ORGANISATIONAL BEHAVIOUR

(BBA6 B12)
VI SEMESTER
CORE COURSE

B.B.A.
(2019 Admission onwards)
CBCSS

UNIVERSITY OF CALICUT
School of Distance Education,
Calicut University P.O.,
Malappuram - 673 635, Kerala.

19669
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UNIVERSITY OF CALICUT
School of Distance Education
Study Material
VI Semester
Core Course (BBA6 B12)
B.B.A.

ORGANISATIONAL BEHAVIOUR
Prepared by:
Dr.P.Siddeeque Melmuri,
Assistant Professor,
School of Distance Education,
University of Calicut.
Srutinized by:
Mr. Baijumon,
Asst. Prof., Dept. of Commerce,
Govt. College, Malappuram.

DISCLAIMER
“The author(s) shall be solely responsible for the
content and views expressed in this book”

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Module Contents Page

I Organizational Behaviour 7

2 Individual Behaviour 24

3 Group 52

4 Motivation and Leadership 77

5 Stress Management 128

Syllabus
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BBA6B12 -(Core)
Organisational Behaviour
Time: 5 Hours per week Credits: 4
Internal : 20 External 80
Objectives:
To familiarize the students with the basic concepts of individual
behaviour and organizational behaviour
To enable the students to catch an idea about inter-personal and group
behaviour
To acquire knowledge regarding the organizational change and
organizational development
Learning Outcomes: On learning the course the students will be able
to-
Understand the different concepts of Organisational Behaviour
Analyse individual and group behaviour
Understand and deal with organisational change, development and
stress

Module I : Organizational Behaviour(OB): Meaning-Features-

Nature and Scope of OB-The Basic Assumptions of OB, Major
Disciplines and their Contributions to OB; Concepts of Strategic
Organisational Behaviour and International Organisational Behaviour.
15Hours
ModuleII : Individual Behaviour: Factors Affecting Individual
Behaviour-Basic Psychological Process—Personality, Determinants
Of Personality—Personality Traits—Perception,Perceptual Process-
Factors Affecting Perception—Learning, Theories of Learning—Social
Learning-Learning Curve. 15 Hours
Module III : Group: Concept of Group Dynamics—Features of
Group—Types of Group Behaviour—Formal and Informal Group
Behaviour—Group Norms—Group Cohesiveness. Teamwork- Types
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of Teams-Team Building-Team Roles- Team Norms- Team

Cohesiveness.
15 Hours
Module IV : Motivation and Leadership: Motivation- Concept,
Theories-Maslow‘s, Hertzberg’s and McGreger’s, X and Y theories);
Financial and Non Financial Motivation. Leadership- Types—
Theories (Trait theory, Michigan Studies and Fideler‘sContingency
Model); Modern Approach to Leadership Theories—Leadership Styles.
20 Hours
Module V : Stress Management—Meaning, Types of Stress— Causes
of Stress Consequences of Work Stress- Conflict, Types of Conflicts—
Levels of Conflict, Conflict Resolution-Organisational Development—
Meaning, Need, Benefits and Limitations -Steps in OD - Organizational
Changes. 15 Hours
Reference books:
1. Fred Luthans: Organisational behaviour, McGraw hill
Education.
2. Danial C. Fieldman and Hugh Arnold: Managing individual
and group behaviour in organization, McGraw hill.
3. Henry Mintzberg: The structure of organization, Prentice Hall.
4. Edwin Gerlof: Organization Theory and Design, McGraw hill.
5. Robin. S. P: Organizational Behaviour, Pearson Education
India.
6. Aswathappa: Organizational Behaviour, Himalaya Publishing
house.
7. Jai B. Sunhat: Culture and Organisational Behaviour, Sage
Texts

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Module I

ORGANIZATIONAL BEHAVIOUR

Meaning and Concept of Organisational Behavior

Organisational behaviour is the study and application of
knowledge about how people act within the organizations. It is a
human tool for human benefit. It applies broadly to the behaviour
of people in all types of organizations, such as business,
government, school and service organizations. Wherever
organizations are, there is a need to understand organisational
behaviour.
The organizational behaviour has a goal lo help the managers
make a transition to the new paradigm. Some of the new paradigm
characteristics include coverage of second-generation
information technology and total quality management such as
empowerment, reengineering and benchmarking, and learning
organization for managing diversity of work. The new paradigm
sets the stage for the study, understanding, and application of the
time-tested micro-variables, dynamics and macro-variables. One
must know why management needs a new perspective to meet the
environmental challenges and to shift to a new paradigm.
Management is generally considered to have three major
dimensions—technical, conceptual and human. The technical
dimension consists of the manager's expertise in particular
functional areas. They know the requirements of the jobs and
have the functional knowledge to get the job done. But the
practicing managers ignore the conceptual and human
dimensions of their jobs. Most managers think that their

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employees are lazy, and are interested only in money, and that if
you could make them happy in terms of money, they would be
productive. If such assumptions are accepted, the human
problems that the management is facing are relatively easy to
solve. But human behaviour at work is much more complicated
and diverse. The new perspective assumes that employees are
extremely complex and that there is a need for theoretical
understanding given by empirical research before applications
can be made for managing people effectively.
Organisational behaviour is concerned with people's thoughts,
feelings, emotions and actions in setting up a work.
Understanding an individual behaviour is in itself a challenge, but
understanding group behaviour in an organisational environment
is a monumental managerial task.
The organisation's work gets done through people, individually
or collectively, on their, own or in collaboration with technology.
Therefore, the management of organisational behaviour is central
to the management task—a task that involves the capacity to
"understand" the behaviour patterns of individuals, groups and
organisations, to ''predict'" what behavioural responses will be
elicited by various managerial actions and finally to use this
understanding and these predictions to achieve "control".
Organisational behaviour can then be defined as: "The study of
human behaviour in organisational settings, the interface between
human behaviour and the organisational context, and the
organisation itself."
The above definition has three parts—the individual behaviour,
the organisation and the (interface between the two. Each
individual brings to an organisation a unique set of beliefs, values,
attitudes and other personal characteristics and these

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characteristics of all individuals must interact with each other in

order to create organisational settings. The organisational
behaviour is specifically concerned with work-related behaviour,
which takes place in organisations. In addition to understanding;
the on-going behavioral processes involved, in 'their own jobs,
managers must understand the basic human element of their
work. Organisational behaviour offers three major ways of
understanding this context; people as organisations, people as
resources and people as people.
Above all, organisations are people; and without people there
would be no organisations. Thus, if managers are to understand
the organisations in which they work, they must first understand
the people who make up the organisations.
As resources, people are one of the organization’s most valuable
assets. People create the organisation, guide and direct its course,
and vitalize and revitalize it. People make the decisions, solve the
problems, and answer the questions. As managers increasingly
recognize the value of potential contributions by their employees,
it will become more and more important for managers and
employees to grasp the complexities of organisational behaviour.
Finally, there are people as people - an argument derived from the
simple notion of humanistic management. People spend a large
part of their lives in; organisational settings, mostly as employees.
They have a right to expect something in return beyond wages
and benefits. They have a right to expect satisfaction and to learn
new skills. An understanding of organisational behaviour can
help the manager better appreciate the variety of individual needs
and' expectations.
Organisational behaviour is concerned with the characteristics
and behaviours of employees in isolation; the characteristics and

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processes that are part of the organisation itself; 'and the

characteristics and behaviours directly resulting from people with
their individual needs and motivations working within the
structure of the organisation. One cannot understand an
individual’s behaviour completely without learning something
about that individual's organisation. Similarly, he cannot
understand how the organisation operates without; studying the
people who-make it up.
Thus, the organisation influences and is influenced by
individuals. Organizational behaviour integrates the relevant
contents of these disciplines to make them applicable for
organizational analysis. e.g. it addresses issues, which may be
relevant to the case, such as the following:

 What facilitates accurate perception and attribution?

 What influences individual, group and organizational

learning and the development of individual attitudes
toward .work?

 How do individual differences in personality, personal

development, and career development affect individual's
behaviours and attitudes?

 What motivates people to work, and how. Does the

organizational reward system influence worker's
behaviour and attitudes?

 How do managers build effective teams?

 What contributes to effective decision-making?

 What are the constituents of effective communication?

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 What are the characteristics of effective communication?

 How can power be secured and used productively?

 What factors contribute to effective negotiations?

 How can conflict (between groups or between a manager

and subordinates) be resolved or managed?

 How can jobs and organizations be effectively designed?

 How can managers help workers deal effectively with

change?
Nature of OB
Organization Behaviour has emerged as a separate field of study.
The nature it has acquired by now is identified as follows:
1. A separate field of study and not a discipline only: OB has
a multidisciplinary orientation and is thus, not based on a specific
theoretical background.
2. An inter disciplinary approach: OB is essentially an
interdisciplinary approach to study human behaviour at work. It
tries to integrate the relevant knowledge drawn from related
disciplines like psychology, sociology, anthropology etc. ,to
make them applicable for studying and analyzing OB
3. An Applied Science: OB basically does the application of
various researches to solve the organizational problems related to
human behaviour.
4. A Normative Science: while the positive science discusses
only cause and effect relationship, OB prescribes how the

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findings of applied researches can be applied to socially accept

organizational goals.
5. A Humanistic and Optimistic Approach: it applies
humanistic approach towards people working in the organization.
It treats people as thinking, feeling human being.
6. Total system approach; The system approach is one that
integrates all the variables affecting organizational functioning.
Man’s socio –psychological framework is complex one and the
system approach of OB tries to study this complexity and to find
solution to it.
OB –as an interdisciplinary approach
Organizational behaviour is an applied behavioral science that is
built on contributions from a number of behavioral disciplines
such as psychology, sociology, social psychology, anthropology
and economics. Let’s see how these disciplines are related to
organizational behaviour:
A. Psychology. Psychology is the study of human behavior which
tries to identify the characteristics of individuals and provides an
understanding why an individual behaves in a particular way.
This thus provides us with useful insight into areas such as human
motivation, perceptual processes or personality characteristics.
B. Sociology. Sociology is the study of social behavior,
relationships among social groups and societies, and the
maintenance of social order. The main focus of attention is on the
social system. This helps us to appreciate the functioning of
individuals within the organization which is essentially a socio-
technical entity.

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C. Social psychology. Social psychology is the study of human

behaviour in the context of social situations. This essentially
addresses the problem of understanding the typical behavioral
patterns to be expected from an individual when he takes part in
a group.
D. Anthropology. Anthropology is the science of mankind and
the study of human behaviour as a whole. The main focus of
attention is on the cultural system, beliefs, customs, ideas and
values within a group or society and the comparison of behaviour
among different cultures. In the context of today's organizational
scenario. It is very important to appreciate the differences that
exist among people coming from different cultural backgrounds
as people are often found to work with others from the other side
of the globe.
E. Economics. Any organization to survive and sustain must be
aware of the economic viability of their effort. This applies even
to the non-profit and voluntary organizations as well.
F. Political Science. Although frequently overlooked, the
contributions of political scientists are significant to the
understand arrangement in organizations. It studies individuals
and groups within specific conditions concerning the power
dynamics. Important topics under here include structuring of
conflict, allocation of power and how people manipulate power
for individual self-interest etc.
Importance and scope of organizational behaviour
Properly emphasized to achieve organisational objectives.
Barnard has observed that an organisation is a conscious
interaction of two or more people. Organisational behaviour
provides opportunity to management to analyse human behaviour
and prescribe means for shaping it to a particular direction.
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Organisational behaviour helps to analyse 'why' and 'how' an

individual behaves in a particular way. Understanding Human
Behaviour Organisational behaviour provides understanding the
human behaviour in all directions in which the human beings
interact. Thus, organisational behaviour can be understood at the
individual level, interpersonal level, group level and inter-group
level.
• Interpersonal Level: Human behaviour can be understood at the
level of interpersonal interaction. Organisational behaviour
provides • means for understanding the interpersonal
relationships in an organisation. Analysis of reciprocal
relationships, role analysis and transactional analysis are some of
the common methods, which provide such understanding.
• Group Level: Though people interpret anything at their
individual level, they are often modified by group pressures,
which then become a force in shaping human behaviour, Thus,
individuals should be studied in groups also.. Research in group
dynamics has contributed vitally to organisational behaviour and
shows how a group behaves in its norms, cohesion, goals,
procedures, communication pattern and leadership. These
research results are advancing managerial knowledge of
understanding group behaviour, which is very important for
organisational morale and productivity.
• Inter-group Level: The organisation is made up of many groups
that develop complex relationships to build their process and
substance. Understanding the effect of group relationships is
important for managers in today's organisation. Inter-group
relationship may be in the form of co-operation or competition.
Scope and importance of OB can be visible in following points:

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• Controlling and Directing Behaviour: After understanding the

mechanism of human behaviour, managers are required to control
and direct the behaviour so that it conforms to the standards
required for achieving the organisational objectives. Thus,
managers are required to control and direct the behaviour at all
levels of individual interaction. Therefore, organisational
behaviour helps managers in controlling and directing in different
areas such as use of power and sanction, leadership,
communication and building organisational climate favourable
for better interaction.
• Use of Power and Sanction: The behaviours can be controlled
and directed by the use of power and sanction, which are formally
defined by the organisation. Power is referred to as the capacity
of an individual to take certain action and may be utilized in many
ways. Organisational behaviour explains how various means of
power and sanction can ,be utilized so that both organisational
and individual objectives are achieved simultaneously.
• Leadership: Organisational behaviour brings new insights and
understanding to the practice and theory of leadership. It
identifies various leadership styles available to a manager and
analyses which style is more appropriate in a given situation.
Thus, managers can adopt styles keeping in view the various
dimensions of organisations, individuals and situations.
• Communication: Communication helps people to come in
contact with each other. To achieve organisational objectives, the
communication must be effective. The communication process
and its work in inter-personal dynamics have been evaluated by
organisational behaviour.
• Organisational Climate: Organisational climate refers to the
total organisational situations affecting human behaviour.

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Organisational climate takes a system perspective that affect

human behaviour. Besides improving the satisfactory working
conditions and adequate compensation, organisational climate
includes creation of an atmosphere of effective supervision; the
opportunity for the realisation of personal goals, congenial
relations with others at the work place and a sense of
accomplishment.
• Organisational Adaptation: Organisations, as dynamic entities
are characterised by pervasive changes. Organisations have to
adapt themselves to the environmental changes by making
suitable, internal arrangements such as convincing employees
who normally have the tendency of resisting any changes.

Basic Assumptions (Foundations of OB) of OB

Organizational behavior bases on two fundamental assumptions.
Nature of people and nature of organization are used foundations
of organizational behavior. Individual differences, a whole
person, caused behavior, and human dignity are practiced in
nature of people and social systems, mutuality of interests, and
holistic concept are applied in nature of organization.There are
two types basic assumptions of OB. They are the assumptions
about nature of people and the assumptions about nature of
organization.
A. The Assumptions about Nature of People
It is necessary to understand basic assumptions about the nature
of people for understanding organizational behavior. The
following are the basic assumptions about nature of people.

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1. Individual Differences
Organizational behavior assumes that all the individuals are
differences from each other. The difference in individuals can be
in several ways like physical characteristics, intelligence,
perception, personality, attitudes, aptitudes, emotion, learning
capability and communicative ability.

2. A Whole Person
Organizational behavior assumes that an individual should be
considered as a whole person. We cannot separate individual’s
psychology, beliefs, values, attitude from physical work settings.
3. Selective Perception
Perception is a process by which individuals organize and
interpret their sensory impressions in order to give meaning to the
environment. Perception is an individual’s own view. Each
person has a unique way to see, organize and interpret about
event, people and things.

4. Motivated Behavior
Motivation is the willingness to do something to achieve
organizational goals and, at the same time, to satisfy individual
needs. Every employee expects motivated behavior from
manager. Manager need to understand about how employees can
be motivated for better performance.
5. Value of the Person
Organizational behavior assumes that people are more valuable
and different than non-living things. Employees should be treated
with respect, dignity and equity by the organizations. Employees
should not be treated only economic tools.
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6. Desire for Involvement

Individuals have desire for involvement in work. They want to
show their creativity, skills, and efficiency while doing the work.
People have capabilities for task performance, role fulfillment,
and meaningful contribution and to meet challenging situations.

B. The assumptions about Nature of Organizations

The nature of organizations is the area of study of organizational

behavior. There are following basic assumption about nature of
organizations.

1. Social System

Organizations are the part of social system. Organizations are

operated by social and psychological laws. Organizational
behavior assumes that organizations are open social system.
These systems affect behavior of individual.

2. Mutuality of Interest

Organizational behavior assumes mutuality of individual and

organization interests. Interests flow both ways. Organizations
need people and people need organizations. Mutual interest
provides a common goal for all the participants, which results in
encouragement of the people to solve problems of the
organization.

3. Ethical Treatment

Ethics involves moral issues and choices. It deals with right or

wrong behavior about event, people and things. Ethical behavior
of an individual depends on the moral standard or codes of
conduct determined by society. Managerial ethics is the standard
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of behavior that guides individuals’ managers in their work.

Organizational should establish rules, code of conduct, working
procedures and system
MODELS OF ORGANISATION BEHAVIOUR
Organizations differ in the quality of organizational behaviour
that they develop. These differences are substantially caused by
different models of organizational behaviour that dominant
management's thought in each organization. The model that a
manager holds usually begins with certain assumptions about
people and thereby leads to certain interpretations of
organizational events.
The following four models of organizational behaviour are as
follows:
A. Autocratic model
B. Custodial model
C. Supportive model
D. Collegial model
Autocratic Model
In an autocratic model', the manager has the power to command
his subordinates to do a specific job. Management believes that it
knows what is best for an organization and therefore, employees
are required to follow their orders. The psychological result of
this model on employees is their increasing dependence on their
boss. Its main weakness is its high human cost.

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Custodial Model
This model focuses better employee satisfaction and security.
Under this model organizations satisfy the security and welfare
needs of employees. Hence, it is known as custodian model. This
model leads to employee dependence on an organization rather
than on boss. As a result of economic rewards and benefits,
employees are happy and contented but they are not strongly
motivated.

Supportive Model
The supportive model depends on 'leadership' instead of power or
money. Through leadership, management provides a climate to
help employees grow and accomplish in the interest of an
organization. This model assumes that employees will take
responsibility, develop a drive to contribute and improve them if
management will give them a chance. Therefore, management's
direction is to 'Support' the employee's job performance rather
than to 'support' employee benefit payments, as in the custodial
approach. Since management supports employees in their work,
the psychological result is a feeling of participation and task
involvement in an, organization.
Collegial Model
The term 'collegial' relates to a body of persons having a common
purpose. It is a team concept.
Management is the coach that builds a better team. The
management is seen as joint contributor rather than as a boss. The
employee response to this situation is responsibility. The
psychological result of the collegial approach for the employee is
'self-discipline'. In this kind of environment employees normally
feel some degree of fulfillment and worthwhile contribution
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towards their work. This results in enthusiasm in employees'

performance.

Four models of organizational behaviour

Autocratic Custodial Supportive Collegial
Basis of Power Economic Leadership Partnership
Model resources

Manageria Authority Money Support Teamwork

lorientation
Employee Dependence Dependence Participation Self-
psychologi on boss On discipline
cal organization
result
Employee Subsistence Security Status & Self-
needs met Recognition actualization
Performan Minimum Passive Awakened Moderate
ce cooperation drives enthusiasm
result
It is wrong to assume that a particular model is the best model.
The selection of model by a manager is determined by a number
of factors such as, the existing philosophy, vision and goals of
manager. In addition, environmental conditions help in
determining which model will be the most effective model

Strategic approach to OB
An approach that involves organizing and managing the people’s
knowledge and skills effectively to implement the organization’s
strategy and gain a competitive advantage
Factors and Outcomes of Strategic Approach
Organizational Factors (culture, work environments,
adaptability)

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Organizational Success
--Satisfaction of Individuals and Groups
-Individual Factors (learning ability, personality,
values, motivation, stress)
--Productivity of Individuals and Groups
-Interpersonal Factors (leadership, communication,
decision-making skill, intra- and inter-group dynamics,
communication)
International Organisational Behaviour
The International OB examines from an international perspective
and within the international context.
Influence of International OB
How culture affects human performance
How cultural differences can be used to enhance key
organizational functions Cultural values and major frameworks
for understanding culture, Motivation and work values,
communications, negotiations and cross-cultural conflict
resolution, groups & teams, leadership, decision making, ethics,
and human resources management.
Significance of International OB
The international context of OB is becoming increasingly
significant as organizations expand beyond their national
boundaries.
Managers of multinational firms have to manage a variety of
social, political and economic environments as well as unique
individual differences.
The differences at the level of the individual include
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individualism/collectivism, power distance, uncertainty

avoidance, and masculinity/femininity, which are different in
different countries
Managers need to be sensitive to cultural differences across
different countries to achieve their goals in the global economy.
The various aspects that differentiate cultures are people's
perceptions, their relationship with their environment, the time
dimension, and the importance attached to public and private
space.
Managerial leadership is the process of influencing others to
direct their efforts towards the achievement of specific goals.
Many factors influence the way in which managers lead their
employees - personal values, interpersonal skills, background and
the decision-making skills of the manager.
Employees who travel to a foreign country for work find it
difficult to adapt to the new culture because of factors like
parochialism, ethnocentrism and culture shock. In some
countries, the emphasis on production rather than productivity
becomes a barrier to the improvement of the performance of the
organization.
It is not possible to transfer business practices directly from one
country to the other It is also not possible to use either the home
country practices or the traditional practices of the host country.
The best approach for expatriate managers would be to operate
within the scope of home office policies, after adapting them to
fit the culture of the host nation. Traditional and conservative
approach to leadership cannot be used for organizations with a
global presence. Globally competent managers have a good
understanding of the worldwide business environment and try to
learn about various cultures in order to carry out business
operations in different countries successfully.
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Module II
INDIVIDUAL BEHAVIOUR

All organizations are composed of individuals. No organization

can exist without individuals. Human behavior, which is;
considered a complex phenomenon, is very difficult to define in
absolute terms. It is primarily a combination of responses to
external and internal stimuli.
These responses would reflect psychological structure of the
person and may be results' of the combination of biological and
psychological processes, which interpret them, respond to them
in an appropriate manner and learn from the result of these
responses.
Psychologist Kurt Levin has conducted considerable research
into the human behavior and its causes. He believes that people
are influenced by a number of diversified factors, which can be
both genetic and environmental. The influence of these factors
determines the pattern of human behavior.
An individual makes a variety of contributions to an organization
in the form of—efforts, skills, ability, time, loyalty and so forth.
These contributions presumably satisfy various needs and
requirements of the organization. In return for contributions, the
organization provides incentives such as pay, promotion, and job
security to the employee. Just as the contributions available from
the individual must satisfy the organization's needs, the incentives
must serve the employees' needs in return.

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If both the individual and the organization consider the

psychological contract fair and equitable, they will be satisfied
with the relationship and are likely to continue it. If either party
perceives an imbalance or iniquity in the contract, it may initiate
a change. A major challenge faced by an organization, thus, is to
manage the psychological contracts.
One specific aspect of managing psychological contracts is
managing the person-job fit. The 'person-job fit' is the extent to
which the contributions made by the individual match the
incentives offered by the organization. The behavior of
individuals in organization is the primary concern of management
and it is essential that the managers should have an understanding
of the factors influencing the behavior of the employees they
manage.

NATURE OF INDIVIDUAL DIFFERENCES

Individual differences are personal attributes that vary from one
person to another. Individual differences may be physical and
psychological. The following figure shows the attributes of
physical and psychological differences

Physical Differences Psychological Differences

Height Personality
Weight Attitudes
Body Shape Perception
Appearance Motivation
Complexion Learning

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Whenever an organization attempts to assess the individual

differences among its employees, it must consider the situation in
which that particular behavior occurs. Individual differences
make the manager's job extremely challenging. In fact, according
to a recent research, "variability among workers is substantial at
all levels but increases dramatically with job complexity. Due to
these reasons, growing work force diversity compels managers to
view individual differences in a fresh way. Leaders now talk
frequently about "valuing differences" and learn to "manage
diversity". So rather than limiting diversity, as in the past, today's
managers need to better understand and accommodate employee
diversity and individual differences.
Important dimensions of individual differences
• Self-concept
• Personality dimensions
• Abilities, and
• Personal values and ethics.
Self-concept
Self is the core of one's conscious existence. Awareness of self is
referred to as one's self-concept. Sociologists Viktor Gecas
defines self-concept as "the concept the individual has of himself
as a physical, social and spiritual or moral being". In other words,
every individual recognizes himself as a distinct individual. A
self-concept would be impossible without the capacity to think.
This brings us to the role of cognitions. Cognitions represent,
"any knowledge, opinion, or belief about the environment about
oneself, or about one's behavior". Among many different types of
cognitions, those involving expectation, planning, goal setting,

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evaluating and setting personal standards are particularly relevant

to organizational, behavior.
Self-esteem
Self-esteem is a belief over one's own worth based on an overall
self-evaluation. Those with low self-esteem tend to view
themselves in negative terms. They do not feel good about
themselves, tend to have trouble in dealing effectively with
others, and are hampered by self-doubts. High selfesteem
individuals, in contrast, see themselves as worthwhile, capable
and acceptable. Although, high self-esteem is generally
considered a positive trait because it is associated with better
performance and greater satisfaction, recent research uncovered
flaws among those having high self-esteem. Specifically, high
self-esteem subjects tended to become self-centered and boastful
when faced with situations under pressure Hence moderate self-
esteem is desirable.
Managers can build employee self-esteem in four ways:
1. Be supportive by showing concern for personal problems,
interests, status and contribution.
2. Offer work involving variety, autonomy and challenges that
suit the individual's values, skills and abilities.
3. Strive for management-employee cohesiveness and trust
building.
4. Have faith in each employee's self-management ability, reward
successes.

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Self-efficacy
Self-efficacy is a person's belief about his' or her chances of
successfully accomplishing a specific task. According to one
organizational behavior writer, "Self-efficacy arises from the
gradual acquisition of complex, cognitive, social, linguistic,
and/or physical skills through experience",
There is strong linkage between high self-efficacy expectations
and success in terms of physical and mental tasks, anxiety
reduction, addiction control, pain tolerance and illness recovery.
Oppositely, those with low self-efficacy expectations tend to have
low success rates.
Personality Dimensions
The big, five personality dimensions are: extroversion,
agreeableness, thoroughness, emotional stability and openness to
experience. Ideally, these personality dimensions that correlate
positively and strongly with job performance would be helpful in
the selection, training and appraisal of employees. The
individuals who exhibit; traits associated with a strong sense of
responsibility and determination generally perform better than
those who do not.

Physical and intellectual qualities

Physical differences among individuals are the most visible of all
differences. They are also relatively easy to assess. Intellectual
differences are somewhat more difficult to discern, but they too
can be assessed by fairly objective means. The abilities/skills and
competencies of employees are both physical and intellectual
qualities.

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• Ability- it refers to an individual's skill to perform effectively

in one or more areas of activity, such as physical, mental or
interpersonal work. Individuals with numerical ability, for
example, can be trained to apply their ability in the field of
engineering, accounting and computer science. Abilities develop
from an individual's natural aptitudes and subsequent learning
opportunities. Aptitudes are relatively stable capacities for
performing some activity effectively. Learning opportunities
translate aptitude into abilities through practice, experience and
formal training. Organizations have to ensure that people possess
the necessary abilities to engage in the behaviors required for
effective performance. This can be accomplished either by careful
selection of people or by a combination of selection and training.
• Skills – skills are generally thought of as being more task-
specific capabilities than abilities.
For example, an individual with numerical ability who goes to
school to learn accounting develops a numerical skill specific to
that field'. Thus, when a particular ability is applied to a
specialized area, (for example accounting), it becomes a skill.
• Competencies- are skills associated with specialization.
Competencies are skills that have been refined by practice and
experience and that enable, the-individual to specialize in some
field. For example, an accountant with numerical "ability and
accounting skill takes a position in the Taxation Department and
as time passes, he develops more competency as a tax expert.
Physical abilities such as strength, flexibility, endurance and
stamina can be developed with exercise and training. Mental
abilities such as reasoning, memory visualization, comprehension
and inter-personal abilities can also be developed through
practice and education. Even in the absence of such formal

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programs, many individuals manage their own careers in such a

way as to continually upgrade their abilities, skills and
competencies in order to remain valuable to their organizations.
Psychological Process of behaviour
Behaviour represents the course of action of a person. It is the
outcome of an action also. It is easy to understand the behaviour
of a person, if we know what caused it or what made the person
behave in a particular way. It caused by number of variables.
Some of the stated as under;
SR Model :( Stimulus- Response model)
The model assumes that the reasons which cause human behavior
are of two types; internal feeling and external environment.
Internal feeling of a person may relate to his motivational factors
whereas external environment which is also called the stimulus
directly influence the activity of a person. Stimulus can be
anything from the external environment like heat, sound etc. the
behaviour is determined by the stimulus or in other way the
external environment forces determine one’s behaviour. From
stimulus, the behaviour (response) occurring.

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S.O.B.A Model: (Stimulus –organism- Behavior-

Accomplishment Model)
This model combines the SR model and human being. Here the
organism is immobile/ passive, but it is mediating, maintenance
and adjective function between S and R

Stimuli(S) - Denotes the external environmental situations.

Stimulus is very comprehensive and all encompassing nature. it
stimulates people into action, interrupt what they are doing and
help them to make their choices.
Organism (O) - organism not only stands for physiological
being but also heredity, knowledge, skills, attitude etc. it
maintains the interaction between stimulus always.
Behaviour (B) - it includes body actions, facial expressions,
emotions and thinking. Behaviour is anything done by a person.
Accomplishment (A) - accomplishments are the consequences of
behaviour. Some of the accomplishments stimulate the organism
repetitively and some doesn’t. Thus individual behaviour is not a
self induced phenomenon, but it is affected by a larger system.

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Individuals behave differently to different stimuli because of

multitude of factors. This includes an individual’s :
Factors Influencing Individual Behaviour
1. Personality-personality traits
2. Economic factors-wage rate, technological change, the job,
economic outlook, employment opportunity etc.
3. Socio-cultural factors-social environment consist of relation
with friends, relatives, coworkers, superiors, subordinates etc.
4. Cultural factors- basic values, perceptions, work ethics,
preferences etc.
5. Organizational factors- structure, hierarchy, resources,
leadership, support etc, from organization
6. Motivation- internal motivation (individual skill, ability,
intelligence etc.) external (incentives, training etc.)
7. Attitudes- perception favorably or unfavorably.
8. Values- personally or socially preferable.
9. Abilities- actual skills and capabilities of a person and
physical-mental ability
10. Perception- is the viewpoint which one interpret a situation.
11. Personal factors- age, sex, education, intelligence, marital
status, religion etc.

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PERSONALITY
The term personality has been derived from Latin word
“personnare” which means to speak through. Personality is
traditionally refers to how people influence others through their
external appearances.
Gorden Allport defines “Personality is the dynamic organisation
within an individual of those psychological systems that
determine his unique adjustment to his environment”.
Personality is a complex, multi-dimensional construct and there
is no simple definition of what personality is. Maddi defines
personality as, “A stable set of characteristics and tendencies that
determine those commonalities and differences in the
psychological behavior and that may not be easily understood as
the sole result of the social and biological pressures of the
moment".
From the above definition we can infer that all individuals have
some universally common characteristics. Some personality
theorists stress the need of identifying person-situation as
interaction. This is equivalent to recognizing the social learning
aspects related to personality. Such a social learning analysis is
one of the most comprehensive and meaningful ways included in
the overall study of organizational behavior. From this
perspective, personality means the way people affect others. It
also involves people's understanding themselves, as well as their
pattern of inner and outer measurable traits, and the person and
situation interaction. People affect others depending primarily
upon their external appearance such as height, weight, facial
features, color and other physical aspects and traits.

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Personality traits
Personality traits are very important in organizational behavior.
In particular, five personality traits especially related to job
performance have recently emerged from research.
Characteristics of these traits can be summarized as follows:
1. Extroversion: Sociable, talkative and assertive.
2. Agreeableness: Good-natured, cooperative and trusting.
3. Conscientiousness: Responsible, dependable, persistent and
achievement-oriented.
4. Emotional Stability: Viewed from a negative standpoint such
as tense, insecure and nervous.
5. Openness to Experience: Imaginative, artistically sensitive
and intellectual. Identifying the above "big five" traits related to
performance reveals that personality plays an important role in
organizational behavior. Besides physical appearance and
personality traits, the aspects of personality concerned with the
self-concept such as self-esteem and self-efficacy and the person-
situation interaction also play important roles.
Personality formation
The personality formation of an individual starts at birth and
continues throughout his life. Three major types of factors play
important roles in personality formation, which are as follows:
• Determinants: The most widely studied determinants of
personality are biological, social and cultural. People grow up in
the presence of certain hereditary characteristics (body shape and
height), the social context (family and friends) and the cultural
context (religion and values). These three parts interact with •
each other to shape personality. As people grow into adulthood,

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their personalities become very clearly defined and generally

stable.
• Stages: According to Sigmund Freud human personality
progresses through four stages: dependent, compulsive, oedipal
and mature. This concept of stages of growth provides a valuable
perspective to organizational behavior. Experienced managers
become aware of the stages that their employees often go through.
This helps them 19 deal with these stages effectively and promote
maximum growth for the individual and for the organization.
• Traits: Traits to personality are also based on psychology.
According to some trait theories, all people share common traits,
like social, (political, religious and aesthetic preferences but each
individual's nature differentiates that person from all others.

Determinants of personality
Peoples are very complex. They have different ability and
interest. Personality is influenced by four major factors as:

Cultural
Factors

Social Personalit Family

Factors y Factors

Situational
Factors

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1. Cultural factors
Culture largely determines what a person is and what a person
will learn. Culture is the complex of the believes, values and
techniques for dealing with the environment which are shared
with the contemporaries and transmitted by one generation to the
next. Norms, attitude, moral values, introducing and accepting
changes etc will influence the personality.

2. Family
Family is an important factor in shaping personality of an
individual. The impact of these factors on the personality can be
understood identification process. Identification starts when a
person begins to identify himself with some other members of the
family. Normally child tries to behave like father or mother.
Home environment, family background, social class, parent
education level, race, family relationship, geographical location,
birth order, number of members in family etc will determine the
personality development of an individual

3. Situational factors
Situation extends an important press on individual. Every
individual goes through different types of experience and events
in his life. Some will influence his behaviour and some will
change and modify his behaviour.
Eg. A trauma suffered by a person, especially sex assault, affects
his later life also. Timid/shy person performs his heroic acts in
certain life saving situation, without caring for his own safety.

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4. Social factors
Socialization is a process by which an infant acquires from the
enormously wide range of behavioral potentialities that are open
to him at birth or customarily acceptable to the family and social
groups. The contribution of family and social group in
combination with the culture is known as socialization. It initially
starts with the contact with the mother and later on the other
members of the family, schoolmates, friends, and then colleagues
at workspace and so on. An individual has to accept the norms of
the society in which he exists.

PERCEPTION
Perception is described as a person’s view of reality. Perception
is an important mediating cognitive process. Through this
complex process, people make interpretations of the stimulus or
situation they are faced with. Both selectivity and organization go
'into perceptual, interpretations.
Externally, selectivity is affected by intensity, size, contrast,
repetition, motion and novelty and familiarity. Internally,
perceptual selectivity is influenced by the individual's motivation,
learning and personality. After the selective process filters the
stimulus situation, the incoming information is organized into a
meaningful whole.
“It is the interpretation of sensory data so as to gather meaningful
ideas”. In the process of perception, people receive many
different kinds of information through all five senses, assimilate
them and then interpret them. Different people perceive the same
information differently.
Perception plays a key role in determining individual behaviour
in organizations. Organizations send messages in a variety of
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forms to their members regarding what they are expected to do

and not to do. In spite of organizations sending clear messages,
those messages are subject to distortion in the process of being
perceived by organizational members. Hence, managers need to
have a general understanding of the basic perceptual process.
Basic Perceptual Process
Perception is influenced by characteristics of the object being
perceived, by the characteristics of the person and by the
situational processes. Perception is a screen or filter through
which information passes before having an effect on people. It
consists of:
1. Perceptual input- Information, object, event, people, symbols
etc. Characteristics of the object include contrast, intensity,
movement, repetition and novelty. Characteristics of the person
include attitude, self-concept and personality.
2. Perceptual mechanism- receiving of information by means of
five senses from the external environment and process them to
form output. It includes:
a. Perceptual receiving
b. Perceptual selectivity
c. Perceptual organization
d. Perceptual Interpretation (perceptual context, perceptual
defense, halo effect, projection, attribution, stereo typing etc.)
3. Perceptual output- behavioral outcome of perceptual
mechanism. It is the result of perceptual process. It includes
attitude, opinions, feelings, values and behaviour The details of a
particular situation affect the way a person perceives an object;
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the same person may perceive the same object very differently in
different situations. The processes through which a person's
perceptions are altered by the situation include selection,
organization, attribution, projection, stereotyping process, and the
halo effect process. Among these, selective perception and
stereotyping are particularly relevant to organizations.
Perceptual context
Sometimes visual stimuli will be completely meaningless without
context. In organization, a pat on the back, a suggestive gesture,
a raised eyebrow etc. will be meaningless without proper context.
They will be made more meaningful if an employee receives a pat
on the back for enhancement of his performance and like that.
Perceptual defense
People often screen out perceptual stimuli that make them
uncomfortable and dissatisfying people generally build defenses
against stimuli or events that are either personally or culturally
unacceptable or threatening. Perceptual defence is performed by
a. Denying the existence or importance of conflicting
information.
b. Distorting the new information to match the old
c. Acknowledging the existence of new information but treating
it as a non- representative exception.

Selective Perception
Selective perception is the process of screening out information
that we are uncomfortable with or that contradicts our beliefs. For
example, a manager has a very positive attitude about a particular
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worker and one day he notices that the worker seems to be

goofing up. Selective perception may make the manager to
quickly disregard what he observed. For example, a manager who
has formed a very negative attitude about a particular worker and
he happens to observe a high performance from the same worker.
In this case influenced by the selective perception process he too
will disregard it.
In one sense, selective perception is beneficial because it allows
us to disregard minor bits of information. But if selective
perception causes managers to ignore important information, it
can become quite detrimental.

Halo effect
It is the tendency of judging the person entirely on the basis of a
single trait which may be favourable or unfavourable. We judge
a person by our first impression about him or her. When we draw
general impression about an individual based on single
characteristics such as intelligence, sociability or appearance, a
halo effect is operating. This phenomenon frequently occurs
when students appraise their classroom teacher.
Stereotyping
Stereotyping is the process of categorizing or labeling people on
the basis of a single attribute. Perceptions based on stereotypes
about people's sex exist more or less in all work places. Typically,
these perceptions lead to the belief that an individual's sex
determines which tasks he or she will be able to perform. For
example, if a woman is sitting behind the table in the office, she
will be very often, perceived as a clerk and not an executive at
first. But it would induce holding an exactly opposite assumption
about a man. Stereotyping consists of three steps: identifying
categories of people (like women, politician), associating certain
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characteristics with those categories (like passivity, dishonesty

respectively) and then assuming that anyone who fits a certain
category must have those characteristics. For example, if
dishonesty is associated with politicians, we are likely to assume
that all politicians are dishonest.
Projection
It refers to the tendency of the people to see their on traits in other
people. It means that when they make judgments about others,
they project their own characteristics in others.eg. For a lazy
supervisor, every worker is lazy or idle.
Attribution
Perception is also closely linked with another process called
attribution. Attribution is a mechanism through which we observe
behaviour and then attribute certain causes to it. According to
Attribution theory, once we observe behaviour we evaluate it in
terms of its consensus, consistency and distinctiveness.
Consensus is the extent to which other people in the same
situation behave in the same way. Consistency is the degree to
which the same person behaves in the same way at different
times. Distinctiveness is the extent to which the same person
behaves in the same way in other situations. The forces within the
person (internal) or outside the person (external) lead to the
behaviour.
For instance, if you observe that an employee is much more
motivated than the people around (low consensus), is consistently
motivated (high consistency), and seems to work hard no matter
what the task (low distinctiveness) you might conclude that
internal factors are causing that particular behaviour. Another
example is of a manager who observes that an employee is late
for a meeting. He might realize that this employee is the only one
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who-is laic (low consensus), recall that he is often late for other
meetings (high consistency), and subsequently recall that the
same employee is sometimes late for work (low distinctiveness).
This pattern of attributions might cause the manager to decide that
the individual's behaviour requires a change. At this point, the
manager might meet the subordinate to establish some
disciplinary consequences to avoid future delays.
Impression management
Social perception is concerned with how one individual perceives
other individuals. Conversely, impression management is the
process by which the general people attempt to manage or control
the perceptions that others form about them. People often tend to
present themselves in such a way so as to impress others in a
socially desirable manner. Thus, impression management has
considerable' implications for activities like determining the
validity of performance appraisals. It serves as a pragmatic,
political tool for someone to climb the ladder of success in
organizations.

Factors Affecting perception

Perceptual selection is determined by two broad factors:
1. External factors
2. Internal factors
External factors
These factors relate the environment. They include:
A. Size – size determines the height or weight of an individual,
object etc. bigger the size, higher will be the perception.

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B. Intensity- intensity attracts to increase the selective

perception. Eg. An illuminated shop attracts attention of the
customers.
C. Repetition- repeated message and advertisement is more
likely perceived than a single one.
D. Movements – moving objects are more likely to be perceived
than a stationary object. A moving car is more perceived than a
parked car.
F. Status- high status people can influence the perception of
employees than low status people. An order from the Managing
Director may be perceived by employees quickly.
G. Contrast - an object which contrasts with surrounding
environment is more likely to be noticed.
E.g. “EXIT” sign in the cinema hall, Danger sign in transformers
etc.
H. Novelty and Familiarity- this states that either the familiar or
novel factor can serve as attention better. E.g. Face of a film star
can be identified even in a crowd. Novel or new type of
advertisement like DOCOMO…
I. Nature – perception level may be varied according to the nature
of input or stimuli. Eg. A picture attracts more attention than a
word.
J. Order- the order in which the objects or stimuli are presented
is an important factor for attention.
E.g. Welcome speech at the beginning will attract more attention.
Like that, in film, suspense will be revealed at last to heighten the
curiosity and perceptive attention.
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Internal factors
Internal or personal factors also influence the perception process.
The important personal factors are:
1. Learning- A perceptual set is basically what a person expects
from the stimuli on the basis
of experience and learning relative to same or similar stimuli. Eg.
Perception on sign board will be different for those who learned
driving and those who not.
2. Motivation- Motivation also plays an important role in
influencing perception. E.g. A hungry person will be very
sensitive to the smell or sight of food than a non-hungry one.
3. Personality- perception is also influenced by personality
especially young and old, man to women etc.
4. Experience-a successful experience enhance and boost the
perceptive ability and leads to accuracy in perception whereas
failure erodes confidence.
LEARNING
Learning is an important psychological process that-determines
human behavior. Simple way, “learning is something we did
when we went to school “it is permanent changing behavior
through education and training, practice and experience. Learning
can be defined as “relatively permanent change in behavior that
occurs as a result of experience or reinforced practice". There
are four important points in the definition of learning:
1. Learning involves a change in behavior, though this change is
not necessarily an improvement over previous behavior. Learning
generally has the connotation of improved behavior, but bad
habits, prejudices, stereotypes, and work restrictions are also
learned.
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2. The, behavioral change must be relatively permanent. Any

temporary change in behavior is not a part of learning.
3. The behavioral change must be based on some form of practice
or experience.
4. The practice or experience must be reinforced in order so as to
facilitate learning to occur.
Components of the learning process
The components of learning process are: drive, cue stimuli,
response, reinforcement and retention.

Drive
Learning frequently occurs in the presence of drive - any strong
stimulus that impels action. Drives are basically of two types -
primary (or physiological); and secondary (or psychological).
These two categories of drives often interact with each other.
Individuals operate under many drives at the same time. To
predict a behavior, it is necessary to establish which drives are
stimulating the most.
Cue Stimuli
Cue stimuli are those factors that exist in the environment as
perceived by the individual. The idea is to discover the conditions
under which stimulus will increase the probability of eliciting a
specific response. There may be two types i of stimuli with
respect to their results in terms of response concerned:
generalization and discrimination.
Generalization occurs when a response is elicited by a similar
but new stimulus. If two stimuli are exactly alike, they will have
the same probability of evoking a specified response. The
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principle of generalization has important implications for human

learning. Because of generalization, a person does not have to
'completely relearn each of the new tasks. It allows the members
to adapt to overall changing conditions and specific new
assignments. The individual can borrow from past learning
experiences to adjust more smoothly to new learning situations.
Discrimination is a procedure in which an organization learns to
emit a response to a stimulus but avoids making the same
response to a similar but somewhat different stimulus.
Discrimination has wide applications in 'organizational behavior.
For example, a supervisor can discriminate between two equally
high producing workers, one with low quality and other with high
quality.

Responses
The stimulus results in responses. Responses may be in the
physical form or may be in terms of attitudes, familiarity,
perception or other complex phenomena. In the above example,
the supervisor discriminates between the worker producing low
quality products and the worker producing high quality products,
and positively responds only to the quality conscious worker.
Reinforcement
Reinforcement is a fundamental condition of learning. Without
reinforcement, no measurable modification of behavior takes
place. Reinforcement may be defined as the environmental
event's affecting the probability of occurrence of responses with
which they are associated.

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Retention
The stability of learned behavior over time is defined as retention
and its contrary is known as forgetting. Some of the learning is
retained over a period of time while others may be forgotten.

LEARNING THEORIES
Classical Conditioning
The work of the famous Russian physiologist Ivan Pavlov
demonstrated the classical conditioning process. When Pavlov
presented a piece of meat to the dog in the experiment, Pavlov
noticed a great deal of salivation. He termed the food an
unconditioned stimulus and the salivation an unconditioned
response. When the dog saw the meat, it salivated. On the other
hand, when Pavlov merely rang a bell, the dog did not salivate.
Pavlov subsequently introduced the sound of a bell each time the
meat was given to the dog. The dog eventually learned to salivate
in response to the ringing of the-bell-even when there was no
meat. Pavlov had conditioned the dog to respond to a learned
stimulus. Thorndike called this the "law of exercise" which states
that behavior can be learned by repetitive association between a
stimulus and a response.
Classical conditioning has a limited value in the study of
organizational behavior. As pointed out by Skinner, classical
conditioning represents an insignificant part of total human
learning. Classical conditioning is passive. Something happens
and we react in a specific or particular fashion. It is elicited in
response to a specific, identifiable event. As such it explains
simple and reflexive behaviors. But behavior of people in
organizations is emitted rather than elicited, and it is voluntary
rather than reflexive. The learning of these complex behaviors

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can be explained or better understood by looking at operant

conditioning.
Operant Conditioning
An operant is defined as a behavior that produces effects. Operant
conditioning, basically a product of Skinnerian psychology,
suggests that individuals emit responses that are either not
rewarded or are punished. Operant conditioning is a voluntary
behavior and it is determined, maintained and controlled by its
consequences.
Operant conditioning is a powerful tool for managing people in
organizations. Most behaviors in organizations are learned,
controlled and altered by the consequences; i.e. operant
behaviors. Management can use the operant conditioning process
successfully to control and influence the behavior of employees
by manipulating its reward system. Reinforcement is anything
that both increases the strength of response and tends to induce
repetitions of the behavior. Four types of reinforcement strategies
can be employed by managers to influence the behavior of the
employees, viz., positive reinforcement, negative reinforcement,
extinction and punishment.
Positive Reinforcement
Positive reinforcement strengthens and increases behavior by the
presentation of a desirable consequence (reward). In other words,
a positive reinforce is a reward that follows behavior and is
capable of increasing the frequency of that behavior. There are
two types of positive: reinforces: primary and secondary. Primary
rein forcers such as food, water and sex are of biological
importance and have effects, which arc independent of past
experiences. For instance, a primary reinforce like food satisfies
hunger need and reinforced food-producing behavior. Secondary
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reinforces like job advancement, recognition, praise and esteem

result from previous association with a primary reinforce.
Primary reinforces must be learned. In order to apply
reinforcement procedures successfully, management must select
reinforces that are sufficiently powerful and durable.
Negative Reinforcement
The threat of punishment is known as negative reinforcement.
Negative reinforces also serve to strengthen desired behavior
responses leading to their removal or termination.
Extinction
Extinction is an effective method of controlling undesirable
behavior. It refers to nonreinforcement.
It is based on the principle that if a response is not reinforced, it
will eventually disappear. Extinction is a behavioral strategy that
does not promote desirable behaviors but can help to reduce
undesirable behaviors.

Punishment
Punishment is a control device employed in organizations to
discourage and reduce annoying behaviors of employees.
Observational learning
Observational learning results from watching the behavior of
another person and appraising the consequences of that behavior.
It does not require an overt response. When Mr. X observes that
Y
is rewarded for superior performance, X learns the positive
relationship between performance and rewards without actually
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obtaining the reward himself. Observational learning plays a

crucial role in altering behaviors in organizations.
Cognitive Learning
Here the primary emphasis is on knowing how events and objects
are related to each other. Most of the learning that takes place in
the classroom is cognitive learning. Cognitive learning is
important because it increases the change that the learner will do
the right thing first, without going through a lengthy operant
conditioning process.
Social Learning
Social learning integrates the cognitive and operant approaches
of learning. It recognizes the learning doesn’t take place only
because of environmental stimuli (classical and operant views)
and of individual stimulus (Cognitive approach), but it is a blend
of both views. It also emphasizes that people acquire new
behaviours by observing or imitating others in a social setting.
Thus it is an interactive nature of cognitive, behavioural and
environmental determinants.
Learning can be gained discipline and self control and an inner
desire to acquire knowledge and skills irrespective of rewards or
consequences. It is also possible by observing others. This is
called vicarious learning or modeling or imitation in which
another person acts as a role model, whose behaviour we tend to
imitate.
E.g. Subordinates may observe their boss; students may observe
their teachers and model them. The steps of modeling are:

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Learning Curve
A learning curve is a graphical representation of the relationship
between how proficient people are at a task and the amount
of experience they have. Proficiency (measured on the vertical
axis) usually increases with increased experience (the horizontal
axis), that is to say, the more someone performs a task, the better
he or she get at it.

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Module III
GROUP

A group consists of a number of individuals working together for

a common objective. Groups have significant influence on an
organization and are inseparable from an organization. They are
useful for the organization as they form foundation of human
resources.
The study of group behavior is essential for an organization to
achieve its goals. Individual and group behavior varies from each
other. In 1920, Elton Mayo and his associates conducted the
Hawthorne experiments and came to know that the group
behavior has great impact on productivity. The importance of
group behavior has been realized from time to time.
Human behavior consists of individuals, who move in groups.
The knowledge of group behavior as well as individual behavior
is necessary for a manager. He must understand group
psychology and should also understand individual behavior in the
context of group behavior. The group in which he moves
influences individual work, job satisfaction and effective
performance.

Definition of a group
A group is a two or more individual who interact regularly with
each other to accomplish a common purpose or goal.

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According to Marvin Shaw, "a group comprises, of two or more

persons who interact with one another in such a manner that each
person influences and is influenced by each other person'.
The key parts of this definition are the concepts of interaction and
influence, which also limit the size of the group. It is difficult for
members to interact sufficiently in a large group.
Groups or work teams are the primary tools used by managers.
Managers need groups to coordinate individual behavior in order
to reach the organizational goals. Groups can make a manager's
job easier because by forming a group, he need not explain the
task to each and every individual. A manager can easily
coordinate with the work of an individual by giving the group a
task and allow them to co-ordinate with each other. But for a
group to work effectively, the interactions between its members
should be productive. Therefore, managers must pay attention to
the needs of individuals.
Need and importance for a Group
The reasons for the need, of groups are as follows:

 Management of modern organizations makes mutual

efforts to introduce industrial democracy at workplace.
They use project teams and work committees where
workers get due recognition. They willingly participate in
decision-making.

 The tasks in modern industries are becoming more

complex, tedious arid of repetitive nature. Work
committees, work groups and teams are formed to
monitor the work. They also make the environment at
workplace livelier.

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 Groups help in making participative management more

effective.

 Groups of all kinds and types help by cooperating in all

the matters related to production and human relations to
work effectively in the organization.

 An individual cannot perform each and every task. Group

efforts are required for its completion. For example,
building a ship, making of a movie, construction of a fly-
over, etc. All these require coordinated and unified efforts
of many individuals, working in a group.

 A group can judge in a better way as compared to an

individual.
Types of Groups
In an organization, there are three types of groups, which are as
follows:
• Functional or formal groups
Functional groups are the groups formed by the organization to
accomplish different organizational purposes. According to A L
Stencombe, "a formal group is said to be any social arrangement
in which the activities of some persons are planned by others to
achieve a common purpose". These groups are permanent in
nature. They have to follow rules, regulations and policy of the
organization. A formal organizational group includes
departments such as the personnel department, the advertising
department, the quality control department and the public
relations department.

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• Task group
Tasks groups are the groups formed by an organization to
accomplish a narrow range of purposes within a specified time.
These groups are temporary in nature. They also develop a
solution to a problem or complete its purpose. Informal
committees, task forces and work teams are included in task
groups. The organization after specifying a group membership,
assigns a narrow set of purposes such as developing a new
product, evaluating a proposed grievance procedure, etc.
• Informal group
Informal groups are the groups formed for the purposes other than
the organizational goals. Informal groups form when individuals
are drawn together by friendship, by mutual interests or both.
These groups are spontaneous. According to Keith David, "the
network of persons and social relations which is not established
or required forms an informal organization". These are the groups
formed by the employees themselves at the workplace while
working together. The organization does not take any active
interest in their formation.
Informal groups are very effective and powerful. These groups
work as an informal communication network forming a part of
the grapevine to the organizations. They are also like a powerful
force, which an organization cannot avoid. Some managers
consider them to be harmful to the interest of an organization.
They suspect their integrity and consider as a virtual threat.
Some managers do not consider them as threat and seek the help
of group members in getting the organizational task
accomplished. Informal groups are of following types:

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o Interest group: Interest groups are the groups formed to attain

a common purpose.
Employees coming together for payment of bonus, increase in
salary, medical benefit and other facilities are the examples of
interest groups
o Membership group: Membership groups are the groups of
individuals' belonging to the same profession and knowing each
other. For example, teachers of the same faculty in a university.
o Friendship group: Friendship groups are the groups of
individuals belonging to same age group, having similar views,
tastes and opinions. These groups can also be formed outside the
plant or office and can be in the form of clubs and associations.
o Reference group: Reference groups are the group where
individuals shape their ideas, beliefs, values etc. They want
support from the group.

GROUP NORMS
Norms refer to group behavior standard, beliefs, attitudes,
traditions and expectations shared by group members. According
to Michael Argyle, "Group norms are rules or guidelines of
accepted behavior which are established by a group and used to
monitor the behavior of its members". They are framed to achieve
objectives of the group. They can be social and fair in nature.
Norms define boundaries between acceptable and unacceptable
behavior. They make the members to identify themselves with the
group. Norms play a significant role in disciplining the members
of a group to make them to work regularly and properly. This
reduces absenteeism and employee turnover. The members of the
group are expected follow the norms strictly. This will make the
group more organized.
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Types of Group Norms

There are two types of group norms, which are as follows:
• Behavior norms: Behavior norms are rules that standardize how
individuals act while working on a day-to-day basis. Examples
are. "Do not come to committee meetings unless you have read
the reports to be '"discussed"', "greet every customer with a
smile'', etc. These norms tend to reflect motivation, commitment
to the organization and therefore result in high level of
performance.
• Performance norms: Performance norms are rules that
standardize employee output and number of hours worked.
Reasons for Strong Enforcement of Norms
Groups don't have the time or energy, to regulate each and every
action of the group members.
Only those behaviors that sound to-be important by group
members should be brought under control.
Groups, like individuals, try to operate in such a way that they
maximize their chances of task success and minimize (heir
chances of task failure. Groups want to facilitate their
performance and overcome barriers to reach their goals.
Moreover, groups want to increase morale and prevent any
interpersonal discomfort to their members. Norms that will help
groups meet these aims of performing successfully and keeping
morale high are likely to be strongly enforced.
Conditions where group norms will be strongly enforced are as
follows:
• If the norms facilitate group success or ensure group survival,
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• If the norms simplify or predict regarding the behavior which is

expected from group members.
• If the norms emphasize the roles of specific members within a
group and • If the norms help the group to solve the inter-personal
problems themselves.

Group Cohesiveness
According to Rcnsis Likert, "cohesiveness is the attractiveness of
the members towards the group or resistance of the members
leaving it". It refers to the attachment of members with the group.
According lo K. Aswalhappa, "cohesiveness is understood as the
extent of liking each member has towards others and how far
everyone wants to remain as the member of the group".
Attractiveness is the key to cohesiveness. Cohesiveness is the
extent to which group members are loyal and committed lo the
group and to each other. In a highly cohesive group, the members
work well together, support and trust one another and are
generally effective at achieving their chosen goals.
A group that lacks cohesiveness will not be very much
coordinated. Its members will not support one another and they
may face difficulty in reaching their goals.
Managers should develop an understanding of the factors that
increase and reduce group cohesiveness.
Advantages of Group Cohesiveness
The advantages of group cohesiveness are as follows:
• The members of cohesive groups have high morale.

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• The members don't have conflicting views, which decreases the

chances of in clash among the views of group members at the
workplace or elsewhere.
• Individuals of cohesive groups have no anxiety at the
workplace.
• Members of cohesive groups are regular at their work.
• Cohesiveness increases productivity.
• Organizations gain from the members of cohesive group
because they communicate better they share ideologies and
respect opinions of fellow employees.
The following factors can increase group cohesiveness:
• Competitiveness with other groups.
• Inter-personal attraction.
• Favorable evaluation from outsiders.
• Agreement on goals.
•Frequent interaction. The following factors decrease
cohesiveness:
• Large group size.
• Disagreement on goals.
• Competitiveness within group.
• Domination by one or more members.
• Unpleasant experiences.

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TEAM
Team building has become one of the most popular and widely
used interventions for improving the management of industrial
and governmental organizations. Today’s organizations are
utilizing teams more and more to meet customer demands and
stay competitive in a changing marketplace. Teams are replacing
individuals as the basic building blocks of modern organizations.
The corporate sector here and abroad is gradually realizing the
tremendous potential of teams enabling companies to take more
creative and informed decisions and effective coordination
without the need for close supervision.
Team is a group of two or more people, who interact and
influence each other but has some characteristics in greater degree
than ordinary groups, including a higher commitment common
goals and a high degree of interdependency and interaction. In
Nut shell, A Team is a group organized to work together to
accomplish a set of objectives that cannot be achieved effectively
by individuals
Before proceeding further let us recall the difference between
groups vs teams as discussed in the previous lesson. While a
group is where two or more people having common interests and
objectives are in constant interaction with each other, a team
comprises of a group of people possessing complimentary skills
and abilities which are put into practice for the achievement of
the desired goals and objectives. Again it is important to
remember that all the teams are groups but not all groups are work
teams. There could be a number of work teams like a baseball
team where members have set responsibilities, it could be like a
football team where all the members work in absolute
coordination with each other, or it could be like doubles tennis
team , where members have primary yet flexible responsibilities.
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Why Teams Work: Benefits To Organizations and

Individuals
The basic premise behind working in teams is to en cash the
collective energies efforts abilities knowledge and creativity of
the individuals to achieve the tasks which cannot be performed
alone, which are quite voluminous in nature, complicated
complex and are interrelated to each other. It entails several
benefits to the organizations and the individuals as outlined
below;
Benefits to Organizations: Encouragement to Teamwork and
Collaboration
The organizations tend to benefit from the collaborated efforts of
its members who are dispersed throughout the organization in the
form of empowered and collaborated workforce.
Benefits to Individuals: Psychological Intimacy, Integrated
Involvement
Psychological intimacy: On the other hand the individuals tend
to gain from the psychological intimacy that is the natural
outcome of any team. The members share a warm and
affectionate relationship with each other, resulting in the feeling
of security and emotional support.
Integrated involvement: The second advantage to the
individuals is with regard to integrated involvement of the
individuals which is achieved through the closeness experienced
during the course of activities undertaken together .it gives the
members a sense of social identity where their abilities are valued
and recognized by others. While psychological intimacy is more
emotion based, integrated involvement is more behaviorally
oriented.
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THE WINNING TRAITS OF EFFECTIVE TEAMS

1. They should have strong top management support and an
effective and efficient leadership, may be level five leadership
which is replete with professional will and humility
2. Teams must be small in size, the ideal size being 6-8 members.
3. The team must specify its goals clearly in unambiguous terms
before jumping into the fire (task)
4. They must have the capacity to work within limited resources
and budgets.
5. The team members should have complementary skills.
6. They must have a distinct working style and methodology.
7. They must be trained to achieve what they are supposed to.
8. Last but not the least, teams must be rewarded and recognized
for their performance and achievements.
TYPES OF TEAMS
In today’s high tech age not all the teams work together
physically, there has been an emergence of virtual teams which
enables the organizations to have access to expertise scattered
across the globe at the touch of a screen. Another phenomenon in
team work which is gaining popularity is the self managed teams
and cross functional teams and quality circles which will be
discussed in this section

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1. Self Directed Or Self Managed Teams

Self directed or self Managed Teams can be defined in terms of
interdependent individuals who can self regulate their behavior
on relatively whole tasks. There are four foundations On which
SMT’S’s rests, these are :
1. Creation of self directed teams, giving them complete
responsibility for the completion of the task.
2. Giving them complete autonomy to manage all the work related
issues by themselves

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3. They regulate and control the performance of their members

and give them frequent feedbacks.
4. All this is possible with the implementation of the socio
technical systems, which enables the team member to enjoy,
enriched jobs.
Socio technical systems are based on the premise that the
organization can experience higher bouts of productivity with the
optimization of the social ( human ) and technical subsystems that
are embedded in the work unit. Now it is important to remember
that these SMT’S are sub units of the larger organization and their
strategies should be linked to the organization only.
2. Virtual Teams
A virtual team can be defined in terms of a group of
interdependent members who work together on a common task
while they are located across the planet.
This is a newer smarter cheaper and faster way of accomplishing
the tasks being used by global organizations in the information
age. The virtual teams are proving to be quite a success as it
enhances team productivity, efficiency, and effectiveness apart
from proving vast experiences of the global and diversified
workforce who apply their local and global exposures in taking
the right decisions for the organizations.
The success of virtual teams however depend upon the presence
of shared understanding between the team members which is
conspicuous by its absence in the virtual teams. This is more so
because of the diversified workforce who are not experiencing
personal touch and communication with each other, besides they
share lesser team spirit and information sharing. Thus it becomes
imperative for the virtual teams to increase their shared
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understanding by increasing their mode of communication by

sharing quality and quantity of information which might be useful
for the achievement of the goals.
3. Cross Functional Teams
A cross functional team is characterized by the presence of a
group of people each possessing specialized skills which are
applied for the achievement of the task with a high degree of
interdependence.
CFT’s are different from the regular teams in the sense that they
are temporary in nature as they come into existence for the
achievement of some specific objectives; the organization has
high performance expectations from them. Here the members
possess specialized skills only e. g marketing finance, production,
IT etc. and they tend to identify themselves with those functions
more strongly. The success of the CFT would depend upon top
management support apart from high degree of coordination
understanding and support amongst the team members who
should have the ability to appreciate and listen to other persons
viewpoint from a different specialized functional area. This also
gives the members an opportunity to slip into the shoes of the
other functional area expert and gets a better understanding of his
function. This obviously leads to higher performance backed by
rational and informed decisions on the part of the team members.
4. Quality Circles
Quality Circle is a small group activity where in a small group of
employees on voluntary basis meet periodically to discuss work-
related problem. Experience with quality Circle in Japan and
elsewhere is very encouraging in terms of involvement of workers
in the work-related matters and psychological satisfaction

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 In a last few years, many companies, both in private sector

and public sector have experimented with Quality Circle
and the results are very encouraging.

 In fact, Quality Circle is an important HRD mechanism

for the involvement of workers at the grass root levels.

 Organizations like JK Jute, Bharat Electronics, BHEL,

HMT etc. and some service Organizations like banks have
experimented with Quality Circles in recent years
TEAM WORK PROCESSES
The model of team effectiveness as exhibited above shows that
team effectiveness can be achieved through effective
management of these three team work processes which are
interdependent on each other in the sense that engaging the team
in setting up the team’s mission , strategy and goals will result in
higher tem effectiveness and also improved action processes in
the form of better team monitoring and coordination, which will
in turn reduce the level of conflict of any nature and will motivate
and manage the emotional sides of the team members.
1. Team Defining Process: Engaging members in the
articulation of teams mission, strategy and goals.
Setting Mission: Entails Clarifying The Reasons For The Team
To Come Into Existence, Describing Its Raison d’etre ( Reason
For Being ) And Its Core Activity.
Team Strategy: Outlining The Road Map Which Will Enable
Them To Sail Through The Current State To The Desired State
Of Existence.

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Team Goals: Outlining The Specifications Of The Quantity,

Quality And The Time Limits Within Which The Task Is To Be
Accomplished.
2. Action Processes: Implementing team goals through regular
reviews, continuous alignment of goals and coaching and guiding
and directing the team Implementation: After the careful
outlining of the teams mission and strategy, the next logical step
is careful tracking which involves starting the implementation,
coordination and having team support behaviors. It involves
seeing through the tasks and ensuring that there are no deviations
in the decided path and if any, corrective action should be taken
immediately.
Coordinating: involves ensuring that the efforts of all the team
members are directed in the same direction
Team monitoring and backup behaviors: involves that the
members act as coaches to each other and assist each other in the
completion of the tasks if required.
3. Interpersonal Processes; Actions taken by members to
manage interpersonal relations at the workplace encompassing
motivating, resolving conflicts and managing emotions of the
team members.
Motivation: can be enhanced by the presence of top management
support, absence of conflicts in team members, reducing the
inequities in reward systems, right scheduling the tasks and
completing the task on time. Apart from these, team motivation
can be enhanced through introducing high levels of involvement,
communication and trust of the members.

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Conflict Management: Enhancing mutual understanding of the

team members will lead to more creative and innovative
environment in the organization.
Emotional Management: Encouraging the team members to be
emotionally intelligent by being aware of the emotions of self and
others at the workplace and managing destructive emotions will
definitely enhance team effectiveness.
Moderators: There are two variables that impact the team
effectiveness, these are Task Interdependence and Team Size.
1. Task Interdependence: is ensured done when the member’s
tasks are designed and lined up in the manner that the task of one
member is dependent upon the other team members inputs.
2. Team Size: It is an established fact that small (3-4) and
medium sized teams( 5-7) perform better than the larger teams (8-
14), hence an ideal team size should be maintained for maximum
efficiency and outputs by the team members.
Team Effectiveness : The final outcome of all the above
processes is team effectiveness which results in the output which
meets the expectations with regard to the standards , quantity and
quality while at the same time enhancing the members well being
and satisfaction and also ensuring capacity building in the
members.
1. Team Performance: The team’s high performance is the result
of effective and efficient teams which is clearly visible in the
organizations performance in terms of sales, growth, profits,
innovative and differentiated products by the company.
2. Employee Wellbeing Satisfaction: a workplace which aims at
maximizing the integration of the employee goals of being

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healthy and safe and the organization’s objectives of profitability

and productivity creates a psychologically healthy workplace,
which in turn leads to a productive and committed workforce.
3. Job Satisfaction: research has established positive relationship
between team work and job satisfaction which in turn is an
outcome of well managed team processes encompassing well
defined team processes action processes and interpersonal
processes.
4. Capacity Building: working in interdependent teams also
entails the benefits to the individuals in terms of their capacity
building as team members tend to learn from each other in long
associations during team work
Emergent states of team behavior
When the teams work together for a considerable period of time,
there is every likelihood that there are three emergent states that
appear in terms of increased team cohesiveness, increased team
potency and the emergence of mental models.
Team cohesion: It can be understood in terms of increased
cohesiveness and bonding amongst the team members which
tends to develop naturally during their long interactions with each
other.
Team potency: It can be understood in terms of increased belief
of the team members that they can perform better as teams across
various in the organization.
Team mental models: It can be understood in terms of increased
and shared mutual understanding between the team members
which are usually implicit in nature and enhances team’s
effectiveness.

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Team Building
Team building is a collective term for various types of activities
used to enhance social relations and define roles within teams,
often involving collaborative tasks. It is distinct from team
training, which is designed by a combine of business managers,
learning and development/OD (Internal or external) and an HR
Business Partner (if the role exists) to improve the efficiency,
rather than interpersonal relations.
Team building is one of the foundations of organizational
development that can be applied to groups such as sports teams,
school classes, military units or flight crews. The formal
definition of team-building includes:
 aligning around goals
 building effective working relationships
 reducing team members' role ambiguity
 finding solutions to team problems
Team member roles and responsibilities
Each team member has a role to play on the team, defined by
skillset and experience. Some might be optimists, encouraging,
innovative ideas and positivity, while others will be more
pragmatic and encourage definable goals and structure. The point
is that all roles have their own value in the collaboration of a team.
Here are some general roles and responsibilities for a team
member:
 Actively participate.
 Be an active listener
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 Take notes.
 Complete tasks and assignments.

Team leader roles and responsibilities

The main role of a team leader is to provide the team with
direction and support. They’re also responsible for delegating
tasks. To effectively lead a team, a team leader must outline not
only the team’s main objective but the tasks each employee is
responsible for. An effective team leader should:
 Prepare material for the team.
 Maintain a team calendar or schedule
 Schedule and hold meetings.
 Facilitate discussion.
 Communicate with team members.
 Assign responsibilities.
 Draft and deliver correspondence.
 Supervise team members.
 Support team members.

Team Norms
Team norms are a set of rules or operating principles that shape
team members’ interactions. Team norms establish clear, agreed-
upon behavior, how the work will get done, and what team
members can expect of each other. This is a key way to build
trust, which is critical for team success.
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While establishing clear, agreed-upon norms for behavior is a

good thing to do, setting team norms can feel like a joke in many
organizations. Even if team members are well-intentioned, their
day-to-day challenges can easily override norms that are
unrealistic.
10 Steps for Establishing Team Norms
Early on, you’ll want to get the group talking about team norms.
Instead of scheduling an official “Team Norms Meeting,” bring
it up organically during one of your team’s first gatherings.
Following these 10 steps, you can facilitate a productive
discussion with your team and agree on a set of best practices and
team norms.
Step 1. Ask each member to think of the worst team they’ve
served on. Any group counts — a work team, a volunteer group,
a sports team — as long as the members were dependent on each
other to produce results.
Step 2. Have each team member spend 2 minutes writing down
what made that experience so terrible. Direct them to be as
specific as possible about their reasons.
Step 3. Ask team members to share their experiences with the
whole group.
Step 4. Ask each member to think of their best team experience.
As with the negative experience, each team member should spend
2 minutes writing down what made the experience so good.
Step 5. As before, encourage team members to share their
experiences with the whole team.

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Step 6. With these comments in mind, discuss as a group what

makes for a good team experience and what makes for a bad one.
Step 7. Ask team members to suggest behaviors and team norms
that would contribute to the current team’s success. Pay attention
to the most relevant issues or actions that could affect the team’s
biggest challenges. Be sure to keep track of suggestions on a
screen or large sheet of paper that all team members can view.
Step 8. Discuss the suggestions as a group and decide as a group
which ones the team can support and adhere to.
As part of this step, flag any concerns or challenges that the team
thinks they may struggle with. Even if you can’t identify a solid
solution, doing this keeps reality in the forefront.
Step 9. Discuss how to respond to a team member who doesn’t
follow the norms. What is the mechanism for dealing with this
situation? Ideally, the team members will take ownership of team
norms, calling out inconsistencies and violations rather than
expecting the team leader to police the process.
Step 10. Transfer the team’s list of “must-do” behaviors into a
document so all team members have access to it. Your team may
choose to post the list of team norms electronically or in its
regular meeting room for quick reference.
Finally, as new members join your team, bring them up to speed
and get their input on team norms. Make it a point to discuss what
is working and what isn’t. Keep the team norms front-and-center,
revisit them to update and add norms, and encourage meetings to
address both the “what” and “how” of functioning as a team.
Setting team norms shouldn’t be a one-time activity — in reality,
it’s just a way to start talking about how the team gets the job

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done. It’s one of several ways to improve team performance and

collaboration.

Team Cohesion
Team cohesion is the strength and extent of interpersonal
connection existing among the members of a group. It is this
interpersonal bond that causes members to participate readily and
remain motivated to accomplish the set goals. Cohesive teams
have an attitude of “we-ness”.
What Influences Team Cohesion?
Similarity of Attitudes and Values
One of the aspects that keep members of a group united is if they
share similar values and attitudes. Employees and human beings,
in general, always prefer the company of those who hold similar
opinions, beliefs, and codes of conduct because they provide
some form of social validation. For instance, if person A shares
the same opinion as person B, then person A will get the feeling
that he’s right even if he’s not.
However, it’s important to note that similarity of interest or
opinion is not the only factor that drives team cohesion. In some
instances, the primary task that needs to be accomplished keeps
the group members united. For example, when a military unit is
sent on a mission, accomplishing the task at hand becomes the
cohesive factor. Whether or not the soldiers have similar attitudes
and values does not matter much.
Size of the Group
Small groups tend to be more cohesive that large groups for the
following reasons:

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With small groups, the members enjoy greater face-to-face

contact. It means that there’s a high degree of interaction and
communication, which helps the members remain united. But
with large groups, the possibility of interacting decreases.
As the size of a group increases, it becomes more challenging to
agree on different issues. It’s more difficult to get 30 members to
agree on a common goal than it is to convince a group of just 10
members.
Another disadvantage of having a very large group is the
possibility of smaller cliques developing within the group. This
can lead to the dilution of the overall goal, hence increasing the
extent of power politics.
Time
It stands to reason that the more time members of a group spend
together, the stronger the bond between them. By interacting
more often, the members are able to learn about each other’s
strengths, weaknesses, and skills. This way, the team leader can
delegate tasks based on members’ abilities, enabling tasks to be
accomplished more efficiently.
Previous Successes and Shared Goals
When a team accomplishes a particular project, all members share
in this victory and excitement as each contributed to the success.
Being successful, even in small activities, increases the cohesion
of team members.
Threat and Competition
A group will become more united when they encounter
challenges. Members will be willing to put their differences aside

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and work toward solving the issue at hand. For instance, if a

hostile organization wants to take control of a particular
company, the board of directors will present a united front to
prevent the acquisition from happening. Similarly, management
threats and competition are likely to unite an otherwise disarrayed
team.

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Module IV
MOTIVATION AND LEADERSHIP

MOTIVATION
The word motivation is derived from ‘motive', which means an
active form of a desire, craving or need that must be satisfied.
Motivation is the key to organizational effectiveness. The
manager in general has to get the work done through others.
These 'others' are human resources who need to be motivated to
attain organizational objectives.
Definition
According to George R. Terry, "Motivation is the desire within
an individual that stimulates him or her to action."
In the words of Robert Dublin, it is "the complex of forces starting
and keeping a person at work in an organization". Viteles defines
motivation as "an unsatisfied need which creates a state of tension
or disequilibrium, causing the individual to move in a goal
directed pattern towards restoring a state of equilibrium, by
satisfying the need."
On the basis of above definitions, the following observations can
be made regarding motivation:
• Motivation is an inner psychological force, which activates and
compels the person to behave in a particular manner.

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• The motivation process is influenced by personality traits,

learning abilities, perception and competence of an individual.
• A highly motivated employee works more efficiently and his
level of production tends to be higher than others.
• Motivation originates from the-needs and wants of an
individual. It is a tension of lacking something in his mind, which
forces him to work more efficiently.
• Motivation is also a process of stimulating and channelising the
energy of an individual for achieving set goals.
• Motivation also plays a crucial role in determining the level of
performance. Highly motivated employees get higher
satisfaction, which may lead to higher efficiency.
• Motivating force and its degree, may differ from individual to
individual depending on his personality, needs, competence and
other factors.
Features of motivation
The following are the features of motivation:
• It is an internal feeling and forces a person to action.
• It is a continuous activity.
• It varies from person to person and from time to time.
• It may be positive or negative.

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Need-based theories to motivation

Need-based theories try to answer the question, "what factor(s)
motivate people to choose certain behaviors?" Some of the widely
known need-based theories are as follows:

(a) Maslow's Hierarchy of Needs

Maslow Abraham proposed his theory in the 1940s. This theory,
popularly known as the Hierarchy of Needs assumes that people
are motivated to satisfy five levels of needs: physiological,
security, belongingness, esteem and self-actualization needs. The
following figure shows Maslow's hierarchy of needs

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Maslow suggested that the five levels of needs are arranged in

accordance with their importance, starting from the bottom of the
hierarchy. An individual is motivated first and foremost to satisfy
physiological needs. When these needs are satisfied, he is
motivated and 'moves up' the hierarchy to satisfy security needs.
This 'moving up process continues until the individual reaches the
self-actualization level.
Physiological needs represent the basic issues of survival such as
food, sex, water and air.
In organizational settings, most physiological needs are satisfied
by adequate wages and by the work environment itself, which
provides employees with rest rooms, adequate lighting,
comfortable temperatures and ventilation.
Security or safety needs refer to the requirements for a secure
physical and emotional environment. Examples include the desire
for adequate housing and clothing, the need to be free from worry
about money and job security and the desire for safe working
conditions. Security needs are satisfied for people in the work
place by job continuity, a grievance resolving system and an
adequate insurance and retirement benefit package.
Belonging or social needs are related to the, social aspect of
human life. They include the need for love and affection and the
need to be accepted by one's peers. For most people these needs
are satisfied by a combination of family and community
relationships and friendships on the job.
Managers can help ensure the 'satisfaction of these important
needs by allowing social interaction and by making employees
feel like part of a team or work group.
Esteem needs actually comprise of two different sets of needs:
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The need for a positive self-image and self-respect.

The need for recognition and respect from others.
Organizations can help address esteem needs by providing a
variety of external symbols of accomplishment such as job titles
and spacious offices. At a more fundamental level, organizations
can also help satisfy esteem needs by providing employees with
challenging job assignments that can induce a sense of
accomplishment.
At the top of the hierarchy are those needs, which Maslow defines
the self-actualization needs. These needs involve realizing one's
potential for continued: growth and individual development.
Since these needs are highly individualized and personal, self-
actualization needs are perhaps the most difficult for managers to
address.
Maslow's concept of the need hierarchy possesses a certain
intuitive logic and has been accepted universally by managers.
But research has revealed several shortcomings of the theory such
as some research has found that five levels of needs are not always
present and that the order of the levels is not always the same as
assumed by Maslow. Moreover, it is difficult for organizations to
use the need hierarchy to enhance employee motivation.
(b) ERG Theory of Motivation
Clayton Alderfer has proposed an alternative hierarchy of needs
- called the ERG Theory of Motivation. The letters E, R and G
stand for Existence, Relatedness and Growth. The following
figure shows ERG theory:

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The existence needs in this theory refers to the physiological and

security needs of Maslow.
Relatedness needs refers to belongingness and esteem needs.
Growth needs refers to both self-esteem and self-actualization
needs.
Although ERG Theory assumes that motivated behavior follows
a hierarchy in somewhat the same fashion as suggested by
Maslow, there are two important differences.
• Firstly, ERG theory suggests that more than one kind of need
might motivate a person at the same time. For example, it allows
for the possibility that people can be motivated by a desire for
money (existence); friendship (relatedness), and an opportunity
to learn new skills (growth) all at the same time.
• Secondly, ERG theory has an element of frustrations-regression
that is missing from Maslow's need hierarchy. Maslow
maintained that one heed must be satisfied before an individual

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can progress to needs at a higher level, for example, from security

needs to belongingness. This is termed as satisfaction—
progression process. Although the ERG theory includes this
process, it also suggests that if needs remain unsatisfied at some
higher level, the individual will become frustrated, regress to a
lower level and will begin to pursue low level needs again. For"
example, a workers previously motivated by money (existence
needs) is awarded a pay rise to satisfy this needs. Then he
attempts to establish more friendship to satisfy relatedness needs.
If for some reason an employee finds that it is impossible to
become better friends with others in the work place, he may
eventually become frustrated and regress to being motivated to
earn even more money. This is termed as ‘frustration-regression'
process.
The ERG theory emphasis on the following key points regarding
needs:
 Some needs may be more important than others.
 People may change their behavior after any particular set
of needs has been satisfied.
(c) The Dual-Structure Approach to Motivation (Two factor
Theory)
Another popular need-based approach to motivation is the dual-
structure approach developed by Frederick Herzberg. This is also
known as Two-factor Theory. Herzberg developed this approach
after interviewing 200 accountants and engineers in Pittsburg. He
asked them to recall such occasions when they had been
dissatisfied and less motivated. He found that entirely different
sets of factors were associated with satisfaction and
dissatisfaction. For instance, an individual who identified 'low
pay' as causing dissatisfaction did not necessarily mention 'high
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pay' as a cause of satisfaction. Instead, several other factors, such

as recognition or accomplishment, were cited as causing
satisfaction.
This finding suggests that satisfaction and dissatisfaction are at
opposite ends of a single scale. Employees would, therefore, be
satisfied, dissatisfied or somewhere in between.
Herzberg identified two sets of factors responsible for causing
either satisfaction or dissatisfaction. The factors influencing
satisfaction are called motivation factors or motivators, which are
related specifically to the job itself and the factors causing
dissatisfaction, are called hygiene factors, which are related to the
work environment in which the job is performed.
Motivators
• Achievement
• Recognition
• Advancement
• The work itself
• The possibility of personal growth
• Responsibility
Hygiene or Maintenance Factors
• Company policies
• Technical supervision
• Interpersonal relations with supervisor

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• Interpersonal relations with peers

• Interpersonal relations with subordinates
• Salary
• Job security
• Personal life
• Work conditions
• Status
Based on these findings, Herzberg recommended that managers
seeking to motivate employees should first make sure that
hygiene factors are taken care of and that employees are not
dissatisfied with pay, security and working conditions. Once a
manager has eliminated employee dissatisfaction, Hertzberg
recommends focusing on a different set of factors to increase
motivation, by improving opportunities for advancement,
recognition, advancement and growth. Specifically, he
recommends job enrichment as a means of enhancing the
availability of motivation factors.
(d) 'X' and ‘Y' theories of motivation
Douglas McGregor observed two diametrically opposing
viewpoints of managers 'about their employees; one is negative
called "Theory of X" and another is positive called "Theory of
Y".

Theory of X
Following are the assumptions of managers who believe in the
"Theory of X" regarding their employees.

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• Employees dislike work.

• Employees must be coerced, controlled or threatened to do the
work.
• Employees avoid responsibilities and seek formal direction.
• Most employees consider security of job, most important of all
other factors in the job and have very little ambition.
Theory of Y
Following are the assumptions of managers who believe in the
"Theory of Y" regarding their employees.
• Employees love work as play or rest.
• Employees are self-directed and self-controlled and committed
to the organizational objectives.
• Employees accept and seek responsibilities.
• Innovative spirit is not confined to managers alone, some
employees also possess it.
Applicability of Theories 'X' and 'Y'
Theory 'X' in its applicability, places exclusive reliance upon
external control of human behavior, while theory 'Y', relies
heavily on self-control -and self-direction.
Theory 'X' points to the traditional approach of management.
Literally, this theory of behavior is related to organizations that
lay hard and rigid standards of work-behavior. Some examples of
such organizations are organizations that break down jobs into
specialized elements; establish 'norms of production, design

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equipment to control worker's pace of work, have rigid rules and

regulations, that are sometimes very vigorously enforced.
Theory 'Y’, on the other hand, secures the commitment of
employees to organizational objectives. This motivational theory
places emphasis on satisfaction of employees. While applying
this theory, the use of authority, as an instrument of command and
control is minimal. Employees exercise self-direction and self-
control.
The concepts of 'Job' Enlargement', 'Participation' and
'Management by Objectives' are quite consistent with theory '
Y'.
McGregor supports the applicability of motivational theory 'Y',
instead of theory ‘X'.
Organization should keep in mind that once theory 'X' is
employed for organizational working, it is difficult for the
management to shift to theory ' Y', all of a sudden. However, with
systematic, judicious and slow steps, shifting in the practical
applicability of theory 'X' to theory ' Y' usually can be achieved.
(e) Mc-Cleland’s Need Theory of Motivation
David C. McClelland and his associate Atkinson have contributed
to an understanding of motivation by identifying three types of
basic motivating needs. These needs have been classified as:
1. Need for Power
2. Need for Affiliation
3. Need for Achievement :

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Need for Power

According to this theory the need for power, which might be
defined as the desire to be influential in a group and to control
one's environment is an important motivation factor. Research
suggests that people with a strong need for power, are likely to be
superior performers and occupy supervisory positions. Such types
of individuals generally look for positions of leadership, they act
effectively, are outspoken, have a stubborn character and exert
authority.

Need for Affiliation

The need for affiliation means the desire for human
companionship and acceptance. Those with a high need for
affiliation often behave the way they think other people want
them to, in an effort to maintain friendship. They prefer a job that
entails a good deal of social interaction and offers opportunities
to make friends. The principal characteristics of such peoples'
traits are as follows:
• Desire to like and be liked.
• Enjoy company and friendship.
• Prefer cooperative situation.
• Excel in group task.
• Star attraction in gathering.
• Leadership qualities.
This need is closely associated with the "social-type” of
personality, who are sociable, friendly, cooperative and

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understanding. Persons with high motivation for power and

affiliation have better chances of becoming good managers.
Need for Achievement
People with a high need for achievement, always feel ambitious
to be successful; are ever prepared to face challenging situations
and set arduous goals .for themselves. They are prone to take
calculated risks; and possess a high sense of personal
responsibility in getting jobs done. These people are concerned
with their progress, and feel inclined to put in longer hours of
work" Failures never dishearten them and they are always ready
to put in their best efforts for excellent performance.

Process-based theories to motivation

Process-based theories to motivation are concerned with how
motivation occurs. They focus on why people choose to enact
certain behavioral options to fulfill their needs and how they
evaluate their satisfaction after they have attained these goals.
Two of the most useful processbased approaches to motivation
arc expectancy theory and equity theory.

(a) Expectancy Theory of Motivation (Vroom’s theory)

Expectancy theory of motivation was developed by- Victor
Vroom. Basically, Vroom's expectancy theory views motivation
as a- process of governing choices. The expectancy theory tries
to explain how and why people choose a particular behavior over
an alternative. The theory suggests that motivation depends on
two things: how much an individual desires a particular goal and
how likely he thinks he can get it. For instance, a person is looking
for a job and reads an advertisement for a position of Assistant
Manager with a starting salary of Rs. 3 lakh per year. Even though
he might want the job, he probably does not apply because he is
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aware that there is little chance of getting it. Next he sees an

advertisement is for UD clerk for a salary of Re. 1 lakh per year.
In this case he realizes that he .can probably get the job, but still
doesn't apply simply because he doesn't want it. Then he comes
across another advertisement for a Supervisor in a big
organization with a starting salary of Rs. 2 lakh per year. He
chooses to apply for this job because he wants it and also thinks
that he has a reasonable chance of getting it.
The expectancy theory rests on four assumptions:
• The theory assumes that behavior is determined by a
combination of forces in the individual and in the environment.
• It assumes that people make decisions about their own behavior
in organizations.
• It assumes that different people have different types of needs,
desires and goals.
• It assumes that people make choices from among alternative
plans of behavior based on their perceptions of the extent to which
a given behavior will lead to desired outcomes.
The above model suggests that motivation leads to efforts and that
effort, when combined with individual ability and environmental
factors, result in performance. Performance, in turn, leads to
various outcomes—each of which has an associated value called
its 'valence'. According to this model, individuals develop some
sense of these expectations before they exhibit motivated or
nonmotivated behavior.

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Effort-to-Performance Expectancy
The effort-to-performance expectancy refers to an individual's
perception of the probability that effort will result in high
performance. When an individual believes that effort will lead
directly to high performance, expectancy is quite strong For
instance, if one feels sure that studying hard for an examination
(effort) will result in scoring high marks (performance), then his
effort-toperformance expectancy is high, that is close to 1.0.
When an individual believes that effort and performance are
unrelated, the effort-to-performance expectancy is very weak,
that is close to 0.0.
Usually we are not sure about our expectations, so they fall
somewhere between 0.0 and 1.0 with a moderate expectancy. ;
Performance-to-Outcome Expectancy
The performance-to-outcome expectancy means an individual's
perception of the probability that performance will result in a
specific outcome. For example, an individual who believes that
high performance will lead to a pay raise has a high performance-
to-outcome expectancy, approaching to 1.00. An individual who
believes that high performance may possibly lead to a pay raise
has a moderate expectancy between 1.00 and 0. And an individual
who believes that performance has no relationship to rewards has
a low performance-to-outcome expectancy that is close to 0.
Outcomes and Valences
Expectancy theory recognizes that an individual may experience
a variety of outcomes as a consequence, of behavior in an
organizational environment. A high performer, for example, may

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get big pay raises, fast promotions and praise from the boss.
However, he may also be subject to a lot of stress and incur
resentment from co-workers. Each of these outcomes has an
associated value or valence that is, an index of how much an
individual desires a particular outcome. If an individual wants an
outcome, its valence is positive. If an individual does not want an
outcome, its valence is negative. If an individual is indifferent to
an outcome, its valence is zero. It is this advantage of expectancy
theory that goes beyond the need-based approaches to motivation.
Expectancy theory maintains that when all of these conditions are
met, the individual is motivated to expand effort. The expectancy
theory also has several other important practical implications,
which managers should keep in mind. The managers can perform
the following activities in relation to this -
• Determine what outcomes employees prefer.
• Define, communicate and clarify the level of performance that
is desired.
• Establish attainable performance goals.
• Link desired outcomes to performance goal achievement.

(a-1)The Porter-Lawler Extension

Porter and Lawler have proposed an interesting extension to the
expectancy theory. The human relation lists assumed that
employee satisfaction causes good performance but research has
not supported such relationship. Porter and Lawler suggest that
there may indeed be a relationship between satisfaction and
performance but that it goes in the opposite direction, that is,
superior performance can lead to satisfaction.

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Porter-Lawler Model
First, an individual's initial effort is influenced by his perception
regarding the value of reward and the likelihood that the effort
will yield a reward. The probability that increased effort will lead
to improved performance is affected by an individual's traits,
abilities and perception of his role in an organization. The model
also distinguishes between intrinsic and extrinsic rewards.
Finally, the
Porter-Lawler model borrows from equity theory the idea that the
employee's satisfaction depends on the perceived equity of the
rewards relative to the 'effort expended and the level of
performance attained.
Implications for Managers
Expectancy theory can be useful for organizations attempting to
improve the motivation of their employees. Nadler and Lawler
suggest a series of steps for managers in applying the basic ideas
of the theory.
1. They should determine the primary outcomes that each
employee likely desires.
2. They should decide what kind and levels of performance are
needed to meet organizational goals.
3. They should ascertain that the desired levels of performance
are attainable.
4. They should ensure that desired outcomes and performance are
linked.
5. They should also analyze the complete work situation for
conflicting expectancies.
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6. They should make sure that the rewards are large enough.
7. They should make sure that the overall system is equitable for
everyone.
The expectancy theory has also its limitations. It is quite difficult
to apply, for example, application of this theory in the work place
would require to identify all the potential outcomes for each
employee, to determine all relevant expectancies and then to
balance everything somehow to maximize employee motivation.
Expectancy theory also assumes that people are rational -
therefore, they will systematically consider all the potential
outcomes and their associated expectancies before selecting a
particular behavior. However, few people actually make
decisions in such a precise and rational manner.
(b) Equity Theory
J. Stacy Adams developed equity theory of motivation. The
equity theory argues that motivations arise out of simple desire to
be treated fairly. Equity can be defined as an individual's belief
that he is being treated fairly relative to the treatment of others.
The figure shows the equity process.

A person's perception of equity develops through a four-step

process as shown below:
1. First an individual evaluates the way he is being treated by an
organization.

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2. The next step is for an individual to choose a co-worker who

seems to be in a roughly similar situation and to observe how an
organization treats him.
3. In the crucial step of equity theory an individual 'compares' the
two treatments.
4. In the fourth step he evaluate a sense of equity to see if the two
treatments seem similar or if they are different.
Adam suggests that employees make these comparisons by
focusing on input and outcome ratios. An employee's
contributions or input to an organization include time, education,
effort, experience and loyalty. Outcomes are what an individual
receives from an organization such as, pay, recognition and social
relationships. The theory suggests that people view their
outcomes and inputs as ratio and then- compare their ratio to the
ratio of someone else. This other 'person' may be someone in the
work group. The comparison may result in three types of
attitudes:
• The individual may feel equitably rewarded,
• Under-rewarded.
• Over-rewarded.
An individual will experience a feeling of equity when the two
ratios are equal. If an individual has the feeling of equity then he
should maintain the status quo. If he has a feeling of inequity then
he is likely to change the input.

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Reinforcement Based Approaches to Motivation

A final approach to the motivation process focuses on why some
behavior are maintained and changed overtime. Reinforcement-
based approaches explain the role of those rewards as they cause
behavior to change or remain the same over time. Specifically,
reinforcement theory is based on the fairly simple assumption that
behaviors that result in rewarding consequences are likely to be
repeated, whereas behavior those results in punishing
consequences are less likely to be repeated.
There arc similarities between expectancy theory and
reinforcement theory. Both consider the processes by which an
individual chooses behaviors in a particular situation. However,
the expectancy theory focuses more on behavior choices and the
latter is more concerned with the consequences of those choices.
Reinforcement Contingencies
Reinforcement contingencies are the possible outcomes that an
individual may experience as a result of his or her behaviors. The
four types of reinforcement contingencies that can affect
individuals in an organizational setting are positive
reinforcement, avoidance, punishment and extinction.
Positive Reinforcement is a method of strengthening behavior.
It is a reward or a positive outcome after a desired behavior is
performed. When a manager' observes an employee is doing a
good job and offers praise then this praise helps in positive
reinforcement of behavior. Other positive reinforces include pay,
promotions and awards.
The other reinforcement, contingency that can strengthen desired
behavior is avoidance. This occurs when an individual chooses
certain behavior in order to avoid unpleasant consequences. For
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instance, an employee may come to work on time to avoid

criticism.
Punishment is used by some managers to weaken undesired
behaviors. The logic is that the unpleasant, consequence will
reduce an undesirable behavior again, for example, punishing
with fine for coming late.
Extinction can also be used to weaken behavior especially that
has previously been rewarded. When an employee tells a vulgar
joke and the boss laughs, the laughter reinforces the behavior and
the employee may continue to tell similar jokes. By simply
ignoring this behavior and not reinforcing it, the boss can cause
the behavior to subside which eventually becomes 'extinct'.
Positive reinforcement and punishment are the most common
reinforcement contingencies practiced by organizations. Most
managers prefer a judicious use of positive reinforcement and
punishment. Avoidance and extinction are generally used only in
specialized circumstances.
New approaches to motivation in organizations
New approaches are emerging to supplement the established
models and theories of motivation. Two of the most promising
are Goal-Setting Theory and the Japanese Approach.

(a) Goal-Setting Theory

This approach to motivation has been pioneered in the USA by
Edwin Locke and his associates in 1960s and refined in 1980s.
Goal-setting theory suggests that managers and subordinates
should set goals for an individual on a regular basis, as suggested
by MBO. These goals should be moderately difficult and very
specific and of type that an employee will accept and make a

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commitment to accomplishing them. Rewards should be tied

directly to accomplished goals. When involved in goal-settings,
employees see how their effort will lead to performance, rewards
and personal satisfaction.
Salient features of this theory are as follows:
• Specific goal fixes the needs of resources and efforts.
• It increases performance.
• Difficult goals result higher performance than easy job.
• Better feedback of results leads to better performances than lack
of feedback.
• Participation of employees in goal has mixed result.
• Participation of setting goal, however, increases acceptance of
goal and involvements.
Goal setting theory has defined two factors,' which influences the
performance. These are given below:
 Goal commitment
 Self-efficiency.
The mere act of goal setting does not ensure higher levels of
motivation among employees. In fact, there seem to be three
important criteria that goals must meet if they are to influence the
behavior of organization members. They are goal specificity, goal
difficulty and goal acceptance.

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Goal Specificity
Goals must be stated in specific terms if they are to motivate
effective performance. Goals must be set in terms of measurable
criteria of work performance, i.e., number of units produced, new
sales etc. and must specify a lime period within which the goal is
to be attained. It also gives a sense of personal satisfaction and
accomplishment to workers if he is able to meet the specific goal.

Goal Difficulty/Challenge
There exists a relationship between goal difficulty and work
motivation. The more difficult- and challenging the goal is, the
higher the level of motivation and performance. However, it is
essential that goals are set at realistic levels. Goals that are very
difficult to achieve are unable to motivate since it is beyond the
capacity of the concerned individual.
Goal Acceptance
In order to influence motivation and performance, a goal must be
internalized by an individual. In other words, the person has to
feel some personal ownership of the goal and must have
commitment to achieve it.

Goal Setting in Practice

The most obvious implication of goal-setting theory is that
managers should be helping subordinates to set goals that are
specific and reasonably difficult so that subordinates accept and
internalize them as their own goals. Besides this, there are a
number of issues that arise in implementing goal setting in
practice.

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• Though specificity of goal is essential and measurability is

desirable, it should not affect in identifying meaningful and valid
objective of goal attainment.
• The manager can stimulate goal acceptance in at least three
ways:
 By involving subordinates in goal-setting process.
 By demonstrating a supportive attitude and approach
toward his subordinates.
 By assigning various rewards to the achievement of goals.
Management by Objectives (MBO) is a managerial technique for
improving motivation and performance using goal-setting
principles.
Cognitive Evaluation Theory
A researcher 'Charms' reported in 1960 that extrinsic motivation
like pay or rewards for a job, which has an intrinsic-motivation
content, which is prior to such rewards. It tends to decrease
overall level of motivation. This proposal is called cognitive
Evaluation Theory" which has been supported by a large number
of research studies conducted subsequently.
(b) Japanese Approach to Motivation
The Japanese approach to motivation has gained increasing
popularity around the world during the past few years. This
approach is rather a philosophy of management than a theory or
model. The basic tenet of the Japanese approach is that managers
and workers should perform together as partners. Since both of
them see themselves as one group, ail members are committed
and
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motivated to work in the best interests of an organization. No one

is called an employee; instead everyone is a team member, team
leader or coach and everyone owns the 'share' of an organization.
Like goal-setting meow, the Japanese approach is likely to
become more common in businesses throughout the world. By
stepping along with the above concept, Z-theory was introduced
by
William Ouchi in his book “The Z Theory”
Enhancing Motivation in Organizations
Managers trying to enhance the motivation of their employees
can, of course, draw on any of the theories described above. They
may in practice adopt specific interventions derived from one or
more theories or they may influence motivation through the
organization's reward system. The organization can enhance
motivation in following ways:
• Humanize the work environment: Respect the need to treat
each employee as an individual.
• Publicize both short and long-term organizational goals:
Encourage personal and departmental goal setting.
• Promote from within: It's great for morale and simplifies hiring
procedures.
Use incentive programs: Inducing the feeling that 'if you're
creative enough, you won't have to rely on expensive financial
bonuses.'
• Establish appropriate deadlines: Every project should have a
deadline.
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• Be liberal with praise: It's almost impossible to over praise and

easy to under praise.
• Be consistent in your own work and in your relations with
others.
• Show a personal interest in the people who work for you:
Relations are always smoother between people who know each
other on a personal basis than relations between people who
merely want something from each other.
• Admit mistakes: People will respect you for it and will be less
likely to hide their own mistakes.
• Don't whitewash unpleasant assignments: Prepare
subordinates for unpleasant assignments well in advance and
offer what support you can.

Financial and Non- Financial Motivators

Every employer tries that the persons working in his organization
should be highly motivated. To achieve the organizational goal,
certain techniques to improve the employee’s morale are there but
these techniques may not be similarly useful in all types of
organization. Motivational techniques classified into the
following categories:

MOTIVATORS

FINANCIAL NON‐FINANCIAL

 More wage and salary  Recognition

 Profit Sharing  Participation

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 Leave with pay  Status

 Medical aid and  Competition

reimbursement
 Job enrichment
 Company paid
insurance  job redesign

 Any other financial  quality circle

incentives and
assistance  Alternate work
schedule.

LEADERSHIP
Leadership is an integral part of management and plays a vital
role in managerial operations. It provides direction, guidance, and
confidence to the employees and helps in the attainment of goals
in much easier way. In business and industrial organizations,
managers play the role of leader and acquire leadership of
subordinates, their efforts towards the achievement of
organizational goals and activate the individuals of an
organization to make them work. Leadership influences behavior
of the individuals. It has an ability to attract others and potential
to make them follow the instructions. Individuals can be induced
to contribute their optimum towards the attainment of
organizational goals through effective leadership. Leadership
acquires dominance and the followers accept the directives and
control of a leader. Leadership provides direction and vision for
future to an organization.

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Definition
Leadership is the art of influencing and inspiring subordinates to
perform their duties willingly, competently and enthusiastically
for achievement of group’s objectives.
Leadership is a function of the leader, the followers and other
situational variables:
L=F (l, f, s)
According to Terry, “Leadership is the ability of influencing
people to strive willingly for mutual objectives”
According to Keith Davis, “Leadership is the process of
encouraging and helping others to work enthusiastically towards
objectives”.
Thus, leaders are people who are able to influence the behavior
of others without recourse to threats or other forms of force
towards the individuals. Leaders are the people who are accepted
by the other individuals, as a superior person to them.
Features of leadership
The features of leadership are as follows:

 Leadership is the process of influencing behavior of

individuals of an organization.
 Leadership uses non-coercive methods to direct and
coordinate the activities of the individuals of an
organization.
 Leadership directs the individuals to attain the tasks
assigned to them by following the instructions of their
leaders.
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 A leader possesses qualities to influence others.

 Leadership gives the individuals, a vision for future.

 Leadership is a group activity. Leader influences his

followers and followers also exercise influence over his
leader.
Importance of Leadership
The following points can analyze the need and importance of
leadership:
• A leader should act as a friend of the people whom he is leading.
• A leader must have the capacity to recognize the potentials of
the individuals and transform them into realities.
• A leader should have the confidence of the individuals of the
organization.
• A leader must be able to unite the people as a team and build up
team spirit.
• A leader should be able to maintain discipline among his group
and develop a sense of responsibility.
• A leader must be able to build up a high morale among the
individuals of the organization.
• A leader should motivate his people to achieve goals.
• A leader should try to raise the morale of the individuals and
should maintain ethical standards among the individuals.
• A leader should act as a link between the work groups and the
forces outside the organization.
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Difference between Leadership and Management

Leading and managing go together but some differences exist
between the two. The following are the differences between the
leadership and the management:
• Management takes rational and logical decisions while
leadership takes decision on expectations of the followers.
Leadership has an emotional appeal while management acts on
rationality.
• The management establishes relationship through a lawful
authority while leadership establishes relationship through
power.
• Managers have formal authority but the leaders have no such
authority.
• All leaders are not managers and all managers are leaders.
• Management is a process of planning, organizing, directing and
controlling the activities of others to attain the organizational
objectives. Leadership on the other hand, is a process of
influencing the behavior of the people to attain their assigned
tasks. A successful manager must possess both the managerial
and leadership qualities.
TYPES OF LEADERSHIP
Following are the main types of leadership:

Autocratic or Authoritarian
In this type of leadership, there is a complete centralization of
authority in the leader, i.e., authority is centered in the leader
himself. He has all the powers to make decisions. He uses
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coercive measures and adopts, negative method of motivation. He

wants immediate obedience of his orders and instructions. Any
negligence on the part of subordinates results in punishment.
There is no participation from the subordinates in decision
making. A leader thinks that he is the only competent person in
the organization. According to Edwin B. Filippo, there are
following three types of leaders in autocratic:
1. Hard Boiled or Strict Autocrat: Leader, under such type uses
negative influence and expects that the employees should obey
his orders immediately. Non-compliance of his orders results in
punishment. He makes all decisions and does not disclose
anything to anyone. He is quite rigid on performance.
2. Benevolent Autocrat: Benevolent autocrat leader uses positive
influences and develops effective human relations. He is known
as paternalistic leader. He praises his employees if they follow his
orders and invites them to get the solutions of the problems from
him. He feels happy in controlling all the actions of his
subordinates.
3. Manipulative Autocrat: Leader, under such type is
manipulative in nature. He creates a feeling in the minds of his
subordinates and workers that they are participating in decision-
making processes. But he makes all decisions by himself. Non-
compliance of his orders also results jn punishment.
Democratic or Participative
Democratic or Participative leadership is also known as group
centered or consultative leadership. In this type of leadership,
leaders consult their groups and consider their opinion in the
decisionmaking process. Leaders encourage discussion among
the group members on the problem under consideration and arrive
at a decision depending on their consent. Participation or
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involvement of the employees in the decision-making process is

also rewarded. Exchange of ideas among subordinates and with
the leader is given encouragement. Leaders give more freedom to
their group members, who feel that, their opinions arc honored
and they are given importance. It develops a sense of confidence
among subordinates and they derive job satisfaction. It improves
quality of decision as it is taken after due consideration of valued
opinions of the talented group members.
The demerit of this type of leadership is that it takes more time to
arrive at a decision, as a lot of time is wasted while taking the
views from the employee. It is, therefore, very time consuming.

Laissez-faire or Free Rein

In this type of leadership, there is virtual absence of direct
leadership. It is, therefore, known as "no leadership at all". There
is complete delegation of authority to subordinates so that they
can make decisions by themselves. Absence of leadership may
have both positive and negative effects.
Free rein leadership may be effective if members of the group are
highly committed to their work. The negative aspect shows that
the leader is not competent enough to lead his group effectively.
Members may feel insecure and develop frustration for lack of
decision-making authority.
Bureaucratic
This type of leadership emphasizes the rules and regulations of an
organization. The behavior of a leader is determined by the rules,
regulations and procedure to be followed under his leadership.
The leader and the subordinates both follow these rules and
regulations. Therefore, there is no difference between the

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management and the administration in this type of leadership. The

employees, themselves cannot do anything in this regard. It is the
rules that determine their performance.
Manipulative
This type of leadership manipulates the employees to attain their
assigned tasks. A manipulative leader is quite selfish and exploits
the aspirations of the employees for his gains. He knows very well
the needs and desires of the employees but he does very little to
fulfill them. Due to such attitude, he has to face the hatred of the
employees at times.
Paternalistic
The paternalistic leadership believes in the concept that the happy
employees work better and harder. It maintains that the fatherly
altitude is the right one for better relationship between the
manager and the employees. Everyone within the organization
should work together like a family.

Expert Leadership
The expert leadership emerged as a result of complex structure of
modern organizations. This type of leadership is based on the
ability, knowledge and competence of the leaders. He handles the
situation skillfully with his talent. The employees feel relieved as
they are working under a person who is expert and can handle the
situation without any problem.
In modern organizations, human resources vary in terms of skill,
knowledge and competences. They differ in quality,
determination and their attitude towards the organization. They
exhibit different behaviors as they differ in attitude and outlook

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also. The leader must understand their behavior and accordingly

can make use of the various types leaderships.
Leadership Skills
There is now recognition in both leadership theory and practice
of the importance of skills, how leaders should behave and
perform effectively. Although there are many skills, such as
cultural flexibility, communication, HRD, creativity, and self-
management of learning, the research-based skills identified by
Whetten and Cameron seem to be most valuable. Their personal
skills model, involving developing self-awareness, managing
stress and solving problems creatively; the interpersonal skills
model, involving communicating supportively, gaining power
and influence, motivating others and managing conflict, are
especially comprehensive and useful. Finally, the widely
recognized organizational behavior .techniques such as, training,
job design and leaders can also effectively use behavioral
management.
Qualities of successful leader-
Qualities required for a successful leader are:
1. Intelligence
2. Maturity
3. Sound physic
4. Self confidence
5. Objectivity
6. Empathy

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7. Foresightedness and Vision

8. Decisiveness
9. Human relation Approach.
10. Responsibility
Theories of leadership
Leadership is the process of influencing others towards the
accomplishment of goals.
Recent efforts by behaviorists have shown a trend towards
integrating the numerous theories of leadership. A number of
theories and approaches to study leadership have been developed.
There are broadly three theories of leadership.
• Trait Theory
• Behavior Theory
• Contingency Theory
(a) Trait Theory
This theory of studying leadership is taken into consideration to
analyze the personal, psychological and physical traits of strong
leaders. The assumption made in this theory was that some basic
traits or set of traits differentiates leaders from non-leaders. For
example, the leadership traits might include intelligence,
assertiveness, above average height, self-confidence, initiative
and understanding of interpersonal human relations. The
existence of these traits determines the importance of leadership.
Possession of these traits helps the individuals to gain possession

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of leadership. Since all individuals do not have these qualities,

only those who have them would be considered potential leaders.
Some of the weakness of this theory is:
• All the traits are not identical with regard to essential
characteristics of a leader.
• Some traits may not be inherited, but can only be acquired by
training.
• It does not identify the traits that are most important and that are
least important for a successful leader.
• It does not explain the leadership failures, in spite of the required
traits.
• It has been found that many traits exhibited by leaders are also
found among followers without explaining as to why followers
could not become leaders.
• It is difficult to define traits in absolute terms.
• Thus, the trait theory has been criticized for lack of
conclusiveness and predictability.
(b) Behavior Theory
The behavioral theory assumed that effective leaders behaved
differently from ineffective leaders.
It also identified the need of consistency of behavior of good
leaders. This theory can be more clearly understood with the help
of following case studies.
• The Michigan Studies: Researchers at the University of.
Michigan, led by Rensis Likert, began studying leadership in the
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late 1940s. Depending on broad discussions with both the

managers and sub-ordinates, the Michigan studies identified two
forms of leadership behavior.
They are discussed as below:
o Job-centered leadership behavior : The first was called job-
centered leadership behavior, which focuses on performances and
efficient completion of the assigned tasks. A job-centered leader
interacts with group members to explain task procedures and
oversee their work.
o Employee centered leadership behavior: The second behavior
was identified as employee centered leader behavior, which
focuses on, high performance standards to be accomplished. This
can be done by developing a cohesive work group and ensuring
that employees are satisfied with their jobs. Thus, the leader's
primary concern is the welfare of the ordinates. The Michigan
researchers thought a leader could show signs of one kind of
behavior, but not both.
• The Ohio State Studies: At about the same time, a group of
researchers at Ohio State also began studying leadership. The
Ohio State leadership studies also identified two major kinds of
leadership behaviors or styles, which are as follows:
o Initiating-structure behavior: In initiating-structure behavior,
the leader clearly defines the leader-subordinate roles so that
everyone knows what is expected. The leader also establishes
formal lines of communication and determines how tasks will be
performed.
o Consideration behavior: In consideration behavior, the leader
shows concern for subordinates feelings' and ideas. He attempts
to establish a warm, friendly and supportive.
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The most obvious difference between Michigan and Ohio State

studies is that the Ohio State researchers did not position their two
forms of leader behavior at opposite ends of a single continuum.
Rather, they assumed the behaviors to be independent variables,
which means that a leader could exhibit varying degrees of
initiating structure and consideration at the same time i.e. a
particular leader could have higher ratings on both measures, low
ratings on both or high ratings on one and low on the other.
The Ohio State researchers found that a leader’s behavior remains
consistent over a period of time, if the situation also remains
same. But the researchers could not come up with one best
combination of behavior suitable to all the situations. The
researchers used to believe that the leaders in possession of both
types of behavior are most effective. However, their studies at
International Harvester found that leaders rated highly on
initiating structure behavior have higher performing but
dissatisfied sub-ordinates, whereas leaders rated highly on
consideration structure had lower-performing sub-ordinates who
showed signs of higher satisfaction.
Most experts now agree that no single set of traits or behaviors
appears to be common to all good leaders. The universal
approaches to leadership can help managers examine their own
leadership characteristics and match them against the traits most
commonly identified with good leaders. In order to understand
the full complexity of leadership, contingency theory is to be
studied.

(c) Contingency Theory

The main assumption of contingency theory is that the behavior
of an appropriate leader varies from one situation to another. The
motive of a contingency theory is to identify key situational

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factors and to specify how they interact to determine appropriate

behavior of a leader.
The three most important and widely accepted contingency
theories of leadership are as follows:
• The LPC theory: The first contingency theory of leadership is
Fred Fielder's Least Preferred Co-worker (LPC) Model. Fielder
identified two types of leadership: task-oriented and relationship-
oriented. Fielder believes that a leader's tendency to be task-
oriented or relationship oriented remains constant. In- other
words, a leader is either task-oriented or relationship-oriented
while leading his group members. Fielder used the Least
Preferred Coworker (LPC) scale to measure the type of
leadership. A leader is asked to describe characteristics of the
person with whom he or she is least comfortable while working.
They can do this by marking in a set of sixteen scales at each end,
by a positive or negative adjective. For example, three of the
scales Fielder uses in the LPC are:
Helpful -------------------- Frustrating 8 7 6 5 4 3 2 1
Tense ------------------- Relaxed 1 2 3 4 5 6 7 8
Boring ------------------- Interesting 1 2 3 4 5 6 7 8
The leader's LPC score is then calculated by adding up the
numbers below the line checked on each scale. A high total score
is assumed to reflect a relationship orientation and a low score, a
task orientation by the leader. The LPC measure is controversial
because researchers disagree about its validity. This is because
some of the LPC measures show whether the score is an index of
behavior, personality or some other unknown factor.

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According to Fielder, the contingency factor favours the situation

from the leader's point of view. This factor is determined by
leader-member relations, task-structure and position-power,
which are discussed as below:
• Leader-member relations: A Leader-member relation refers to
the nature of relationship between the leader and his work group.
If the leader and the group enjoy mutual trust, respect, confidence
and they like one another, relations will remain good. If there is
little trust, respect or confidence and. if they do not like one
another, relations will remain bad. Good relations are assumed to
be favourable and bad relations unfavorable.
• Task-structure: Task-structure is the degree to which the
group's task is clearly defined. When the task is routine, easily
understood, and unambiguous and when the group has standard
procedures, the structure is assumed to be high. When the task is
non-routine, ambiguous, complex, with no standard procedures
and precedents, structure is assumed to be low. High structure is
more favourable for the leader and low structure is unfavorable.
If the task structure is low, the leader will have to play a major
role in guiding and directing the group's activities. If the task
structure is high, the leader will not have to pay much attention.
• Position-power: Position-power is the power vested in the
position of a leader in an organization. If the leader has the power
to assign work, administer rewards and punishment, recommend
employees for promotion or demotion, position-power is assumed
to be strong. If the leader does not have required powers, the
position-power is weak. From the leader's point of view, strong
position power is favourable and weak position power is
unfavorable.

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Fielder and his associates conducted various studies highlighting

if a situation favors the leadership and group effectiveness or not.
When the situation includes good relations, high structure and
strong power, a risk-oriented leader to lie most effective.
However, when relations are good but task structure is low and
position-power is weak, LI relationship-oriented leader is
considered to be most effective.
• A final point about LPC theory is that, Fielder argues that any
particular-type of leadership, which is measured by the LPC is
inflexible and cannot be changed. In other words a leader cannot
change his behavior to fit a particular situation. Fielder's
contingency theory has been criticized on the ground that LPC
measure lacks validity and that the assumption about the
inflexibility of the leader's behavior is unrealistic.

(d) The Path-Goal theory

The path-goal model of leadership was introduced by Martin
Evans and Robert House. Path-goal theory says that a leader can
motivate subordinates by influencing their expectations. Leaders
can motivate sub-ordinates by making clear what they have to do
to get the reward they desire. The path-goal model assumes that
leaders can change their style or behavior to meet the demands of
a particular situation. This model identifies four kinds of leader
behavior: directive, supportive, participative and achievement-
oriented. According to this model managers can adjust their
behavior to include any four kinds of leadership behavior
mentioned above. For instance, while leading a new group of sub-
ordinates, the leader may be directive in giving guidance and
instructions to them. He may also adopt supportive behavior to
encourage group cohesiveness, to look after their needs and
ensuring that they get the rewards and benefits. As the group
becomes more familiar with the task and as new problems are
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taken into consideration, the leader may use participative

behavior by which he can participate with employees in making
decisions and take their suggestions as well. Finally, the leader
may use achievement-oriented behavior to encourage continued
high performance of sub-ordinates.
Environmental characteristics are factors, which are beyond the
control of subordinates. It includes task structure, the primary
work group and the formal authority system. For instance, when
structure is high, directive leadership is less effective than when
structure is low. Sub-ordinates do not usually need their boss to
repeatedly tell them how to do a routine job. According to the
pathgoal theory, these environmental factors can create
uncertainty for employees. A leader who helps employees reduce
such uncertainty can motivate them. The following figure shows
the path goal model of leadership.

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(e) The Vroom-Yetton-Jago Theory (VYJ)

The Vroom-Yetton-Jago model was first introduced by Vroom
and Yetton in 1973 and was revised by Vroom and Jago in 1988,
this model has a much less focus than the path-goal theory. It
helps a leader to determine the extent, to which employees should
participate in the decision-making processes,
The VYJ theory argues that decision-effectiveness is best judged
by the quality of decision and by the acceptance of that decision
on the part of employees. Decision acceptance is the extents to
which employees accept and are loyal to their decisions. To

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maximize decision effectiveness; the VYJ theory suggests that

leaders adopt one of five decision-making leaderships. The
appropriate leadership depends on the situation. As summarized
in the following table, there are two autocratic types of leadership,
which are AI and All, two consultative types of leadership, which
are CI and CII and the other one is group GII.
Decision-Making Styles in the VYJ model

Decision Style Description

A1 Manager makes the decision
alone.

A11 Manager asks for information

from subordinates but makes
(he decision alone. Sub-
ordinates may or may mil be
informed about what the
situation is.

C1 Manager shares the situation

with individual subordinates
and asks for information and
evaluation. Subordinates do
not meet as a group and the
manager alone makes the
decision.

C 11 Manager and subordinates

meet as a group to discuss the
situation but the manager
makes the decision.

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G11 Manager and subordinates

meet as a group to discuss
thesituation and the group
makes the decision.

A = Autocratic; C= Consultative; G = Group

The situation is defined by a series of questions about the
characteristics or attributes of the problem under consideration.
To address the questions, the leader uses one of the four decisions.
Two of them are used when the problem affects the entire group.
For example, a decision about the facilities to be given to
employees in a new office affects the entire group and the other
two are appropriate when the decision affects a single individual
only. e.g. a new office for that individual only.
Moreover, one of each is to be used when the decision has to be
made quickly because of some urgency and the others arc to be
used when the decision can be made more slowly and the leaders
wants to use the opportunity to develop subordinates' decision-
making abilities.
The VYJ model was criticized because of its complexity.
Computer software has been developed to aid leaders in defining
the situation, answering the questions about the problem
attributes and developing a strategy for decision-making
participation.
Although the VYJ model is too new to have been thoroughly
tested, evidence so far indicates that this model can help leaders
to choose the most effective way to include the subordinates in
decision-making.

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Other contingency approaches

In addition to these three major theories, there are other
contingency models or theories developed in recent years. The
other models are as follows:
• Vertical Dyad Linkage Model: This model stresses the .fact that
leaders actually have different kinds of working relationship with
different subordinates. Each managersubordinate relationship
represents one vertical dyad. The Vertical Dyad Linkage model
suggests that leaders establish special working relationships with
some subordinates based on some combination of respect, trust
and liking. These people constitute the ‘in-group’.
Other subordinates remain in the ‘out-group’s, who receive less
of leader's time and attention. Those in the 'in-group' receive more
of the manager's time and attention and are better performers.
Research shows that people in the ‘in-group’ are more productive
and more satisfied with their work than ‘out group’ members.
• Life Cycle Model: The life cycle model suggests-that
appropriate leader behavior depends on the maturity of the
followers. In this context, maturity includes motivation,
competence and experience. The model suggests that as followers
become more mature, the leader needs to move gradually from
high to low task orientation. Simultaneously, the leader's
employeeoriented behavior should start low, increase at a
moderate rate and then decline again.
Many leaders are familiar with the life cycle theory because it is
both simple and logical.
However, it has received little scientific support from researchers.

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RECENT LEADERSHIP THEORIES

A. Leader Member Exchange Theory
B. Inspirational Leadership
1. Transformational leadership
2. Charismatic leadership
3. Authentic leadership
Some new developments on the leadership front have given
rise to the newer theories which are directed towards leader
member relations, inspiring leaders who are charismatic
authentic and transformational which are discussed below
Leader Member Exchange Theory
Popularly called the LMX theory maintains that leaders
usually form varying relationships with their followers, where
some of them become a part of their in group who enjoy more
attention and are given higher levels of authority and
responsibility than the followers who are in the out group and
do not enjoy the attention of the leader. This also determines
the citizenship behavior of the followers which is more visible
in the members of the in group than the out group.

Inspirational Leadership
Some new research has shown inclination towards
inspirational leadership, which has been identified as
Transformational Leadership, charismatic leadership and
authentic leadership which are discussed below.

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1 Transactional vs. Transformational Leaderships

According to James Burns there are two types of leaders:
transformational and transactional.
Transformational leaders are those who recognize, exploit
and satisfy the needs of followers while elevating them into
high levels of motivation and morality. Transformational
leadership elevates the goals of subordinates and inspires
them to give their best to an organization. Transformational
leadership, primarily, consists of four dimensions: charisma,
Inspirational motivation individualized consideration and
intellectual stimulation.

 Charisma or individualized influence: Provides

vision and sense of mission, instills pride, gains
respect trust.

 Inspirational motivation: Communicates high

expectations, uses symbols to focus efforts, and
expresses important purposes in simple ways.

 Intellectual Stimulations: Promotes intelligence,

rationality, and careful problem solving.

 Individualized consideration: Gives personal

attention, treats each employee individually, coaches,
and advises..
In Transactional leadership, the leader exercises influence
during daily leader subordinate exchanges without any
special emotional inputs or considerations. The leader offers
rewards to subordinates who achieve the tasks assigned to
them (or, for showing appropriate behavior). His focus is on
achieving results in a practical way, clarifying things to
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subordinates. He is hardworking, tolerant and fair minded. He

generally takes pride in keeping things running smoothly and
efficiently. He often emphasizes the importance of
impersonal aspects of performance such as plans, schedules
and budgets. He has a sense of commitment to the
organization and conforms to organizational norms and
values.
2. Charismatic leadership
This leadership style is visible when the leader displays
exceptional personal abilities, knowledge skills and certain
behaviors which gives him an edge over others , and is able to
influence the decisions of the groups or individual by the sheer
virtue of the combined effect of all the personality traits which
distinguishes leaders’ from non leaders which is called
charismatic leadership.
The Key Characteristics of Charismatic leaders
1. Self Confidence- They have complete confidence in their
judgment and ability.
2. A vision- This is an idealized goal that proposes a future better
than the status quo. The greater the disparity between idealized
goal and the status quo, the more likely that followers will
attribute extraordinary vision to the leader.
3. Ability to articulate the vision- They are able to clarify and
state the vision in terms that are understandable to others. This
articulation demonstrates an understanding of the followers’
needs and, hence acts as a motivating force.
4. Strong convictions about vision- Charismatic leaders are
perceived as being strongly committed, and willing to take on

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high personal risk, incur high costs, and engage in self-sacrifice

to achieve their vision.
5. Behavior that is out of the ordinary- Those with charisma
engage in behavior that is perceived as being novel,
unconventional, and counter to norms. When successful, these
behaviors evoke surprise and admiration in followers.
6. Perceived as being a change agent- Charismatic leaders are
perceived as agents of radical change rather than as caretakers of
the status quo.
7. Environmental sensitivity- These leaders are able to make
realistic assessments of the environmental constraints and
resources needed to bring about change.
3Authentic/ ethical and moral leadership
This type of leadership has been much in demand these days
owing to the fall in the ethical standards of the top leadership as
witnessed in the various scandals rocking the business world. The
Volkswagen scandal being the latest to hit the corporate world.
There is an increasing emphasis on the top leadership who hold
high moral values and ethics and can lead the organizations
without falling prey to the greed of making fast bucks. The ability
of the leaders to act in the right way as differentiated from the
wrong is called moral quotient.MQ determines the ability to
appreciate and understand the difference between Knowing Vs
Doing the right thing. It enables you to distinguish the RIGHT
from the WRONG. Nevertheless moral competency is making its
presence felt on the corporate landscape owing to a powerful
correlation between strong moral values and business success.
Research also shows that, it is by no accident that the most
successful leaders attribute their accomplishments to a

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combination of business savvy practices and strict adherence to

moral code.
The sagas of some of the iconic and legendary organizations like
The Enron’s, The Mitsubishis; The Lucent Technologies was still
fresh, when the greed of the Lehman brothers and our very own
Satyam shook the business world. AND one fine morning, our
cricket crazy nation was aghast at the match fixing scandal at the
IPL which made everybody raise their eyebrows in astonishment
and being betrayed by the few greedy people who took away the
sanctity of the game in a few seconds. These are examples of
some of the great organizations whose Global identities have been
brought to naught, thanks to the fiasco of moral leadership at the
top. This bears ample testimony to the freewheeling of the moral
compass of its leaders which saw these organizations crashing at
the stock markets.

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Module V
STRESS MANAGEMENT
Stress is the general term applied to the pressures people feel in
life. The presence of stress at work is almost inevitable in many
jobs. The nature of stress has been studied by scholars in a wide
range of academic disciplines. Physicians, psychiatrists, and
researchers in management have all studied its causes and its
symptoms, and have defined the term in a variety of different
ways.
Stress is defined as "the reactions of individuals to new or
threatening factors in their work environments”.
Stress can be either positive or negative. Some new work
situations can bring us positive challenges and excitement. For
example, promotions to new jobs present employees with positive
stress. Employees may feel anxious about their new work
assignments; they also anticipate them eagerly and look forward
to the additional challenges, rewards, and excitement. In these
cases, the new and uncertain job situations create positive stress.
The positive stress is also called the Eustress. However, there are
certain other types of work that are very threatening and
anxietyarousing.
For example, depression in the economy can create negative
stress for sales personnel, because they will be much more
anxious about making sales commissions and sales quotas.
For every individual there is an optimum level of stress under
which he or she may perform to full capacity. If the stress
experienced is below this optimum level, then the individual gets
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bored, the motivational level to work reaches a low, point, and

apathy sets in. If one operates in a very low stress environment
and constantly experiences boredom, the person is likely to
psychologically or physically withdraw from work.
Psychological withdrawal will result in careless mistakes being
frequently made, forgetting to do things, and thinking of things
other than work during work hours. Physical withdrawal will
manifest itself in increased rates of tardiness and absenteeism,
which may ultimately lead to turnover. Though the optimum
stress level is different form different individuals, each individual
can sense and determine how much stress is functional for an
individual to operate in a productive manner.

Sources of stress
Stress is a reality of our everyday life. There are both positive and
negative stresses that come from our work and non-work lives.
As pointed out by Near. Rice, and Hunt (1980) and Sckaran
(1986), among others, the work and non-work domains of one's
life are closely interrelated. The stresses and strains experienced
in one domain are carried over to the other. Thus, if one
experiences stress at work, that stress will be carried over to the
home.
One major source of job stress is the job itself. The way the job is
designed, the amount of time pressure an individual faces and the
amount of expectations others have of a person at work can all
lead to job stress. Interpersonal relationships are a second source
of job stress. How much contact an individual has with coworkers
and managers, how much time he or she deals with clients or
consumers, and how pleasant those interactions are all influences
of how much stress an individual experiences at work. Third
source is problems in personal lives, which can spill over into the

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work environment, adding further tension to an already stressful

work situation.
Sources of job stress
• Job Characteristics

 Role ambiguity

 Role conflict

 Role overload

 Ethical dilemmas
• Interpersonal Relationships

 Amount of contact with others

 Dealing with people in other departments

 Organizational climate
• Organizational Factors

 Task demand

 Role demand

 Satisfaction

 Organisation structure

 Organisation leadership

 Organisation life stage

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• Personal Factors

 Career concerns

 Geographical mobility

 Rate of life change

Job Characteristics
A major source of job stress is a person's role in the organization.
A role is simply the set of expectations that other people in the
organization have for an individual, For example, supervisors,
coworkers, customers and suppliers expect an employee to
behave in certain predictable ways. The expectations others have
of an employee arc sometimes unclear, in conflict, or too high for
the employee to meet within the time allotted, and he or she
experiences stress.
• Role Ambiguity: When there is a lot of uncertainty surrounding
job definitions or job expectations, people experience role
ambiguity. With the recent increase in mergers and acquisitions
among major organizations, more and more employees arc
experiencing job stress as a result of role ambiguity. Role
ambiguity is anxiety arousing among employees that leads to job
stress.
• Role Conflict: Often employees discover that different groups
of people in an organization have widely varying expectations of
them, and that they cannot meet all those expectations.
This inconsistency of expectations associated with a role is called
role conflict, which results in stress.

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• Role Overload: Role overload is a situation in which employees

feel they are being asked to do more than time or ability permits.
Working under time pressure is especially stressful.
• Role Under load: Role Under load is the condition in which
employees have too little work to do or too little variety -in their
work. For example, salespeople in a store with no customer,
standing around all day with nothing to do, could be said to
experience role under load. Ironically, role under load leads to
low self-esteem, increased frequency of nervous symptoms and
increased health problems.
• Ethical Dilemmas: Ethical dilemmas such as whether or not one
should report the observed unethical behaviors of another person
can cause extreme levels of stress in individuals. This will be
especially true for those who have strong moral values of right
and wrong and a deep sense of personal and corporate social
responsibility. Tensions arise because one might have to contend
against one's own colleagues who might be close friends, and may
fear of reprisal and other undesirable consequences.

Interpersonal Relationships
Another major source of stress in organization is poor
interpersonal relationships with supervisors, subordinates,
coworkers. or clients. When interpersonal relationships at work
are unpleasant, employees develop a generalized anxiety, a
diffuse feeling of dread about upcoming meetings and
interactions. Three aspects of interpersonal relationships at work,
which have a negative impact on job stress, are as follows:
• Amount of contact with others: Jobs vary in terms of how much
interpersonal contact is built into them. Too much prolonged
contact with other people can cause stress.

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• Amount of contact with people in other departments: Having

contacts with people outside one's own department creates a
special sort of stress. People in other departments do not always
have an adequate understanding of jobs outside their own areas,
which can cause stress.
• Organizational climate: The overall psychological climate of
the organization can create stress. When day-to-day life in an
organization is marked by unfriendly, distant, or hostile
exchanges, employees are continually tense and this causes stress.

Organizational Factors
Following are the organizational factors that cause stress in
individuals:
• Work environment factors such as noise, heal, poor lighting,
radiation and smoke are stressinducing agents.
• Insufficient resources such as time, budget, raw materials, space
or manpower also induce stress in the work environment. When
one has to produce and perform with inadequate resources on a
long-term basis, this naturally imposes stresses and strains on the
individuals who are responsible for getting the job done.
• Structural factors in the organizational setting such as staff rules
and' regulations and reward systems, may cause stress.
• Lack of career promotion in organizations may be sometime
cause stress.
• Environmental factors of stress include sudden and
unanticipated changes in the marketplace, technology, the
financial market and so on.

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Personal Factors
Employees’ personal lives have a marked effect on their lives at
work. If things are going well personally, they are more likely to
be upbeat and optimistic. They have more energy and patience for
dealing with problems at work. On the other hand, if employees
are having some personal problems, they might be more tense or
distracted when they go to work.
Factors that influence how much stress people bring from their
persona! Lives to the work setting are as follows:
• Career Concerns: One major career concern that can cause
stress is lack of job security. A second career concern that can
cause employees stress is status incongruity, i.e., having jobs with
less status, power and prestige than they think they deserve.
• Geographical Mobility: Geographical moves create stress
because they disrupt the routines of daily life. When geographical
moves arc undertaken as part of a job transfer, the moves can be
even more stressful. The transferred employees are likely to feel
out of control at work, too, and experience their new work
environments as unpredictable.
Effects or consequences of job stress
Negative stress has unpleasant consequences for them, their
families and for the organizations they serve.
Effects on the Individual
The impacts of distress on individuals are of following types:
• The subjective or intrapersonal effects of stress are feelings of
anxiety, boredom, apathy, nervousness, depression, fatigue, and

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anger. Sometimes experiencing the stress may cause aggressive

behaviors on the part of the individual.
• The cognitive effects include poor concentration, short attention
span, mental blocks and inability to make decisions.
• The physiological effects can be seen in increased heart and
pulse rate, high blood pressure, dryness of throat, and excessive
sweating.
• The behavioral effects arc manifest in such things as accident
proneness, drinking, excessive eating, smoking, impulsive
behaviors, depression, and withdrawal behaviors.
• The manifest health effects could be stomach disorders, asthma,
eczema, and other psychosomatic disorders. In addition, the
mental health, i.e. the ability lo function effectively in one's daily
life, will also decline as excessive stress is experienced.

Consequences for the Family

Negative stress, which is handled by individuals in dysfunctional
ways, such as drinking or withdrawal behaviors, will have an
adverse effect on their home life. Spouse abuse, child abuse,
alienation from family members, and even divorce could result
from dysfunctional coping mechanisms.
Consequences to Organizations
The adverse consequences on an organization include low
performance and productivity, high rates of absenteeism and poor
decision-making. It also leads to lost of customers because of
poor worker attitudes, increased alienation of the worker from the
job, and even destructive and aggressive behaviors resulting in
strikes and sabotage. The stresses experienced by employees who

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take on critical roles and are responsible for safety can sometimes
be detrimental to the public. For instance, the stresses experienced
by a train driver or railway guard, or that of an airline pilot,
navigator, or air traffic controller may result in serious accidents.
Needless to say that the costs of employee stress to the
organization in terms of lost profits, poor image and loss of future
business are enormous.
Methods of managing stress
Stress is a factor that everybody has to contend with on a daily
basis both in the work and non-work spheres of life. Since the
body has only a limited capacity to respond to stress, it is
important for individuals to optimally manage their stress level to
operate as fully functioning human beings.
There are several ways in which stress can be handled so that the
dysfunctional consequences of stress can be reduced. Some of
them are:
Role Analysis Technique (RAT)
The Role Analysis Technique helps both the manager and the
employee to analyze the requirements and expectations from the
job. Breaking-down the job into various components clarifies the
role of the job for the entire system. This also helps to eliminate
reduction of work and thus lowering down the stress level.

Job Relocation
Job relocation assistance is offered to employees who are
transferred, by finding alternative employment for the spouses of
the transferred employees and getting admissions in schools for
their children in the new place. These arrangements help to reduce
the anxiety and stress for the moving family.

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Recreational Program
Providing recreational facilities, arranging group meditation
programs, help to reduce the stress levels of the employees.

Employee Assistance Program

Another widely used strategy is the employee assistance
Programs, which offer a variety of assistance to employees. These
include counseling employees who seek assistance on how to deal
with alcohol and drug abuse, handling conflicts at the work place,
dealing with marital and other family problems.
Career Counseling
Career Counseling helps the employee to obtain professional
advice regarding career that would help the individual to achieve
personal goals. It also makes the employees aware of what
additional educational qualifications or specialized technical
training, if any, (hat they should acquire. By becoming
knowledgeable about the possible avenues for advancement, the
employees who consider their careers to be important can reduce
their stress levels by becoming more realistic about their options
and can start preparing themselves for it.

Time Management
Another way of coping with stress is to manage time more
effectively. People can learn to get better organized so that they
can do their work more efficiently.
Delegation
Another way of coping with job stress is to delegate some
responsibilities to others. Delegation can directly decrease
workload upon the manager and helps to reduce the stress. !
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More Information and Help

Some new employees have to spend more time on a job than
necessary because they are not sure what they are doing. So it is
necessary that some help should be provided before doing the
work that would lead to much efficient, effective work. It would
also reduce anxiety and stress among the employees.

Health Maintenance
Probably the most frequently used organizational stress
management program is health maintenance. Many companies
invest large sum of money in gym and sport facilities for
maintaining the health of the employees.
Supervisor Training
Another type of stress management Program that organizations
are experimenting with is supervisor training. The emphasis on
supervisory training Program is how to prevent job stress.
Managers are trained to give better performance appraisals, to
listen to employees’ problems more effectively, and to
communicate job assignments and instructions more clearly.
Individual Stress Reduction Workshops
Some organizations have also sponsored individual stress
reduction workshops for their employees. These programs
include biofeedback, meditation to career counseling, time
management and interpersonal skills workshops. In lectures and
seminars, participants are given a basic understanding of the
causes of stress and its consequences. Then, participants are given
materials to help them identify the major sources of stress in their

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own lives, and some strategies for dealing with that stress more
effectively.
ORGANISATIONAL CONFLICT
Conflict arises from difference of opinion between the group
members while attaining the organizational goals. An
organization is an interlocking network of groups, departments,
sections or work teams. In organizations everywhere, conflict
among groups of different interests is unavoidable. According to
one survey, managers spend an estimated 20 percent of their time
dealing with group conflicts. The success of an organization
depends upon the harmonious relations among all independent
groups. Managers may either directly resolve the conflicts or they
may act as mediators between two or more employees. In either
case, knowledge and understanding of conflict and the methods
of resolving it are important.
Inter-group conflicts result from the ways in which organizations
co-ordinate the work of different groups and distribute rewards
among those groups.
Types of conflict
The levels of group conflict are as follows:
• Personal conflict: Are the conflicts that arise among employees,
individuals because of their competitive roles.
• Group conflict: Are the conflicts arising within two or more
groups due to difference in their attitudes and behavior.
• Infra-organizational conflict: Are the conflict arising between
levels of an organization, which are of two types. Vertical conflict

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arises between higher and lower level of management. Horizontal

conflict arises among the employees at same level.
Reasons for conflict
There are many reasons for conflicts among groups and its
members. Some of them are related to limited resources,
communication problems, differences in interests and goals,
different perceptions, attitudes and lack of clarity about
responsibilities. The reasons for group conflicts are as follows:
• Communication problems: Groups often become very involved
with their own areas of responsibility. They tend to develop their
own unique vocabulary. Paying attention to an area of
responsibility is a worthy Endeavour, but it can result in
communication problems.
The receiver of information should be considered when a group
communicates an idea, a proposal, or a decision. Misinformed
receivers often become irritated and then hostile.
• Incompatible goals: Inter-group conflict arises because of goal
incompatibility. In other words, goal attainment by one group
may reduce the level of goal attainment by other groups. This may
be due to horizontal differentiation and task specialization. The
conflict between production and marketing departments, line and
staff departments, union and management are few examples of
inter-group conflicts that arise because of incompatibility of
goals.
• Task interdependence: Task interdependence means to what
extent a work, group relies on other organizational groups to
complete its tasks. In simple words, it refers to the dependence of
one group on another for resources or information. It can be said

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in general that as interdependence increases, the potential for

conflict increases.
According to J. Thompson, there are three types of
interdependence among groups, which are as follows:
o Pooled interdependence: It arises when groups have little
interaction with each other but are affected by each other's
activities. For example, a branch in Delhi does not need to interact
with a branch in Chennai. The only linkage between the two is
that they share financial resources from a common pool and the
success of each branch contributes to the success of the
organization.
o Sequential task interdependence: It arises when one group is
unable to commence its work until the work of other group gets
completed. In sequential task interdependence, the output of one
group becomes the input of another group. In such situations, the
potential for conflict is greater. Life and staff groups often have
conflicts resulting from this type of interdependence.
o Reciprocal interdependence: It arises between the groups,
which depend on each other for their respective task such as
production department and quality department. The production
department provides the goods to the marketing department to sell
and the marketing department prepares the orders and estimates
on the basis of the volume produced by the production
department. Inter-group conflict arises from reciprocal task
interdependence over difference in performance expectations.
Each group is dissatisfied will the quality or quantity of work
received; from the other group.
o Task ambiguity: The lack of clarity over job responsibilities is
called task ambiguity and it frequently leads to aggression
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between groups. Inter-group conflict also arises when it is not

clear which group is responsible for certain activities. Task
ambiguity often arises where the organization is growing quickly
or the organization's environment is changing rapidly. A good
example of task ambiguity is inter-group conflict arising in the
recruitment of new employees. It may be the responsibility of
either the personnel department or any of the functional
departments such as marketing, finance. The confusion may also
arise regarding who has the final authority to execute the final
decisions.
o Resource sharing: The relation between two groups can be
affected by the degree to which they make use of a common pool
of resources and the degree to which this common pool of
resources is adequate to meet the demands of both the groups.
Thus, conflict of this nature; arises because of the differences
between aggregate demand of a group and available resources to
meet them. Each party of the conflict competes with each other to
get a larger share. The conflict between management and the
labor union-is the best example. Such conflicts take place in the
quantum of wages, amenities, working conditions and other
related matters
o Difference in work orientation: The ways in which employees
do their work and deal with others vary widely with the functional
areas of an organization. First, functional groups differ in their
time perspectives. For example, R&D scientists have a longer-
range of goals than manufacturing groups. The range of work of
manufacturing group is evaluated on how quickly it can
manufacture high-quality products while the range of R&D
scientists can be evaluated on the basis of product development
and testing after a long period of time. Second, the goals of
different functional groups vary to a large extent. The goals of
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manufacturing groups are more specific and clear-cut than the

goals of R&D groups.
o Conflicting reward systems: Sometimes the ways in which
reward systems in organizations arc designed create a situation in
which one group can only.
Accomplish its goal at the expense of other groups. For example,
staff departments may be rewarded for cutting costs and
personnel while line departments are rewarded for increasing the
amount of products sold or services provided. To increase the
amount of products sold, the line group may have to depend even
more heavily on staff groups such as advertising. However the
staff groups are being rewarded for cutting costs and personnel
provided the types of services asked for by line groups can
prevent them from meeting their own goals. Conflicting reward
systems inevitably result in poor inter-group relations.
o Different perceptions and attitudes: The attitudes, values and
perceptions of members of various groups towards each other can
be a cause and a consequence of the nature of their relationship.
If the group relations begin with the attitudes of distrust,
competitiveness, secrecy and closed communications, there is a
possibility of conflicts, disagreements in their views and among
themselves. This can affect the success of a group to accomplish
their work in an effective manner.
Conflict Resolution
Methods to Solve Inter-group Conflict Indirectly
The various methods to solve inter-group conflicts indirectly are
as follows:

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• Avoidance: It is an indirect method often used by the managers.

It includes avoidance of direct approaches on the part of managers
to solve among groups.
• Encouragement: This is another indirect method to solve the
group conflicts. It includes encouragement on the part of
managers to the groups so that they will be able to meet and
discuss their differences.
• Bargaining: This is the indirect method, in which the groups
agree as to what each of them will get and give others regarding
their work. This makes the accomplishment of the assigned task
much easier. For example, one group may agree to give the other,
a quick turnaround time on the repairs of needed equipment only
if the Second group agrees to bring complaints about the quality
of repairs to it before going to management.
• Persuasion: This is the indirect method, in which the groups
find the areas of common interests among themselves. The groups
try to find out those interests levels where they have the same say.
Afterwards', the groups try to show how important it is to each of
them in attaining organizational goals.
Methods to Solve Inter-Group Conflict
The various methods to solve inter-group conflicts directly are as
follows:
• Ignoring the conflict: This is a direct method used by (he
managers to solve inter-group conflicts. Ignoring the conflict is
characterized by the absence of behavior wherein the members of
the groups avoids dealing with the dysfunctional aspects of the
conflict. In this, a, group simply refuses to attack the other group.
But the disadvantage of this method is that it ignores the causes

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of conflicts and as a result, the conflict situation frequently

continues or gets worse over time.
• Domination by the management: This method of solving inter-
group conflicts emphasizes on improving the inter-group
relations. To improve the inter-group relations, greater
integration or collaboration among groups is needed.
Management can use domination to minimize the conflicts by
exercising its authority and power over the groups and their
members.
• Removing the key figures in the conflict: This is another direct
method to solve the intergroup conflicts. If a conflict arises
because of personality differences between two individuals,
removing them is a possible solution. It includes the removal of
the key figures in the conflict. The key figures that are to be
removed may be leaders of the groups and removing them could
lead to greater conflict. It is also difficult to pinpoint accurately
the individuals who are the root-cause of conflicts.
• Problem solving: Management can also establish a task force
with representatives from groups in conflict to work on problems.
The task force develops the ideas 'and procedures for improving
group interaction and thereby attempt to solve the conflicts
arising between the groups.
o Appealing to super-ordinate goals. The final method to
minimize the conflicts is to find super-ordinate goals. For
example, a wide profit-sharing plan of a company may encourage
groups to work together. If the profits of a company are
distributed among employees at the end of the year, the conflicts
among groups can reduce. The super ordinate goals are as
follows: The assignment and co-ordination of work among

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groups should be clarified so that the daily disputes over minor

issues can be avoided.
o Managers should monitor reward systems to eliminate any win-
lose conflicts among groups.
o The use of co-operative approaches among groups in
organizations often leads to more positive results than does the
use of competitive approaches.
o Managers can establish rules and standard procedures to
regulate conflict in more constructive and effective ways.
ORGANISATIONAL DEVELOPMENT
Organizational Development (OD) is the most significant
innovative and integrated process of achieving organizational
efficiency and effectiveness. The term Organizational
Development (OD) refers to a broad range of behavioral science
based strategies used to diagnose the need for change in
organizations and to implement changes when necessary. OD can
be defined as “a technique for bringing change in the entire
organization, rather man focusing attention on individuals to
bring change easily in the entire organization.”

Nature of OD
OD is a general strategy or approach to organizational change mat
is employed to analyze and diagnose the sources of organizational
problems and to develop and implement action plans for their
solution. According to Bennis, OD has the following
characteristics;
• It is an educational strategy for bringing planned change.
• It relates to real problems of an organization.
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• Laboratory training methods based on experienced behavior are

primarily used to bring change.
• Change agent applying OD technique for change is external to
the forms of consultants.
• There is a close working relationship between change agents and
the people who are being changed. The relationships involve
mutual trust, joint goals, means, and mutual influence.
• The change agents share social philosophy about human value.
They are humanists seeking to get a humanistic philosophy in
organization.
Objectives of OD
1. To increase interpersonal trust among employees
2. To increase employees level of satisfaction and commitment
3. To increase openness of communication
4. To confront problems instead of sweeping the under the rug
5. To effectively manage the conflict
6. To increase co-operation and collaboration among the
employees
7. To improve organization’s problem solving and self renewal
capabilities.

Benefits of OD programmes
1. It tries to create an environment in which exciting and
challenging work can be found

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2. It treats each human being as a person with a complex set of

needs, all of which are important in his work and life.
3. It gives each member of the organization opportunities to
develop to his full potential.
4. It seeks to make the organization more effective in meeting all
its goal
5. It gives people in an organization the chance to influence how
they relate to work, the organization and the work environment.
Limitations of the OD programmes
1. OD requires use of certain persons who can take initiative to
bring about change.
Complacement people cannot be helpful in implementing OD
2. OD cannot be applied with giving the consideration to the
circumstances existing within the organization. The local
circumstances may pose a problem in adopting to change.
3. OD is heavily based on the behavioral science concepts.
Behavioral sciences have many limitations which are applicable
to OD also.
4. It ignores circumstances and their influence in organization.

Organizational Development Process

The procedure of organizational development programme
involves the following steps

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1. Initial consultation: the first step in OD process is to approach

the organizational development consultant to determine the type
of OD programme to be developed.

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Consultant may internal staff or external agency. For the purpose

of OD, they will conduct interview with needed parties.
2. Data collection: the consultant meets various groups away
from the workplace in order to collect data to determine
organizational climate and behavioral problem faced by the
organization.
3. Data feedback and confrontation: data collected are made
known to work groups concerned and are asked to review the data
collected and to provide required feedback
4. Action Planning and Problem solving: data are used by the
group to suggest the specific recommendations for change. They
discuss the problem faced by the organization and sketch needed
plans.
5. Team building: consultant encourages team building through
organizing meeting with managers and their immediate
subordinates and so they can improve the functioning of
workgroup.
6. Inter group development: with the development of natural
team (managers and their immediate subordinates), the larger
group comprising several teams may be developed.
In this way it will include the whole organization.
7. Appraisal and follow up: the consultant further helps the
organization in making an appraisal of the programme and find
out deficiency, if any. He can develop additional programmes in
areas where the original programme if felt ineffective and the
result are poor. The consultant advises follow up for better
understanding.

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OD offers some very attractive methodologies and philosophies

to practicing managers and academicians. William Halal is right
when he says "OD in future includes any method for modifying
the behavior in the organization, hereby, encompassing the entire
spectrum of applied behavioral science". There also have been
experiences of failure in OD but these are being recorded and
collected to be reviewed. In general, OD shows a promising
future, since there are no rigid sets of procedures in OD work and
different strategies have to be evolved for different types of
organizations.
ORGANISATIONAL CHANGE
Change simply refers to alteration in the existing conditions of an
organization. Even in most stable organizations change is
necessary to maintain stability. The economic and social
environment is so dynamic that without adapting to such change
even the most successful organizations cannot survive in the
changed environment. Therefore, management must
continuously monitor the outside environment and be sufficiently
innovative and creative to implement these changes effectively.
Organizations encounter different forces for change. These forces
come from external and internal sources of the organization.
External forces
External forces for change originate outside an organization.
There are four key external forces for change:
Demographic Characteristics: These include age, education,
skill level and gender of employees. Organizations need to
effectively manage these characteristics in order to receive
maximum contribution and commitment from their employees.

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Technological Advancements: Both manufacturing and service

organizations are increasingly using technology as a means to
improve productivity and market competitiveness.
Market Changes: The emergence of a global economy is forcing
Indian organizations to change the way they do business.
Organizations are entering into new partnerships with their
suppliers in order to deliver higher quality products at lower
prices.
Social and Political Pressures: These forces are created by social
and political events. Personal values affect employees’ needs,
priorities and motivation. Therefore, managers need to adjust
their managerial style according to the changing employee values.
Political events also create substantial change in an organization.
Although it is difficult for organizations to predict changes in
political forces, many organizations hire lobbyists and
consultants to help them detect and respond to social and political
changes.
Internal forces
Internal forces for change come from inside the organization.
This may come from both human resource problems and
managerial behavior.
Human Resource Problems
These problems stem from em ployee perceptions about their
work environment and conflict between an employee and
organization needs. Organizations might respond to these
problems by using the various approaches to job design by
implementing realistic job previews and by reducing employees'
role conflict, stress, work overload and ambiguity.

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Managerial Behaviour
Excessive interpersonal conflict between managers and their
subordinates is a sign of implementing an immediate change.
Inappropriate leader behavior such as inadequate direction and
support are the cause of conflict between managers and their
subordinates.

Nature of Change
Organizations introduce changes through people. Unless the
people arc willing to accept the need and responsibility for
organizational change, intended changes can never be translated
into reality.
In addition, individuals have to learn to adapt their attitudes and
behavioral patterns to constantly changing environments.
Management of change involves both individual and
organizational change. Individual change is behavioral change,
which is determined by individual characteristics of members
such as their knowledge, attitudes, beliefs, needs, expectations
and skills. It is possible to bring about a total change in an
organization by changing behaviors of individual members
through participative and educative strategies. Although, the
degree of difficulty involved in the change and the time taken to
bring about the change will depend on the target of change.
The attitudes towards change are largely dependent on the nature
of the situation and the manner in .which changes are initiated and
executed.
Changing individual behavior is more time consuming and a
difficult task. The linkage between attitude and behavior is not
direct and therefore changing behavior is more difficult than

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changing attitudes. One's attitude does not necessarily get

reflected in one's behavior. For example, we know that honesty is
the best policy and we have favorable altitudes towards people-
who are honest but in certain situations, we may still act in a less
honest way.
Bringing total behavioral change in all the groups and members
of an organization involves difficult long-range effort. More often
than not, it is a slow painful process to usher a total cultural
change in an organization.
It is possible to change total organization without focusing at the
level of individual's change of knowledge, attitude and behavior.
Modification in the organization's structures, policies, procedures
and techniques leads to total organizational change. These types
of changes alter prescribed relationships and roles assigned to
members and eventually modify the individual members’
behavior and attitudes. As these two kinds of changes are
interdependent, the complexity of managing change increases
manifold.

Approaches to organizational change

As organizational change is a complex process, therefore
managers must approach it systematically and logically. Some
organizational changes are planned whereas other changes are
reactive.
Planned change is designed and implemented by an organization
in an orderly and timely fashion in the anticipation of future
change. Reactive change results from a reaction of an
organization to unexpected events. In contrast to planned change,
it is a piece-meal response to circumstances as they develop.
External forces that the organization has failed to anticipate or
interpret always bring about reactive change. Since reactive
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change may have to be carried out hastily, it increases the

likelihood of a poorly conceived and poorly executed Program.
Planned change is always preferable to reactive change.
Managers who sit back and respond to change only when they can
no longer avoid it are likely to waste a lot of time and money
trying to patch together a last-minute solution. The more effective
approach is to anticipate the significant forces for change working
in an organization and plan ways to address them. To accomplish
this, managers must understand the steps needed for effective
change.

A comprehensive model of change

The comprehensive model of change shown in the following
figure shows seven steps that can lead to effective change. This
model is useful for both planned and reactive change.
The seven steps of comprehensive model of change are as
follows:

Recognize need for change

The first step in this model is recognizing need for change. For
marketing managers who anticipate needed. Change, recognition
is likely to come much earlier, as a result of marketing forecasts
indicating new market potential, expert indications about
impending socio-economic change or a perceived opportunity to
capitalize on a key technological breakthrough. These managers
tend to ‘initiate change because they expect it to be necessary in
the near future in any case’.

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Establish goals for change

The manager must then set goals for the proposed change. It is
important for the manager to specify goals that the change is
supposed to accomplish. The goals can be set to maintain or
increase the market standing, to enter new markets, to restore
employee morale, to reduce turnover, to settle a strike and to
identify good investment opportunities.

Diagnose relevant variables

An important next step is diagnosing organizational variables that
have brought about the need for change. Turnover, for example,
may be caused by a variety of factors such as low pay, poor
working conditions, poor supervision, better alternatives in the
job market or employee job dissatisfaction etc. Thus, if turnover
is the recognized stimulus for change, the manager must
understand what has caused it in a particular situation in order to
make the right changes. To carry out this diagnosis, the manager
may discuss the situation with employees and other managers.
Select change intervention
After the manager has developed an understanding of the problem
and its causes then he must select a change intervention that will
accomplish the intended goal. An intervention is a specific
change induced in an organization with the intention of solving a
particular problem or accomplishing a specific objective. For
example, if turnover is caused by low pay, then a new reward
system is required and if the cause is poor supervision then
interpersonal skills and training for supervisors is required.

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Plan implementation of change

The manager must then carefully plan the implementation of
change. Planning the implementation of change involves
consideration of the cost of the change, how the change will affect
other areas of the organization and the degree to which employees
should participate in bringing about the change. Hastily
implemented change can result in more harm than benefit. For
example, if the change involves the use of new equipment, the
manager should not make any changes that rely on the use of new
equipment until it has arrived and been installed and workers
know how to use it. Moreover, if change is thrust upon them too
quickly, their resistance may stiffen.

Implement change
A systematically implemented change is more likely to proceed
smoothly and to encounter fewer obstacles than is a change that
is implemented too quickly and without adequate preparation.
Evaluate implementation
Finally, after the change has been implemented, the manager
should verify that it has accomplished its intended goals. A
change may fail to bring about the intended results. This may be
due to inappropriate goals or inaccurate diagnosis of the situation
or wrong selection of intervention.
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