover
letter containing ingratiating information are rated higher than those not
containing such information. Effectiveness of ingratiation depends on its
honesty and intention.
Pressure: Is exerting influence on others to do what you want under
the fear of something unpleasant to happen to them. This includes using
warnings, repeated demands, and threats till the target agrees. Researches
proposed that managers having low referent power use this tactic more
frequently as compared to managers having high referent power. Pressure
tactics work most efficiently when used in crisis situation.
Coalitions: Coalition tactics take advantage of peer pressure. It refers
to a group of individuals working together towards a common goal
to influence others. For example, trade unions, who use their biggest
weapon, i.e. strikes to threaten the management to strike in order to get
their demands fulfilled.
Effectiveness of tactics depend on the situations in which they are used.
Chance of success can be increased if two or more tactics are used
together depending on choice and suitability. As rational persuasion,
inspirational appeals, and consultation are considered most effective when
the audience is highly interested in the outcomes of a decision. Pressure
is least effective as they may also backfire sometimes.

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Notes Table 5.1: Preferred Power Tactics by Influence Direction

8SZDUG,QÀXHQFH 'RZQZDUG,QÀXHQFH /DWHUDO,QÀXHQFH
Rational Persuasion Rational Persuasion Rational Persuasion
Inspirational Appeals Consultation
Pressure Ingratiation
Consultation Exchange
Ingratiation Legitimacy
Exchange Personal appeals
Legitimacy Coalitions
The above table purports that:
‹ Rational persuasion is present across all three levels.
‹ Inspirational appeal is best suited as a downward influence on
subordinates.
‹ Pressure works as a downward influence.
‹ Personal appeals and coalition are the most efficient lateral influence
tactic.
‹ Sequencing of tactics, a person’s skill in using the tactics and the
organizational culture highly impact effectiveness of influence.
‹ Usage of the above tactics must start with “softer” tactics, that
rely on personal and inspirational appeal, rational persuasion and
consultation.
‹ In terms of usage of these tactics, the user must begin with “softer”
tactics that rely on personal power, such as personal and inspirational
appeals, rational persuasion and consultation.
‹ If “softer” tactics doesn’t work then “harder” tactics such as exchange,
coalition and pressure, emphasizing formal power and incurring
higher cost and risk can be used.
‹ A single soft tactic is more effective than a single hard tactic, and
combining two soft tactics or a soft tactic and rational persuasion is
more effective than any single tactic or combination of hard tactic.

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5.5 Organizational Politics Notes

Although politics has no place in organizations, still it’s a part of it.

There are various factors in an organization that increases the political
activity of an organization. On the forefront is the disagreement among
people. If everyone agrees to each other all the time, there will be no
politics. Base of politics is disagreement, and disagreement is prompted
by diversity in thinking, in culture, in departments and in goals.
Another contributing factor to politics is scarcity. If there is scarcity of
any resource, all would want to attain maximum of it, which may also
lead them to engage in political behaviours to maximise their claims
on scarce resources. Another aspect is when organizations downsize to
improve efficiency, resources must be reduced, and people may engage
in political actions to safeguard what they have. The opportunity for
promotions or advancement has consistently been found to encourage
competition for limited resource as people try to positively influence the
decision outcome.
Difference of interest is also a factor leading to political behaviour. For
example, Management interest is to maximise organizational profits and
cut the organizational cost. On the other hand, trade union’s interest is
to maximise their gains. Their interests are contrary to each other and
lead then to indulge in using political tactics to meet their own ends.
Certain personality traits, needs, and other factors also contributes to
political behaviour. Like for example high self-motivators possess an
internal locus of control and have a high need for power and they engage
more in political behaviour, because they know they can control their
environment, they are proactive and attempt to manipulate situations in
their favour. They have high desire for power and they are comfortable
in using politics to satisfy their self-interest.
Cultures symbolizing low trust, role ambiguity, unclear performance
evaluation systems, high pressures for performance, and self-serving
senior managers will also create breeding grounds for political behaviour.
Therefore, low trust within the organization should be replaced by hi-
trust among people which in general suppress political behaviour and in
particular inhibit illegitimate behaviour.

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Notes 5.5.1 Factors Contributing to Political Behaviour

Both individual and organizational factors can increase political behaviour
and provide outcomes for both.
At the individual level, there are some specific personality traits, needs
and other such factors that are related to political behaviour.
At organizational level, there are certain organizational situations that
promote utilising politics as means to ends. For example, when there is
opportunity for promotions, political behaviours are more likely to occur,
or when organizations plan to downsize, people may engage in political
actions to save what they have.

5.5.2 Sources of Political Behaviour in Organizations

In organizations, there are certain reasons that drive their people towards
political behaviour. Various research and studies identified some such
sources of political behaviour in an organization, they are as under:
Goal Ambiguity: When there is ambiguity regarding goals of a department,
much room is there for politics. People may take advantage of such
ambiguity regarding organizational goals and can pursue personal gain
under the smokescreen of pursuing organizational goals.
Scarcity of resources: In such scenarios where resources are scarce,
people in organizations can practice politics to maximize and claim their
share. On the contrary, if the resources are ample, politics may not be
required to acquire it.
Transforming technology and environment: Ambiguity and uncertainty
in the environment can trigger political behaviour among those who
are willing to practice it. When the nature of the internal technology is
nonroutine into the organization and the external environment is dynamic
and full of complexities, there is much room for politics to dwell.
When the decisions are non-programmed: Decisions in an organisation
can either be programmed or non-programmed. i.e. either they can be
executed according to a set pattern or they can be taken spontaneously.
In later case, the decision process are usually more ambiguous, which
leaves room for political maneuvering. Programmed decisions, on the other
hand, are specific hence little room is left for political maneuvering exists.

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Organizational change: Organizational changes in organizations pave Notes

the path for opportunities of political instead of rational behaviour. Such
changes are in the form of restructuring a particular department, opening
a new division, introducing a new product line, and so forth, and this
may lay down a good ground for the politically governed behaviour of
the people.
Today, most organizations have scarce resources, ambiguous goals, complex
technologies, and sophisticated and uncertain, leading a large number of
organizations to be highly political in nature. As an outcome, contemporary
managers must have more sensitive management of their organization to
rationally guide the acquisition and maintenance of power in organizations.
Else, organizations may deviate from policies and standard operating
procedures (SOPs) and can resort to political behaviour as an attempt
to grab the maximum amount of power in their share. That is, increases
in the specification of policy statements often are inversely related to
political efforts, as shown in Exhibit 5.1. This is true primarily because
such management practices can reduce the uncertainties surrounding a
decision and hence the opportunity for political efforts.
Conditions Leading to Political Behaviour
Prevailing Conditions Resulting Political Behaviour
Ambiguity in goals $WWHPSWVWRGH¿QHJRDOVWRRQH¶VDGYDQWDJH
Resources Constraints Fight to maximise one’s share of resources
Changing technology & Attempts to exploit uncertainty for personal
Environment gain
Non-programmed decisions Attempts to make suboptimal decisions
that favour personal ends
Organizational change Attempts to use reorganization as a chance
to pursue own interest and goals
Exhibit 5.1: Conditions leading to Political Behaviour

5.5.3 People Response to Organizational Politics

Different people respond differently towards organizational politics. Incidents
indicate that it may have favourable outcomes, but for most people who are
unwilling to play the politics games, tend to have predominantly negative
outcomes. As indicated by strong evidences, perception of organizational

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Notes politics are negatively related to job-satisfaction, it may also increase

job anxiety and stress. People may also believe that they may be losing
ground to those who are active politickers, or they might feel pressurised
in the political environment leading to decline in performance as they
perceive such environment to be unfair and demotivating.
On many occasions, when employees see politics as threat, they respond
with defensive behaviours, which may either be reactive and proactive
to avoid action, blame or change. Such behaviours are often associated
with negative feelings towards job and work environment. Exhibit 5.2
shows such responses to organizational politics.
Organizational politics may
Decreased Job
Satisfaction
threatenemployees

Increased anxiety
and stress

Increased
turnover

Reduced
Performance

Exhibit 5.2: Employee Response to Organizational Politics

5.5.4 Managing Organizational Politics

When Politics start playing a dirty game it needs to be managed. Completely
washing off politics from the organization is almost an impossible task
so one has to come into the habit of living with it by managing it in
the organization and keeping it under control. The same can be done by
keeping few vital things in mind:
1. Instead of eradicating or reducing organizational politics, focus should
be more on activities that creates a healthy political environment that
contributes towards improving knowledge flows and organizational
performance.
2. Managers should also consider appointing “alignment managers”,
people having political competencies who can push ideas, steer
organizational change without resistance.

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3. Managers needs to adopt consistency in supporting behaviour and Notes

aligning interest, goals and responsibility of their diversified work
team to keep them motivated to share and disseminate knowledge.
4. Teams should keep themselves updated by renewing norms and
work habits on ongoing basis.
5. Activities to diffuse tensions and work struggles must be encouraged
among employees.
6. Companies must devise training programs and invest in creating
technical and cultural compatibility among work teams.
7. Those who are good at politicking, more likely to get higher
performance evaluation, larger higher salary increases and more
promotion, here an efficient manager’s role is to identify them and
make fair and just decisions.
8. Sometimes Employees play politics because they are habitual to it.
They are not always driven by lower job satisfaction, increased
anxieties and stress and rivalry.

Technology, Innovation, and Politics in Performance Appraisals

Developing a strategy for a performance appraisal is an important step
for any company, and keeping out political bias is a main concern as
well. Unfortunately, many times there is no way around bringing some
bias into a performance appraisal situation. Managers often think of the
impact that their review will have on the employee, how it will affect
their relationship, and what it means for their career in the future. There
are a lot of games played in the rating process and whether managers
admit it or not, they may be guilty of playing them. Many companies,
such as Adobe, are looking at ways that they can revamp the process
to eliminate potential biases and make evaluations fairer.
In 2012, Adobe transformed its business, changing its product cycle;
while undergoing process changes, Adobe understood that there needed to
be a cultural shift as well. It announced the “Check-in” review process
to allow for faster feedback, as well as an end to their outdated annual
review process. With the faster-paced reality of their product cycles
and subscription-based model in technology, this made complete sense.

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Notes
This process established a new way of thinking, allowing for two-way
communication to become the norm between managers and employees.
They were able to have frequent candid conversations, approaching the
tough subjects in order make improvements rather than waiting until
an annual review and letting bad performance go unchecked or good
performance go unnoticed. Eliminating a once-a-year cycle of review
also eliminates the issue of politics creeping into the process. Managers
are able to think critically about the performance, working alongside
their employees to better the outcome rather than worrying about having
a tough conversation and the bad result that may follow—and having
to live with the fallout. Employees also are given chances to provide
feedback and their own personal evaluation, which then is discussed
with the manager. They review the items together, and what is formally
submitted is agreed upon, rather than set in stone. The addition of the
employee feedback is another great way to reduce the insertion of
politics or bias in the review.
In result of this change, Adobe’s employees showed higher engagement
and satisfaction with their work, consistently improving. They no longer
had negative surprises in their annual review and were able to adjust
priorities and behaviours to become more effective workers.
Questions:
1. What are important considerations to eliminate potential political
bias in a performance review?
2. Why was Adobe successful in the changes that they implemented
in their performance review process?
3. What other positive outcomes could be achieved from an ongoing
feedback model versus annual performance review?
Sources: D. Morris, “Death of the Performance Review: How Adobe
Reinvented Performance Management and Transformed its Business,” World
at Work Journal, Second Quarter, 2016, https://www.adobe.com/
content/dam/acom/en/aboutadobe/pdfs/death-to-the-performance-review.
pdf; “How Adobe retired performance reviews and inspired great
performance,” Adobe website, accessed January 4, 2019, https://
www.adobe.com/check-in.html; K. Duggan, “Six Companies That Are
Redefining Performance Management,” Fast Company, December 15,
2015, https://www.fastcompany.com/3054547/six-companies-that-are-
redefining-performance-management.

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IN-TEXT QUESTIONS Notes

6. The basis of influence is power. (True/False)

7. The power tactic that is based on factual data and logical
arguments is ________.
8. This Power tactic refers to Give and Take:
(a) Consultation
(b) Exchange
(c) Personal Appeal
(d) Inspirational Appeals
9. ________ refers to make others feel happy about themselves.
10. ________ tactic is present across all three levels (upward,
downward & lateral).
11. Goal ________ is the source of Political behaviour in the
organization.
12. Decreased ________ and reduced ________ are the two responses
towards organizational politics.
13. One must always make attempt to completely eradicate politics
from the organization. (True/False)
14. Activities to diffuse ________ and ________ should always be
encouraged among employees to manage politics.
15. Companies must always invest in creating ________ and ________
compatibility to curb political behaviour.

5.6 Summary
In organizations power is symbolised by the amount of influence that you
have on others. There is a directly proportional relations between power
and influence, i.e. more is the power, greater is the influence. It is usually
seen in organizations that everyone seeks power, irrespective of sector,
industry, nature of organization, level of hierarchy one belongs to, no
matter what level you are working at, almost everybody seeks power in
their hands so that they can work or make others work in their interest.
When using power a very important point that needs to be kept in mind

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Notes is ‘How much’ and ‘Where’ to use power, as excesses of anything is not
good, and so is Power.
In any organization politics also coexist with power, they are closely
linked to each other. To understand this it is necessary to understand the
transformation of power into politics, how politics effect organization and
its people, how people respond to politics and how managers manage
politics in organizations.

5.7 Answers to In-Text Questions

1. Dependence
2. True
3. (c) Charismatic Power
4. Referent Power
5. Coercive Power
6. False
7. Rational persuasion
8. (b) Exchange
9. Ingratiation
10. Rational persuasion
11. Ambiguity
12. Job satisfaction & Performance
13. False
14. Tension & Work struggle
15. Technical & Cultural

5.8 Self-Assessment Questions

1. Present your views on the following statement in for or against “The
use of power in organization is unethical”.
2. Compare & contrast interpersonal and structural sources of power
in organizations.

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3. What is Dependence? How power is the function of dependence? Notes

4. What are the nine most often identified power or influence tactics
and their contingencies?
5. What are the sources of organizational politics. What are the skills
which an executive must possess in order to be politically competent?

5.9 References
‹ Drummond H., (2002). Introduction to Organizational Behaviour,
Oxford University Press Inc., New York.
‹ Gordon R.J., A Diagnostic, (1991). Approach to Organizational
Behavior, Allyn and Bacon, Massachusetts.
‹ Kanter, R.M. (1979). Power Failure in Management Circuits. Harward
Business Review, p. 65.
‹ Pfeffer, J. (1992). Understanding Power in Organizations. California
Management Review, p. 3.
‹ Carney, D. (2010). Powerful People Are Better Liars. Harward
Business Review, p 32-33.
‹ Ferguson, A.J., Ormiston, M.E. and Moon, H. (2010), From approach to
Inhibition: The Influence of Power on Responses to Poor Performers.
Journal of Applied Psychology, p 305-320.
‹ French Jr., J.R.P. and Raven, B. (1959), Studies in Social Power, Ann
Arbor, MI: University Of Michigan, Institute for Social Research,
p 150-167.
‹ Raven, B.J. (1993), The Bases of Power: Origins and Recent Develop-
ments, Journal of Social Issues, p 227-251.
‹ Yukl, G. (2004), Use Power Effectively, Handbook of Principles of
Organizational Behaviour, p 242-247.
‹ Ward, E.A. (2001), Social Power Bases of Managers: Emergence
of a New Factor, Journal of Social Psychology, p 244-147.
‹ Emerson, R.E. (1962), Power Dependence Relations, American
Sociological Review, p 31-41.
‹ Mintzberg, H. (1983), Power in and around Organization, Upper
Saddle River, NJ: Prentice Hall, p 24.

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Notes ‹ Robbins, S.P., Judge, T.A., and Vohra, N. (2013), Organizational

Behavior, Dorling Kindersley (India) Pvt. Ltd.. p.439.
‹ Kreitner, R., Kinicki, A. (1998). Organizational Behavior, Irwin/
McGraw-Hill Companies. Pfeffer, T. (1982) Power in Organizations,
Pitman, Boston.
‹ Falbe, C.M. and Yulk, G. (1992), Consequences for Managers of
Using Single Influence Tactics and Combination of Tactics, Academy
of Management Journal, p 638-653.
‹ Rao, A., Kim, J., Sarachandra, S. and Mirabelli, A. (1957), Managing
Across Cultures: Influence Strategies of American & Indian Managers,
Review of Business Research, p 58.

5.10 Suggested Readings

‹ Robbins, S.P., Judge, T.A., and Vohra, N.(2013), Organizational
Behavior, Dorling Kindersley (India) Pvt. Ltd.. p.439.
‹ Pfeffer, J. (1992). Understanding Power in Organizations. California
Management Review, p. 3.
‹ Ferguson, A.J., Ormiston, M.E. and Moon, H. (2010), From approach to
Inhibition: The Influence of Power on Responses to Poor Performers.
Journal of Applied Psychology, p 305-320.
‹ Raven, B.J. (1993), The Bases of Power: Origins and Recent
Developments, Journal of Social Issues, p 227-251.

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L E S S O N

6
Motivation at Work
Dr. Reema Aggarwal
Assistant Professor
Department of Distance & Continuing Education, Campus of Open Learning,
University of Delhi
Email-Id: [email protected]

STRUCTURE
6.1 Learning Objectives
6.2 Introduction
6.3 Process of Motivation
6.4 Approaches to Motivation
6.5 Maslow’s Need Hierarchy Theory
6.6 McClelland’s Theory of Needs
6.7 Alderfer’s ERG Theory
6.8 Herzberg Two Factor Theory
6.9 Comparison between Maslows’ & Herzbergs’ Theory of Motivation
6.10 Theory X and Theory Y
6.11 Vroom’s Expectancy Theory
6.12 Equity Theory
6.13 Goal Setting Theory
6.14 Reinforcement Theory
6.15 Types of Motivation: Cognitive Evaluation Theory
6.16 Application of Motivation Concepts
6.17 Alternative Work Arrangements
6.18 Management by Objectives (MBO)
6.19 Employee Involvement Program
6.20 Summary
6.21 Answers to In-Text Questions
6.22 Self-Assessment Questions

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Notes 6.23 References

6.24 Suggested Readings

6.1 Learning Objectives

At the end of this lesson, the student should be able to-
‹ Define Motivation
‹ Explain the need for and process of motivation in an organisation.
‹ Develop an understanding of the importance of motivation in an
organisation.
‹ Explain various theories of motivation.
‹ Differentiate between content and process theories of motivation.
CASE STUDY
Amrita and Shweta together has recently joined “Edu Drive”. Edu
Drive is an innovative learning organisation that collaborates with
various schools and promotes the concept of experiential learning.
The office is near to Amrita’s house, Amrita finds the job suitable
to her in terms payment and location. Whereas it takes 30 minutes
to Shweta to reach office. At the Edu Drive, Amrita works under
the supervision of Mr. Das, and Shweta works under the supervision
of Mr. Jain. As managers, Mr. Jain and Mr. Das are quite different.
Mr. Jain supports job rotation, employee participation, equal treatment
to all subordinates, etc. He assigns different tasks each week to reduce
boredom; this also allows employees to understand how the tasks are
operated Edu drive, as they are allowed to do a variety of tasks. For
instance, Shweta has worked at the content/ PowerPoint presentation
development, video development, and addressing queries through
online portal. In addition to this, Mr. Jain also motivates Shweta to
address concerns of teachers in case of urgency.
Mr. Das, on the other hand, feels it is essential to specialize in a
particular task, due to which he prefers repeating the same task
repeatedly. For instance, Amrita has only worked on Organizing and
formatting the content and PowerPoint presentations.
Mr. Das supports specialization and is very particular about time.
According to him, monetary and non-monetary benefits could vary
from person to person. Two employees in the same position could
receive different benefits based on their performance.

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On a fine day, Amrita met Shweta at lunch. Since morning Amrita Notes
has been formatting documents. During lunch hour, Amrita shared
her awful experience with Shweta.
Amrita - I am tired of this monotonous job. Every day I do the
same thing.
Shweta - Why don’t you tell Mr. Das you want something else? I
have heard he allows Daisy to work in other areas, even though I
have heard daisy is paid $2 more an hour. Is that true?
Amrita - Yeah, though I do exactly what she does. What I don’t do
is tell Mr. Das how cool his dressing sense is. If you ask me, his
dressing sense is pathetic.
Shweta - That’s bad. You put in equal effort.
Amrita - Efforts? In what? Formatting ppts. This job is so meaningless.
Even if I format more documents what will I get, another badge that
says a good job.
Anyhow, what about you? How’s your job going?
Shweta - Pretty good. Today Mr. Jain and I discussed targets that
I have to achieve in the next week. It is to counsel 40 teachers at
TGT level. Through my contacts, If I succeed in doing so, then I’ll
get a bonus of $75. It is difficult, but I want to give it a shot.
Amrita - Good to know. I would have left this job if I didn’t have
monetary constraints.
Shweta - Look at the brighter side; you are paid more than Rahul.
Rahul joined before you joined.
Amrita - True. Rahul gives way too much effort, and to me, it
doesn’t even make sense. If daisy is getting more pay, then I think
daisy should also take all responsibilities as well.
Shweta - I understand. Mr. Jain is the best supervisor.
Amrita - (while looking at the watch) yeah, I am getting late; Mr.
Das is very particular about time. He expects his subordinates to
reach 5 minutes before time. I think it’s time to format documents.
Questions:
1. Name the various motivation theories that have been highlighted
in the above case.
2. Identify the motivation theory that explains Amrita’s behaviour
towards the end.

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Notes 3. Using expectancy theory explains the difference in motivation

between Amrita and Shweta.
(Reference: Robbins, S. P., Judge, T. A., & Vohra, N. (2019). Organizational
behaviour by Pearson 18e. Pearson Education India.)

6.2 Introduction
A manager’s responsibility is to inspire staff to perform their tasks effectively.
So how do managers accomplish this? The solution is “Motivation”, the
process through which managers make employees more productive and
effective. It is the process in which basic need leads to creating drives
aimed at a goal. Highly driven people put in much effort at their jobs,
whereas those who lack motivation do not. Employees who are “happy”
are sometimes mistaken for those who are “motivated.” These may be
connected, but motivation reflects the degree of drive workers have
to work hard regardless of their level of enjoyment. It is a force that
directs employees to act in a certain way. Motivated employees are more
productive and engaged and feel more immersed in their work.
The phenomenon of motivation is complex, with multiple definitions.
The common frame of reference contains one of the following words in
the definition: drives, goals, incentives, desires, wants, and needs. The
motivation process accounts for an individual’s intensity, direction, and
persistence of effort toward achieving a goal. The concept of motivation
is situational, and its level varies between different individuals and at
different times. If you understand what motivates people, you have the
most powerful tool for dealing with them at your command. Motivating
employees is one of the most crucial roles of management. It includes the
skills of communicating, leading by example, challenging, encouraging,
obtaining feedback, involving, informing, briefing, and rewarding. Motivation
is a catalyst since it impacts the intensity of willingness and the level of
work a person puts forth to attain organisational goals.

6.3 Process of Motivation

The motivational process begins with identifying an employee’s needs and
drives. Needs are the deficiencies a person experiences at a particular point
in time that makes specific outcomes appear attractive. These deficiencies

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cause psychological (e.g., need for recognition) or physiological (e.g. Notes

need for water, shelter, or food) imbalances within the individuals. The
deprived person, in turn, examines the environment (surroundings) to find
the sources to gratify these imbalances. An unsatisfied need often acts
as an energizer as they create tension within the individuals. Therefore,
employees explore ways to satisfy them.
Next comes the effort given by employees within a context of opportunity
(resources at disposal) to bridge the gap. Actions should be goal-oriented,
as motivation is primarily goal-directed. Goal-directed efforts lead to
performance towards which skill and technology (i.e., ability) undoubtedly
contribute significantly. In the next phase, if performance is suitably
rewarded, it results in need satisfaction. Finally, once the employees have
received rewards, they reassess their needs.

Environment
Opportunity

Needs and
drives Tension Effort Performance Rewards

Goals &
Incentives
Need
satisfaction

Figure 6.1: Process of Motivation

The managers today have a challenge to cater to diverse employees
and their needs to help employees get attuned to working in different
cultures. Training and retaining the exemplary employees and supporting
their growth is another reason managers need to utilize the insights and
implications suggested by motivational theories. Several theories attempt
to explain how motivation works. The foundation of these motivation
theories took place during the 1950s. In management circles, probably the
most popular explanations of motivation are based on the needs of the
individual. However, there has been a shift in the business environment
with regard to globalization in terms of the blending of work cultures
and social cultures, increasing participation of women, raising awareness
of the issue, and increased competition. All this has made motivation an
even more prominent subject.
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Notes
6.4 Approaches to Motivation
Several theories attempt to explain how motivation works. The theories
could be broadly categorized into Cognitive and non-cognitive models.

6.4.1 Cognitive Models

The cognitive model of motivation consists of theories that focus on
the human mind’s internal state. The focus is on mental processes that
emerge from human needs, desires, expectations, and drives. Theories
under the cognitive model could be further sub-divided into Content and
Process theories.

6.4.1.1 Content Theories

Content (or need) theories of motivation focus on factors internal to the
individual that energize and direct behaviour. These theories suggest
that people have certain needs and/or desires which are internalized. In
general, such theories regard motivation as the product of internal drives
that compel an individual to act or move (hence, “motivate”) toward
satisfying individual needs. It answers the following question-
“What Motivates Employees?”
The motivation process starts with specific unsatisfied needs (as mentioned
above). These psychological and physiological needs create tension in the
mind of employees. The employees explore ways and act in a particular
manner to satisfy these unsatisfied needs. Content theories explain
different types of needs within employees. Following are some popular
content theories-
‹ Maslow’s Need Hierarchy Theory
‹ Herzberg’s Motivation Hygiene Theory
‹ Alderfer’s ERG Theory
‹ McClelland’s Needs Theory

6.4.1.2 Process Theories

Process theories are concerned with determining how individual behaviour

is directed and maintained in the specifically self-directed human cognitive

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processes. Process theories of motivation are based on early cognitive Notes

ideas which posit that behaviour results from conscious decision-making
processes. It looks at what people are thinking about when deciding whether
to put effort into a particular activity. It answers the following question-
“How Motivation Occurs?”
Process theories explain process within the human mind that leads to
motivation. Following are some popular process theories-
‹ Vroom’s Expectancy Theory
‹ Adam’s Equity theory
‹ Goal Setting Theory

Theories of Motivation

Cognitive Models Non-Cognitive Models

Content Process Reinforcement

Theories Theories Theory by B.F.
Skinner
Maslow’s Need Vroom’s
Hierarchy Theory Expectancy Theory

Alderfer’s ERG Adam’s Equity

Theory theory

McClelland’s Needs Goal Setting Theory

Theory By Edwin Locke
Herzberg’s
Motivation Hygiene
Theory

Theory X and
Theory Y

Figure 6.2: Cognitive and Non-Cognitive Models of Motivation

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Notes 6.4.2 Non-Cognitive or Reinforcement Model

Unlike the cognitive model, which focuses on the internal state, the non-
cognitive model focuses on external forces. If an action is rewarded,
the employee is motivated to repeat the action. Similarly, if action is
punished, employees will be motivated not to repeat it. A manager could
use various external forces, like rewarding, punishing, ignoring, etc., to
motivate employees to behave in a particular manner. Both cognitive and
non-cognitive models are complementary to each other. It is not mutually
exclusive. It means both models work together to motivate employees.
IN-TEXT QUESTIONS
1. The motivational process begins with identifying an employee’s
________ and ________.
2. These theories of motivation could be broadly categorized into
________ and ________ models.
3. Cognitive model of motivation consist of theories that focus on
________.
4. Theories of motivation under cognitive model could be further
sub-divided into ________ and ________.
5. Content theories does not include:
(a) Maslow’s Need Hierarchy Theory
(b) Herzberg’s Motivation Hygiene Theory
(c) McClelland’s Needs Theory
(d) Adam’s Equity theory
6. Process theories does not include:
(a) Alderfer’s ERG Theory
(b) Goal Setting Theory By Edwin Locke
(c) Vroom’s Expectancy Theory
(d) Adam’s Equity Theory

6.5 Maslow’s Need Hierarchy Theory

It is one of the popular motivation theories given by A.H. Maslow. Maslow
suggested that employees’ needs are arranged in a particular hierarchy (as

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shown in Figure 6.3). As lower-order needs are satisfied, the hierarchy’s Notes
next need becomes dominant. From the standpoint of the theory, we
could say that no need is ever gratified. A substantially satisfied need
no longer motivates. Maslow separated the needs into higher and lower-
order needs. Physiological and safety needs are lower-order needs, while
higher needs are social esteem and self-actualization. The differentiation
is that the higher-order needs are satisfied only within a person, and the
lower-order needs are satisfied by material things. Following is a brief
on various categories of need as mentioned by Maslow-
‹ Physiological Needs: Physiological needs are basic needs that are
important for human survival, like water, food and shelter. Unless
these basic needs are fulfilled, other needs won’t be able to motivate
employees.
‹ Safety and security Needs: Once physiological needs are met, one’s
attention turns to safety and security needs. Such needs might be
fulfilled by living in a safe area, medical insurance, job security
and financial reserves.
‹ Social Needs: Employees are social beings. The need for social
circle and belongingness remains important. Social needs are the
first higher-level wants that become essential after a person has
satisfied their lower-level physiological and safety requirements.
‹ Ego or Esteem Needs: Esteem needs may be classified as internal
or external. Internal esteem needs are related to self-esteem, such
as self-respect, independence, and achievement. External esteem
needs are such as social status and recognition. Some esteem needs
are self-respect, attention, recognition, and reputation.
‹ Self-Actualization: It is the quest of reaching one’s full potential
as an individual. Unlike lower-level needs, this need is never fully
satisfied as one matures. There are always new opportunities to
continue to grow. Self-actualized people tend to have needs such
as truth, justice, wisdom, and meaning. Self-actualized persons
have frequent occurrences of peak experiences, which are energized
moments of profound happiness and harmony.
Note: However, not all people are driven by the same needs - at any
time, different people may be made by entirely different factors. To
motivate employees, managers must recognize the needs level at which
the employee is operating and use those needs to motivate employees.

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Notes
6.5.1 Appraisal of Maslow’s’ Need Hierarchy Theory
The theory suggests that needs follow a definite sequence. However, due
to cultural differences, this may not hold. Some cultures appear to place
social needs before others (for example, Spain and Belgium workers felt
this way). Similarly, some assumptions might not work in all cases; for
example, employees won’t move to the next level need unless a lower
need is fulfilled. Also, satisfied needs won’t motivate employees further.
Finally, there is little evidence to suggest that people are motivated to
satisfy only one need level at a time, except when there is a conflict
between needs. A “multiplicity of motives often guides employees”. Even
though Maslow’s hierarchy lacks scientific support, it is pretty well-known
and is the first theory of motivation to which many people are exposed.

Self
actualization

Esteem Needs

Social Needs

Safety Needs

Physiological
Needs
Figure 6.3: Maslow Needs Hierarchy Theory

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6.6 McCelland’s Theory of Needs Notes

Three need model is formulated by ‘David McClelland’. David McClelland

proposed that an individual’s specific needs are acquired over time,
shaping one’s life experiences. The needs can be classified under three
categories: Achievement, Affiliation, and Power. Also termed as the need
for affiliation (n Aff), the need for power (n Pow), and the need for
achievement (n Ach).

Need for
Achieveme

Three
Need Need for
Power

Theory

Need for
Affiliation

Figure 6.4: Three Need Theory

Need for achievement (n Ach): Refers to the drive to excel, grow,
strive, and succeed to a set of standards. People who need achievement
differentiate themselves from others by their desire to do things better.
They try to seek situations where they can achieve rapid feedback on
their performance. Such individuals set moderately challenging goals.
They are not gamblers, but they take up situations where the probability
of winning is 50 -50. Such individuals also prefer to work hard and take
personal responsibility for failures.
Need for power (n Pow): The need to make others behave in a particular
manner in which they wouldn’t have acted otherwise. The need for power
is the desire to have an impact on others or to be able to influence or
control others. Individuals with high ‘Power Need’ enjoy being in charge

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Notes and prefer to be placed in competitive and status-oriented positions.

McClelland categorized power into two categories, namely, institutionalized
and personalized power. Here institutionalized power refers to the power
used for social benefit, and personalized power refers to the power
exercised for individual gain.
Need for affiliation (n Aff): The desire for friendly and close interpersonal
relationships. It refers to the need for affiliation, i.e. the desire to be
liked and accepted by others. Individuals with this need strive to maintain
friendships and prefer cooperative situations.

6.6.1 Implication of the McClelland’s theory of needs

David McClelland’s Human Motivation Theory gives a manager a way of
identifying people’s motivating drivers. It can help get praise and feedback
effectively, assign suitable tasks, and keep oneself highly motivated.
Certain problems have also been identified in theory: The degree
to which we have each of the three needs is difficult to measure, and
therefore the theory is difficult to put into practice. It is more common
to find situations where managers aware of these motivational drivers
label employees based on observations made over time. Therefore, the
concepts are helpful but not often used objectively.

6.7 Alderfer’s ERG Theory

The ERG theory is an extension of Maslow’s hierarchy of needs. The
theory was developed to reduce the overlap between the five needs
described by Maslow. Maslow’s need theory was condensed into three
types of needs, namely, existence, relatedness, and growth by Alderfer.
It also assumes that no rigid structure of needs hierarchy is followed.
‹ Existence Needs: The existence needs comprise all those needs that
relate to the physiological and safety aspects of human beings and
are a prerequisite for survival. Thus, Maslow’s physiological and
safety needs are grouped into one category because of their same
nature and similar impact on an individual’s behaviour.
‹ Relatedness Needs: The relatedness needs refer to the social needs,
that an individual seeks to establish relationships with those he cares

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for. The relatedness needs refer to our desire to maintain essential Notes
relationships interpersonally. These align with Maslow’s social needs
and the external component of Maslow’s esteem needs
‹ Growth Needs: Growth needs refers to the intrinsic desire for personal
development and the characteristics included under self-actualization.
The ERG theory demonstrates that more than one need may be
operative simultaneously, and if the gratification of a higher-level
need is stifled, the desire to satisfy a lower-level need increases.
Thus, growth needs are those needs that influence an individual to
explore the maximum potential in the existing environment.

Growth

Relatednes

Existence

Figure 6.5: Alderfer’s ERG Theory

6.8 Herzberg Two Factor Theory

Frederick Herzberg proposed the two-factor theory of motivation. An
empirical study was conducted using a sample of 200 engineers and
accountants, and based on the study’s findings, the various needs were
categorized into two factors, namely, hygiene factors and motivators.
Hygiene factors, which were previously thought to be the motivators, do
not result in motivation but are necessary to bring the level of motivation
to a start level or platform so that the motivation of personnel from that
platform becomes easier. It was reported in the study that the presence

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Notes of hygiene factors would not cause satisfaction, but their absence would
cause dissatisfaction. Hygiene factors must be present in the Job before
motivators can be used to stimulate that person.

Hygiene factors
(Job-Dissatisfaction Motivating Factors
(Job-Satisfaction)

Figure 6.6: Herzberg’s Theory

One cannot use motivators until all the hygiene factors are met. Herzberg’s
needs are specifically job-related and reflect some of the distinct things
people want from their work as opposed to Maslow’s Hierarchy of Needs
which reflects all the needs in a person’s life. The following table shows
the difference between hygiene factors and motivators-
Hygiene factors Motivators
Absence results in dissatisfaction; Absence results in no satisfaction;
presence results in no dissatisfaction presence results in satisfaction

Examples- Company policy, adminis- Examples- Achievement, recognition,

tration, supervision, working condi- work itself, responsibility, and growth
tions, equitable salary

Hygiene Factors Motivators

Dissatisfie

Satisfiers

E.g. Salary, E.g. Work itself,

Status, Security, Achievement,
Work Recognition,
Growth, etc.

Figure 6.7: Examples of hygiene and motivation factors

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Herzberg also reported that both factors are uni-dimensional, i.e., the effect Notes
could only be seen in one direction. In other words, hygiene factors are
maintenance factors or dissatisfiers, meaning if they are present, they act
as a maintenance factor, and if they are not, they act as a dissatisfier.
Either way, they won’t motivate employees. Similarly, motivators are
satisfiers, which means they tend to motivate the employees if they are
present.

6.8.1 Contribution of Herzberg’s Two-Factor Theory

Herzberg’s two-factor theory has two essential Contributions.
First, improving work conditions and basic pay won’t motivate employees
to give higher performance. On the contrary, it would only reduce
dissatisfaction among employees. It gave managers a different perspective,
who believed this could motivate employees.
Secondly, Herzberg stressed that “work itself” is a motivator. It also gives
a better understanding of the term “Job enrichment”.
Additionally, Herzberg mentioned that today’s motivator is tomorrow’s
hygiene factor. Because eventually, human needs shift to other needs.
Herzberg’s Two Factor Theory continues to be essential for management
in motivating their employees. His idea that satisfaction and dissatisfaction
do not form a continuum, that one decreases with another increase, still
holds. In fact, companies today are increasingly looking for ways to enrich
their team’s work. They are building enrichment into the appraisal and
review process and investing in training and development opportunities.
Job engagement has also become a key focus.
Example - TESCO (a major supermarket chain in the UK) today focuses
on factors causing satisfaction as well as dissatisfaction. Employees are
motivated and empowered by timely and appropriate communication,
involving personnel in decision-making, and delegating wherever possible.
Forums are held every year in which staff can provide input on pay
raises. Tesco personnel even get an opportunity to give their input when
restaurant menus are designed, helping to prevent feelings of alienation
and dissatisfaction.

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Notes 6.8.2 Relationship between Herzberg’s’ theory and McClellands’

theory of motivation
People with high achievement (n Ach) are more inclined towards motivators,
whereas those who score low in achievement (n Ach) are more inclined
towards maintenance factors.
For example, managerial people are expected to score high on achievement.

6.8.3 Appraisal of Herzberg Two factor Theory

Herzberg’s’ theory argues that job enrichment is required for intrinsic
motivation. According to Herzberg, the Job should have a sufficient
challenge to utilize the full ability of the employee. If the motivation-
hygiene theory holds, management must not only provide hygiene factors
to avoid employee dissatisfaction but also provide factors intrinsic to the
work itself for employees to be satisfied with their jobs. Herzberg’s theory
is highly appreciated but has also been criticized due to the following
reasons-
1. Limited sample of Professions: The study’s finding was based on
the limited sample of professionals, who might value challenging
tasks, but it is difficult to generalise the findings or say that financial
benefits or payments are not a motivator.
2. Too much emphasis is given to the enrichment of jobs. For example-
Employees do get satisfaction through status and pay; but such
components have not been given much focus.
3. Situational factors have been ignored. For example, pay may motivate
a worker, but the same is not true for an employee.
IN-TEXT QUESTIONS
7. Physiological and safety needs are the _________ of motivation
given by A.H. Maslow.
(a) Lower order needs
(b) Higher-order needs
(c) Important needs
(d) Required needs

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8. Higher order needs are _________ and _________. Notes

(a) Social esteem

(b) Self-actualisation
(c) Safety needs
(d) Both (a) and (b)
9. _________ proposed the two-factor theory of motivation.
(a) Frederick Herzerg
(b) A.H. Maslow
(c) Alderfer
(d) Locke
10. Absence of Hygiene factors results in dissatisfaction, presence
results in _________.
(a) No dissatisfaction
(b) Satisfaction
(c) Achievement
(d) Dissatisfaction
11. _________ argued that job enrichment is required for intrinsic
motivation.
(a) Herzbergs’ Two-factor Theory
(b) Maslow’s Need Hierarchy Theory
(c) Alderfer’s ERG Theory
(d) McClelland’s Needs Theory

6.9 Comparison between Maslows’ & Herzbergs’ Theory

of Motivation
There are some similarities and differences between Herzberg two factor
theory and Maslows’ need hierarchy. Herzberg’s maintenance factors
include part of self-esteem needs. Esteem needs consist of two portions;
one is intrinsic in nature, like recognition. Recognition comes through

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Notes competencies and achievements. Hence it acts as a motivator. However,

esteem needs are extrinsic, like status gained through the position one
occupies, which only falls under the hygiene factor. As shown in Figure
6.8, motivation factors are higher-order needs.

Figure 6.8: Relationship between Maslows’ and Herzbergs’ Model

Following are some noticeable differences between both the theories:
Herzberg Maslow
The theory given by Herzberg is based It is not based on an empirical
on an empirical study. study.
The theory fails to explain the behaviour It is true for all employees in
of workers. It is more relevant for general.
professionals.
Only higher-order needs are treated as $OO XQVDWLV¿HG QHHGV FRXOG EH D
motivators. motivator.
It is prescriptive in nature. It is Descriptive in nature
It doesn’t follow any sequence. It follows a hierarchical
arrangement of needs.

6.10 Theory X and Theory Y

Douglas McGregor formulates theory X and Y. After studying managers’
dealing with employees, McGregor identified two different viewpoints
based on the assumptions a manager follows while managing employees.

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Theory X Notes
Assumptions
‹ Employees in general does not like work and if possible, tries to
avoid it.
‹ Unless manager closely supervise employees, it is difficult to ensure
task completion. Therefore, manager must push employees to work
either through reward or punishment.
‹ Employees lacks aspiration and dislikes responsibility. They give
more weightage to job security.
‹ Manager needs to direct them at every step.
Under the first viewpoint, the manager believes that employees dislike
working and therefore it is important to direct them as managers. This
viewpoint is based on the “Carrot and Stick Approach”. According to the
“Carrot and Stick” approach, a manager could motivate such employees
through rewards or could make them work through punishments. In other
words, Theory X assumes that lower-order needs (as Maslow suggested)
dominate the employees. It represents a pessimistic viewpoint.
Theory Y
Assumptions
‹ Unlike Theory X, employee like their work.
‹ Employees possess self-direction and self-control. They are dedicated
to achieve the goals set by organisation.
‹ Employees are loyal and committed towards organisations.
‹ Employees are ready to take responsibility, and they possess capabilities
to solve problems and complete the task on their own.
Unlike theory X, under theory Y is an optimistic viewpoint. Here, managers
assume that employees are self-motivated and like to do the work. If we
look at Maslow’s need hierarchy, then according to theory Y employees
are motivated by higher-order needs, like esteem and self-actualization
needs motivates employees.
Implication of Theory X and Theory Y
Theory Y encourages employee participation in decision making process.
It encourages decentralization. According to this theory employee are

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Notes problem solver and knows how to discover new ways to complete a
task. It is found to be more reasonable and valid as compared to Theory
X. Unfortunately, no evidence confirms that either set of assumptions is
valid. Theory X and Theory Y lack empirical support, which is vital for
accepting the OB theories.
IN-TEXT QUESTIONS
12. Three need model is given _________.
(a) David McClelland
(b) Frederick Herzerg
(c) A.H. Maslow
(d) Alderfer
13. The need for _________ is the desire to have an impact on
others or to be able to influence or control others.
(a) Affiliation
(b) Power
(c) Safety needs
(d) Achievement
14. The desire for friendly and close interpersonal relationships. It
refers to the need for _________.
(a) Affiliation
(b) Power
(c) Safety needs
(d) Achievements
15. People with high on _________ are more inclined toward
motivators.
(a) Achievement needs
(b) Affiliation needs
(c) Safety needs
(d) Social needs

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16. The _________ is an extension of Maslow’s hierarchy of needs. Notes

(a) Herzbergs’ Two factor Theory

(b) Goal Setting Theory by Edwin Locke
(c) Alderfer’s ERG Theory
(d) McClelland’s Needs Theory

6.11 Vroom’s Expectancy Theory

Expectancy theory is part of process theories. Unlike previous theories,
where the focus was on what motivates employees? Expectancy theories
attempt to answer how motivation takes place in employees’ minds.
Expectancy, Instrumentality and Valence interact psychologically to create
a motivational force such that the employee acts in ways that bring
pleasure and avoid pain. In other words, individuals’ perception of the
outcomes of their actions and the value they add to the outcomes will
determine their motivation to do a particular action. The Vrooms’ theory
of motivation consists of three components: Expectancy, Instrumentality,
and Valence.
Expectancy (Effort-performance probability) - Employees have different
expectations and levels of confidence about what they can do. Expectancy
refers to an employee’s perception of his/her capabilities to perform the
given task. It could range from 0 to 1. Example: If an employee believes
that s/he lacks the required knowledge and the chances to complete the
given task are zero, zero will be scored in expectancy. Similarly, if s/he
believes that s/he will be able to complete the task based on confidence
level, higher score on expectancy would be obtained.
Instrumentality- refers to employees’ perception about receiving desired
rewards if they perform the given task. In other words, employees’ beliefs
about doing specific actions will lead to promised rewards (strength of
relationship). It could range from 0 to 1. Example: Let us assume an
employee X needs a promotion. Suppose Employee X believes that his/
her efforts will give him the promotion. Then, s/he will score high on
Instrumentality. Similarly, if s/he believes the efforts have nothing to do
with promotion, s/he will score zero in Instrumentality.

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Notes Valence - This represents employees’ preference for the reward. In other
words, it refers to how highly the employees value the rewards. It could
range from -1 to 1. If an employee is indifferent about the reward, his
valence will be zero.
All three components could be arranged in the form of an equation:
Motivation = Expectancy × Instrumentality × Valence
All components should score above zero. If either of them becomes zero,
motivation among employees will become zero. Conversely, motivation
will be high if all three components will score high.

Expectancy

Instrumentality Motivation

Valence

Figure 6.9: Vroom Expectancy Theory

6.12 Equity Theory

J.S. Adams formulated the Equity Theory of motivation. The equity theory
helps us understand the importance of equal treatment of all employees
in an organisation. The theory explains the process through two components,
namely inputs and outcomes. People use subjective judgment to balance
the outcomes and inputs for comparing other employees with themselves.
If people feel they are not equally rewarded, they either reduce the
quantity or quality of work. However, if people perceive that they are
rewarded higher, then they are motivated to work harder.
This theory believes that a manager’s fair treatment and balanced decisions
are crucial in an organisation and states that an employee compares his/
her job’s input and outcomes with others, whether within or outside the
organisation and then responds to eliminate these inequalities.

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Inputs [What I put into Notes

my job: Efforts, loyalty,
time, knowledge, etc.]

Outputs [What I get

from my job: Pay, bonus,
perks, benefits, etc.]

Figure 6.10: Equity Theory

Here ‘Input’ refers to everything that an employee gives to the organisation
(example-skills, knowledge, efforts, time, idea, etc.); and ‘Outcomes’ refers
to various rewards that he receives from an organisation (for example-
pay, recognition, promotion, benefits, friendly relationships, etc.). The
employee tends to compare the inputs he gives to an organisation with
the outcomes he receives. Additionally, s/he tends to compare his input-
outcomes ratio with others.
According to Equity theory, employees take measures to re-establish fair
treatment in case of inequity. Following are some examples through which
employees could re-establish equity -
‹ Changing their inputs by giving less effort.
‹ Changing outcomes by asking for higher returns.
‹ Plans to leave the organisation.
‹ Changing the employee with whom they compare themselves.
Porter and Lawler’s expectancy model is an improvement over the
expectancy theory formulated by Vroom. The model states that combining
individual factors and the environment determines behaviour.
IN-TEXT QUESTIONS
17. Theory X and Y are formulated by ________.
(a) David McClelland
(b) Frederick Herzerg

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Notes (c) A.H. Maslow

(d) Douglas McGregor
18. Under this, manager believes that employees usually dislike
working and therefore as a manager it is important to direct
them.
(a) Theory X
(b) Theory Y
(c) Theory Z
(d) Three need theory
19. Expectancy theory is part of ________.
(a) Process Theories
(b) Content Theories
(c) Non-cognitive Theories
(d) Reinforcement Theory
20. ________ refers to how highly do the employees value the
rewards.
(a) Valence
(b) Instrumentality
(c) Expectancy
(d) None of the above
21. “If people feel that they are not equally rewarded they either
reduce the quantity or quality of work to some other organization.”,
the statement holds true as per-
(a) J.S. Adams Equity Theory
(b) Equity Theory by Edwin Locke
(c) Alderfer’s Equity Theory
(d) McClelland’s Equity Theory

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6.13 Goal Setting Theory Notes

Edwin Locke and Gary Latham formulated the goal-setting theory. The
theory states that goals affect employees’ motivation. The goal-setting
theory emphasizes on the importance of setting specific and challenging
goals for achieving motivated behaviour. Challenging goals are difficult
but not impossible to attain.
Instead of giving vague tasks to people, specific objectives are more helpful.
It revolves around the concept of “Self-efficacy,” i.e., an individual’s
belief that he or she can perform a given task. According to Locke and
Latham, goals affect individual performance through four mechanisms.
First, goals, direct effort toward goal-related activities and away from
unrelated activities. Second, goals energise employees. Challenging
goals lead to higher employee effort than easy goals. Third, goals affect
persistence. Employees exert more effort to achieve high goals. Fourth,
goals motivate employees to use their existing knowledge to attain a goal
or to acquire the knowledge needed to do so.
The goal-setting model indicates that individuals have needs and values
that influence their desires. According to Maslow’s hierarchy of needs,
all individuals possess some basic needs. Individuals do, however, differ
in their values. Therefore, if an employee finds that they are not satisfied
with the current situation, goal setting becomes a way of achieving what
they want.

6.14 Reinforcement Theory

B.F. Skinner formulated reinforcement theory. This theory proposes
that behaviour is a function of its consequences. In other words, unlike
cognitive theories of motivation, other than the inner state, motivation
can be enhanced through external factors. People are motivated or
demotivated by the action of their consequences. Positive consequences
lead to people repeating their behaviour, whereas negative consequences
restrict employees from repeating their actions.
Skinner argued that individuals’ internal needs and drives could be
ignored because people learn to exhibit certain behaviours based on what
happens to them as a result of their behaviour. Skinner states that the

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Notes work environment should be made suitable for the individuals. He also
mentioned that punishments lead to frustration and de-motivation. Hence,
the only way to motivate is to keep making positive changes in the
organisation’s external environment. The focus is on operant conditioning.
There are two types of reinforcement, namely, positive and negative.
Positive reinforcement refers to the occurrence of a valued behavioural
consequence that strengthens the probability of the behaviour being
repeated. The specific behavioural consequence is called a reinforcer.
An example of positive reinforcement might be a salesperson that exerts
extra effort to meet a sales quota (behaviour) and is then rewarded with
a bonus (positive reinforcer). The administration of the positive reinforcer
should make it more likely that the salesperson will continue to exert the
necessary effort in the future.
Negative reinforcement refers to an undesirable behavioural consequence
that is withheld, with the effect of strengthening the probability of the
behaviour being repeated. Negative reinforcement is often confused with
punishment, but they are not the same. Punishment attempts to decrease
the probability of specific behaviours; negative reinforcement attempts to
increase desired behaviour. Thus, both positive and negative reinforcement
increases the likelihood that a particular behaviour will be learned and
repeated.
An example of negative reinforcement might be a salesperson who exerts
effort to increase sales in his or her sales territory (behaviour), followed
by a decision not to reassign the salesperson to an undesirable sales
route (negative reinforcer). The administration of the negative reinforcer
should make it more likely that the salesperson will continue to exert the
necessary effort in the future.
As mentioned above, punishment attempts to decrease the probability of
exhibiting specific behaviours. Punishment is the administration of an
undesirable behavioural consequence to reduce the occurrence of unwanted
behaviour. Punishment is one of the more commonly used reinforcement-
theory strategies, but many learning experts suggest that it should be
used only if positive and negative reinforcement cannot be used in the
given circumstances. For an example of punishment might be demoting
an employee who does not meet performance goals or suspending an
employee without pay for violating work rules.

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The purpose of extinction is to reduce unwanted behaviour. In this manager Notes

tends to ignore the behaviour completely. Due to the absence of desired
response, the employee avoids the behaviour.
For example, if an employee receives no praise for his/her contribution
for months, his/her desirable behaviours will diminish. Thus, managers
may continue to offer posit behavioral consequences to avoid unwanted
Extinction.

6.14.1 Schedules of Reinforcement

The reinforcement schedule is timing the behavioural consequences
following a given behaviour. There are two broad types of reinforcement
schedules: continuous and intermittent. If a behaviour is reinforced each
time it occurs, it is called continuous reinforcement. Researchers suggest
continuous reinforcement is the fastest way to establish new behaviours or
eliminate undesired ones. However, this type of reinforcement is generally
not practical in an organisational setting. Therefore, intermittent schedules
are usually employed. Intermittent reinforcement means rewards are given
at irregular intervals. There are four types of intermittent reinforcement
schedules: fixed interval, fixed ratio, variable interval, and variable ratio.
Fixed interval schedules of reinforcement occur when desired behaviours
are reinforced after set periods. The simplest example of a fixed interval
schedule is a monthly paycheck.
The fixed ratio schedule of reinforcement applies the reinforcer after a
set number of occurrences of the desired behaviours. For example, the
sales commission is based on the number of units sold. Like the fixed
interval schedule, the fixed ratio schedule may not produce consistent,
long-lasting behavioural change.
Variable interval reinforcement schedules are employed when desired
behaviours are reinforced after varying periods. Examples of variable
interval schedules would be special recognition for successful performance
and promotions to higher-level positions. This reinforcement schedule
appears to elicit desired behavioural change resistant to Extinction.
Finally, the variable ratio reinforcement schedule is the reinforcer after a
number of desired behaviours have occurred, with the number changing
from situation to situation. The most common example of this reinforcement

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Notes schedule is the slot machine in a casino, in which a different and unknown
number of desired behaviours (i.e., feeding a quarter into the machine)
is required before the reward (i.e., a jackpot) is realised. Organisational
examples of variable ratio schedules are bonuses or special awards that
are applied after varying numbers of desired behaviours occur.

6.14.2 Behaviour Modification and Reinforcement

Behaviour modification is the use of empirically demonstrated behaviour
change techniques to improve behaviour, such as altering an individual’s
behaviours and reactions to stimuli through positive and negative
reinforcement.
Reinforcement Theory Applied to Organisational Settings
The best-known application of reinforcement theory principles to
organisational settings is called behavioural modification or behavioural
contingency management. Typically, a behavioural modification program
consists of four steps:
‹ Specifying the desired behaviour as objectively as possible.
‹ Measuring the current incidence of desired behaviour.
‹ Providing behavioural consequences that reinforce desired behaviour.
‹ Determining the effectiveness of the program by systematically
assessing behavioural change.
Reinforcement theory is an important explanation of how people learn
behaviour. Behaviour modification focuses on the external environment
by stating that manipulating consequences can affect behaviours. The
alternative consequences include positive and negative reinforcement,
punishment, and extinction. Reinforcement can be applied according to
either continuous or partial schedules. The major benefit of behaviour
modification is that it makes managers conscious motivators. It encourages
managers to analyse employee behaviour, explore why it occurs and how
often, and identify specific consequences that will help change it when
those consequences are applied systematically.

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6.15 Types of Motivation: Cognitive Evaluation Theory Notes

Motivation activates human behaviour and gives it direction. Cognitive

evaluation theory suggests that there are two types of motivation;
intrinsic and extrinsic. Intrinsic (internal) motivation is an internal state
or condition that drives behaviour, such as a hobby. On the other hand,
extrinsic (external) motivation refers to direction from outside the person,
including the promise of rewards, the threat of punishments, intimidation,
and coercion. Both intrinsic and extrinsic motivations are essentially
related to goals.

6.15.1 Intrinsic Motivation

Any of the following may determine intrinsic motivation:
1. Physiological States/Needs: Employees may seek sensory stimulation
to decrease hunger, thirst, or physical discomfort.
2. Emotional Needs: An employee may seek to calm over-aroused
emotions, increase good feelings, decrease negative emotions,
maintain optimism and enthusiasm, develop a sense of productivity,
or increase self-esteem.
3. Cognitive Needs: Employees may seek to increase knowledge and
understanding, maintain attention to interesting and personally
meaningful events and activities, solve problems, or resolve uncertainty
or confusion.
4. Social Needs: Employee(s) may seek to be like a role model, to be
part of a group, to help others, or to be accepted by peers and have
friends.
5. Volitional/Self-Determination Needs: Finally, an employee may
seek to achieve goals that he has set for herself, take control of her
affairs, reduce others’ control over her (become self-determined),
or pursue her dreams.
In summary, intrinsically motivated employees act as they do because of
their own needs, goals drive them, and wants versus external inducements,
they like the outcomes, and the outcomes make them feel good — give
them a sense of satisfaction. The motivation agent is inside the person;
they have an internal locus of control. It is worth noting that the idea of

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Notes reward for achievement is absent from this model of intrinsic motivation
since rewards are an extrinsic factor.

6.15.2 Extrinsic Motivation

Management systems in many rehabilitation centres, schools, and homes
are based on the assumption that people are extrinsically motivated and
will not engage in positive behaviour without external inducements.
The underlying belief is that most human resources engage in activities
because they are directed to do so, because they are required to do so,
or because they are provided with either promise of rewards or threats
of punishment to sustain their participation. Thus rewards (e.g., monetary
or non-monetary) play an essential role. All factors mentioned above
(under reinforcement theory) represent external factors that motivate or
demotivate employees.
IN-TEXT QUESTIONS
22. The motivational process & not the Motivators as such is
associated with:
(a) Need hierarchy theory
(b) Two factor theory
(c) Berg theory
(d) Expectancy theory
23. Who has given the Reinforcement theory of motivation?
(a) Abraham Maslow
(b) B.F. Skinner
(c) Victor Vroom
(d) Frederick Herzberg
24. How many levels are there in Needs Hierarchy theory of
motivation?
(a) 2
(b) 3
(c) 4
(d) 5

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25. Name the motivation theory that is based on Satisfaction- Notes

progression?
(a) Alderfer – ERG theory
(b) Maslow – Hierarchy of needs theory
(c) Herzberg – Two factor theory
(d) Skinner’s reinforcement theory

6.16 Application of Motivation Concepts

It is essential to apply various motivational concepts to organisations.
Some of the applications of motivation and their linking with motivational
theories have been discussed below.

6.16.1 Job Design and Motivation: The Job Characteristics

Model (JCM)
Job Design refers to how elements of a job are organised. The model
states that any job could be described in terms of the following five
dimensions-
Skill Variety: The variety of activities an employee is expected to do
while performing a particular job. For example, an employee who invests
7 hrs. in spraying paint scores low on this dimension, and a garage owner-
operator who is involved in various tasks like repair, customer interaction,
rebuilding engines, bodywork, etc., will score high on this dimension.
Task Identity: The degree of completion of work which makes the Job
an identifiable piece.
Task Significance: The degree of impact a job has on the Job of others.
Autonomy: The degree of freedom the job provides to an employee in
determining procedures, methods and scheduling of work to be carried out.
For example: If an employee at the customer care office is given a set
of procedures or questions for taking up queries, then such an employee
scores low on this dimension.
Feedback.: Feedback is the degree to which an employee about the
performance receives direct and clear information. For example an Ipad

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Notes assembler, assembling and testing if it works properly is an example of

high feedback.
From a motivational standpoint, if employees score high on these
dimensions, they will be more motivated to perform than the situation
otherwise. In addition, employees with higher-order needs (like growth
or achievement) will prefer more autonomy. The dimensions could be
further used to compute a consolidated motivational potential score (MPS).

6.16.2 Redesigning of jobs to motivate employees

The nature of the Job itself impacts the level of motivation. The same is
suggested in the JCM model and Herzberg’s motivational theory. Through
the following ways, jobs could be redesigned to motivate the employees-
Job Rotation:
The periodic shifting of employees from one Job to another is known as
Job rotation. Job rotation could be helpful if the Job lacks skill variety
and the employee suffers from over-routinisation. In addition, job rotation
helps reduce boredom and helps employees understand how their work
contributes to the organisation. Example: Ticket agents may be involved
in baggage handling. Singapore Airlines is well known for its extensive
job rotation.
Job Enrichment:
Job enrichment refers to a vertical movement. The skill variety dimension
is increased by adding more tasks to the current Job. It makes existing
jobs comparatively more challenging. Job enrichment adds more meaning
to a job and gives more freedom to the employees. Recent studies suggest
that job enrichment works best when equivalent rewards accompany it.

6.17 Alternative Work Arrangements

Organisations could also motivate employees through various work
arrangements like Flexitime, job sharing and telecommunication. These
arrangements are beneficial in the current scenario because of diversity
in the workforce, like a single parent and dual-earner couple.

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Job Sharing: Notes

Job sharing refers to a system in which two or more employees split a
40-hour-a-week job. For example, Ford engineers Julie Levine and Julie
Rocco engaged in a job-sharing program. One worked in a morning slot,
while the other worked in an evening slot. It helped them in managing
their work-life balance while working on the Job of redesigning the
Explorer Crossover.
Job sharing combines the talent of two or more employees and gives
flexibility to employees, which could motivate them to perform better.
Japanese organisation follows Job sharing for different reasons, like
avoiding layoffs due to overstaffing.
CASE STUDY
Sunaina works at “Insta International”. She is a coordinator responsible
for handling applications received from agency partners. She is also
responsible for reviewing and ensuring all fields are filled properly.
She is also responsible for following up with agency partners and
building a relationship with agency partners. As per the job description,
it is a full-time job requiring a minimum of 8 hours of commitment.
Presently, her office timing is from 10 a.m. to 6 p.m.
Sunaina is a good performer who meets her deadlines. Last year her
performance rating was above average. She also received “applause”
from her immediate manager. Keeping her professional life aside, in
her personal life, Sunaina is a single mother. She wakes up at 5 a.m.
and prefers to sleep before 9 a.m. recently her daughter has started
going to school, due to which from next month she needs to pick
her daughter up from school at 3 p.m.
Now Sunaina has no choice other than to leave her present job.
Sunaina goes to meet her manager, Mr. Amit, in person with a
resignation letter-
Amit: Hi Sunaina, How are you?
Sunanina: I am good. Due to some personal engagements, I am
afraid I won’t be able to continue with this job.
Amit: Why? What happened?
Sunanina explained her situation and left the resignation letter on his
desk. After two days, Amit calls Sunanina in his office.

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Notes Amit: I was going through your resignation letter. I can recall that
we lost hardworking employees in the past for similar reasons. After
talking with the HR department, we have come across an alternative.
The office opens at 6 a.m. and closes at 8 p.m., and you are supposed
to devote 8 hours to the office. We could give you an option to pick
up suitable hours, provided the hours should fall within the opening
and closing time of the office.
Questions:
1. Identify the alternative work arrangement that Mr. Amit provides
to Ms Sunaina
2. State the benefits and limitations of such alternative work
arrangements.

Flexitime
Flexitime refers to flexible work hours. Under this, organisations give
an option to employees to choose working hours. In most cases, core
hours remain the same. However, the flexibility of two to four hours
is given beyond the fixed hours. Flexi hours provides various benefits
to organisations; for example, it reduces absenteeism, reduces work
productivity, reduces hostility towards manager, eliminates tardiness,
increases autonomy, etc. However, other than the advantages, Flexi hours
have certain limitations, like it is not suitable for all types of jobs. For
example, if Sunaina is involved in direct customer dealing and customers
are usually unavailable before 10 a.m., it won’t be possible to give any
alternative.
Telecommuting
Work from home facility. For at least two days a week, employees could
work from home. Post covid, many organisations across the globe allow
telecommuting. It not only gives flexibility to employees but also is a
cost-saving way for an organisation.

6.18 Management by Objectives (MBO)

In his book “The Practice of Management”, Peter Drucker formulated
management by Objectives (MBO) in 1954. Management by objectives

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(MBO) is a systematic and organised approach that allows management Notes

to focus on achievable goals and attain the best results from available
resources. It aims to increase organisational performance by aligning goals
and subordinate objectives. Ideally, employees get strong input to identify
their objectives, timelines for completion, etc. In addition, MBO includes
ongoing tracking and feedback in reaching objectives. The principle behind
MBO is to ensure that everybody within the organisation has a clear
understanding of the aims, or objectives, of that organisation, as well
as awareness of their roles and responsibilities in achieving those aims.
Principles of Management by objective:
‹ Cascading of organisational goals and objectives
‹ Specific objectives for each member
Goal Setting and its Effects on Performance
Motivation is goal-directed. A goal is the object or aim of an action, for
example, to attain a specific standard of proficiency, usually within a
specified time limit. An employee’s goals often are driving forces, and
accomplishing those goals affects performance. Goals affect performance
through four mechanisms.
First, goals serve a directive function; they direct attention and effort
toward goal-relevant activities and away from goal-irrelevant activities.
Second, goals have an energising function. High goals lead to greater
effort than low goals. Third, goals affect persistence. When participants
are allowed to control the time they spend on a task, challenging goals
prolong effort. Fourth, goals affect action indirectly by leading to the
arousal, discovery, and/or use of task-relevant knowledge and strategies.

6.19 Employee Involvement Program

Employee involvement programs use inputs for employees in the decision-
making process. Employee involvement creates an environment in which
people impact decisions and actions that affect their jobs. Employee
involvement is not the goal or tool practised in many organisations. Instead,
employee involvement is a management and leadership philosophy about
how people are most enabled to contribute. It is a participative process
that uses the total capacity of employees and is designed to encourage
increased commitment to’’ the organisation’s success.

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Notes Following are a few Employee involvement programs-

Participative management refers to a process where subordinates
share decision-making power with the superior. The degree of power is
significant, but the subordinate should have the required knowledge and
competencies to participate. It helps in motivating employees.
Quality Circles: A group of employees meeting regularly to discuss
their quality problems, investigate causes, recommend solutions, and take
corrective actions.
Employee Stock Ownership Plans: Company established benefit plans
in which employees acquire stock as part of their benefits.
Linking Employee Involvement Programs and Motivation Theories
Many motivational theories can be linked with employee involvement
programs. For example, theory Y of motivation shows consistency with
participative management, while in the case of hygiene theory, employee
involvement programs could provide employees with intrinsic motivation
by increasing opportunities for growth, responsibility, and involvement in
the work itself. Employee involvement is attuned with ERG theory and
efforts to stimulate the achievement need.

6.20 Summary
Motivation is the process in which basic need leads to creating drives
aimed at a goal. Highly driven people put in much effort at their jobs,
whereas those who lack motivation do not.
‹ The cognitive model of motivation consists of theories that focus on
the human mind’s internal state. Theories under the cognitive model
could be further subdivided into Content and Process theories.
‹ Content (or need) theories of motivation focus on factors internal to
the individual that energise and direct behaviour. In contrast, Process
theories are concerned with determining how individual behaviour
is directed and maintained in the specifically self-directed human
cognitive processes.
‹ Content theory includes Maslow’s Need Hierarchy Theory; Herzberg’s
Motivational Hygiene Theory; Alderfer’s ERG Theory; and McClelland’s
Needs theory; while Vroom’s Expectancy Theory, Adam’s Equity
theory; and Goal Setting Theory fall under Process Theories.

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‹ B.F. Skinner formulated reinforcement theory. This theory proposes Notes

that behaviour is a function of its consequences. In other words,
unlike cognitive theories of motivation, other than the inner state,
motivation can be enhanced through external factors.
‹ Cognitive evaluation theory suggests that there are two types of
motivation; intrinsic and extrinsic.
‹ It is essential to apply various motivational concepts to organisations.
Some of the applications of motivation and their linking with
motivational theories includes redesigning of job, providing alternative
work arrangements to employees; management by objective, initiating
employee involvement programs and employee participation programs.

6.21 Answers to In-Text Questions

1. Needs and drives

2. Cognitive and non-cognitive models
3. Internal state of human mind
4. Content and process theories
5. (d) Adam’s Equity theory
6. (a) Alderfer’s ERG Theory
7. (a) Lower order needs
8. (d) Both (a) and (b)
9. (a) Fredrick Herzberg
10 (a) No dissatisfaction
11. (a) Herzbergs’ Two factor Theory
12. (a) David McClelland
13. (b) Power
14. (a) Affiliation
15. (a) Achievement needs
16. (c) Alderfer’s ERG Theory

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Notes 17. (d) Douglas McGregor

18. (a) Theory X
19. (a) Process theories
20. (a) Valance
21. (a) J.S. Adams Equity theory
22. (d) Expectancy theory
23. (b) B.F. Skinner
24. (d) 5
25. (b) Maslow – hierarchy of needs theory

6.22 Self-Assessment Questions

1. Define motivation & Explain the process of motivation.
2. Explain Cognitive evaluation theory. State the effect of intrinsic and
extrinsic rewards on the behaviour of the employees.
3. Explain Maslow’s need theory and its implications for management.
4. Do you believe that motivational theories are affected by the Culture?
Justify your answer with suitable examples.
5. “Millionaires keep working even in the later years of their lives”
What motivates them to work.

6.23 References
‹ Luthans, F. (2011). Organizational Behavior: An Evidence – Based
Approach, McGraw Hill Education.
‹ Robbins, S. P., Judge, T. A., & Vohra, N. (2019). Organisational
behavior by Pearson 18e. Pearson Education India.
‹ Chhabra, T.N., (2017). Management Process & Organizational
Behaviour, Sun India Publication. Delhi.

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Notes
6.24 Suggested Reading
‹ Kaul, V. (2011). Business Organization and Management: Text and
Cases. Pearson Education India.

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L E S S O N

7
Leadership
Dr. Reema Aggarwal
Assistant Professor
Department of Distance & Continuing Education,
Campus of Open Learning,
University of Delhi
Email-Id: [email protected]
Ms. Manisha Yadav
Assistant Professor
Department of Distance & Continuing Education,
Campus of Open Learning,
University of Delhi
Email-Id: [email protected]

STRUCTURE
7.1 Learning Objectives
7.2 Introduction
7.3 What is Leadership?
7.4 University of Iowa Studies
7.5 Likert’s Management Systems by Rensis Likert
7.6 Theories of Leadership
7.7 Great Man Theory
7.8 Trait Theory
7.9 Behavioural Approach
7.10 Contingency Theories
7.11 Contemporary Theories
7.12 Summary
7.13 Answers to In-Text Questions
7.14 Self-Assessment Questions
7.15 Suggested Readings

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7.1 Learning Objectives Notes

After reading this lesson, students will be able to:

‹ Understand the meaning and traits of a leader.
‹ Distinguish between a leader and a manager.
‹ Understand different leadership styles and their importance.
‹ Understand the evolution of leadership theories.
‹ Relate to the contemporary theories of leadership.

7.2 Introduction
“If your actions inspire others to dream more, learn more, do more and
become more, you are a leader!” - John Quincy Adams.
Leadership is one of the most complex and multidimensional phenomena.
It has been studied extensively over the years and has taken on greater
importance than ever before in today’s fast-paced and increasingly
globalised world. Nonetheless, leadership continues to generate captivating
and confusing debate due to the complexity of the subject.
The present lesson traces the historical evolution of leadership theories
and reviews the progress over the years. It explores four main eras
in leadership theory: trait, behavioural, contingency and contemporary
leadership theories.

7.3 What is Leadership?

Simply speaking, “leadership” is defined as “the ability to lead.” Leadership
in business is the capacity of a company’s management to set and achieve
challenging goals, take fast and decisive action when needed, outperform
the competition and inspire others to perform at the highest level they can.
Researchers have proposed many different definitions and theories of
leadership. Some of the definitions of leadership given by eminent
researchers are:
Stogdill (1974) says that:
“Leadership is the initiation and maintenance of structure in expectation
and interaction.”

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Notes James MacGregor Burns (1978) concedes that:

“Leadership is leaders inducing followers to act for certain goals that
represent the values and the motivations - ‘the wants and needs, the
aspirations and expectations - of both leaders and followers. And the
genius of leadership lies in the manner in which leaders see and act on
their own and their followers’ values and motivations.”
According to Katz and Kahn (1978):
“Leadership is the influential increment over and above mechanical
compliance with the routine directives of the organization.”
According to John Gardner (1990):
“Leadership is the process of persuasion and example by which an
individual (or leadership team) induces a group to take action that is
in accord with the leader’s purpose or for the shared purposes of all.”

7.3.1 Characteristics of a Leader

There is no clear cut formula for becoming a successful leader. Nonetheless,
a few must-have traits are enumerated as follows:
1. Integrity: A leader must embody impeccable standards of integrity
and honesty. Her/His decisions should be objective and unbiased.
2. Initiative: A good leader has an enterprise trait. She/He is resourceful
and thinks on her/his feet and grabs the lucrative opportunities given
half a chance.
3. Communication skills: A leader should be eloquent and should be
able to articulate his/her vision and goals with brevity.
4. Motivation skills: A leader must be able to influence followers to
work towards shared goals and concurrently achieve their individual
goals.
5. Adaptive: In this ever-changing world, a leader must be receptive
to new ideas and ways of doing things.

7.3.2 Leader vs. Manager

A leader leads by example, whereas a manager dictates terms. A leader
is someone whom people follow or someone who guides others. On
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the other hand, is someone responsible for directing and controlling the Notes
work and staff in an organisation. The following table states a few subtle
differences between the two:
Leader Manager
Innovator Administrator
People Focused Work focused
Have followers Have subordinates
Do the right thing Do things rightly
Creating value Counting value
Change seeker Prefer stability
Influence and inspire Power and control

7.4 University of Iowa Studies

The University of Iowa Studies was the first to examine different leadership
styles using scientific methodology. Kurt Lewin, in collaboration with
Lippit and White, wanted to dissect different leadership styles and their
effectiveness which resulted in concluding that there are three leadership
styles - authoritarian, democratic, and laissez-faire. These are widely
studied leadership styles around the globe.

7.4.1 What is the University of Iowa Studies

In 1939, the great depression was about to dissipate and industries were
back on their feet. Yet, no one tried to fathom out which leadership style
tics the subordinates the most. Psychologist Kurt Lewin was the first to
do so. The Iowa Studies of leadership set out to identify different styles
of leadership. This early study was very influential and established three
major leadership styles.
In the first part of the study, they trained adults to act as authoritarian,
democratic, or laissez-faire leaders. Later, they assigned school children
of the same IQ to one of the three groups. They gave each group the
same task. The performance was evaluated on the amount of quality of
work accomplished. The three group leaders assumed different styles as
they shifted every six weeks from group to group. The objective was to
gauge the bearing of different leadership styles on the level of satisfaction/
frustration of an individual.

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Notes The Three Styles of Leadership:

1. Authoritarian Leadership
Under this style, a leader makes all the decisions. He passes a dictum
telling all the subordinates what to do, how to do it and when to do it.
No leeway for creativity or innovation gets bestowed upon an employee.
Under the authoritarian leadership style, a leader is believed to be a know-
it-all brass and will do what is best for the organization. Employees are
presumed to be ignorant, work-shy, lack ambition, dislike responsibility,
and prefer to be led. They are not trusted to do what is beneficial for
the organization. Unlimited authority is thus rightly vested in the leader.
Against its conspicuous flaws, authoritarian leadership is befitting to
situations where there is little time for group decision-making or where
the leader is the most knowledgeable member of the group.

Figure 7.1: Authoritarian Leadership

2. Democratic Style
This style is characterized by a structured but co-operative approach
to decision-making. It focuses on group relationships and sensitivity
to the people in the organization. This type of leadership style fosters
professional competence. Subordinates are encouraged to express their
ideas and make suggestions. However, shared decisions are not likely to
occur in all aspects of organizational operations. Democratic leaders sell
a vision. They tend to be warm, confident and friendly. The democratic
leadership style encourages employee participation and professional growth.

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Notes

Figure 7.2: Democratic Style

It is well suited in environments where people have a very high level
of expertise, like software engineers, lawyers, doctors, mature teachers,
etc. The democratic leadership style promotes greater job satisfaction
and improved morale.
3. Laissez-faire
Laissez-faire is a hands-off approach. A leader trusts his employees
and gives them carte blanche to use their skills and accomplish the
organization’s goals. But this is not a one-size fits its approach. Only
individuals with high internal motivation and requisite skill sets can work
under this minimalistic leadership style. On the other hand, if employees
are not skilled or lack motivation, in that case, this style will drive the
productivity of the organization into the ground.

Figure 7.3: Laissez-faire

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Notes 7.4.2 Observations of the study

Nineteen out of twenty boys liked the democratic leadership style. The
only boy who liked the authoritarian style happened to be the son of an
army officer. Seven out of ten boys preferred the laissez-faire leader to
the autocratic one as they preferred confusion and disorder to strictness
and rigidity present in the autocratic style. The boys under the latter style
exhibited more aggressive, hostile and indifferent behaviour than their
counterparts under other leadership styles. They either showed hostility
or cracked jokes about hostility towards others. Others belonging to the
democratic style showed less aggressive and more indifferent behaviour
when brought under the autocratic style of a leader. Even under the
laissez-faire style of the leader, boys committed more aggressive acts
than the ones under the democratic style.
The studies found the democratic style to be less productive than the
autocratic style. On the flip side, quality was a rung higher with a
democratic leader atop than the group with an autocratic leader. Besides,
decision-making was less creative under authoritarian leadership than
under democratic leadership. The researchers concluded that democratic
leadership was the most effective form.

7.4.3 Conclusion
Undoubtedly a study on ten-year-old boys cannot be juxtaposed with the
leadership behaviour of adults with much more intricate jobs. Nonetheless,
the study in its own right was a trailblazer for the understanding of
leadership styles from the point of scientific methodology. It depicts how
the same group can deliver different results based on the leadership style
deployed by the superiors.

7.5 Likert’s Management Systems by Rensis Likert

In the 1960s, social psychologist Rensis Likert and his colleagues at the
University of Michigan in the United States administered questionnaires
to managers from 200 organizations. He wanted to gauge management
performance by determining which leadership style could extract maximum
productivity from the subordinates.

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7.5.1 What is Likert’s Management System Notes

Likert’s management systems are management styles developed by Rensis

Likert in the 1960s. He studied the patterns and styles of managers for
three decades and established a four-fold model of management systems.
His four systems are designed to highlight various organisational dynamics
and characteristics built around interactions between individuals. Notably,
the systems explore several soft management skills, such as trust-building
and their effects on the broader dynamic of the organisation itself.
The four management systems by Likert:
1. System 1 - Exploitative Authoritative: Under this system, decision-
making and responsibility lie in the hands of the people at the
upper echelons of the hierarchy. The top management makes the
policies and rules. The employees at the lower level are bound to
follow the instructions. The superior has no trust and confidence
in subordinates. Dictums get imposed on employees. They cannot
freely converse about their jobs with the managers. The managers
play on fear - punishment and threats get used as motivation tools.
Teamwork and communication are minimal.
2. System 2 - Benevolent Authoritative: The responsibility lies at the
managerial levels but not at the lower levels of the organizational
hierarchy. The superior has condescending confidence and trust in
subordinates (master-servant relationship). Here again, the subordinates
do not feel free to discuss things about the job with their superiors.
Teamwork or communication is very little and motivation is based
on a system of rewards.
3. System 3 - Consultative: Under this system, managers have greater
trust in their subordinates and demonstrate it by implementing
ideas or beliefs that they share with their team members. There
is an open level of communication throughout the organization,
and team members are often consulted during the decision-making
process, particularly when any changes will affect them substantially.
However, the ultimate power of decisions remains with those at the
highest levels within the organization. Employee motivation gets
roused by incentives, including rewards and the responsibility for
specific tasks. In this style, employees are given greater freedom

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Notes and involvement in meaningful tasks is used to boost intrinsic

motivation.
4. System 4 - Participative: Responsibility for achieving the organiza-
tional goals is widespread throughout the organizational hierarchy.
The superior has a high level of confidence in his subordinates. The
level of communication is high, both horizontally and vertically,
and teamwork is regular.

7.5.2 Key Concepts

Under Likert’s Management Systems, several dynamics determine which
management system is at play. These are:
‹ Motivation
‹ Communication
‹ Influence
‹ Decision-making
1. Motivation: Motivation is a driving force that stimulates the employees
to accomplish the organization’s objectives. Now, it can be used both
positively (through rewards and incentives) and negatively (through
punishment and threats). Exploitative Authoritative and Benevolent
Authoritative primarily focus on punishment, whilst Consultative and
Participative are angled more towards a system of reward, though
none is committed to any one approach. Rewards can come in the
form of monetary bonuses, extra responsibility, opportunities for
development, or the improvement of employee relationships with
superiors.
2. Communication: In Exploitative Authoritative Systems, communication
is virtually one-way, with decisions being dictated directly from
higher management to subordinates, on the other hand, in Participative
Systems, communications are horizontal, with employees participating
in the day-to-day decision-making process.
3. Influence: The levels of influence employees hold are a conspicuous
indicator of the management system at play. In Benevolent and
Exploitative Authoritative Systems, subordinates are generally not
consulted about decisions that relate to their role. On the other

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hand, in Participative Systems, employees are encouraged to add Notes

their pennyworth to the discussions.
4. Decision-making: When employees are asked their opinions and
ideas regarding the running of the business, they may indirectly
influence the decision-making of their superiors, with their thoughts,
ideas and values being included in any strategic planning. However,
in either of the Authoritative Systems, the final decision is made
by individuals at the upper levels of the organizational hierarchy.
Alternatively, in Consultative Systems, the employees are given a
role in the decision-making process through consultation and in a
Participative System, subordinates may have as much influence in
decision-making and goal setting as their manager.

7.5.3 Conclusion
Likert’s studies confirmed that the departments or units employing
management practices within Systems 1 and 2 were the least productive,
and the departments or units employing management practices within
Systems 3 and 4 were the most productive.
With the help of the profile developed by Likert, it became possible to
quantify the results of the work done in the field of group dynamics.
The Likert theory also facilitated the measurement of the “soft” areas of
management, such as trust and communication.
According to Rensis Likert, the nearer the behavioural characteristics of
an organization’s approach System 4 (Participative), the more likely this
will lead to long-term improvement in staff turnover and high productivity,
low scrap, low costs and high earnings.

7.6 Theories of Leadership

Leadership theories seek to explain how and why certain people become
leaders. Initially, the focus was on ascertaining the characteristics of
leaders, but some attempted to identify the behaviours that people can
adopt to improve their leadership abilities in different situations.
Early debates on leadership often suggested that such skills were innate
abilities. In other words, these theories proposed that certain people were

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Notes “born leaders.” More recent theories propose that possessing certain traits
may help make people nature leaders, but that experience and situational
variables also play a critical role.
What exactly makes a great leader? Do certain personality traits make
people better suited to leadership roles, or do characteristics of the
situation make it more likely that certain people will take charge? When
we look at the leaders around us—be it our employer or the President—
we might find ourselves wondering exactly why these individuals excel
in such positions.
People have long been interested in leadership throughout human history,
but it has only been relatively recently that several formal leadership
theories have emerged. Interest in leadership increased during the early
part of the twentieth century.
Early leadership theories focused on what qualities distinguished between
leaders and followers, while subsequent theories looked at other variables
such as situational factors and skill levels. While many different leadership
theories have emerged, most can be categorized into one of the five broad
types: Great man theory, trait theory, behavioural theories, contingency
theories and contemporary theories.

7.7 Great Man Theory

Are some people born to lead? A cursory glance at the history provides
numerous anecdotal evidence. Alexander the Great, Julius Caesar, Napoleon,
Mahatma Gandhi and Abraham Lincoln were the nonpareil leaders of
their times. They had a strong moral fibre, great resolute to achieve
their objective and a clear vision. Even today, the belief that truly great
leaders are born is common.

7.7.1 What is the great man theory

In the 19th century, a historian named Thomas Carlyle said, “The history
of the world is the biography of great men”. According to him, a leader
is one gifted with unique qualities that captures the imagination of the
masses.

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The Great Man Theory of leadership espouses that great leaders are Notes
born, not made. It states that some people are born with traits that
are the mainstay of a successful leader. Under the Great Man Theory,
prominent leaders throughout history were born to lead and deserved to
do so on the back of their natural abilities and talents. The theory gives
the semblance of heroism.

7.7.2 Criticism
One of the central problems with the Great Man theory of leadership is
that not all people who possess the so-called natural leadership qualities
become great leaders. If leadership is simply an inborn quality, then
every individual endowed with the said traits must have eventually found
themselves in leadership roles.
The Great Man Theory gives the semblance of heroism. Accordingly, a
leader is a hero who accomplishes goals against all odds for his followers.
Such assumptions are unrealistic.
Many of the traits cited as being vital to being an effective leader are
typical masculine traits. In contemporary research, there is a significant
shift in such a mentality.

7.7.3 Conclusion
The Great Man Theory was a catalyst for arousing the interest of the
researchers in understanding what leadership is - Who is a leader? What
are the distinguishing traits of a great leader? From this emerged the trait
theory of leadership.

7.8 Trait Theory

The Great Man Theory is the earliest theory of leadership. It suggested
that great leaders were born and not made. They had some inborn qualities,
and this made them great. However, there was no agreement on the traits
these leaders shared or how to identify such people. In trait theory, the
researchers attempted to identify these traits of a leader.

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Notes 7.8.1 What is the Trait Theory

The Trait Theory is an extension of the Great Man Theory. The objective
of the Trait Theory was to discern the innate traits embodied by an
individual that transmogrify them into successful leaders. Different
researchers worked on this theory, like Francis Galton. Galton stated that
leadership quality is for those who have specific traits that are rigid by
birth. Cowley also said in 1931 that traits should be part of research in
leadership study. In 1948, Ralph Melvin Stogdill also supported Trait
theory and did value addition to it. He added further that leadership is
based not only on inherent traits but also on the way a leader interacts
with the situation.
The theory sought personality, social, physical, or intellectual traits that
differentiated leaders from non-leaders. Underlying this approach was the
assumption that some people are natural leaders endowed with certain traits
not possessed by others. It attributed managerial success to extraordinary
abilities such as tireless energy, intuition, uncanny foresight, and irresistible
persuasive powers. Some of the traits identified were as follows:
(i) Personality traits: Self-confident, adaptable, assertive, emotionally
stable etc.
(ii) Task-related characteristics: Driven to excel, accepting of responsibility,
having initiative, results-oriented etc.
(iii) Physical traits: Young to middle-aged, energetic, tall, handsome etc.
(iv) Social characteristics: Charismatic, charming, tactful, popular,
cooperative, diplomatic etc.

7.8.2 Assumptions
The kernel of this theory is its three assumptions, which are as follows:
‹ Individuals have innate leadership traits.
‹ A specific set of traits induces a particular behaviour pattern.
‹ This behaviour pattern is irrespective of the situation, i.e., doesn’t
change according to the situation.

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7.8.3 Results Notes

There were many studies conducted during the l930s and 1940s to discover
these elusive qualities focusing on the trait of leaders. But the research
effort failed to find any traits that would guarantee leadership success.
It could not identify a universal set of traits to recognize a leader in all
situations.

7.8.4 Criticism
The trait theory of leadership lacks in providing better and clear results.
It is not fit for all situations, as different traits were set forth by different
researchers ergo, there is no uniform list. Consideration of other factors
that affect leadership is also missing. Also, the comparative analysis of
traits and their importance is undetermined. It couldn’t justify why some
people with these traits were not influential leaders and why some others
with streaks of rigidness were successful. Tests to measure these traits
are also not present.
IN-TEXT QUESTIONS
1. _________ holds a formal position in the organisation, whereas
_________ can influence the group even without a formal
position in the organisation.
2. Leaders who practice Laissez-faire style is very good at ________.
(a) Decision Making
(b) Delegating work
(c) Communicating with employees
(d) None of the above
3. Under this leadership style followers feel they are participating
in the decision making, but they are not—
(a) Benevolent Autocratic
(b) Dictator Leadership Style
(c) Manipulative Leadership Style
(d) Laissez-faire Leadership Style

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Notes 4. _________ leadership theory assumes that leaders are born not
made.
(a) Trait theory
(b) Authentic leadership
(c) Great man theory of leadership
(d) Transactional theory of leadership

7.9 Behavioural Approach

The behavioural leadership theory focuses on how leaders behave. Sometimes
called the style theory, it suggests that leaders aren’t born successful
but can be created based on learnable behaviour. Behavioural theories
focus heavily on the actions of a leader—this theory suggests that the
best predictor of leadership success is viewing how a leader acts. Action
rather than qualities are the focal points of behavioural learning theory.
The main difference between trait theory and behavioural theory is the
process of becoming a leader. In the trait theory of leadership, people can
become leaders smoothly because they were born with the requisite skills.
In the behavioural theory of leadership, however, anyone can become a
leader after learning leadership skills.

7.9.1 Ohio State Studies

The researchers at the Ohio State University ushered in the direction of
studying leadership extensively. The objective was the examine the impact
of a leader’s behaviour on job performance and satisfaction of employees.
For this purpose, they administered the Leader Behaviour Description
Questionnaire (LBDQ) to scores of employees. The LBDQ consisted of
150 statements concerning leadership behaviour. Each employee responded
depending on the degree of a leader’s engagement in various behaviours.
After studying the results of the ratings, the researchers subsumed the
leader’s behaviour under two categories. First, consideration and second
initiating structure.
(i) Consideration: The extent to which the leader exhibits concern for
the welfare of the employees. A leader high in consideration respects

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employees’ ideas, tries to solve their problems, is approachable, Notes

treats them as equals and frequently appreciates their work. She/
he focuses on forging mutual trust and a conducive environment
for his employees.
(ii) Initiating structure: The extent to which the leader defines individual
roles. A leader high in initiating structure will set clear goals and
emphasize meeting performance targets and deadlines. She/he will
set much store by systematic coordination of work. Will delineate
job descriptions of each employee along the pecking order.
Ohio State Leadership Grid:
According to Ohio State Leadership Studies, a leader can elicit both
behaviours concurrently, which means consideration and initiating structure
are not mutually exclusive.
Hence, leadership behaviour can be plotted on two separate axes rather
than on a single continuum, as shown in the following diagram:

Figure 7.4 : Ohio State Leadership Quadrants

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Notes Each quadrant in the above diagram is a mixture of varying degrees of

initiating structure and consideration. A manager adopts any one style.
The four quadrants are as follows:
1. Low structure and low consideration: The leader neither provides a
rigid structure nor demonstrates much consideration for his employees.
He projects a laissez-faire leadership style and is suitable for highly
skilled employees with high intrinsic motivation.
2. High structure and low consideration: The leader is pedantic
about structuring the work and roles of employees. He projects
an autocratic leadership style and does not care much about his
employees’ needs and wants.
3. Low structure and high consideration: A leader sets much store
by the needs and wants of his employees. His primary concern is
the welfare of his employees. For instance, a leader might define
the problem and ask the group members to decide how they will
work together to accomplish the task.
4. High structure and high consideration: A leader is highly active
and considerate of his employees. He defines the structure but is
open to alteration to squeeze in employees’ ideas, needs and wants.
Conclusion:
The Ohio State Leadership study found that a leader who is high in initiating
structure and consideration (a high-high leader) is predominantly effective.
He achieves high employee performance and satisfaction. However, in a
significant number of cases, there were exceptions found. These exceptions
indicated a need to take situational factors into cognizance.

7.9.2 University of Michigan

a study commenced at the University of Michigan intending to identify the
leadership styles that achieved maximum performance and job satisfaction
among employees. It draws much semblance to Ohio State studies. The
study identifies two broad leadership styles: employee-oriented and
production-oriented leadership style.
(i) Production-oriented leader: This is quite similar to a leader under
the Ohio State study who is high on initiating structure focusing

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on task-oriented activities. The leader considers employees as Notes

stakeholders.
(ii) Employee-oriented leader: This is similar to a leader under the
Ohio State study who is high on the consideration emphasising on
human relations. The leader considers employees as a means to
achieve production targets.
Conclusion:
According to the University of Michigan, employee-oriented leadership
coupled with general direction and not overbearing supervision would
yield maximum performance and job satisfaction.
Criticism:
The overarching assertion that an employee-oriented style leads to better
productivity is contentious. It does not account for the employees and
the circumstances that may warrant the use of a production-oriented
leadership as more effective.
For instance, some intricate jobs might require a more hands-on approach
from the leader.
Also, the same leadership style may not yield the same results for two
different organisations due to different dynamics.

7.9.3 Leadership Grid

The leadership studies at the University of Michigan and the Ohio State
University hinged on task-oriented and employee-oriented leadership styles.
In the 1960s, Robert Blake and Jane Mouton also built their work on these
dimensions. They proposed a grid known as the managerial grid (also
known as the leadership grid). The x-axis of the grid indicates concern
for production (keeping tight schedules) by the leader and the y-axis
portrays concern for people (accommodating people’s needs and giving
them priority). Each dimension ranges from low (1) to high (9) and thus
rendering 81 different positions in which the leadership style may fall.

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Notes

Figure 7.5: Leadership Grid

The five resulting leadership styles are as follows:
(i) The impoverished style (1, 1): The managers have low concern
for; people and production. Managers use this style to avoid getting
into trouble. The main concern for the manager is not to be held
responsible for any mistakes, which results in less innovative
decisions.
The leader uses a “delegate and disappears” management style.
They are not committed to either task accomplishment or employee
satisfaction, which leads to chaos, disharmony within the organisation
and high employee turnover.
(ii) The country club style (1, 9): This style has a high concern for
people and a low concern for production. Managers using this style
pay much attention to the security and comfort of the employees
in the hope that this will increase their performance. The resulting
atmosphere is buoyant but not necessarily productive.
(iii) The task management style (9, 1): With a high concern for
production and a low concern for people, this style finds employee
needs unimportant. Managers using this style manage their employees
through rules and punishments. This dictatorial style is based on
Theory X and perceives employees as a mere means to an end.

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(iv) The middle-of-the-road style (5, 5): The manager tries to balance Notes
the company’s goals and workers’ needs. This is a halfway between
employees’ needs and the company’s needs, which are viewed as
disparate by the manager. He believes it to be the best way possible
as he assumes that employees’ needs and the company’s goals can
not be reconciled and hence, tries to achieve acceptable performance.
(v) The team style (9, 9): In this style a manager pays high concern
to both people and production. The manager premises his leadership
style on Theory Y, where s/he fosters teamwork. This method relies
heavily on making employees feel like a quintessential part of the
company.
The manager leads by positive example and endeavours to harness
a team environment in which all team members can reach their
highest potential, both as a team and as an individual. He or She
encourages the team to accomplish team goals effectively and work
as a team to strengthen the bonds among the various members.
Conclusion:
The Managerial Grid is used to help managers analyze their leadership
styles through a technique known as grid training. Under this training,
questionnaires get administered to the employees that help managers
identify how they stand in their concern for production and people. The
training aims to help leaders reach the ideal state (9, 9).
Nevertheless, the model ignores the importance of internal and external
limits, matter and scenarios.
IN-TEXT QUESTIONS
5. Hersey and Blanchard Model is part of _________ theories.
(a) Trait theories
(b) Behavioural theories
(c) Contingency theories
(d) Contemporary theories
6. Leadership Grid is part of _________ theories.
(a) Trait theories
(b) Behavioural theories

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Notes (c) Contingency theories

(d) Contemporary theories
7. Ohio State studies is part of _________ theories.
(a) Trait theories
(b) Behavioural theories
(c) Contingency theories
(d) Contemporary theories
8. If a leader shows more concern for employees over the task, such
a leader falls under quadrant which is popularly also known as
_________ as per the Leadership grid.
(a) Impoverished
(b) Teamwork
(c) Task oriented
(d) Country club
9. If a leader shows more concern for task over the employees, such
a leader falls under quadrant which is popularly also known as
_________ as per the Managerial grid.
(a) Impoverished
(b) Teamwork
(c) Task oriented
(d) Country club
10. If a leader shows more concern for both task and employees, such
a leader falls under quadrant which is popularly also known as
_________ as per the Managerial grid.
(a) Impoverished
(b) Teamwork
(c) Task oriented
(d) Country club

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11._________ quadrant is best position for a leader as per behavioural Notes

theory of Managerial grid.
(a) Impoverished
(b) Teamwork
(c) Task oriented
(d) Mid Way

7.10 Contingency Theories

The contingency leadership theory, sometimes called situational theory,
focuses on the context of a leader. A leader’s effectiveness is directly
determined by the situational context in addition to his behaviour. This
theory takes the specific leadership styles and suggests that good leaders
can adjust their leadership style situationally. It also advocates that it
will be best to find the right leader for a specific situation. Types of
contingency theories include Fiedler’s Contingency Theory, Evans and
House’s Path-Goal Theory and Hershey and Blanchard’s Situational Theory.

7.10.1 Fiedler Contingency Model

Till the late 1960s, the building blocks of leadership theories were; the
innate skill set to be a leader, and there were predominantly two leadership
styles (task-oriented leadership and relationship-oriented leadership style).
None of the theories factored in the clout of external factors on the
effectiveness of a particular leadership style.
In 1967, an Austrian psychologist, Professor Fred Fiedler, concurred with
the idea of natural leadership style dyed-in-the-wool, which is hard to
change. Nevertheless, as per him, situational factors have an equal sway
on the efficacy of a leadership style. Fiedler contended that there is no
infallible leadership style for every situation. For this reason, there must
be a match between the leadership style and the situation at hand. So,
the two vital tenets of his theory were:
(i) Natural leadership style, and
(ii) Situation favourableness

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Notes Assumptions:
The model contended that an individual premises his leadership style on
his past experiences and psychology. It is impossible to change one’s
natural leadership style. There are only two ways to improve the outcome
of an organisation:
(i) Change the situation, or
(ii) Change the leader
Steps for application of the Model:
Step 1: Identify the leadership style
To riddle out one’s leadership style, Fiedler curated the Least Preferred
Co-worker (LPC) questionnaire. The questionnaire asks respondents to
describe the one co-worker they least enjoyed working with by rating that
person on a scale of 1 to 8 for each of 16 sets of contrasting adjectives
(such as pleasant–unpleasant, efficient–inefficient, open–guarded, supportive–
hostile). If the respondent even held this co-worker in high regard and
scored him high, Fiedler categorized him/her as a relationship-oriented
leader. By contrast, if the respondent gave a low score to this co-worker,
it is deduced that his natural leadership style is task oriented. About 16
per cent of respondents scored in the middle range and consequently
weeded out of the study.
Step 2: Defining the situation
Every situation calling for leadership requires a specific leadership style
geared towards it. For this reason, one must assess the favourableness
of the situation. This hinges on three variables:
(i) Leader-member relationship: This is a measure of trust, confidence,
and respect members have for their leader. The higher the confidence,
the more favourable the situation is.
(ii) Task structure: It is highly streamlined structure leading to a
favourable situation. The more precise the tasks are – the higher
the task structure.
(iii) Power position: It gauges the authority of a leader over power
variables like hiring, firing, promotions and salary increase. Stronger
the power position, the more favourable the situation.
Essentially,

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Favourable situation = Good leader-member relationship + high task Notes

structure + strong power position.
An unfavourable situation is on the other end of the continuum.
Step 3: Matching leaders and situations
Combining the three contingency dimensions yields eight possible situations
in which leaders can find themselves. The Fiedler model proposes
matching a respondent’s LPC score and these eight situations to achieve
maximum leadership effectiveness. Fiedler concluded that task-oriented
leaders perform better in very favourable and very unfavourable situations.
Relationship-oriented leaders, however, perform better in moderately
favourable situations.
(Low) Group performance (High)

Favourable Moderate Unfavourable

Figure 7.6: Fiedler Contingency Model

Situation Favourable Moderate Unfavourable
Leader-member High High High High Low Low Low Low
relations
Task structure High High Low Low High High Low Low
Position Power High Low High Low High Low High Low
Conclusion:
Fiedler’s theory is far too rigid. It states that you cannot change your
leadership style, so when a scenario arises where your leadership style
and the situation at hand are at odds, you should bow out. Also, if your
score falls in the middle range of the LPC test, the theory does not
categorise you into any leadership style.
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Notes 7.10.2 Hersey and Blanchard’s Situational Theory

Until this time, leadership theories focused on the leaders and their traits.
However, Paul Hersey and Ken Blanchard premised their leadership model
on the subordinate’s maturity. Under this model, leadership style is not
static and should be geared based on employees’ maturity levels. The
maturity level has two components:
‹ Psychological maturity: Reflects their self-confidence, willingness,
and readiness to accept responsibility.
‹ Task maturity: Reflects their relevant skills and technical knowledge.
High job maturity means the employee has the ability to execute
the task at hand with efficacy.
Four leadership styles:

Figure 7.7: Hersey and Blanchard’s Situational Theory

1. Delegating style: A low-task, low-relationship style wherein the
leader gives carte blanche to the employees to accomplish the goal.
This style is befitting for employees with high psychological and
task maturity.
2. Participating style: A low-task, high-relationship style wherein the
leader kindles the employees to partake in decision-making. This
style is suitable for employees with high task maturity but a flagging
willingness to execute the task.

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3. Selling style: A high-task, high-relationship style wherein the leader Notes

helps employees to gain confidence. He tries to sell his ideas and
vision to the employees. This style is befitting for employees with
high task maturity but, with time, have lost enthusiasm.
4. Telling style: A high-task, low-relationship style wherein the leader
gives explicit directions and supervises work closes. This style is
geared towards low-maturity employees.
Conclusion:
The upside of the model is that it provides leeway for the leaders to gear
their leadership style based on their employees’ maturity, understanding
and context of the organisation. It advocates that leadership is flexible
and not static, like Fiedler’s Contingency Model, which believes that an
individual’s leadership style is fixed.
The downside is it places too much responsibility on the leader’s ability
to decide and change his leadership style as per the situation. However,
these decisions may be flawed.

7.10.3 Path-Goal Theory

The path-goal theory was the brainchild of Robert House. It has the
expectancy theory of motivation at its core. The path-goal theory expounds
on the impact of a leader’s behaviour on an employee’s perception of
expectancies between his effort and performance. It is incumbent on the
leader to define goals, clarify the path to achieve goals, and heave any
obstacles from that path.
The path-goal theory endorses servant leadership. Servant leadership theory
advocates that a leader is a facilitator. He should provide the information,
support, and all other resources required by employees to complete the
task. According to the path-goal theory, the choice of leadership style is
contingent on several employee and environmental factors. Compendious
details of each component are as follows:
Leadership styles:
There are four leadership styles:
1. Directive: In this, the leader envisions the present and future goals of
the organisation. Then, he breaks it down into smaller manageable

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Notes goals with checkpoints at each step. Employees have explicit

information about their work and how to do it. The leader uses the
carrot-and-stick approach. He makes judicious use of rewards and
punishments. This is the same as the task-oriented leadership style.
2. Supportive: The leader is cordial and empathetic. He demonstrates
thoughtfulness and concern for his employees’ welfare. This is the
same as the people-oriented leadership style.
3. Participative: A leader doesn’t consider his employee as a cog in
the machine but as a stakeholder. He consults his employees on
important decisions related to goal setting and the path to achieving
those goals.
4. Achievement-oriented: The leader sets challenging goals and
encourages employees to reach their peak performance. The leader
believes that employees are responsible enough to accomplish
challenging goals. This is the same as the goal-setting theory.
Contingencies:
The relationship between a leader’s style and effectiveness is dependent
on the following variables:
(i) Employee factors: These include factors such as employees’ needs,
locus of control, experience, perceived ability, satisfaction, willingness
to leave the organization and anxiety. For instance, if there is an
employee with low motivation, then a participative leadership style
will be preferable.
(ii) Environment factors: These include factors such as task structure
and team dynamics that are outside the employees’ control. For
example, for employees performing simple and routine tasks, a
supportive style is much more effective than a directive one.
Conclusion:
The theory has been subjected to empirical testing in several studies and
has received considerable research support. This theory consistently reminds
leaders that their primary role as a leader is to assist their subordinates in
defining their goals and then to assist them in accomplishing those goals
most efficiently and effectively. This theory gives a guide map to the
leaders about how to increase subordinates’ satisfaction and performance
levels.

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Notes

Figure 7.8: Path-Goal Theory

7.10.4 Continuum of Leadership Behaviour by Tannenbaum

and Schmidt
The “contingency” approach argues that leadership style should be based
on a particular situation and not on the leader’s personal preferences.
Contingency theorists Robert Tannenbaum and Warren Schmidt identified
seven leadership styles. They run in a continuum, from rigid authority at
one end to full freedom for your team at the other. The below diagram
displays all the styles:

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Notes

Figure 7.9: Range of Leadership Behaviour

The seven leadership styles broadly correspond to a team’s level of
development. As trust and competency grow, so does the amount of
freedom that the team members want and that leaders feel comfortable
providing.

7.11 Contemporary Theories

7.11.1 Transactional and Transformational Leadership

Style
Burns suggested the initial idea of transactional and transformational
Leadership, and Bass formally introduced the theory. Transactional
leaders mainly focus on ongoing work. They work with employees to

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fulfil organizational goals and simultaneously plan for the next actions. Notes
Based on the results and performance manager also rewards and punishes
employees. Under transactional Leadership, employees are appreciated for
their contribution, but the manager usually neglects employees who lack
required capabilities and skills. Transactional leaders are more concerned
about completing goals as suggested in path-goal theory, Fiedlers’ model,
etc.
The transactional leadership style compliments the transformational
leadership style. The last decades of the 20th century recognized the need
for leaders who could develop their followers’ behaviour and transform
them into new leaders. Various researchers extensively explored the theory.
It is a leadership style where leaders like Richard Branson (Virgin),
Andrea Jung (Avon) etc., tend to inspire their followers. Transformational
Leaders change or transform followers’ perceptions and help them solve
old problems in new ways. They motivate employees to put extra effort
into achieving the set goals. Bass suggested four factors that form
transformational Leadership: idealized influence, inspirational motivation,
intellectual stimulation and individual consideration. Transformational
leaders help employees improve and grow to do their jobs independently.
They ensure that employees change and improve for the betterment of
an organization.
Transformational Leadership goes beyond transaction or task completion
and helps followers transform themselves to adopt new ways of doing
the task. They pursue employees to be more creative and innovative. The
transformational leader does have qualities of transactional Leadership.
But the same is not true in the vice-versa case. The transactional leader
follows the Laissez-Faire style, he hands over the responsibility to
followers, and mostly they tend to intervene when set standards are
not met. In addition, to following roles, transformational leaders also
provide vision to the followers. They communicate challenging goals
and motivate employees to perform above expectations using a problem-
solving approach. Unfortunately, sometimes employees and Leaders get
enthusiastic and become over-engaged with loyal employees and piling
up too many tasks and responsibilities.

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Notes

Figure 7.10: Transactional and transformational leadership

(Source: Robbins, S. P., Judge, T. A., & Vohra, N. (2019). Organizational
behaviour by Pearson 18e. Pearson Education India.)
Transformational leaders are more creative and ready to take more risks.
Such leaders are able to boost the confidence among followers to pursue
ambitious goals. They make followers believe that goals are personally
essential for them. They have a charisma that motivates employees to
give extra effort. But vision dominates charisma, unlike charismatic
Leadership. Leaders are found to be committed to the organization and
can win the followers’ trust.

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CASE STUDY Notes

Leadership styles played a critical role in the inability of Xerox to
capitalize on its invention of the first user-friendly personal computer.
The researchers in the Xerox Palo Alto Research Centre (PARC)
developed the first graphical user interface, mouse and menu driven
computer-technological advances that made computing accessible to
the novice user (Bennis & Biederman, 1997). The lab’s charismatic
leader, Bob Taylor, recruited only the very brightest scientists, gave
them the freedom to innovate and inspired them to work together to
solve tremendously complex problems. Researchers at PARC invented
new products, obtained multiple patents and pioneered many of the
computer technologies we now take for granted. However, because
Xerox PARC was not well integrated into the rest of the company,
Xerox’s top management was sceptical of the inventions the lab
developed and didn’t see how they fit in with their current copying
equipment (Poe, 2000). Xerox lacked a transactional leadership style
in the top management team to provide the structure and systems
that could capture the knowledge generated in the PARC labs. Where
Xerox failed, Apple succeeded. Steve Jobs visited the PARC facility
in 1979 and immediately saw the future of computing in the mouse-
driven graphical user interface (Bennis & Biederman, 1997). Jobs left
the PARC labs without any hardware or software but with a vision
for how computers should operate. Jobs and his Apple employees
were able to convert the innovative PARC ideas into the Macintosh
computer, which debuted in 1984, changing the face of computing.
Because of Jobs’ Leadership, Apple created the systems and structures
that were able to convert their knowledge into a valuable product. Jobs
exhibited both transformational and transactional leadership styles.
He used a transformational leadership style to create a vision for the
Macintosh and challenge his employees to reach nearly impossible
goals. He used a transactional leadership style to create the systems
and structures in Apple that allowed the knowledge created at all
levels of the organization to be converted into a valuable product-the
Macintosh personal computer:
(a) Using the instances from the case study, differentiate between
transformational, transactional and charismatic Leadership.
(b) What led to the success of Apple under the Leadership of Steve
Jobs.

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Notes 7.11.2 Charismatic Leadership

The followers’ positive perception of their leader (like Martin Luther
King Jr., Steve Jobs, Indira Gandhi and Narendra Modi etc.) makes such
leaders powerful and influential. However, followers sometimes don’t
even have rational reasons behind such beliefs. This term was initially
suggested by sociologist Max Weber. The word “Charisma” is derived
from a greek word which means gifts.
Charismatic Leadership refers to a “Certain qualities of an individual
personality, by which they are set apart from ordinary people and are
treated as endowed with exceptional powers or qualities. Such qualities
are not accessible to the normal person and are regarded as the divine
origin or exemplary and based on them, the individual is treated as a
leader.”
Later in 1977, Robert J. House studied it in organizational settings.
According to Robert House, followers’ positive perception of certain
observed behaviours in an individual makes them leaders. Charismatic
leaders usually have a vision and are ready to take risks at a personal
level to achieve their vision. They are susceptible to the follower’s needs
and generally show behaviour that is perceived as a novel.
It has been observed that charismatic leaders influence followers with an
appealing vision followed by a long-term strategy that could result in a
better future. The followers can visualize a challenging yet achievable
vision from a charismatic leader. The vision usually fits the ongoing
circumstances and gives uniqueness to the organization. They can increase
confidence in followers that the vision could be attained through a
given strategy and high performance. Employees can identify with the
leader personally. Such leaders also communicate a certain set of values
to achieve the goal. Overall, employees are able to connect with such
leaders at an emotional level. The combination of certain personality
traits and situational factors mainly leads to the rise of charismatic
leaders. Charismatic leaders possess high confidence and are generally
achievement-oriented, for example, Barack Obama. Similarly, followers
become more receptive to charismatic leaders when they face stress and
crises. For instance, in the 1930s, Franklin D. Roosevelt’s vision was to
get people out of the Great Depression.

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7.11.3 Authentic Leadership Notes

The dawn of the 20th century and the beginning of the 21st century saw
some infamous large-scale scams (like the fall of top companies like
Enron and WorldCom) and periods of recession due to the deteriorating
rate of leaders’ moral and ethical conduct among employees. This led to
the emergence of new theories of Leadership that were more value-laden
and ethical such as “Authentic Leadership”. Practitioners like Bill George,
academicians like Avolio, leadership consultants like Kevin Cashman,
etc., initially recognized the concept of Authentic Leadership. Authentic
leaders are more effective at optimizing their effectiveness to achieve
superior long-term results.
Authentic leaders are the one who maintains consistency in their words,
actions, and internal value system. In addition, such leaders foster a
long-term relationship with an organization in a self-disciplined manner;
such leaders are not only passionate about their work but are deeply
grounded in the roots of their value system and moral conduct. Balanced
processing internalized moral perspective, relational transparency and
self-awareness are the four significant constructs of authentic leadership
that are widely accepted.
Authentic leadership is an approach to leadership that emphasizes building
the leader’s legitimacy through honest relationships with followers who
value their input and are built on an ethical foundation. Generally, authentic
leaders are positive people with truthful self-concepts who promote
openness. Building on the simple but essential idea that leaders may
construct their sense of self-based on who they are as distinct individuals
and based on who they are.

7.12 Summary
Leadership largely depends upon the followers’ perception and their
acceptance. There are various leadership styles and theories in literature
that helps us in understanding what makes an effective leader. The 19th
century witnessed the rule of dictators and Power - influence behaviour
among the leaders. The leadership at that time was mostly all about the
one-man show, the Great man theory, and the Trait theories are grounded
in this and were an attempt to search common traits that make a common

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Notes man a powerful leader. Even today a leader equipped with such traits
adds to the leadership effectiveness. With time union conflicts, uneducated
workers, adaptation of new technology, etc., emerged and it became difficult
to generalize trait theory. The focus of leadership researchers turned
towards the behaviour of leaders. The leader’s behaviour plays a crucial
role especially in controlling today’s information era’s highly qualified
employees. Due to the accelerated rate of technological advancements
and associated unpredictability in the work environment, the need for
contingency and situational leadership arises. The last decades of the
20th century recognized the need for leaders who could develop their
followers’ behaviour and transform them into new leaders. This led to the
development of transactional and transformational theories of leadership.
Till today many organizations are following the transformational style
of leadership that was introduced in the 20th century. It involves five
dimensions namely attributable and behavioural influence, inspirational
motivation, the focus of intellectual growth and individual consideration.
The dawn of the 20th century and the beginning of the 21st century
saw some infamous large-scale scams and periods of recession due to
the deteriorating rate of leaders’ moral and ethical conduct among the
employees. The overall societal loss at the macro level and maintenance
of investors’ trust at the organizational level led to the emergence of
new theories of leadership that were more value-laden and ethical such
as Authentic Leadership. Looking at the various theories it can be stated
that it is difficult to define leadership in few words. The current leader
should follow a style/approach that fits the needs of all the stakeholders.

7.13 Answers to In-Text Questions

1. Manager, Leader
2. (b) Delegating work
3. (c) Manipulative Leadership Style
4. (c) Great man theory of leadership
5. (c) Contingency theories
6. (b) Behavioural theories
7. (b) Behavioural theories

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8. (d) Country club Notes

9. (c) Task oriented
10. (b) Teamwork
11. (b) Teamwork

7.14 Self-Assessment Questions

1. Define Authentic Leadership. Do Ethics and trust relevant concepts
to becoming an effective leader?
2. State the limitations of behavioural theories of Leadership.
3. Differentiate between a manager and a leader. Why does a manager
need to become a leader?
4. Write a short note on the following - (Any 5)
‹ Three Need Theory
‹ Adams theory
‹ Tannenbaum and Schmidt Continuum
‹ Managerial Grid
‹ Situational Leadership Theory
‹ Minzberg Managerial roles
5. Presently work environment has become very challenging in terms
of competition. Additionally, Post Covid-19, many organizations are
working in Hybrid mode (Physically and Work from home). Which
leadership style or combination of leadership styles is more suitable
for the present-day leader?

7.15 Suggested Readings

‹ Koontz, H, Essentials of Management, McGraw Hill Education, 2020.
‹ Stoner, J. et. Al. Management, New Delhi, Prentice Hall of India,
2018.
‹ Robbins, S. P. Fundamentals of Management: Essentials of Concepts
and Applications, Pearson Education, 2014.

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L E S S O N

8
Work Teams and Groups
Dr. Nidhi Kesari
Assistant Professor
Shaheed Sukhdev College of Business Studies
University of Delhi
Email-Id: [email protected]

STRUCTURE
8.1 Learning Objectives
8.2 Introduction
8.3 Work Groups
8.4 Work Teams
8.5 Group Cohesiveness
8.6 Summary
8.7 Answers to In-Text Questions
8.8 Self-Assessment Questions
8.9 References
8.10 Suggested Readings

8.1 Learning Objectives

‹ Analyse the growing popularity of using team in organizations.
‹ Differentiate between work team and group.
‹ Compare and contrast types of teams.

8.2 Introduction
In the previous chapters, you have well understood the concepts of individuals and their
behaviours. It is worth mentioning that individual’ behaviour changes when they join a
group. Once an individual is a part of a group, group behaviour as a whole becomes
crucial for performance. Let’s understand the same with cricket match example. You must

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have watched cricket match; either a one day, 20-20 or test match format. Notes
The success and failure completely depend on the team spirit and team
performance. Individual player may be good bowler or good batsman or
good keeper etc. Even though all the players are physically and mentally
fit but for winning a match team performance is essential. If only few
players are performing well but others are not then even a best of the
team will fail to win the match. It is important to understand that if one
can play as a team member and build a good team with essential skill
set, nothing can stop the team to achieve its objectives. The beauty of
teamwork can be explained as problem gets divided and strengths get
multiplied when a team stands together. In other words, teamwork is a
backbone of an organization. Big ventures are not possible without a
good team.
Being a student of organizational behaviour, one wants to know how
people working in an organization behave or interact with one another
as an individual, as a team member and/or as a group member inside of
a business organization for the success of the business.
As part of a group and team, individuals are responsible, accountable and
have sufficient authority for proper execution of allocated work which
creates a synergy by performing collectively.

8.3 Work Groups

Work groups share information, interact mainly to make decisions and
help every group member in performing and fulfilling responsibility
within their area of operation.

8.3.1 Group Properties

(a) Roles: Everybody in a team has to play a role in a well-coordinated
expected manner. For which one has to identify their role as per
given position. Identification of role depends upon how others believe
us to act in a given situation. This calls for our own understanding
of others’ beliefs. If the compliance of role is as per divergent
role expectation, it results in role conflict that can be minimized
if monitored closely.
(b) Norms: Norms are acceptable standards of behaviour (do’s and don’ts)
which are shared among the group members. It means groups create

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Notes strong pressure on individual members for conformity in respect to

changing their attitudes and behaviour to the group’s standard.
(c) Status: Is a rank or a position assigned to members of a group or
to some group by others in terms of permeates. The determinants
of status are (i) the power exercised by a person over the others,
(ii) ability of a person to contribute to the goals which are set by
the group, and (iii) an individual’s personal traits.
(d) Size: The size of the group, which depends on goal, also affects the
group’s behaviour.
(e) Cohesiveness: It is the degree to which group members are willing
or motivated to stay in the group as they have to spend a great
deal of time together. In fact group cohesiveness is related to the
group productivity.
(f) Diversity: It refers to the extent to which group members are different
or similar to one another. It identifies both costs in terms of group
conflict resulting in dropout rates and benefits in terms of increased
productivity.

8.3.2 Reasons for Joining Groups

People cannot live and survive in isolation for a long period. For a variety
of reasons, people join group. Some of them are as below:
(a) Security: People join a particular group to get the sense of security
from adverse environments and reduce insecurity from threats.
(b) Self-Esteem: Joining a group increases self-esteem through group
membership.
(c) Affiliation: To show association or relationship with a group.
(d) Power: It gives a sense of power to members of the group who join
the group. Group power lies in being united as a group. People like
to control others and make an impact on others. Membership of
group offers power to people and enables them to use it over the
others.
(e) Status: People join groups to gain a status in the society. It provides
recognition to the members of the group.

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(f) Goal Achievement: The group is able to achieve organizational goals Notes
which cannot be achieved when working individually.
Types of Groups:
It is generally seen that an organization has different types of groups
which work for the achievement of common organizational goals. A
group is a collection of individuals who have a relation to one another
that make them interdependent to some significant degree. Group can be
classified as formal and informal:
(a) Formal Group: Formal group is designated work group defined
by an organization’s structure. Crew members in the ship are the
example of a formal group.
A formal group can be divided into the command group and task
group:
(i) Command Group or Functional Group: A command group is
reflected through the organizational chart and determines who
the reporting officer is. Various functions of the organization like
finance, marketing, human resource, research and development
have functional groups.
(ii) Task Group or Project Group: This group is created in the
organization to identify and provide solutions for a specific
problem. For a particular project a deadline is fixed and the
efforts are made to meet the deadline. Budget for these projects
are fixed in advance to facilitate the time bound resolving of
the problem. The group is dissolved when the project gets
completed.
(iii) Task Force or Ad hoc Committee: It is very similar to a
task group. As the name suggests it is temporarily created to
address a specific issue. Task force gets dissolved after making
a recommendation on the specific issue. For example - Issue
can be redesigning of the reward system in the organization.
(iv) Quality Circle: Organizations are concerned for quality and
want to ensure that each employee is committed to maintaining
quality and will upgrade themselves. A small employee group
is created to deal with productivity, and quality related issues.
This group ensures that issues related to quality are resolved

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Notes so that organization’s commitment to quality can be ensured

in all times to come.
(b) Informal Groups: Informal groups are more social in nature. These
groups are not defined by role relationships. The behaviour that team
members should engage in are stipulated by and directed toward
organizational goals. Employees from different departments playing
chess together is an example of an informal group.
Informal groups are also classified into two groups.
(i) Interest Group: Interest group is a group where people come
together to attain a specific objective with which each one
is concerned. A common interest binds the group members.
Members may not belong to the same organization or department.
Joining and leaving the group is at the will of the members
and nothing is formal. For example, the Indian Commerce
Association.
(ii) Friendship Group: People have social needs and want to be
part of some social group. Social activities, religious beliefs,
etc., may be used to create friendship group. Some of the
“friendship groups” commonly found in the organisations
are - Yoga group, birthday groups, etc.
Difference between formal and informal groups:
Basis for difference Formal Group Informal Group
1. Meaning Groups created by Groups created by the
organization are to employees to satisfy
DFFRPSOLVKDVSHFL¿F their social needs
task
2. Formation Deliberately Voluntarily
3. Size Large Comparatively small
4. Life It depends on the type It depends on the
of group members
5. Structure :HOOGH¿QHG 1RWZHOOGH¿QHG
6. Importance Given to position Given to person
7. Relationship Professional Personal
8. Communication 0RYHV LQ D GH¿QHG Stretches in all the
direction directions

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8.3.3 Group Development Process Notes

All groups go through various stages which are as follows:

(a) Forming: The first stage of group development is forming, which
brings together a group of individuals who look upto the leader for
guidance and direction regarding the goals, tasks and skills required
to achieve the goals.
(b) Storming: This stage is one of intergroup conflict which is concerned
with who will control the group. Members accept the existence
of the group but resist the constraints it imposes on individuals.
Members may feel agreeable or frustrated with the task or with
other members of the group.
(c) Norming: In the third stage members begin to take greater responsibility
for tasks and come forward to resolve issues, setting up of group
processes, formulation of group policies, procedures and values
resulting in developing confidence in the group and its members.
At this stage group members also start expressing their satisfaction
to be part of the group.
(d) Performing: The fourth stage is performing. Now the group is
functional with active members who take initiatives and involve
themselves to complete a task. Group members adhere to the
group norms and collective efforts are made to ensure the group
effectiveness.
(e) Adjourning: It is the final stage in group development which involves
the termination of task and disagreement from relationships. The
group may have mixed feelings. Some may be thrilled over their past
achievements and performances, some may be unhappy to depart.
This stage may happen for some groups quite early and some may
experience it in a long run.
IN-TEXT QUESTIONS
1. Which of the following statement is TRUE or FALSE?
(a) Group refers to a collection of individuals who may interact.
(b) The accountability of work group is individual.
(c) The goal of group is to share information.

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Notes (d) Groups create strong pressure on individual members

for conformity in respect to change their attitudes and
behaviour to group’s standard.
(e) One of the reasons to join group is security.
(f) Diversity refers to the extent to which group members are
different or similar to one another.
(g) The stages of group development process are five.
(h) In forming, Work output is low, focused on defining the
goals and tasks.
(i) Performing relates to highly productive.
(j) Adjourning is related to termination of task.
(k) Leadership is shared in norming stage of group process.
2. Match List I with List II:
List I List II
1. Group (a) Two or more interacting and
interdependent individuals who come
together to achieve specific goals
2. Work group (b) Interacts primarily to share information
and to make decision.
3. Formal group (c) Designated work group defined by an
organization’s structure.
4. Informal group (d) It is social in nature.
3. Fill in the blanks:
(a) The first stage of group development process is _________.
(b) The last stage of group development process is _________.
(c) Work group has _________ accountability.
(d) Work group goals are _________.
(e) _________ has face to face interaction.
(f) The formations of informal groups are _________.
(g) Friendship group is an example of _________.
(h) Quality Circle is an example of _________.

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4. Arrange the following in right sequence: Notes

(i) Adjourning
(ii) Performing
(iii) Forming
(iv) Storming
(v) Norming

8.4 Work Teams

A work team generates positive synergy through coordinated efforts. Team
performance increases due to coordinated individual efforts. Individuals
contribute to achieving goals and are accountable for the same. Individual
inputs such as goal, synergy, accountability, and skills are crucial.
In business terms, when a group of people collaborate to achieve mutual
goals and create a synergy effect, it is known as a team. In other words,
setting aside any personal conflict and coming to a mutual conclusion
that benefits the group and the organization is teamwork in business. It
involves constructive feedback and improving each other’s ability without
any personal grudges and feuds.
Teamwork has tremendous power. A team with good tuning can multiply
the efficiency of a person by many times, and the total output can be
unimaginable.

8.4.1 Types of Teams

Teams have the potential to out stand products, provide services, coordinate
different projects and negotiate the deals and make decisions. This section
describes the four most common types of teams in an organization. These
teams are capable of delivering the results and achieving the goals in a
focused manner.
(a) Problem Solving Teams: A team of 5 to 12 employees of the same
department meet on a weekly basis to discuss issues related to
efficiency, work environment and quality concerns. They discuss
the matter and make a recommendation to the manager. They can

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Notes only recommend the solutions and have no authority to implement

the recommendations.
(b) Self-Managed Work Teams: Self-managed work teams are ahead of
problem solving teams. They not only make recommendations but
also have authority to implement the solutions and take ownership of
the results. These teams have 10 to 15 employees who are engaged
in interdependent or highly related jobs and are fully responsible
for the jobs which they have been assigned with.
(c) Cross-Functional Teams: Cross functional teams are formed with
the employees who come from different work areas but more or less
from the same hierarchical level. This team is formed to accomplish
a task. Cross functional teams have become very popular because
of their capacity to handle complex projects.
(d) Virtual Teams: Teams which meet virtually are commonly termed
as virtual teams. All above teams meet face to face and perform
their tasks. Virtual teams use computers, internet, software and other
aids to let team members meet at a virtual platform even though
members are physically dispersed. During Covid 19 pandemic, many
of us have used virtual platforms to conduct meetings and connect
colleagues with specific goals. We have experienced how it feels to
be virtually present. Video conferencing has become very common.

8.4.2 Difference Between Group and Team is given below

Terms ‘groups’ and ‘teams’ are majorly used interchangeably. Cane
suggests that organizations are sometimes unsure whether they have teams
or simply groups of people working together. Following table highlights
the difference between team and group—
Basis Team Group
'H¿QLWLRQ It includes two or more people It includes two or more people
who share a common goal and who come together to complete
have a collective identity. the given task.
Common superior Team may not have a common Group has a common superior
superior.
Commitment Team members are supposed to Group members are not much
be highly committed to work. committed to work.

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Basis Team Group Notes

Interdependency Team has the higher degree of Group has a small degree of
interdependence interdependence.
Accountability Team members themselves are Group members are not
mutually accountable. themselves so accountable.
Size Limited Medium or large
Selection Crucial Immaterial
Leadership Shared or rotating Solo
Synergy Positive Neutral (sometime negative)
Skills Complementary Random and varied
Goals Collective performance Share information

8.4.3 Creating Effective Teams

Nothing becomes effective without putting in some effort. So to make a
team effective it calls for efforts from the management. Our discussion
is based on four components of team effectiveness, namely, context,
composition, work design and process. Let’s discuss.
Context Composition Work Design Process
Adequate resources Ability of members Autonomy Common purpose
Leadership and Personality Skill variety 6SHFL¿FJRDOV
structures
Climate of trust Allocating roles Task identity 7HDPHI¿FDF\
Performance Diversity Task &RQÀLFWOHYHOV
evaluation and VLJQL¿FDQFH
reward systems
Size of teams 6RFLDOORD¿QJ

I. Context: It includes all the components that form an atmosphere around

the team. Following are the sub-components of Context—
Adequate Resources: Scarcity of resources is the limitation which almost
all the teams face. This reduces the ability to give their best and perform
effectively to achieve its goal. Teams are dependent on the organization
to provide adequate resources to the teams. Organisational support is
crucial. Resources are critical for teams. Timely information, optimum

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Notes staff, adequate equipment and administrative assistance are critical for
the teams.
Leadership and Structures: All the members in the team have to perform
certain tasks. This has to be decided by the team leader. Leader not only
leads the team but play an important role in the team. Leader has to
empower the team members and play the role of a facilitator. Teams that
establish shared leadership by effectively delegating it are more effective
than teams with a traditional single-leader structure.
Climate of Trust: Trust is the base of every successful team. Trust among
the members and on the leaders facilitates cooperation, creates bond,
increases capacity to bear risk increases and reduces vulnerabilities. A
climate of trust makes a strong foundation for a team.
Performance Evaluation and Reward System: Rather than having individual
performance evaluation system, organisations should recognize team players
and reward individuals for their team performance. Organisations must
adopt group based appraisals, gainsharing, profit sharing, and small-group
incentives that can motivate teams to commit for attainment of goals by
team efforts.
II. Team Composition: This component focuses on the members who
form a team. Each member of the team is selected based on their skill
sets and abilities. Team composition includes following sub-components—
Abilities of Members: Each member of the team is important. Selection
depends on skills, knowledge and abilities. Members must complement
each other. Selecting the best of the employees is not the key. Sometimes
a mediocre employee turns out to be excellent and determined team
builder and has precision for work. Managers need to understand the
requirements of the team. For complex problems, high ability teams with
intelligent members must be selected.
Personality of Members: Individual behaviour is significantly influenced
by personality. Different dimensions of personality are crucial for team
effectiveness. Big five personality model provides a good base about the
relationship between personality and effectiveness. Teams which reflect
high conscientiousness and are open to experiences are better performers.
Studies suggest that specific behavioural tendencies such as personal

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organization, cognitive structuring, achievement orientation, and endurance Notes

boost higher levels of team performance.
Allocation of Roles: Identification of potential roles and selecting the
members keeping the roles can be very effective. Team should have a
proper blend of experienced and skilled members. Managers must understand
each individual strengths and weaknesses and allocate assignments that
most suit them.
Diversity of Members: Diversity, like race and gender diversity, among
the team can show different results. One, it may not at all impact the team
performance. Two, it may impact team performance in a very positive
manner and third, may produce negative impact on team performance.
Diversity in, education, and expertise are positively related to group
performance, but these effects are quite small and depend on the situation.
Leaders can play an important role in managing diversity effectively.
Size of Teams: Effectiveness lies in keeping the team small in size. Most
effective teams have five to nine members. Managers must focus on roles/
tasks and accordingly select most responsible and accountable members.
III. Work Design: It includes the design of the work. Work designs are
motivating by nature because it increases the sense of ownership of work
and makes employees responsible for the tasks done. Variables which are
concerned with work design are as follows—
Autonomy: Is the freedom to do the task as per my choice which doesn’t
violate the generally accepted rules. It answers the question ‘how much
does the task let employees exercise its freedom?’
Skill Variety: Opportunity to use different skills and talents to complete
the tasks.
Task Identity: Task identity is related to the ability to complete a task in
a given time. A task needs to be understood well and identified completely
to execute it well.
Task Significance: Task significance means a task should create substantial
impact on others. Team members should be more than willing to work
on such tasks or projects which create impact on others.
IV. Team Processes: It reflects the way the team operates. Common
purpose, specific team goals, team efficacy, level of conflict, and are

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Notes some of the variables which contribute to the team effectiveness. The
idea behind the team process is to enhance process gains by reducing
process losses to create positive synergy.
Common Purpose: Common purpose provides direction to the team
and enhances commitment among the team members. Clarity over the
purpose is vital for the success of the teams. Directionless team will lead
to nowhere. It is worth spending time to thoroughly draft the mission,
vision of the organization and then for a specific team.
Specific Goals: Goals must be measurable, specific and realistic. Goal
should be challenging. Team performance increases with attainable but
difficult goals.
Team Efficacy: Teams work harder to achieve success and success further
motivates the teams to work harder. Managers can provide training to
the employees and also help the team achieve small targets to boost
their confidence. High level of confidence will increase the capability to
deliver and make a team effective.
Conflict Levels: Conflict is not always bad. Conflict has a complex
relationship with team performance. Functional conflicts are positive
and dysfunctional conflicts create frustrations. Task related conflicts are
functional in nature and relationship conflicts are dysfunctional in nature.
Moderate level of task conflict like disagreements among members on
certain issues may ignite creative thinking and team may lead to better
decisions. Dysfunctional conflicts like incompatibilities and tensions
among the members may become complex and lead to negative outcomes.
IN-TEXT QUESTIONS
5. Which of the following statement is TRUE or FALSE?
(a) A work team generates positive synergy.
(b) Team performance increases due to coordinated efforts.
(c) A team with good tuning multiply the productivity of the
person.
(d) Virtual teams connected through the use of internet.
(e) Video conferencing is an example of virtual team.

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6. Fill in the blanks: Notes

(a) Team members themselves are _________ accountable.

(b) The goal of team is _________ performance.
(c) The leadership of team is _________.
(d) There are _________ components of effective team.
(e) Strategies are developed to _________ the goals.
(f) Autonomy is the variables of _________.
Social Loafing: It is the tendency when individuals put less effort to
complete a task when working collectively than working alone. There
is a general belief that productivity of the group working together will
be higher than the total performance of the individual members working
independently in the group. Members can engage in social loafing so
making members individually and jointly accountable is logical.

8.5 Group Cohesiveness

Group cohesiveness is important for the smooth functioning of a group.
Group differs in their cohesiveness. Cohesiveness is the tendency of a
group to remain together while working towards a goal for the emotional
need satisfaction of its members. It develops over time.
Factors that influences group cohesiveness:
(a) Time spent together,
(b) Size of the group,
(c) Structure of the group,
(d) Agreed upon group goals,
(e) Inter-group competition,
(f) Task commitment,
(g) Group pride,
(h) Favourable evaluation.
Advantages:
(a) Worker satisfaction
(b) Low turn-over

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Notes (c) Less absenteeism

(d) Higher productivity.
To encourage cohesiveness suggestions are given below:
‹ Make a small size group to create bonds among the members.
‹ Encourage members to have conformity with group goals.
‹ Time spent together by members should be increased.
‹ Membership in the group should be perceived as difficult to attain
and status of the group should be increased.
‹ Offer a reward to the group rather than to individual members.
‹ Encourage inter group competitions.

8.5.1 Groupthink
Groupthink refers to the group pressure which is created on any member
of the group which influences a member’s ability and thought process
to make a decision in a particular way. It denotes a situation where
the members put aside their opinions and beliefs and try to conform to
the group decision. In a highly cohesive group, any member’s ideas or
opinions or solutions are influenced by other group members.
Symptoms of Groupthink:
1. There is an illusion of unanimity that creates a belief that everyone
is in full accord if they don’t speak and abstention becomes in
favour.
2. Group members present logical reasons and assumptions to rationalize
any resistance from a group member. When a decision is agreed
upon, that course of action is followed. It stops the member from
reconsidering his opinion.
3. Members apply direct pressure on those who do not agree to conform
by being pressured into an agreement.
4. Member avoids deviating from the group consensus by keeping silent
about their doubts and difference of viewpoints.
What Causes Groupthink?
(a) Dictatorial leadership

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(b) Group cohesion Notes

(c) Dislike of confrontation
(d) Time constraints
(e) Decisional Stress.
How to Minimise Groupthink?
(a) Managers can monitor group size as size increases, people grow more
intimidated and hesitant. There is no magic number that eliminates
groupthink as individual feel less personal responsibility when group
size is large.
(b) Group leaders should be encouraged to be impartial by organisational
leaders.
(c) Deliberations of all kinds should be open and all divergent of views
should be welcomed from the members. Leaders should play an
active role to make this process free and devoid of pressure tactics.
(d) Stimulate an environment of healthy debate to avoid groupthink by
which better ideas may arise.
(e) Have people from different backgrounds who will have different
experiences, beliefs, and views which prove to be beneficial in
avoiding groupthink and can lead a productive debate.
(f) Include members of other departments to get different perspectives.
(g) Take time enough over decisions that enable you to properly analyze
the situation and come to a more rational response.
(h) Consult an outside expert to get knowledge and information that you
don’t have.

8.5.2 Groupshift
Group shift refers to the tendency of group members to exaggerate their
initial positions that they hold in the beginning of group discussion. While
taking decisions in groups, the discussion leads to a significant shift from
the initial positions of members in which they were before the discussion.
It is seen that group decisions are more conservative and riskier than
individual decisions. Group decisions set individual members free from
accountability for the group’s final choice. No single individual can be

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Notes held fully responsible even if the decision fails. Group can undertake
greater risk in this case.
The main reasons for groupshift are diffusion of responsibility throughout
the group by members. It is said that smaller groups have higher groupshift
than larger groups.
Difference between Groupthink and Group Shift:
1. Groupthink refers to the group pressure which is created on any
member of the group which influences member’s ability and thought
process to take decisions in a particular way, whereas, groupshift is
the tendency of group members to exaggerate their initial positions
that they hold in the beginning of group discussion.
2. In groupthink, the group creates pressure on the individual member,
whereas, in groupshift, the individual member creates pressure on
the group.
3. In groupthink, popular view is favoured and personal view is put
aside whereas, in groupshift, due to group influence personal view
becomes much stronger.
Techniques to Eliminate Groupthink & Groupshift/Group Decision
Making Techniques
There are the following four techniques used to eliminate groupshift
and groupthink from a group, also popularly known as Group Decision
Making Techniques—
A. Brainstorming: It is a process of generating ideas in which the
group leaders state the problem in a clear manner so all participants
understand and are encouraged to interact, think the unusual while
withholding any criticism of those alternatives. All ideas are recorded
for later discussion and analysis with pros and cons. Brainstorming
develops group cohesiveness. The following are the two brainstorming
techniques that help groups arrive at a preferred solution:
(a) Nominal Group Thinking
It is more structured and enhances the brainstorming with a
voting process. Group coordinator describes the problem and
members independently write solutions without discussing
among themselves. This eliminates the tendency of groupthink.

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Then all the responses are collected, discussed and answered Notes
by the member who has written them. After discussion based
on evaluations a rank is assigned by members and the solution
which gets the highest ranking by most of the members is the
final decision.
The nominal group technique is an inexpensive means for
generating a large number of ideas. In this technique, the
following steps are taken:
(i) Alternatives or the solutions are independently written
by each member.
(ii) All ideas are then recorded and no discussion is initiated
till the time all ideas are presented by the members.
(iii) Ideas are then discussed and the group evaluates them.
(iv) Ideas are then ranked by each member independently.
(v) Final decision is based on the members rank assigned to
the ideas.
(vi) Idea which gets the highest rank by most of the members
is the final decision.
(b) Delphi Technique
It is a technique in which questionnaires are sent to the members
located at different places. The results of the questionnaires
are compiled and a copy of results is sent to all members
with the view to review the results and respond to the second
questionnaire which may generate new solutions. This process
is repeated until a consensus is reached.
IN-TEXT QUESTIONS
7. Which of the following statement is TRUE or FALSE?
(a) Group cohesiveness develops over time.
(b) One of the advantages of group cohesiveness is less
absenteeism.
(c) Brainstorming is a process of generating ideas.
(d) The nominal group technique is an inexpensive means
for generating a large number of ideas.
(e) Delphi technique in used to develop consensus.

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Notes 8. Fill in the blanks:

(a) Group _________ in their cohesiveness.
(b) Group cohesiveness is important for the _________ functioning
of a group.
(c) Groupthink refers to a _________ phenomenon.
(d) Groupthink denotes a situation where the members _________
their opinions and beliefs.
(e) Group shift refers to the _________ of group members
to exaggerate their initial positions that they hold in the
beginning of group discussion.
(f) The main reasons from groupshift are _________ of
responsibility.
(g) Smaller groups have _________ groupshift than larger
groups.

CASE STUDY
Mumbai’s Dabba Walas
Mumbai’s Dabba Wala is not a new name for any Indian. They have
gained lot of popularity not because of glossy business but because
of their efficiency and commitment to work. Dabba Wala’s case study
is discussed in the most renowned business schools in the world. The
high level of effectiveness has earned them a six sigma certification
for which other businesses strive and dream of.
The flawless quality service since 1890 has ensured complete customer
satisfaction with regards to the reliability of the system from twelve
decades in India.
Dabba Walas run a tiffin service in Mumbai whose objective is
supply of packed lunch food in tiffin from the customer’s home
to the customers’ work place every working day. They arrange the
collection of packed lunch in traditional tiffin boxes, load them on
local trains (a compartment is reserved for the bulk tiffins) and deliver
to all the areas in Mumbai including suburbs of Mumbai. These
meals are cooked and packed by wives or mothers (or sometimes
local restaurants) for individual office workers in central Mumbai.

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The noticeable feature of this delivery is that every office workers Notes
gets home tiffin every working day on time without any fault or delay.
Obviously, the contents (in terms of variety and taste) of each tiffin
box are unique, which is the central appeal of the service. When the
lunch time is over in the day, the dabba walas again collect the empty
tiffins from the working place and return them to the workers’ homes.
The supply system adopted by dabba walas is extremely unique and
full of risk. At each of the central stations, where train stops for
about 20 seconds, other members of dabba wala teams unload the
tiffin boxes for destinations near the station and sort them for hand
delivery to the offices and workshops where the individual recipient
work. Sharp round 12:45 pm tiffins are delivered and then the process
is reversed to return the empties boxes to the homes. The service
cost per box is about Rs. 300 per month and each dabba wala earn
about Rs. 4,500 a month. Customers pay one month’s bonus to the
organization for the Diwali festival.
This seems to be simple process but it’s a highly complicated, precisely
well-coordinated operation. Mumbai city is known for its traffic chaos
and local train rush. Traffic delays and occasional chaos are very
common. Some of the dabba walas negotiate the traffic on foot and
by bicycle at a cracking pace irrespective of weather conditions; the
tiffin must get through.
The error rate is said to be vanishingly very small; one box may go
astray every two months; about one in six million deliveries.
One of the eye-catching point is that there is no government or IT
support except special reserved train coach, no track and trace, no
computers, no bar codes is leveled, just a handwritten code on each
box that allows the dabba walas to identify or recognize which station
the box has to be sent to and unloaded, its ultimate destination and
its return address.
Many of the dabba walas have low level of literacy, but their ability
to decode and correctly route the boxes that they each carry through
the crowded streets is the key to the whole system. This kind of
supply chain system requires very low levels of capital intensiveness.
It is the team work that makes the service happens. Dabba walas

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Notes commitment has made them special and the guiding force behind this
commitment is Shivaji. In the name of Shivaji the members find the
motivation to do the hard work and serve people with their home
cooked food. They have a team of 5000 dabba walas who serve
almost 2,00,000 mumbaikar daily.
The future of the service
Of late, the migrations of workers in search of job in metro cities at
large are very high. Due to Covid-19 pandemic, people are hesitant
to have meals from the nearby local road side restaurants or dhabas.
The people with all sphere of life irrespective of different regional
styles and traditional loves to eat home cooked hygiene food. This
diverse range of home-prepared meals reliably to the individual in
the workplace is in high in demand. The growth of fast food centre
is a global phenomenon who also delivers fast food at destination as
they claim as hygienic. They do have a website and are now able to
accept orders via the site or by SMS. It requires frequent ordering
every day which is quite monotonous for the office going workers.
It is also seen that some of meal delivery centre claim that they
supply home cooked hygiene meal on order at destination but it is
good only for few days or emergency time not for all days in terms
of variety, quality and taste.
The reasons for using dabba walas services are the following appeals:
1. Homemade food is cheaper and hygienic.
2. Homemade food is best for health as against junk foods which
make you sick.
3. If you love to eat food made by your wife or mother, dabba
walas is the solution.
4. They assures that they deliver yours home cooked meal on time
at right destination.

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IN-TEXT QUESTION Notes

9. Match List I with List II:

List I List II
1. Brainstorming (a) Develops group cohesiveness
2. Delphi technique (b) Develops consensus.
3. GroupShift (c) No single individual can be held fully
responsible even if the decision fails.
4. Groupthink (d) An illusion of unanimity that creates a belief
that everyone is in full accord.

Your tasks are:

(a) If a team is defined as a group of dedicated people working towards
a common goal, discuss the strengths and weaknesses of the dabba
walas practice of making team members as shareholders, rather than
employees.
(b) Analyze the cohesiveness and performance of the dabba walas team.
(c) To what extent does the dabba walas service display the features
of an effective work group?
(d) Why has technology played a very meager role in the development
of the dabba walas service so far? Is this likely to change in future.
(e) Identify ways in which this might affect the team spirit of the
organization.

8.6 Summary
Most of the work in organization is done in teams. People often join
groups to satisfy their needs of security, status, self-esteem, affiliation,
power and goal achievement. In any organization, many different types
of groups coexist. Whatever be the kind of group, every group goes
through five stages of development, namely forming, storming, norming,
performing and adjourning. Group cohesiveness is very important for
the smooth functioning of a group. Several factors influence the group
cohesiveness. Various decision-making techniques are used in groups for
the development of consensus decisions. Groupthink and groupshift are
two very important concepts in group decision-making.

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Notes
8.7 Answers to In-Text Questions

1. All true
2. 1 (a), 2. (b), 3 (c), 4. (d)
3. (a) Forming, (b) Adjourning, (c) Individual, (d) Share information
(e) Group, (f) Voluntarily (g) Informal groups (h) Formal groups
4. (iii); (iv); (v); (ii) and (i)
5. All true
6. (a) Mutually, (b) Collectively, (c) Rotating (d) Four (e) Achieve
(f) Work design
7. All true
8. (a) Differ, (b) Smooth, (c) Psychological, (d) Put aside (e) Tendency
(f) Diffusion, (g) Higher
9. 1. (a); 2. (b); 3. (c); 4. (d)

8.8 Self-Assessment Questions

1. What do you mean by work team?
2. What do you mean by Work group?
3. What is the difference between a group and a team?
4. What are the different types of teams that can exist in an organisation?
Why do people join groups? Discuss.
5. What are the main characteristics of a group?
6. What are the various types of formal groups? Discuss with examples.
7. Explain the characteristics/features of an informal group. Describe
the various types of informal groups.
8. Describe the five stage of model of group developments.
9. Explain the term group cohesiveness.
10. Discuss the various group decision-making techniques.
11. What is the difference between groupthink and groupshift.

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Notes
8.9 References
‹ Robbins S.P., & Judge, T.A. (2017). Organisational Behaviour. 17th
Ed. Pearson.
‹ Pareek, U., & Khanna, S. (2016). Understanding Organizational
Behaviour. 4th Ed. Oxford.
‹ Mullins, L.J. (2010). Management & Organisational Behaviour. 9th
Ed. Printice Hall.

8.10 Suggested Reading

‹ Singh., K. (2015). Organisational Behaviour Text and Cases. 3rd Ed.
Vikas Publication.

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L E S S O N

9
Conflict
Dr. Savita Kumari
Manager (HR & Admin)
Construction Industry Development Council
Email-Id: [email protected]

STRUCTURE
9.1 Learning Objectives
9.2 Introduction
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9.1 Learning Objectives

After reading this lesson, students will be able to:
‹ Familiarize themselves with the concept and different thoughts on conflict.
‹ Understand systems thinking to diagnose and analyse conflict.
‹ Develop an understanding of different Conflict Management Techniques in organization.
‹ Develop their own approach to Conflict and Conflict Management Techniques.

9.2 Introduction
In this chapter, we will understand what is conflict, how conflicts originate in any
organization and why conflicts are important to be managed. In addition to this, the chapter

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also highlight the need and importance to address the conflicts to attain Notes
the achievement of the group or team.
CASE STUDY
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No frills carrier IndiGo Airways became largest passenger airline service
company after Jet Airways was grounded. This company was founded by
Rakesh Gangwal and Rahul Bhatia in the year 2006. They operated for
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partners. This can be viewed as a classic example of a disagreement
EHWZHHQSDUWQHUVOHDGLQJWRFRQÀLFWZKLFKIXUWKHUHVFDODWHGWRFRXUWFDVH
and adversely impact the operation of the organization. One of the reasons
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LQGRXEOHDLVOHGDLUFUDIWZKLFKKDGWKHFDSDFLW\WRÀ\QRQVWRSIRUPRUH
than 10 hours and offer passengers more comfort and services whereas Mr.
Gangwal wanted to focus on code shares – a commercial aircraft where
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Ideally, this should have been resolved through discussion and evaluation
of alternatives based on respective merits. However, ego of the partners
became a roadblock in reaching an agreement. Secondly, other reason
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has more control over the executives and management. Because of these
issues operational decisions started getting delayed which led to shortage
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also be viewed as lost opportunity arising due to Jet Airways shutdown. It
is observed that if differences of opinion and perception not get resolved
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This case has been developed based on information published/reported in
various news channels and print media.
Conflicts are very common in almost all organizations. Conflict tends
to arise anywhere, whether a family setup or a workplace. The reasons
may be varied originating due to the differences in personal background,
ideology, perception or likings of the people. Any individual or team
may have differences in their opinion, but if they fail to negotiate then
conflict arises. Conflict is inevitable amongst those who work in a close
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Notes environment like in any organization. Conflict occurs in the situation

where there is a mismatch of perceptions or emotions among individuals
or groups. It arises everywhere and at every level like in personal
relationships, in business and professions, in organizations, between
groups and organizations, and even among nations.

9.3 Conflict: Concept, Sources, Types and Stages

9.3.1 Concept and Dimensions of Conflict

Conflict is an expected, natural and universal phenomenon among
individuals, teams & in organizational life. Conflict may arise from the
differences of opinion and may escalate to dispute level and if not resolved
will lead to an unhealthy work environment. Thus, proper diagnosis
and timely resolution of conflict is essential for the organization. It is
good to respect the different views and opinions. A work culture where
everyone’s view is respected on their merit and discussed in a positive
tone and environment leads to a positive impact and does not lead to
unproductive behaviour and a toxic work environment.
In organizations, managers devote a lot of time and resources in handling
and resolving conflicts. It is a very tedious task to estimate the losses due
to organizational conflict. So, management of conflict is important for
the effective functioning of organizations. In most of the organizational
set ups, there are various reasons for conflict like when employees do
not get the salary and responsibilities as per their expectations, due to
the differences in background of employees, differences in ideology and
perception of employees etc.
EXAMPLE
Sanu and Disha, best friends were working on a project as a team. In a
brain storming session with respect to the implementation of the project a
difference of opinion emerged between them. They were not able to reach
a consensus and project went on a deadlock. This is a classic example of
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WKHFRQÀLFWLQVPDUWZD\ZLWKRXWIDYRXULQJDQ\RQHDQGPDGHWKHSURMHFW
run. He made them understand the losses and negative effect of stalling a
project just because of differences in opinion. Project is more important
than any one’s way of thinking or behaving.

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9.3.2 Why Conflict Arises – Understanding the reasons and Notes

cause of Conflicts
Conflict can arise in various scenarios and it is important to be able
to identify the conflict before it escalates and damages the workplace
environment. Conflict can be caused by a number of factors and the
first step towards conflict resolution is identifying and understanding
the underlying reason. Conflict resolution more often than not begins by
asking “What Happened?”.
The answer to this question however, can be one or more of the following:
‹ Perceived Breach of Faith and Trust: If any individual or group
recognizes and feels breach of faith and trust among them, conflict
is very obvious results. Under any situation, when one party puts
faith and trust in another and that faith is broken, it can generate
an emotional response that leads to conflict. On the other side, a
trusting relationship leads to feelings of confidence and security.
‹ Unresolved Disagreements: Disagreement is the starting phase of
any conflict situation. Disagreements are likely to arise when people
work in an interdependent manner. But if the disagreement is left
unresolved it can turn to a serious conflict situation. Therefore, it
is very important to address and resolve disagreements as soon as
possible and not let them get worse and continue.
‹ Miscommunication: Interpersonal communication skills and empathy
may help in avoiding conflict situations and if any conflict condition
arises, it may also help in handling and resolving the same in a better
way. On the other hand, miscommunication may lead aggravation
of conflict.
‹ Personality Clashes: It is a universal truth that we all are different.
According to experts, our personalities are genetically determined
which results in different sets of preferred behaviours. It is one of
the obvious reasons for personality clashes.
‹ Differences in Acquired Values: Differences in acquired value is
a common source of conflict. Our values are the beliefs we hold
that help us to decide between the right and wrong, good or bad,
and normal or abnormal. Values develop through the influence

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Notes parents, siblings, friends, teachers, books etc. So, the value system
is a strong driver of behaviour and a frequent source of conflict
between individuals.
‹ Underlying Stress and Tension: In the present competitive environment,
increased work pressure and paucity of time mounts the stress
leading to irritating behaviour and creating fuss on petty things. In
stressed conditions there is a higher possibility of conflict arising.
‹ Ego Problems: Ego is one of the strong drivers of human behaviour
and often a cause of conflict. One of the fastest and most effective
ways to diffuse an argument or conflict is to admit mistakes and
try to see the situation from the other person’s point.

Figure 9.1: Causes for Conflict

IN-TEXT QUESTIONS
1. Find out the false statement about conflict:
(a) It is inevitable
(b) Present opportunities as well
(c) Offer opportunities for growth
(d) Creates problems that required to be tackled with into the
open

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2. __________ is not a portion in the definition of conflict? Notes

(a) Perception
(b) Disruption of tasks
(c) Negative effects
(d) Incompatibility
3. _________ is not a reason for conflict?
(a) Unresolved disagreements
(b) Perceived breach of faith and trust
(c) Effective Communication
(d) Personality clashes

9.3.3 Views of Conflict

There are various perceptions regarding conflicts among the people and
organizations. Some feels it as a natural happening whereas others treat it
as a personality defect. There is an emerging view that conflict is bound
to happen if people work in closely and regularly interact with one other.
It is because of differences in opinion and is good as it stimulates the
thinking process and makes us ready for positive changes. The broad
views on conflicts are as follows:
Traditional View: As per this view conflicts are always destructive in
nature and leads to violence, so it should be avoided ab initio. It may
be because of lack of trust and poor communication among the groups.
It advocates for immediate action for resolving the conflict. It feels that
delay in resolving the conflict will worsen the situation and will have
adverse effect on the performance of the organization. According to this
view, senior management should involve to resolve the conflict at the
earliest otherwise it will invoke negative feelings among the people which
will be damaging in nature.
The Human Relations or Contemporary View: It considers conflict as
a dispute which is behavioural in nature and occasional in appearance. It
will increase group performance through increased healthy competition.
However, if conflict crosses its critical level, then it should be resolved
amicably without delay.

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Notes The Interactionist View (Modern View): With the emergence of new
school of thoughts in management organizations have started accepting
conflict as a natural happening. If it is in its primitive stage of differences
of opinion then it should be considered good and healthy for the
organization as it will increase competitiveness among the workforce.
They will become sincere, effective and more productive. This school of
thought has highlighted the different kinds of conflicts based on tasks,
processes or relationships. Task conflict originates during defining the
goals or contents of the work whereas process conflicts arise on account of
differences in PRGXVRSHUDQGL to complete the task. Relationship conflict
is due to behavioural issues. However, one should be alert enough to
make sure that these healthy and good conflicts should not escalate to
destructive levels.
IN-TEXT QUESTIONS
4. The _________ view of conflict says that it must be avoided.
5. As per _________ interpretation conflict is not only a positive
point, but is also necessary to accomplish organizational growth.
6. The _________ concept trusts that conflict may benefit a group’s
performance.

9.3.4 Sources for Workplace Conflict

The most common sources of workplace conflict include:
Authority Use of
Relationship common
Tight
resources
Deadlines
Task
interdependence
Sources for Goal
Workplace Differences
Roles and Conflict
Expectations

Ambiguous Communication
jurisdictions interruptions
Temperament
clashes

Figure 9.2: Sources for Workplace Conflict

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1. Use of Common Resources: In any organization people have to Notes

use common resources like manpower, budget, office spaces,
information and other facilities etc. for accomplishment of duties and
responsibilities. Scarcity of these resources or unequal distribution
of resources between employees or departments may be a source
of conflicts among employees. An equitable and transparent basis
of distribution of resources by managers may tackle the situation.
2. Tight Deadlines: Tight deadlines of the project promote employees
to work faster in an efficient manner. Most of the employees
can perform better when they have to meet tight deadlines, but
few of them have negative emotional responses. In the situation,
where employees cannot meet targets, they might try to shift their
responsibilities to another employee, which gives rise to conflicts
among employees and even between departments.
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Procedures: Wherever an organization’s goals, policies, rules and
procedures are not clearly well-defined and easy to understand, it
could create dissatisfaction among people and hinder the work in
organization.
4. Communication Interruptions: Communication gap or miscom-
munication are an important cause of conflict within an organization
and give rise to misunderstandings. On the other hand, when
people don’t have the liberty to communicate their issues with their
managers, it causes inadequate communication, misunderstandings
that often lead to conflicts among employees.
5. Temperament Clashes: This is the most common cause for workplace
conflict. As we have discussed earlier in the lesson, individuals have
different values and perceptions, and in case it does not match with
their peers, it leads to severe disagreements among them, between
management and employees, or between a manager and an employee.
6. Overlapping or Ambiguous Jurisdictions: Ambiguity in inter
allocation of responsibilities such as job boundaries or the range
of powers can create confusion among managers leading to blame
game for poor performance. It creates room for conflict to occur.
7. Roles and Expectations: Functional responsibilities of any employee
is well defined in any organization. Every employee is expected to

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Notes fulfil for their functional responsibilities as defined by their role

assignment. However, sometimes these roles and responsibilities may
be overlapping and/or poorly classified leading to conflict among
the stakeholders. The conflict in such cases may arise among the
peer group members or with seniors/subordinates as well.
8. Task Interdependence: Coordination is the key where two departments
work together and interdependently. Any gap in coordination could
lead to conflicts among them.
9. Authority Relationships: If authority relationships in an organization
are not well defined, they can give rise to conflict. Employees
caught in such situations try their best to expand their position
or protect their current situation, and conflicts can rise from
status disagreements. Status conflicts may also be the outcome of
differences in job assignments, status symbols, working conditions,
and inequitable rewards.
IN-TEXT QUESTIONS
7. _________ is not considered one of the potential sources of
conflict?
(a) Use of common resources
(b) Value similarities
(c) Communication disruptions
(d) Job interdependence
8. __________ is an example of organizational conflict.
(a) Creative Idea Conflict
(b) Leadership Conflicts
(c) Personality-Based Conflicts
(d) All of the above

9.3.5 Types of Conflict

On the basis of impact on the overall development of any organization,
Conflicts may be classified into two categories namely - Functional or
Constructive and Dysfunctional or Destructive.

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Functional or Constructive Conflict: Notes

As conflict in its initial stage are issues based i.e., differences of opinion on
any subject, they may be healthy for the organization. When an individual
or team puts forward their views rationally then it benefits the organization.
It will be good for the organization because of its constructive approach
and positive impact. It creates a constructive competitive environment
in the organization.
Dysfunctional or Destructive Conflict:
When an individual or group becomes obsessed with their views and
take it personally then they become disrespectful to others’ views. This
creates an unhealthy atmosphere which leads to rivalry among the groups.
This may be escalated further because of mishandling which will spoil
the work culture and inter-relationships among the groups and lead to
downfall of the organization. Thus, this type of conflict should be resolved
at the beginning itself.
ACTIVITY
1. Two work associates Sanu and Pihu have different style and
recommendations regarding use of system in the department
and projects started in the department.
Is this a constructive or destructive conflict?
How would you find to discover destructive and constructive
elements and effects? Lists the strategies you use - avoidance,
management, or resolution.
2. Shiva believes that his superior insulted him and placed him in
a bad light in the eyes of his associates. He is livid
Is this constructive or destructive conflict?
Find out the most suitable strategies?

9.3.6 Different Stages of Conflict

Stages in the conflict process highlight the way conflict develops and
works within any organization. The five stages indicate how conflict
begins, grows, and unfolds among individuals or groups.

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Notes The conflict process consists of five stages:

‹ Potential opposition or incompatibility
‹ Cognition and personalization
‹ Intentions
‹ Behaviour
‹ Outcome
Potential Opposition Cognition and
Intentions Behaviour Outcome
or Incompatibility Personalization

Figure 9.3: Conflict Stages

1. Potential Opposition or Incompatibility: This is a latent stage, where
conflict has yet not been visualized. In this situation, the people are
yet not aware of the conflict, but there may be unseen frustrations
which might come on the surface at any time. Communication
hindrance, any breach in group composition or team building and
personal traits of the employee are few of the reasons which create
opportunities for conflict to rise under this stage.
2. Cognition and Personalization: After conflict is recognised, it is
apparently felt either simultaneously or at a later period, depending
upon the situation. In this stage, differences are perceived by the
individuals. However, if no one is feeling the conflict, then it is
generally said that no conflict exists.
3. Intentions: An intention is nothing but an idea that any individual
aim to carry out. In other words, intentions originate between
individual’s observations and feelings and help the people who are
connected in the potential conflict to select to act in a particular
way. Under this stage a person infers what the other person meant
in order to determine action. The five diverse ways an individual
responds to the other people’s statements or actions are, competing,
collaborating, avoiding, accommodating and compromising. Every
group in the conflict tries to adopt one of these responses to resolve
conflict.
4. Behaviour: Under this phase conflict becomes apparent, as ae reflected
in the statements, actions and reactions of the people involved in

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the conflict. These behaviours might be apparent efforts to get the Notes
other people to reveal intentions.
EXAMPLE
Sonu had taken some money from Monu which had to be returned back in
few days but after a month Monu started asking for money back. Initially
Sonu kept making excuses for not returning the money but later he started
refusing to return back and threatening to Monu.
7KHLQWHQVLW\RIWKHEHKDYLRXUIDOOVDORQJDFRQÀLFWRULHQWHGFRQWLQXXP,I
WKHLQWHQVLW\LVORZWKHFRQÀLFWPLJKWMXVWEHDPLQRUPLVXQGHUVWDQGLQJ
and if the intensity is high as in the above case, it can be harmful or even
destroy the relation between the people involved.
5. Outcomes: The outcome of the conflict may be functional or positive.
On the other side it may be dysfunctional or negative. In cases
where conflicts are a one-time incident, this may be the end. In the
situation where it is an ongoing event, it looks like a remarkable
highland, like the figure above and more like a continuing loop, it
may be destructive.
The conflict map offers a at a glance picture of the conflict and is merely
indicative rather than comprehensive. The main elements which need to
be denoted on the conflict map are the parties that is major, minor as
well as third and external parties, the associations among them, their
comparative power, the issues between them, and their interests and goals.
IN-TEXT QUESTIONS
9. _________ is the first stage of the conflict process.
(a) Understanding and personalization
(b) Behavioural appearance
(c) Potential opposition or incompatibility
(d) Intention
10. _________ is not a stage of conflict process?
(a) Potential opposition or incompatibility
(b) Cognition and personalization
(c) Communication
(d) Behaviour

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Notes 11. As per interactionist opinion, the overall goal of conflict

management is?
(a) Attaining the desired conflict level
(b) Resolution of conflict
(c) Motivating conflict situation
(d) Recognizing conflict

9.4 Management of Conflict

9.4.1 What is Conflict Management

In the present scenario, globalization has made employees more diverse
around the world. As a result, organizational conflict has been a major
issue to be addressed. It is the responsibility of managers to cope with
the challenges that come with the workforce diversity to avoid conflicting
situations.
Conflict management is the method by which disputes get resolved, negative
results are minimized and positive results are prioritized. The ability
to understand and correctly diagnose conflict is essential to managing
it. There are two techniques for managing the organizational conflict:
preventive measures and curative measures. Preventive measures try to
create an environment so that dysfunctional conflicts do not take place.
As in most of the cases, conflict is destructive in nature, it should be
resolved as soon as possible after it has developed, but all efforts should
be made to prevent it from developing.
Some of the preventive measures to manage the organizational conflict
are as follows:
‹ Establishment of Common Goals.
‹ Minimization of Interdependence.
‹ Reduction in Shared Resources.
‹ Develop Trust and Effective Communication.
‹ Develop Best Co-ordination.
‹ Exchange of Personnel.

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‹ Involvement of Superior Authority as and when required. Notes

‹ Reorganization of Groups as per project.
‹ Expansion and Proper Channelization of Resources.
‹ Confronting and Negotiating.

9.4.2 Different Style of Conflict Management

In the 1970s Kenneth Thomas and Ralph Kilmann identified five main
styles of dealing with conflict that vary in their degrees of cooperativeness
and assertiveness. According to them individual characteristically have a
chosen conflict resolution style. The five styles of conflict management
are explained below:
Collaboration: Collaborative approach recognizes the concerns and
interests of both parties, and accordingly finds solutions that satisfy
these concerns. This method is suitable wherever the concerns of both
the parties are significant to be compromised, both parties are keen to
play by collaborative rules, and mutual incentive is high.
Competition: This style of conflict management takes a firm attitude
and denies understanding the viewpoints of the other parties. Under this
behaviour individuals will keep pushing their viewpoint at others until
they get their way. This approach could be appropriate when individuals
have to stand up for their rights, need to make a speedy decision and
force others to get on board, and want to end a longstanding conflict.
Compromise: Under this method of conflict management two individuals
or groups bargain a mutually acceptable solution which partially satisfies
the interests of each party without damaging their working association.
In other words, compromising behaviour tries to find a solution which
ultimately, at least partly, satisfies all the parties.
Accommodating: In the situation where a matter is important to one
party and the outcome has no particular negative consequences for them,
under this situation accommodating approach can be a good gesture to
keep a cooperative association and build up social credits for future. This
method could be suitable to use when an individual cares less about the
issue than the opponent.
Avoidance: This style of conflict management technique aims to reduce
conflict by ignoring it, removing the conflicting parties, or avoiding it. An

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Notes avoiding style entirely evades the conflict. This style would be suitable
in the condition where conflict seems insignificant.
IN-TEXT QUESTIONS
12. As per compromising of conflict management:
(a) Parties with equal power are at a standstill
(b) Want to achieve a temporary solution to a complex problem
(c) Collaboration or competition are not successful, and
(d) All of the above
13. _________ is not a conflict-handling intentions?
(a) Collaborating
(b) Resisting
(c) Competing
(d) Accommodating

9.4.3 Steps that Managers Must Follow to Ensure Successful

Conflict Management and Resolution
Conflict management is the process of addressing the issues and challenges
responsible for the origin of Conflict so that it should not ignite any personal
dispute or lead to any negative impact on the organization. Rather it should
create healthy competition among the employees. Conflict management
consists of analytical processes, interactive behaviour, negotiation of
strategies, and other interferences which is needed to avoid unnecessary
conflicts. Thus, we can say that conflict is an absolutely predictable social
phenomenon and it should be channeled to useful purpose.
The steps that managers must follow to ensure successful conflict
management and resolution between individuals or groups.
Step 1: Find out the source of the conflicts
First of all, it is necessary to find out the sources and gather information
as much as possible before addressing the conflict. Proper information
facilitates easier conflict resolution. It is required to ask a series of
questions to identify its source. Information on the conflict might be
collected by giving a chance to both the conflicting parties to keep their
points. A caution is there that for getting a better idea of the situation,
one has to show the impartial stand for both the parties.

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Step 2: Look beyond the conflicting incident Notes

Sometimes, even a minor issue triggers a conflicting situation that
aggravates over time. Under this situation the source of the conflict is
forgotten, and only the present behaviour is addressed. However, in this
situation people must get to the source of the conflict and discuss it.
IN-TEXT QUESTIONS
14. The two general approaches to bargaining are known as ________.
(a) Emotional and rational
(b) Affective and reflective
(c) Distributive and integrative
(d) Formal and informal
15. A characteristics of properly managed conflict is:
(a) Dissatisfaction and reduced productivity
(b) Placing blame on others for the problem at hand
(c) A pursuit of “win-win” resolutions
(d) Reduced opportunities for future cooperation
Step 3: Request solutions
After recording the issues of parties, it is required to find out way
towards conflict resolution. In most of the cases, the best solutions are
provided by the parties themselves. The mediator needs to get solutions
after analyzing the issues from both sides. In most cases solutions might
not be possible in a single meeting and thus the mediator requires series
of meetings to derive it in acceptable form.
Step 4: Identify solutions that both the disputing parties are ready
to accept
After getting the viable solutions, point out the merits of each of the
solutions from the perspective of the disputing parties and organization.
Step 5: Agree on a solution
The final step is to choose the best solution. The ultimate solution is
that which works for both the parties and the organization, and get both
parties to accept it as the future course of action.

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Notes 9.5 Summary

Conflicts are complicated and confusing and there could be multiple reasons
for the rise of conflict. Out the dynamics and being able to analyze the
elements of the conflict is the first and the tedious step towards resolution.
Given that the conflicts could have a beneficial significance, but also
terrible, it is crucial that managers identify the most appropriate conflict
management technique. Conflict often creates a situation of distrust and
suspicion among the members of the group as well as the organization.
Sometimes conflict can cause high levels of tension among the individuals
and groups. Effective management of organizational conflict is essential
for the growth of the firms.

9.6 Answers to In-Text Questions

1. (c) Offer opportunities for growth

2. (b) Disruption of tasks
3. (c) Effective Communication
4. Traditional
5. Interactionist
6. Contemporary
7. (b) Value similarities
 d) All of the above
9. (a) Understanding and personalization
10. (c) Communication
11. (a) Attaining the desired conflict level
12. (d) All of the above
13. (b) Resisting
14. (c) Distributive and integrative
15. (c) A pursuit of “win-win” resolutions

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9.7 Self-Assessment Questions Notes

1. Explain the concept of Conflict. Discuss the approaches of conflict

Management.
2. Discuss the different views of conflict.
3. Define constructive and destructive conflict.
4. Discuss steps that managers must follow to ensure successful conflict
management.

9.8 References
‹ Barbara A., Budjac Corvette (2014). Conflict Management: A Practical
Guide to Developing Negotiation strategies, Pearson Education
Limited, Pearson, ISBN 10: 1-292-03999-X.
‹ Rahim H, A M. Afzalur (2002). Toward a Theory of Managing
Organizational Conflict, the International Journal of Conflict
Management 2002, Vol. 13, No. 3, pp. 206235.
‹ Robbins Stephen P and Judge T.A. (2017) Organizational Behaviour,
17th Ed. Pearson.
‹ Stephan P. (2016). Conflict Management, Springer International
3XEOLVKLQJ 6ZLW]HUODQG  ,6%1 

9.9 Suggested Readings

‹ Luthans, F. (2015). Organizational Behaviour: An Evidence Based
Approach (13th ed.)., McGraw-Hill Irwin.
‹ Nelson, D.L., Quick, J.C., & Khandelwal, P. (2016). ORGB: A South
Asian Perspective (2nd ed.). India: Cengage Learning India Pvt.
Ltd.
‹ Nelson, D.L., Quick, J.C., & Khandelwal. P, (2013). Organizational
Behaviour: A South Asian Perspective (7th ed.). India: Cengage
Learning India Pvt. Ltd.
‹ Pareek, U. & Khanna, S. (2016). Understanding Organizational
Behaviour (4th ed.). New Delhi: Oxford University Press.

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L E S S O N

10
Stress and Well Being
at Work
Dr. Jyotika Bahl
Assistant Professor
Gargi College
University of Delhi
Email-Id: [email protected]

STRUCTURE
10.1 Learning Objectives
10.2 Introduction
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10.1 Learning Objectives

The objective of this chapter is to understand:
‹ The concept of stress and its features.
‹ Different sources of stress – organisational, individual, environmental.

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‹ The need for devising strategies to deal with stress both at organisation Notes
and individual level.
‹ The concept and importance of well-being and PERMA model.

10.2 Introduction
This chapter is designed to provide an understanding of the terms-
stress and well-being which assume importance due to challenges and
opportunities being faced by employees due to multiple role playing, work
life imbalance, demanding nature of jobs, high competition, workforce
diversity and flexible work schedules.
Humans in the organisation can stay committed, loyal and engaged if
they experience optimum level of stress and are able to maintain a good
standard of well-being. Often management of stress and maintenance of
well-being are ignored by employees and the organisations. But the need
for handling stress is increasing because of complexity of work, role
conflict, task demand, life trauma and so on. Most of the time employees
are unable to identify stress and get addicted to smoking or even drugs
to provide the much needed relief from stress. Thus timely identification
and management of stress is the need of the hour.
Well-being is increasingly deliberated on various platforms to promote
the idea of not only physical well-being but also emotional and mental
well-being. The concern for holistic human health has gained importance
as employees are burdened with tasks and forget to prioritise their well-
being over other unimportant tasks. The understanding and importance of
the concept of well-being is relevant to the organisations also as it helps
increase productivity, reduce absenteeism and turnover. Organisations need
to promote the idea of well-being among the employees.

10.3 Understanding Stress

10.3.1 Understanding Stress and its Features

Stress is the pressure or tension people experience in life. Pressure can
be the result of constant demand exerted on the individual. For example,
an employee may have to face work deadlines, a working mother may be

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Notes required to maintain work life balance and a sales representative may be
under constant pressure to get new clients to retain in their job. Stress is
thus the natural and unavoidable feature of human life. But stress beyond
a particular limit may cause psychological and physiological concerns
which may affect the performance of employees at work. Thus stress is an
experience of physiological and psychological imbalance within a person.
It is the body’s reaction to any change or demands made by internal
or external environment. Today in a fast paced and highly competitive
environment stress is a natural consequence.
According to Selye, “Stress is the non-specific response of the body to
any demand made upon it.”
R S Schuler described “Stress as a dynamic condition in which an
individual is confronted with an opportunity, constraint and demand
related to what he desires and for which the output is perceived to be
both uncertain and important.”
Stress is associated with opportunity, constraints and demand. Constraints
prevent us from achieving what we desire whereas demand is something
that we desire. For example, while confronting the annual performance
evaluation at work we encounter opportunities, constraints and demand.
Good performance will entail an opportunity for promotion and higher
salary, while poor performance may result in loss of job. Clearly a rational
human will demand and even aspire for a promotion. But performance
at work is constrained by resources, time, politics and other conditions.
Stress is not necessarily bad in itself. It no doubt has a negative connotation
attached but stress may also have a positive value. For example, the front
line workers during covid were exposed to risk of virus transmission,
uneven and long working hours and uncertainty due to non-availability
of medical treatment. They were undergoing huge stress. But an optimum
amount of stress is necessary to motivate them to undertake breakthrough
research in medical treatment. Thus stress is not always negative but has
positive value as well.
Stress is additive. New stressors may be added to previous stressors to
create a high level of stress. A single incident of stress does not have
the potential to create a feeling of stress or tension in an individual. In
order to appreciate the stress level in a person, one needs to sum up his
opportunity stress, constraint stress and demand stress.

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From the discussion and understanding of stress, the following characteristics Notes
of stress are evident.
1. Stress is an experience of physiological and psychological imbalance
within a person. Stress can have both positive and negative connotations.
Stress is positive if experienced within limits, for example the
pressure of deadline for completion of an assignment is important
for employees to motivate them to meet the finish line. Stress
experienced by a deserving employee who has lost an opportunity
of promotion due to a biased performance appraisal is negative.
Potential Stress can become actual stress if there is uncertainty
associated with an important outcome.
2. Stress is additive and it accumulates in the mind of a person.
3. It is a dynamic condition which is associated with opportunity,
constraints and demand.
4. It is natural and unavoidable. Everybody experiences stress irrespective
of the hierarchy in the organisation, status or even personal conditions.
IN-TEXT QUESTIONS
1. Stress can cause both __________ and __________ imbalance
in a person.
2. Stress is the specific response of the body to any demand.
(a) True
(b) False
3. Stress is the summation of:
(a) Constraints, demand and opportunity
(b) Anthropologic and physiological imbalance
(c) Ill-feelings
4. In case of over-stress, a person may experience.
(a) Anxiety
(b) Dull health
(c) High performance

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Notes
10.3.2 Implication of Stress on Performance and Satisfaction
Since stress has the potential to adversely affect performance, there have
been studies investigating the relation between stress and performance.
The most widely studied pattern of relationship is suggested by Selye.
According to him optimum stress may be achieved at work and is reflected
in performance when job provides adequate challenge, but not too little
or much pressure. It is important to understand that optimum stress is
different for different individuals and they can identify or even sense it
and determine how much stress is functional to operate in a productive
manner. In case of optimum stress there is high motivation and high
energy. In case of under-stress, boredom creeps in.

10.4 Sources of Stress

The sources of stress can be categorised into two factors- organisational
stressors and individual stressors.

10.4.1 Organisational Stressors

The organisational stressors are discussed below:
1. Task Demands: They are the stressors associated with the job
a person performs. Some jobs by nature are more stressful than
others. For example, jobs of professionals like lawyers may need
long hours of research to prepare case arguments. In some unusual
cases they may be required to refer to judgments of foreign courts or
writings of renowned jurists. Doctors and surgeons may be required
to be available 24×7 for emergency cases and thus might need to
make extra effort to maintain work life balance as their jobs are
demanding. Similar holds true for defence personnel, airline staff,
football/cricket coaches. Even factory workers or non-managerial
employees working in hazardous industries such as coal mines are
exposed to health hazards causing them stress. The contractual
nature of skilled jobs may make the workers vulnerable for want
of job security.
2. Role Demands: The source of stress in organisational role includes
role ambiguity, role conflict, responsibility towards people and things

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and other stressors. Role ambiguity includes lack of clarity about Notes
work expectations, objectives, colleagues related to responsibilities
of the job. For example, a new recruit at work might not fully
understand the responsibilities due to a poor orientation program
or due to lack of training. Role conflict arises when workers are
exposed to conflicting job demands or required to do things which
they do not want to do. For example, an employee performs multiple
roles at the same time, a lady lawyer may be arguing cases in court,
required to prepare for cases, may need to fulfil responsibilities as
mother, wife, daughter and so on. Responsibility towards things
may also cause stress, for example, a cashier in the bank might be
entrusted with safe keeping and dealing in cash. The mismatch of
cash balance may be a cause of stress for him. Similarly, a factory
supervisor entrusted with keeping boilers at correct temperature, to
avoid hazardous substances escaping the factory premises. Ensuring
safety standards is stressful during natural calamities.
3. Interpersonal Relations at Work: Maintaining interpersonal relations
with superiors, colleagues and subordinates is the prerequisite
to avoiding stress. But sometimes superiors, colleagues or even
subordinates are not cooperative, thereby increasing the chances
of stress. Bad interpersonal relations may be due to different
orientations, philosophy, personality, interest and so on. Stressful
interpersonal relations among superior-subordinate may be due to
task-oriented approach, autocratic leadership style or misunderstanding
of motivational needs of subordinates. Whatever may be the reason,
it has the effect of lowering the morale of the subordinate, increasing
the absenteeism from work and even job hopping. Colleagues may
be unable to maintain cordial relations because of difference of
interest, opinion, unhealthy competition between them, desire for
achieving higher goals in less time.
4. Organisation Structure and Climate: Stress can be generated because
of employee organisation mismatch. For example, if the employee
does not relate to the philosophy of the organisation or objectives
of the organisation, the employee may find it difficult to adjust with
the organisation. Lack of belongingness, poor communication, scarce
opportunity in decision making, practice of politics by organisation
members are other reasons for stress in employees.

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Notes 5. Organisation Leadership: The leadership style can also be a cause

of stress in some cases. For example, an employee needing support
and guidance may not receive it as his leader shows no concern
or even compassion for him. The employee would naturally feel
demotivated and experience stress. Another employee, for instance,
may want active participation in decision making but if disallowed an
opportunity to participate in decision making process may experience
stress. The mismatch of leadership style with the requirements of
the employee may be cause of concern for the management.
 *URXS3UHVVXUHVEmployees may feel stressed when there is group
pressure to conform to the decided output or norms. For example, an
employee may be willing to produce more than the output decided
by the group for getting promotion or a raise in pay but may be
restricted by the group. This may cause stress as his personal goals
conflict with the group pressure. Acceptance and observance of group
norms may also cause stress as an employee may not personally
agree to the same. For example, during a strike the labourers may
be expected to abandon work but a labourer may feel the need to
work for his daily wage. Thus group norms can be a source of
tension and stress among workers.

10.4.2 Individual stressors

Some individual factors in relation to personal or professional life may
be a cause of stress among individuals. They are discussed as follows:
1. Career Development: There are numerous stressors in relation to
career development including job security and status incongruity.
Individuals are keen on career development and would prefer job
security. Situations like contractual nature of job or loss of job
due to fear of obsolescence of skills, redundancy or even early
retirement may cause potential tension for employees. Situations of
status incongruity which include under or over promotion or even
frustration from attainment of career ceiling may also cause stress.
2. Personality Profiles: Individuals possess different personalities – type
A and type B. While type A experience a chronic sense of urgency
and a competitive drive and they aspire to achieve more and more
in life in less and less time. Type B personality is totally opposite.

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Both personalities require a different environment to flourish and Notes

grow. Non-availability of such opportunity may be a cause of stress
and tension in the individual.
3. Life Change: Changes in life of an employee both professional and
personal may be a source of stress. Different situations may have
varying impacts. For example, divorce may be considered more
traumatic for one whereas loss of livelihood may be more traumatic
for others. Different situations represent different intensity of life
change units (LCU) in a person’s life. Negative events like trouble
with the boss, turnover or biased evaluation of performance and
positive events like marriage or change of house have a unique
value or LCU. Major negative changes may cause stress, depression
and even health issues. Thus it is essential that individuals handle
only that threshold of LCU which doesn’t set in and cause tension.
4. Life Trauma: It is an upheaval in an individual’s life that alters
his or her attitude, emotions or even behaviour. For example, if an
individual is experiencing a life change because of divorce, there
is certainly stress and potential ground for health issues to surface.
The individual also experiences emotional turmoil during the actual
divorce process and the court proceedings. This turmoil may be in
the form of life trauma and will cause stress which may creep in
the work space.
Life trauma is similar to life change but a narrow term which has shorter
term focus. Major life traumas which may cause stress include marital
problems (like domestic violence, divorce, custody of children), family
difficulties and health problems. For example, an individual having knee
injury may have to restrict his physical activities, may even require giving
up his hobbies of playing sports and may feel stressed. Similarly, an
individual being a victim of domestic violence or dowry demand may be
going through tough times which may affect their concentration at work
and ultimately affect their performance at work.

10.4.3 Environmental Stressors

Environmental factors also influence the level of stress among the
employees in an organisation. Some environmental factors causing stress
are discussed below:

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Notes 1. Economic Uncertainty: Changes in business cycle create economic

uncertainty. When economy experiences a contracting trend, people
experience anxiety in relation to job security. Slowdown of business
may reduce the profitability and have a spill over effect on the
employment of employees, salary and other benefits.
2. Political Uncertainty: A stable political environment would relatively
be less stressful in comparison to an unstable political environment.
3. Technological Uncertainty: Obsolescence of technology is another
reason for tension and stress as it requires the employee to upgrade
himself with the latest skills. New innovations in technology may
render the present skill and experience redundant. The evolution of
technology, robotics and automation are a threat to employee and
can be a cause for stress.
4. Terrorism: Terrorism witnessed at the global level is another major
source of stress. For example, employees in Israel have faced this
threat for long and have learnt to deal with it. The instances such
as 9/11, cyber threats and cyber-crime pose a challenge and risk
to the health and well-being of the employees
IN-TEXT QUESTIONS
5. Role ambiguity and role conflict are examples of:
(a) Organizational stressors
(b) Individual stressors
6. Life change and life trauma are same thing.
(a) True
(b) False
7. Employees demanding guidance and support from leaders should
get leaders having:
(a) Concern for them
(b) Concern for results
8. Which one of the following is not an individual stressor:
(a) Breakdown of marriage
(b) Domestic violence

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(c) Role demands Notes

(d) Cultural difference because of inter-caste marriage?

10.5 Consequences of Stress

Stress is indispensable in life. Everyone experiences stress for some
or the other reason. With growing competition, complexity of life and
commercialisation of activities, stress free life is a myth. Stress has an
impact on the health of an individual and the life of an organisation.

10.5.1 Consequences for an Individual

1. Physical Consequences: Stress has the ability to cause unnecessary
toxin in the body and harm the health and well-being of an individual.
Minor ailments like headache, backache, stomach or intestinal issues,
skin disorders like acne or hives are common. Major health issues
like heart disease or stroke can be the harmful impacts of stress.
Depending on the perception of stress, an individual may experience
either minor or major health disorders.
2. Behaviour Consequences: An individual may experience a behavioural
change because of stress. Stressed people may become aggressive
easily or may even be violent at times. In stressful situations they
seek support of drugs or alcohol. They might even be addicted to
smoking. Studies show that people smoke in stressful circumstances
and get so addicted to smoking that they smoke even in the absence
of the stressful environment. Stress has the potential of making a
stressor prone to accidents and can even cause appetite disorder.
3. Psychological Consequences: Extreme stress may impact the mental
health and well-being of individuals. Stressed people may experience
depression, lack of sleep, over eating, loss of appetite, etc. They
may become restless in many situations and may even experience
panic attacks.

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Notes IN-TEXT QUESTIONS

9. Which of the following is the change in behaviour due to stress.
(a) Addiction to drugs
(b) Aggressive nature
(c) Smoking
(d) All of the above
10. The adverse effects of stress on the organization include:
(a) Reduced productivity
(b) Heart disease
(c) Loss of popularity
11. Which of the following is a organizational consequence of stress.
(a) Loss of commitment
(b) Depressive sleeping or eating.
12. Stress of an individual effects mind, body and behaviour.
(a) True
(b) False

10.5.2 Consequences for the Organisation

The degree of stress experienced by an employee in the organisation will
have both direct and indirect effect on the organisation. Stress for whatever
reason caused, organisational, individual or environmental, has a spill
over effect on the organisation. Following are some such consequences
that an organisation will encounter due to stress:
1. The performance of the employee will be affected due to stress.
The employee might not be able to maintain the standard level of
output and quality. This has the potential to affect the profitability
of the organisation.
2. There may be withdrawal symptoms in an individual who is
witnessing stress. In such cases there is a high level of absenteeism
and labour turnover. Employee may also withdraw psychologically
thereby ceasing to care about the organisation.

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3. The motivation, morale, commitment, attitude and job satisfaction Notes

might suffer. The employee may be unwilling to put his best at
work and might look for options for job change. Stressed people
may be prone to complain about unimportant matters.
4. Decision making may suffer as stressed individuals may lack the
calm and patience to take the correct decision. Stressed individual
may be inclined to make poor decisions.
5. Stress adversely affects the communication and human relations at
work.

10.6 Management of Stress

Since each one of us experiences stress in different aspects of life. It
becomes increasingly important to devise strategies to deal with stress
both at organisational and individual level. Some strategies to deal with
stress are discussed below.

10.6.1 Strategies to Deal with Stress at Organisation Level

1. Organisation Role Clarity: Employees experience stress when they
are unaware of their role in the organisation. This could be due to
role conflict or role ambiguity. For example, if a project manager
is required to report to two bosses and if the instructions of the
bosses contradict each other, the manager will feel the need for
clarity. Thus the organisation needs to focus on clarifying the roles
expected from employees. Role analysis is a technique that can be
used to analyse what the job entails and what are the expectations.
Breaking the job into various components will help clarify the job
of the job holder for the entire system. This can help reduce stress
because of unrealistic expectations.
2. Job Redesign: Job can be a source of tension among the employees.
Designing the job properly by inserting appropriate tasks and
preparing work schedules can help ease the stress and streamline
the work.
3. Stress Reduction and Stress Management Programmes: Stress
reduction programmes aim to identify the organisational stressors

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Notes and reduce their effects by redesigning, reallocation, workloads,

job variety or improving supervisory skills. Stress management
programmes aim to train employees or their work groups to manage
their stress symptoms effectively.
4. Supportive Organisational Climate: Much of the organisational
stress is due to faulty policies and practices. Stress can be controlled
by creating a supportive organisational climate. Building a supportive
organisational climate is dependent on organisational leadership
rather than power and resources. Supportive organisational climate
requires participation of employees in decision making to provide
them the sense of belongingness and attachment which helps to
reduce stress.
5. Counselling: Counselling involves discussion of the problem or issue
with a counsellor. It helps to release emotional burden and stress.
Talking to an expert about the pressures and tension helps not only
in dealing with the stressful situation but also in obtaining expert
advice. Counselling does assist in identifying stress, handling stress
and recovering.

10.6.2 Strategies to Deal with Stress for Individuals

1. Relaxation: Dealing with stress requires adaptation and relaxation
is an effective way to adapt. People can relax in a variety of ways.
They can take regular breaks from work and go on vacation. Vacation
may bring a change in attitude and behaviour towards different
aspects of life. Employees can also relax and take breaks while on
the job. For example, lunch break, tea breaks can enhance their
energy and reduce stress.
2. Time Management: One way to reduce stress is to manage time
well. Individuals can prepare a list of tasks/activities to be done
on a particular day in order of importance and concentrate on
important tasks. Some not so important tasks can be delegated to
others. Prioritising helps in concentrating on important and relevant
tasks and avoids the unnecessary pressure and burden to complete
all tasks.

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3. Role Management: Individuals do perform multiple roles on a Notes

daily basis. Thus they should work towards avoiding situations of
role overload, role ambiguity and role conflict. For example, an
individual should not accept extra work when they are overburdened
as it will adversely affect their health and well-being. Individuals
should also seek clarification in situations where there is confusion
or ignorance with respect to work expectations. Also individuals
perform different roles at one time. For example, a doctor may be
a father, son, dean in his department, colleague for other doctors,
there is a possibility of role conflict. Managing different roles will
help reduce the risk of stress and tension.
4. Meditation: Meditation can help reduce stress and restore inner
balance. It requires quiet, concentrated inner thought in order to rest
the body physically and emotionally. It helps to calm in stressful
situations temporarily.
 6XSSRUW*URXSAny individual has primary and secondary groups.
Primary groups are those with which a person relates very closely
like family and close friends. Primary group can provide support
during stress. Individuals can share their worries, stress and feelings
with them. Support groups have the potential to boost the morale
of the person and keep them going.
IN-TEXT QUESTIONS
13. Which of the following is a collateral programme undertaken
to deal stress
(a) Career development programme
(b) Health promotion programme
(c) Stress management
(d) All of the above
14. Which of the following needs to be managed to reduce stressful
situations
(a) Role ambiguity
(b) Role conflict
(c) Role overload
(d) All of the above?

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Notes 15. Taking power naps or breaks in between work can help reduce
stress
(a) True
(b) False
16. ________ helps in reducing stress by talking to expert thereby
releasing tension and stress

10.7 Well-Being

10.7.1 Understanding Well-Being

According to Martin Seligman, Well Being is more than just feeling good
and happy, it reflects the amount of flourishing and optimal psychosocial
functioning. He suggested the PERMA model of well-being which consists
of five pillars - positive emotion, engagement, relationship, meaning and
accomplishment.
PERMA Model
Positive emotion It implies the ability to connect to happiness, stay
optimistic and view past, present and future from a
constructive perspective.
Engaged An individual is engaged when he is fully absorbed
and participates actively in activities which results in
experiencing mastery, focus and joy.
Relationships Relationships and connections are crucial to life.
Relationships and bonds based on love, intimacy, emotional,
physical bonds are important elements for well-being.
Meaning It is the sense of purpose and direction in one’s life.
Accomplishment It is the sense of satisfaction and fulfilment as a result
of achieving one’s goal.
An employee possessing a good standard of well-being at work is likely
to be more creative, more loyal and provide better customer satisfaction
as compared to an employee having a low standard of well-being. Also
a good standard of well-being would ensure high productivity, long term
organisational success and employee engagement. Employee well-being is
directly linked to organisational performance. Thus organisations should

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make a constructive effort so that employees achieve a good standard Notes

of well-being.
Well-being is not restricted to individual level factors but also extends to
organisational and societal factors as individual well-being does not exist
on its own or in the workplace but in the societal context. In addition
to occupational hazards, the absence of work (whether unemployment
or under-employment) is a major stressor and cause of ill-health. In
some cases, such as the current economic slowdown post pandemic,
unemployment is involuntary.
Waddell and Burton define well-being as “the subjective state of being
happy, healthy, contented, comfortable and satisfied in one’s life.”
It includes physical, material, social, emotional (happiness) and development
dimensions. Well-being at work is also influenced by mental and physical
health, job security, work organisation, engagement at work, work life
benefits and wages. Different authors have recognised different determinants
of well-being. Some determinants are work related factors, life style and
personality.
IN-TEXT QUESTIONS
17. Which of the following is not one of the five pillars in the
PERMA model.
(a) Positive feeling
(b) Engagement
(c) Relationship
(d) Meaning
(e) Accomplishment
18. Relationships include:
(a) Connections
(b) Quality relations based on love, intimacy, emotional bonds
(c) Both (a) and (b)
(d) None of the above
19. The study of well-being requires study of:
(a) Individual factors

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Notes (b) Organizational factors

(c) Societal factors
(d) All of the above

10.8 Summary
This chapter focuses on employee health, well-being and managing stress.
Understanding the importance of well-being, health and stress can help
in organisational success, increasing productivity and performance of
employees. At the same time it reduces chances of absenteeism, turnover
and accidents at workplace. It also helps employee enhance their loyalty,
commitment and satisfaction. Healthy and stress free employee can be
an asset for organisations. Thus maintaining optimum level of stress and
good standard of well-being should be one of the goals of an organisation.

10.9 Answers to In-Text Questions

1. Psychological and physiological

2. (b) False
3. (a) Constraint, demand and opportunity
4. (a) Anxiety
5. (a) Organisational stressor
6. (b) False
7. (a) Concern for them
 c) Role demand
9. (d) All of the above
10. (a) Reduced Productivity
11. (a) Loss of Commitment
12. (a) True
13. (d) All of the above
14. (d) All of the above
15. (a) True
16. Counselling

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17. (a) Positive feeling Notes

 c) Both (a) and (b)
19. (d) All of the above

10.10 Self-Assessment Questions

1. Sam has been facing the issue of role ambiguity and is reporting to
two bosses. Sometimes he gets contradictory instructions and orders
to execute. In this situation he is unable to decide what to do, he
feels pressured and is even thinking of quitting the job. Help him
identify the source of stress and suggest ways in which he can deal
with stress and workplace pressure.
2. Some stress is indispensable and necessary to make the job challenging
and keep the motivation high. Comment on the statement.
3. Discuss the organisational sources of stress. Can the organisation
reduce the possibility of stress among the employees? Discuss.
4. The study of Well-Being is gaining significance today. Discuss the
concept of well-being and its scope.

10.11 References
‹ Marko Divjak (2021), How to enhance the Employee Well-Being at
work, International Journal of Management, 10, 109-114.
‹ Robbins, S.P, Organisation Behaviour, Pearson Education.
‹ Schulte, P & Vainio H (2010), Well-being at work- overview and
perspective, Scand Journal of Work Environ Health, 36(5), 422-429.
‹ Singh and Chhabra, Organisation Theory and Behaviour, Dhanpat
Rai &Co.

10.12 Suggested Readings

‹ Robbins, S.P, Organisation Behaviour, Pearson Education
‹ Singh and Chhabra, Organisation Theory and Behaviour, Dhanpat
Rai &Co.

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L E S S O N

11
Organizational
Change
Dr. Reema Aggarwal
Assistant Professor
Department of Distance & Continuing Education,
Campus of Open Learning,
University of Delhi
Email-Id: [email protected]

STRUCTURE
11.1 Learning Objectives
11.2 Introduction
11.3 What is Change?
11.4 Forces of Change
11.5 &KDQJH $JHQW DQG 3ODQQHG &KDQJH
11.6 Resistance to Change
11.7 0RGHOV RI &KDQJH
11.8 6XPPDU\
11.9 Answers to In-7H[W 4XHVWLRQV
11.10 6HOI$VVHVVPHQW 4XHVWLRQV
11.11 References
11.12 6XJJHVWHG 5HDGLQJV

11.1 Learning Objectives

At the end of the lesson, students shall be able to:
‹ Define organizational Change.
‹ Explain Forces for Change.
‹ Understand the difference between the external and internal forces for Change.
‹ Explain Lewin’s three-step model of the change process.

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‹ Understand the importance of managing organizational Change. Notes

‹ Understand why employees resist Change and how to manage
Resistance to change.
CASE STUDY
Innovative Machines’ senior managers, Krishna and Mahesh, noticed that
in the last few years, hard-working and high-performing employees have
been leaving their job, even when the company continuously revises the
PRQHWDU\EHQH¿WVIRUDOOHPSOR\HHV:KLOHGLVFXVVLQJ0DKHVKKLJKOLJKWHG
a recent case of Ms Sweta, serving her notice period in the company.
Sweta was hired four years back, and she has been working under Johana
for the last four years. Her performance plot is quite good. During the
human resource teams’ interaction with Sweta, they learned that In her
previous assignment with a Russian client, Sweta suggested an innovative
idea that not only helped the company give deliverables on time but also
KHOSHG WKH FRPSDQ\ JHW PRUH VLJQL¿FDQW SURMHFWV IURP WKH VDPH FOLHQW
Johana offered her monetary rewards as per existing practice, but Sweta
UHIXVHGWKHPRQHWDU\EHQH¿W,QVWHDG6ZHWDZDVORRNLQJIRUUHFRJQLWLRQ
and promotion. As a team leader, Johana received a prize in an event, but
Sweta’s name was nowhere throughout the event. Further, Sweta was not
happy with the seniority norms that are followed in the company during
promotions.
The senior managers, during their discussion, came across similar cases
where the company was losing performing employees due to the seniority
norms. Krishna suggested that changing “seniority norms” to “performing
norms” for promotion could help the company retain talent. Mahesh said,
“Yes it would help us in satisfying young employees like Sweta, but it
would dishearten our existing senior employees, who have served the
company for a long and are expecting a promotion”. Further, he also added
that “our company do value loyalty”.
Questions:
1. Why are employees leaving the company?
2. Could the company retain efficient and innovative employees
like Sweta through monetary norms? Comment.
3. Should the company change its existing seniority norms to retain
performing employees? Comment
4. What would you do if you were in the position of senior
manager?

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Notes 11.2 Introduction

Organizations, irrespective of industry and type, must embrace change
to remain competitive and relevant in the present-day competitive world.
Irrespective of the degree of change, organizations must respond to changes
in the environment, like changes in technology, taste and preference of
customers, demand, competition, etc. In fact, organizational change is an
essential feature of organizational development. As seen in the opening
case, bright performing employees of “Innovative Machines” leave the
company due to their traditional seniority norms. To remain competitive,
organizations need to change. Let us assume the company changes its
existing norms; this change could lead to two possible situations: it will
help the company retain young performing employees but could demotivate
the existing loyal employees. For people in managerial positions, it is
essential to understand that change is a process that goes through several
stages. The present lesson helps students understand the concept of change
and development. It answers why people resist change and how to manage
resistance to change. Finally, through various models, it elaborates on
various stages and theories of change.

11.3 What is Change?

The term “change” refers to any alteration that occurs in an organization’s
overall work environment. According to Robbins, Change means making
things different. Change is inevitable and occurs in all aspects. Therefore,
managing change is an integral part of a manager’s job. An organization
is an open system affected by both the internal and external environment.
Organizations voluntarily change to remain competitive; sometimes, change
occurs due to an external force (like cutthroat competition). Therefore,
change may be voluntary or forced. Managers have two options: to
wait until a change is forced on them or to take preventive steps and
strengthen the organization for the change by taking voluntary steps. For
example, the mobile phone industry has been incredibly volatile; Nokia
and Blackberry remained a dominant players; until Android came into the
market. Top managers at Nokia could not adapt to the necessary change;
eventually, Nokia’s sales shrank, and Samsung (and other products like
iPhones) captured the market.

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11.3.1 Features of Change Notes

‹ Change is constant yet varies in degree and direction.

‹ Change produces uncertainty yet is not entirely unpredictable.
‹ It creates both threats and opportunities.

11.4 Forces of Change

Change is inevitable. To survive in the present-day scenario, an organization
must adapt external environment (e.g., government law and regulation,
technology, economic changes, etc.) and must change if required by internal
forces (e.g., changes in organizational strategy, workforce changes, new
equipment, employees’ attitude). Both internal and external forces make
it essential for an organization to change.
I. Internal forces
Change in the organization could also be attributed to internal forces. As
we see in the opening case, the need for change was due to employees’
attitudes. Similarly, other internal factors could lead to change like change
in strategy, change in workforce or change in existing equipment. For
example, if two organizations are merging, in the process of merger, it
is crucial to eliminate duplicate departments or duplicate management
positions. Similarly, if new equipment is introduced or the existing
method is changing to compete in the industry, it is required to unlearn
old practices and learn a new one (e.g., digitalization in the education
sector). Sometimes extreme steps are also taken in the process, like new
recruitment and termination of existing employees.

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Notes External Internal

Force Force

Changes in
Marketing organizational
strategy
Governmental
Laws & Workforce
Regulations Changes

Technology New
Equipment

Economic Employee
Changes Attitudes

Figure 11.1: Forces for Change

II. External forces
An organization needs to adapt to external environmental changes, like
adopting new technology to remain competitive, new government laws to
avoid legal problems, economic changes to survive in the business, etc.
Following are a few popular examples of external and internal forces
that made it essential for an organization to change-
EXAMPLES
External forces responsible for the change in an organization:
‹ Nokia: The company adapted the smartphone (new technology)
almost one year after the release of the first iPhone. This led
to the fall of Nokia-the global leader in Mobile Phones.
‹ Blackberry Motions: 7KH\ UXOHG WKH PRELOH LQGXVWU\ LQ 
by offering an arched keyboard. To protect what they had,
they failed to understand the changing demand in the market
for an extensive touch screen display. This led to the fall of
Blackberry motions.
‹ Unprecedented Lockdown During Covid-19: To survive a
recession, a company must analyze the change in the pattern of
consumer demand and should adapt it accordingly. During the
lockdown, to survive, organizations were compelled to change
their deliverables in line with social distancing norms.

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‹ During the recession period, consumers restrict their spending Notes

(like the 2008 recession period), and consumers would usually
prefer to cut on entertainment budget. Therefore, for the
entertainment industry, it becomes important to provide cost
effect products and change accordingly.
‹ Change in government laws like deregulation, anti-trust laws,
Demonetization, etc.: Change in law could change competition
in the market, consumer spending, etc. This could lead to the
change in organization.
‹ Organisation leaders who are sensitive to environment also
introduce change to adapt green practices

IN-TEXT QUESTIONS
1. Unprecedent lockdown during Covid-19 is an example of _______
responsible for a change in an organisation.
2. Change in attitude of existing employees is an example of
_______ responsible for a change in an organisation.
3. Change is ______.
(a) Not required
(b) Required only in IT industry
(c) Inevitable
(d) Voluntary effort
4. _________ is essential for organization to change.
(a) Internal forces
(b) External Forces
(c) Government Pressure
(d) Both (a) and (b)

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Notes
11.5 Change Agent and Planned Change
The change was needed in the opening case study due to the performing
employees’ attitude towards the existing seniority norms. Similarly, some
changes could be due to other situational factors; for example, a manager
allowing flexi-hour during unprecedented lockdown for better work-life
balance.
However, sometimes change is introduced in a planned form by top
management. Such change in the organizations is normally introduced to
make the organization more competitive and is termed Planned Change
or Developmental Change. For example- Expanding product lines or
introducing new technology – like automation. The planned change is
for the development of the entire organization, and it helps employees
to accept the change. Transformation of the organization is essential, but
sudden transformation could lead to disastrous results. Planned change
could be change in the people, structure, or process. It takes place through
a change agent.
A change agent is a person who manages change in an organization. A
change agent could be at a managerial or non-managerial position, internal
to the organization, external consultant, or current or new employee. They
visualize organization’s future after change, which others do not identify.
The change agent is responsible for determining the transformation process.
They need to promote the value of transformation, help employees through
smooth transformation process, and is also responsible for identifying
ways to implement the change process.

11.6 Resistance to Change

Employees see change as a threat; they see the need of change but still
resist it. Employees’ resistance could erode the organization’s energy,
especially when all employees start resisting the change together. Normally
employees resist changes due to anxiety and fear. Both top-level employees
and lower-level employees could resist change. Top-level generally resist
changes suggested by lower to middle-level employees when they focus on
immediate performance. Lower-level employees resist change because of
fear and anxiety. Resistance could be for both major and minor changes.

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Superiors are willing to take suggestions from subordinates if they are Notes
willing to explore or focus on mastery. In fact, resistance to change could
be positive if it leads to positive discussion or a brainstorming process.
Such a response is preferred over silence or complete disengagement
of employees in the whole process because here, management gets
an opportunity to explain why change is important and how it would
benefit the organization along with employees. Change is important, but
change is also a costly and risky process. Sometimes sudden change or
transformation could lead to bad decisions, especially if the change agent
is unable to understand the impact of change or cost of change.

11.6.1 Why do Employees Resist

1. Due to Fear and Anxiety: Employees resist “change” due to the
fear of failure. If employees are doing good in the organization or
are less competitive, they feel that change could make their work
harder or jeopardize their job security.
2. Employees’ Unwillingness to Unlearn, Know and Learn Unknown:
The process of change involves “Unlearning” the existing ways of
doing work and “Learning” new ways of doing work. The process
takes effort and is also a concern for employees who are good at
doing work using existing ways. The resistance further increases
if employees feel that change is not productive for their individual
growth and development.
3. Concern related to support from seniors especially when structures
are changing Change in structure could have an impact on existing
scaler chain (flow of communication from top to bottom), creating
psychological concerns related to support from new superiors.
4. Preference to Follow the Existing Routine: Employees fail to
understand the importance of change for organization. They resist
moving away from their comfort zone. They have more confidence
in the existing work environment and feel that new environment
could take away their power and they might have to lose control.

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Notes
11.6.2 Techniques to Overcoming Resistance to Change
To handle resistance, management could opt various strategies. Kotter and
Schlesinger suggested following six techniques to overcome resistance
to change-
Communication and Educating Employees About Change: This is
a common and a positive way to overcome resistance to change. As
mentioned earlier one reason for resistance to change is fear, and anxiety
among employees about their future in the organization. It is important to
communicate the need of change and the objective of introducing change.
It is equally important to communicate how change is going to impact
the future of employees in a positive way. At least employees who are
affected by the change should be communicated about the stage of change,
consequences of change, and support system that will be provided to all
for a smooth transformation.
Employee Participation and Involvement in Change Decision: Though
employee participation could be time consuming, but it is helpful in
reducing resistance to change. If employees participate in decision making
and agree that change is beneficial for the organization, it will be difficult
for them to resist something they previously agreed to. Also, involvement
of all could increase the quality of change decision.
Support and Facilitation: Lack of support from organization could be
one reason for resistance. It is also important to provide emotional support
to employees, because change needs employees to move away from their
comfort zone. The employees will be able to cope up with change if they
will be allowed to express their fear and anxiety.
Developing positive relationships: People accept changes if they trust
the change agent implementing them. The positive relationship between
change agent and employees affected by change is crucial. As a result,
employees feel secure about their future and allow smooth transition.
Agreement and Negotiation: Under this technique organization bargain
and negotiate with the resisters. Keeping interest of the organization and
resisters in mind, all aspects could be discussed.

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Notes

Figure 11.2: Techniques to overcome Resistance to change

Coercion: The technique of coercion is a negative approach. It is illegal,
ineffective and in the long run results in mass resentment. Under this
technique, employees are compelled to accept the change through force
and threats. For example – threatening employees, pay cuts, negative
performance appraisal, etc. This technique should be avoided as far as
possible.

11.7 Models of Change

Models of change are theories that provide an approach to change.
They aim to provide an understanding or a guide to navigating the
transformation process and ensure that change is accepted and put into
practice. Each model provides its explanation. The choice between various
models depends upon various factors like the organisation’s size, nature,
situational factors, etc. The following are popular models of change that
are effective approaches to change-

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Notes I. Lewin’s change management model

Kurt Lewin provided 3 stage model of change. The three steps that an
organization should follow are as follows – Unfreezing, changing to the
new state, and Refreezing to make the change permanent.
Unfreezing: When any change takes place, it is important to prepare
employees at all levels before change is made. Two forces need to focus
on the organization at this stage. First is the driving force, the force that
directs movement towards change, the organization needs to increase this
force. The second is restraining force, which includes those who resist
change; the organization needs to decrease it. Employees at all levels
could be prepared for the change through communication and employee
participation. Companies that have been successful in the past are likely
to encounter restraining forces because employees question the need for
change.
Changing to the New State: At this stage change is introduced. This
stage is also known as movement. At this stage, it is important to keep
the momentum going, and the organization should support employees
who are facing the problem and should keep communicating the need to
change to all employees.
Refreezing: When change is implemented, the new situation should be
refrozen to sustain it over time. Without this last step, change would not
stay long, and employees will attempt to return to the previous equilibrium
state. Refreezing aims to stabilize the new situation by balancing the
driving and restraining forces.

Figure 11.3: Lewin’s Change Management Model

II. Nudge Theory: The nudge theory is a step-by-step process of
implementing change rather than encouraging a fixed mindset to promote
change. The nudge theory explores ways to nudge employees toward change.

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Under this process, change is viewed from the employees’ perspective. Notes
Here employees are given a perspective/or recommendation rather than a
command. Throughout the process, employee benefits are communicated,
and employee feedback is taken for a better change decision. Nudge
theory helps employees see the benefit of change; this reduces resistance
among the employees.
III. Kotter’s change management theory/or Kotter’s eight-Step plan
John Kotter of Harvard Business School built on Lewin’s three-step
model to create a more detailed approach to implementing change. Kotter
began by listing common mistakes managers make when trying to initiate
change. For example, they may fail to create a sense of urgency about the
need for change, a coalition for managing the change process, a vision
for change and effectively communicate it, and/or to anchor the changes
into the organization’s culture. They also may fail to remove obstacles
that could impede the vision’s achievement and/or provide short-term
and achievable goals. Finally, they may declare victory too soon. Kotter
established eight sequential steps to overcome these problems.
Kotter’s eight-Step plan for implementing Change
1. Establish a sense of urgency by creating a compelling reason for
why change is needed.
2. Form a coalition with enough power to lead the change.
3. Create a new vision to direct the change and strategies for achieving
the vision.
4. Communicate the vision throughout the organization.
5. Empower others to act on the vision by removing barriers to change
and encouraging risk-taking and creative problem-solving.
6. Plan for, create and reward short-term “wins” that move the
organization toward the new vision.
7. Consolidate improvements, reassess changes, and make necessary
adjustments in the new programs.
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new behaviours and organizational success.
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Notes IN-TEXT QUESTIONS

5. __________ is a person who manages change in an organization.
6. __________ formulated 3 stage model of change.
7. __________ is a step by step process of implementing change
rather than encouraging a fixed mindset to promote change.
8. Threatening employees, pay cuts, negative performance appraisal,
etc. are example of __________ technique to overcome resistance
to change-
(a) Coercion
(b) Positive Relationship
(c) Negotiation
(d) Support and Facilitation

11.8 Summary
Irrespective of the degree of change, organizations must respond to changes
in the environment, like changes in technology, taste and preference
of customers, demand, competition, etc. Organizational change is an
essential feature of organizational development. To remain competitive,
organizations need to change. For people in managerial positions, it is
essential to understand that change is a process that goes through several
stages. Employees often see change as threatening. Sometimes employees
do realize that change is important and is a need of time. Still, they
show resistance to change. If employees together resist change because
of anxiety or any other reason, it can sap the organization of vital energy
when it is most needed. Resistance to change doesn’t just come from
lower levels of the organization.
In many cases, higher-level managers will resist changes proposed
by subordinates, especially if these leaders are focused on immediate
performance. The change agent may take the lead in organizational
development.

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11.9 Answers to In-Text Questions Notes

1. External forces
2. Internal Force
3. (c) Inevitable
4. (d) Both (a) and (b)
5. Change Agent
6. Kurt Lewin
7. The nudge theory
 a) Coercion

11.10 Self-Assessment Questions

1. Explain the concept of Change and what you understand by the term
change management.
2. Explain the impact of Resistance to Change on the organizations.
3. What are the major challenges the manager faces while introducing
a planned change?
4. Explain various models of Change.
5. Change is inevitable due to the growing competition and other external
forces. Explain the statement and various forces of Change

11.11 References
‹ Luthans, F. (2015). Organizational Behaviour: An Evidence Based
Approach (13th ed.). McGraw-Hill Irwin.
‹ Robbins, S. T., Judge, T. A., & Vohra, N. (2015). Organizational
Behaviour (16th ed.). Pearson Education.
‹ Singh, K. (2015). Organizational Behaviour: Texts & Cases (3rd
Edition ed.). India: Pearson

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Notes
11.12 Suggested Readings
‹ Griffin, R. W., Phillips, J. M., & Gully, S. M. (2017). Organizational
Behaviour: Managing People and Organizations. Cengage Learning.
‹ Greenberg, J., & Baron, R. A. Behaviour in Organisations. Prentice
Hall of India Pvt. Ltd., New Delhi.

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 Glossary
Adjourning: The final stage of group development that involves termination of the group.
Agreeableness: A person’s capacity to collaborate with others.
Ambiguity: Something that can be understood in more than one way.
Avoiding: A conflict situation in which disagreements and concerns go unexpressed.
Brainstorming: Generating ideas without any criticism.
Coalitions: A government formed by two or more political parties working together.
Coercion: The use of force to persuade someone to do something that they are unwilling
to do.
Cognitive: How a person perceives and acts in the world.
Collaborating: The pooling of individual needs and goals towards a common goal.
Competing: A conflict style in which own needs overwhelm the needs of others person.
Compliance: The action or fact of complying with a wish or command.
Compromising: A conflict style involving trade-offs.
Conflict Styles: Varying approaches of behaving during conflict.
Conscientiousness: A measure of an individual’s reliability.
Consensus: A situation in which all members of a group find an outcome together.
Delphi Technique: A decision-making method which does not require the physical presence
of group members.
Egalitarianism: Egalitarianism is a belief in human equality especially with respect to
social, political, and economic affairs.
Emotional Stability: A person’s capacity to cope with stress.
Empathy: The ability to put oneself in another person’s position to understand that
viewpoint.
Extraversion: An individual’s level of ease in interpersonal connections.
Extrovert: Individuals who are reality-oriented, sociable individuals and performers.
Formal Groups: Formal groups are created to achieve specific organizational objectives
and are concerned with the co-ordination of work activities.

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Notes Forming Stage: The first stage of group development in which people join
the group and then define the group’s purpose, structure and leadership.
Group: A collection of individuals working in face-to-face relationships
to share information and resources for a task to be achieved.
Group-Shift: Changing the decision as per the group.
Group Cohesiveness: The tendency of a group to remain together.
Groupthink: When a group exerts extensive pressure on an individual
to align his or her opinion with others opinions.
Heredity: Characteristics of a person’s personality that are passed down
from parents to their children.
Ideal-Self: Way an individual would like to be.
Informal Group: Group that appear in response to the need for social
contact.
Ingratiation: An individual’s attempt to influence another person by
becoming more likeable to their target.
Introvert: Individuals who are self-assured and driven by their own
distinct thoughts.
Job Redesign: Involves designing the job by inserting appropriate tasks
and preparing work schedules.
Learning: Transformation of one’s behaviour as a result of education,
training, practice and experience.
Life Change: Life Change is changes in the life of an employee both
professional and personal.
Life Trauma: Life Trauma is an upheaval in an individual’s life that
alters his or her attitude, emotions or even behaviour.
Locus of Control: Belief about the results of an action.
Looking-Glass-Self: An individual’s impression of how others see his
attributes or feel about him.
Machiavellianism: An individual’s tendency to manipulate others to gain
and achieve power.
Norming Stage: The third stage of group development where resolving
of differences takes place.

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 GLOSSARY

Openness to Experience: A person’s creativity and interests. Notes

Perception Filter: Perception filter is the process of letting some
information in while keeping out the rest.
Performing Stage: The fourth stage of the group development when the
group is fully functional and works on group tasks.
Personality: Role that an individual performs in public.
Persuasion: The act of persuading somebody to do something or to
believe something.
Real-Self: What others show you in terms of your self-image.
Risk Taking: Willingness to accept risks.
Salient Cues: Salient cues are those cues that are somehow so striking
that they stand out.
Selective Attention: Selective attention is the “process of paying attention
to some, but not all, physical and social cues”.
Self-Esteem: A sense of liking or disliking oneself.
Self-Image: What an individual perceives about himself.
Self-Monitoring: Capacity to adjust to the demands of the situation.
Socialization: Process by which a newborn acquires a wide variety of
behaviour from the extremely vast range of behavioural potentialities that
are available to him at birth.
Stakeholder: One who has a vested interest in a situation or outcome.
Stereotypes vs Prejudice - Stereotypes: Stereotypes are unfounded
assumptions about a social group that lack any basis in fact. Stereotypes
are assumptions made about a social group that can be either good or
negative, conscious, or unconscious. Prejudice: Prejudice is a strong
unreasonable feeling of not liking or trusting somebody/something,
especially when it is based on his/her/its race, religion, or sex.
Storming Stage: The second stage of group development in which
conflicts start arising.
Stress: Stress is a dynamic condition in which an individual is confronted
with an opportunity, constraint and demand related to what they desire
and for which the output is perceived to be both uncertain and important.

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Notes Team: A group of individuals working in face-to-face relationship for

a common goal, having collective accountability for the outcome of its
efforts.
Well Being: Well Being is more than just feeling good and happy, it
reflects the amount of flourishing and optimal psychosocial functioning.

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