ME7554 INDUSTRIAL MANAGEMENT

Unit – IV - GROUP DYNAMICS

Department Of Manufacturing Engineering

Anna University
UNIT IV GROUP DYNAMICS

Groups – Contributing factors -Group Behaviour –– Group Norms,

Communication – Process – Barriers to communication – Effective
communication, leadership – formal and informal characteristics –
Managerial Grid – Leadership styles – Group Decision Making –
Leadership Role in Group Decision, Group Conflicts – Types –Causes
– Conflict Resolution – Inter group relations and conflict, Organization,
centralization and decentralization – Formal and informal –
Organizational Structures – Organizational Change and Development –
Change Process – Resistance to Change – Culture and Ethics.
 Contents

 Introduction
 Meaning and characteristics of groups
 The types of groups
 Formal work groups
 Informal work groups
 Group characteristics
 Group decision making
 Advantages of group decision making
 Group dynamics
 Principles of group dynamics
Group

 Group is a collection of people, who perceive themselves to be

group, who interact with each other and are psychologically aware
of one another and independent on each other.
 Studies proved that group thinking and group norms could result in
standard production levels even though there is reduction in
infrastructure facilities.
Why groups are formed

1. Accomplishment of task and jobs together

2. For socialization of new employees

3. For decision making collectively using different skill levels.

 Introduction

 The concept of group is very old.

 Men lived in groups in ancient time.
 Man used to hunt and protect itself from wild animals in
groups.
 With the advancement of civilization, many racial groups
developed in different parts of the world and developed
different cultures.
 The culture of different countries flourished with different
racial groups.
Meaning and Characteristics of Group

 A group refers to two or more persons who share a common

purpose.
 “A group is defined as two or more persons in a state of social
interaction.”
---- Kimball Young
 “A group consists of two or more persons who share norms
about certain things with one another and whose social roles
are closely interlocking.”
---- T.M. Newcomb
 “A group is plurality of persons who interact with anyone else.”
---- W.J.H. Sprott
 Characteristics of a Group

The necessary characteristic of a group are

1. Two or more people,
2. Who interact with one another, (The members of a group
occasionally meet, talk, and do things together)
3. Share some common ideology, and (The members of a group
have something in common like common goals, common
threat, security concern, etc.)
4. See themselves as a group. (People who interact with each
other and who have a common ideology are attracted to one
another)
Criteria’s for a group to include

 Formal social structure

 Face to face interaction
 Two or more persons
 Common fate
 Common goals
 Interdependence
 Self-definition as group members
 Recognition by others
 s

PROXIMITY,
INTERACTION AFFILIATION
INFLUENCE

WHY PEOPLE
SECURITY POWER
JOIN GROUPS?

ESTEEM IDENTITY
A group fulfills the following needs of its members:
 Affinitive needs of an individual are fulfilled by the group
through friendship between individuals.
A group also fulfills egoistic needs of an individual by
developing self-esteem and status.
A group fulfills functional needs of its members by helping
him/her in his daily activities, adjusting work routines and
avoiding boredom.
 Cognitive needs may be satisfied by motivation.
A groups serves the following purposes:
 Group is a means for affiliation needs like needs for friendship,
love and support.
A group is a means of developing a sense of identity and
maintaining self-esteem.
 It is a means of establishing reality through developing
consensus among group members.
 It is a means of increasing security and power to handle a
common enemy or threat.
 Types of Groups

 Groups may be classified on the basis of the following criteria

 Purpose or goal
 Extent of structuring
 Legal organization or setting
 Groups may be formal or informal.
 All groups have the following common characteristics
 Have leaders
 Have followers
 Try to achieve some goal or goals
 Have ideas about how to achieve the goals
 Communicate expectations to members
 Satisfy some needs of its members
Group structure

 Group structure consists of

 group roles,
 norms,
 status,
 size and
 cohesiveness.
Reason for people joining groups

 1. Security reason eg. Flat owners Assc.

 2. Status- MCC, Leo, rotary, Golf club
 3. Self esteem- Who is who, Bnz, BMW,
 4. Affiliation Member IEEE, Affiliated to US universities
 5.Power
 6. To achieve goal
 Group NORMS
Group norms are acceptable standards of behavior within a group that
are shared by the group members.
Tuckman’s 5 stages of group development model.
 Forming
 Storming
 Norming
 Performing
 Adjourning
 Forming

 Great uncertainty about groups purpose ,not clear about structure,

about group leadership.

Storming

People come out with lot of ideas.

Also intergroup conflicts occur here.
Norming

 Group structure solidifies.

 As per norms, consensus is arrived .
 ‘we’ feeling comes out here.
 Group norms are acceptable standards of behavior within a group
that are shared by the group members.
6) Group Norms

 Every group has some rules, norms, beliefs,

traditions and attitudes that the group
members must follow.

 “Norms are prescriptions for acceptable

behavior determined by a group, institution
or society.”
---- Luthens
 “Group norms are rules or guidelines of
accepted behavior which are established by
a group and used to monitor the behavior of
its members.”
---- Argyle
Performing

 The group structure is fully functional & accepted by all people.

Group energy is fully used for performing task.
Adjourning

 Groups dismantling and except other group for continuous working.

 When the tasks are completed & the group is formally wound up.

 Group thinking and group norms could result in standard production

levels even though there is reduction in infrastructure facilities.
 Classification or types of norms in
groups
 Performance norms: It indicate the hardness of work levels, output
level, performance predication, etc.

 Appearance norms: Dress code, Loyalty to groups, not looking for

another job, etc.

 Social arrangement norms: It involves taking food together,

friendship, club members, interactions with others, etc,

 Allocation of resources norms: The norms covers about payment,

difficult task allocation, etc.
Types of group

1. Formal group: Flight Crew Other types of Groups:

2. Informal group: They are  Command group

alliances which are  Task group
informally formed as per
 Interest group
social needs eg: Employees
 Friendship group
of different department
taking lunch together.  Membership group

 Reference group
 Formal Work Groups

 The aim of the manager’s is to create formal

work groups that are necessary to achieve the
goals of the organization.
 The characteristics of formal workgroups are
 They are approved by some authority.
 There is a fixed division of labor.
 Individuals are assigned specific responsibilities.
 There are personal interactions between the group
members.
 Group members are rewarded.
Informal Work Groups

 Informal groups are not very

well organized groups.
 They exist because the formal
groups in an organization do
not satisfy human needs
sufficiently.
 Informal workgroups provide
a means of satisfaction for
security needs, social needs
and esteem needs.
 Informal Work Groups and Security Needs
 Informal groups support their members and protect them from
outside pressure and authority.
 The group protects an individual from unfriendly work
environment.
 When a person is new in the organization, he may feel
worried. He does not know his surroundings well.
 New employees try to find an existing group and join it for
help in the orientation process.
 Informal Work Groups and Social Needs
 Many jobs do not allow communication and interaction
between workers.
 In this situation, people cannot make friends and are unable to
satisfy their need for companionship.
 People want to belong to a small social group in which
relationships are based on common interests and values.
 Social groups occur in most companies.
 Members of a social group enjoy each other’s company.
 Informal Work Groups and Esteem Needs
 Informal groups are also a means of status or prestige for its
members.
 This is specially true if
 The group is well known in the organization
 Outsiders want to join the group
 It is difficult to achieve acceptance into the group
 The informal group is a source of egoistic need satisfaction.
 The need to achieve can be partially satisfied by the informal
group.
 Advantages of Informal Groups

 Informal groups increase the employee’s sense of security and

help him to do the work more effectively.
 Informal groups can help the manager in maintaining
discipline.
 Informal groups help to maintain “no time clock” policy
because the employee are highly motivated and also there is
peer pressure. So any individual cannot take undue advantage
of this policy.
 Disadvantages of Informal Groups

 The disadvantages of informal groups arise when the goals of

the group do not match with the organizational goals.
 This problem occurs when a planned change is implemented.
 The protection and social relationships provided by informal
groups are in danger due to new plans that disturb order and
stability, create new procedures of standard and production
and disturb the pattern of personal interactions on the job.
Groups fail due to the following

 Absence of trust
 Fear of conflict
 Lack of commitment
 Avoidance of accountability
 In attention to results
 Disfunctions of groups

 Norm violation and role ambiguity/conflict

 Group thinking problem.
 Social loafing : It is a type of non- performance or under
performance by any one member of a group. This also an outcome
of group thinking.
 Group Decision Making

 Important decisions are taken by groups and not by

individuals.
 Generally, group decision making is better than individual
decision making.
Advantages of group decision making
 Groups perform better than individuals in decision making
because:
 A wide range of alternatives and solutions is considered.
 Decisions taken in a group are well accepted and the level of
commitment is also high. People accept a decision when they have
contributed to decision making.
 Potential Problems with Group Decisions
 Group decisions take longer time than individual decisions.

 Sometimes, group decision may be a compromise which gives no positive results.

 A dominant person in a group may dominate over other members and affect decision

making.

 This is more common when group members are of unequal rank. A person with high

rank tries to dictate over members with low rank.

 Problem of individual dominance can be handled in the following ways:

 Avoid announcing your preferred solution while the group is working on the

problem.

 Listen carefully to suggestions from every member.

 Encourage every group member to participate.

 Try to achieve a good solution

 Group Dynamics

 It is related to the interactions between group members in a

social situation.
 It is concerned with getting knowledge of groups, how they
develop, and their effect on individual members and
organization.
 “Group dynamics is an expression that describes the situation
in which people acting together in a group accomplish certain
thing, either positively or negatively in a way that cannot be
explained adequately in terms of the individual acting
separately.” --- Thomas Harrell
 Many factors in the work environment affect group behavior. The

two most broad aspects are

 The physical environment, e.g., plant, equipment, layout

 The psycho-social environment, e.g., worker needs reward systems, work

group structure, supervisory practices, work group norms, worker roles and

attitudes.
 Principles of Group Dynamics

 Principles of group dynamics are the norms that the group must
follow to work effectively.
 These principles are----

i. There should be no barrier between the leader and the follower.

The leader (who changes others) and the follower (who are
changed) should have a strong sense of belongingness to the group.

ii. The group should be attractive to its members. It increases the

group’s influence on its members.

iii. A group member with higher prestige has a greater influence on

other members of the group.
 Principles of Group Dynamics

iv. Efforts to change individual members of a group will make

them conform to the norms of the group.

v. Pressure for changes in a group can be established by creating

the perception that there is a need for change.

vi. Information related to the need for change, plans for change,
and the results of change should be shared by all members of
the group.

vii. Changes in one part of the group may cause tension in other
parts. This tension can be reduced by removing the change or
making some adjustments.
Cattell proposed seven theorems which show characteristics
of synergy within a group:

 Groups are formed to satisfy individual needs and stop to exist

when this purpose is not solved.
 The total synergy of a group is the result of the attitudes of all
members towards the group.
 Effective synergy may be aimed to achieve goals outside the
group.
 Individual group members may also use groups to achieve
personal goals, group goals may be secondary to them.
 Group memberships may overlap, but the total synergy in the
group remains constant.
Guidelines for better use of Group Dynamics

 Peoplewho are to be changed & who influence the

group should have strong sense of belongingness
 Group should be more attractive to its members
 Attitudes/Values/Behaviorthat needs to be changes
should be relevant to Group
 Group Member having more prestige can exert more
influence
 After successful change of a subpart, would encounter strong
resistance
 Information relating to the need for change plans must be shared
by relevant group members
 Bring about re-adjustment in related parts
Group Dynamics Implications for Managers

 Obtain cooperation from Informal Groups

 Use Informal Groups to improve attitudes of employees
 Develop Informal Groups to satisfy various needs of
employees
 Provide Groups with high quality leadership for effective
results
 Enhance productivity and minimize resistance to change
 Group Behaviour

 Individual behavior also affect the group behavior.

 Because deviation in Individual behavior will effect group behavior in

turn effect production, employee retention.

 Normally deviation in behavior in workplace is likely to develop further.

If it is not supported by group norms.

 Therefore, Managers should try to motivate, stress the commitment,

extend the employee cooperation in order to avoid the deviation in
Individual behavior.

 Because deviation in Individual behavior will effect productivity,

employee retention, job satisfaction, etc.
 Examples of deviation in workplace behaviour

 Production line: Coming late, leaving early, slow working, wasting

resources, etc.
 Stealing from organization, sleeping, playing games.
 Political: Showing favoritism, gossip, rumour spreading, blame game.
 Personal: Verbal abuse, stealing from co-workers, fighting, chit-
chatting, fund rising, chit fund, etc.
UNIT IV GROUP DYNAMICS

Groups – Contributing factors -Group Behaviour –– Group Norms,

Communication – Process – Barriers to communication – Effective
communication, leadership – formal and informal characteristics –
Managerial Grid – Leadership styles – Group Decision Making –
Leadership Role in Group Decision, Group Conflicts – Types –Causes
– Conflict Resolution – Inter group relations and conflict, Organization,
centralization and decentralization – Formal and informal –
Organizational Structures – Organizational Change and Development –
Change Process – Resistance to Change – Culture and Ethics.
CONTENTS

 IMPORTANCE OF COMMUNICATION

 PURPOSE OF COMMUNICATION

 COMMUNICATION PROCESS

 COMMUNICATION FLOW

 COMMUNICATION NETWORKS

 METHODS OF COMMUNICATION

 BARRIERS TO EFFECTIVE COMMUNICATION

 ELECTRONIC MEDIA IN COMMUNICATION

Communication

 Communication is the process of passing of information

from one person to another person.
 It must be clear and understood by the person who
receives it.
 Effective communication will lead to team work and work
satisfaction in the organization.
IMPORTANCE OF COMMUNICATION

 For ensuring good coordination,

communication is a must.
 Most of the problems for human occur
due to lack or insufficient communication.
 Communication is the process of
initiating , transmitting and receiving
information .
 Among these stages , if any one lacks ,
definitely it will lead to misunderstanding
of concept.
PURPOSE OF COMMUNICATION
To integrate he managerial functions with external envoirnment

Organizin Leadin
Planning Staffing Controlling
g g

Communication

External environment
 Suppliers
Customers
Governments
Community
Others
PROCESS OF COMMUNICATION
COMMUNICATION FLOW

Downward communication

Upward communication

Horizontal or lateral communication

DOWNWARD COMMUNICATION

Top management

Manager 1 Manager 2 Manager 3

S S S S S S S S S
1 2 3 1 2 3 1 2 3
UPWARD COMMUNICATION

Top management

Manager 1 Manager 2 Manager 3

S S S S S S S S S
1 2 3 1 2 3 1 2 3
LATERAL COMMUNICATION

Top management

Manager 1 Manager 2 Manager 3

COMMUNICATION NETWORK S

Simple chain, wheel, circular, free flow , V,

METHODS OF COMMUNICATION

Formal communication

Informal communication
FO
Formal communication
COMMUNICATION

 Written communication

 Oral communication
WRITTEN COMMUNICATION

 The passing of information in writing is done from one person

to another.
 Ex: Circular, Memoranda, letter, handbooks, pamphlets,
policy statements, procedures, electronic display, leaflets,
posters, etc.
Advantages:
 It provides a permanent record for further reference.
 It’s very suitable for lengthy messages.
 Easy to verify and communicate long distance

Disadvantages:
 The process is slow.
 Feedback is not known immediately.
 Doubts cannot be clarified .
ORAL COMMUNICATION
 Oral communication

 The information is passed on orally from one person to another.

 Ex: Instructions, speeches, meetings, telephone, loudspeakers, etc
Advantages:
 Doubts are clarified immediately.
 Feedback is known.
 Quick and effective method.
Disadvantages:
 No permanent record of communication.
 More likely to be forgotten or distorted.
 Not suitable for lengthy messages.
 Noise
INFORMAL COMMUNICATION

Grapevine- Talking about the

happenings in the organisation.
Work related
People related
Mostlyoral
Accurate
To know the reactions of the
employees
NON VERBAL COMMUNICATION
 BARRIERS TO EFFECTIVE COMMUNICATION

 The information should simple & clear

 Thhysical barriers – Physical distance

 Socio psychological or personal barriers – Sentiments, motives

 Organizational barriers- Filtered, different meaning

 Semantic barriers – Symbols, Sign board, pictures, etc

 Mechanical barriers – poor practice, defective layout, server

problem, etc.
 language to the receiver
LISTENING

 Stop talking
 Put the talker at ease
 Show the talker that you want to listen
 Remove the distractions
 Empathize with the talker
 Be patient
 Hold your temper
 Go easy on arguments and criticism
 Ask questions and
 Stop talking
ELECTRONIC MEDIA IN COMMUNICATION

o Telecommunication

o Teleconferencing
TELECOMMUNICATION

Examples:
A large bank supplies hardware and software
to its customers.
E-mail service making ease delivery of
documents.
Computerized airline reservation system
facilitates making travel arrangement .
Teleconferencing

Advantages
 Saves travel expenses and travel time
 There is no need to make travel plans long
in advance
Disadvantages
 The equipment to subject to breakdown
 It’s a poor substitute for meeting other
persons face - to - face
Use of computers for information handling

 Electronic data processing system handles

large amount of data
 The stored data can be retrieved whenever
it is required without any distortion
 Computer graphics can inform visually
displaying important company information
 Computer printouts and colored maps are
quickly displayed when compared to
communication media
 SUMMARY
 Communication is a transfer of information from a sender to receiver
 Communication can be in written form but more information is
communicated orally
 Information may flow not only downward or upward in the
organization but also horizontally or diagonally
 Communication is hindered by barriers and breakdown in
communication process.
 Electronic media can also improve communication
UNIT IV GROUP DYNAMICS

Groups – Contributing factors -Group Behaviour –– Group Norms,

Communication – Process – Barriers to communication – Effective
communication, leadership – formal and informal characteristics –
Managerial Grid – Leadership styles – Group Decision Making –
Leadership Role in Group Decision, Group Conflicts – Types –Causes –
Conflict Resolution – Inter group relations and conflict, Organization,
centralization and decentralization – Formal and informal –
Organizational Structures – Organizational Change and
Development – Change Process – Resistance to Change – Culture
and Ethics.
Leadership Skills and personal characteristics needed for
managers
 Managers need various skills ranging from technical to design.
 Analytical and problem solving abilities
 Managers must be able to identify problems, analyze complex situations and
by solving the problems encountered, exploit the opportunities.
 Analytical skills should be used to find needs of present customers – or
potential ones – and then to satisfy those needs with a product or service.
 They must recognize the emotions, needs and motivations of the people
involved and initiated the required change as well as of those who resist
change.
 Personal characteristics needed by managers
 DESIRE TO MANAGE
The successful manager has a strong desire to manage, to influence others, and
to get results through team efforts of subordinates.
The desire to manage requires effort, time energy and usually, long hours of work.
 COMMUNICATION SKILLS :
The important characteristic of managers is the ability to communicate through
written reports, letters, speeches and discussions.
Communication skills are important for effective, with people in the same
organizational unit or suppliers, governments, the community, and, of course,
the shareholder in business enterprises.
 EMPATHY
Ability to understand the feeling of another person and to deal with the emotional
aspects of communication.
 INTEGRITY AND HONESTY

Managers must be morally sound and worthy of trust.

Integrity in managers includes honesty in money matters and in dealing with

others, effort to keep superiors informed, adherence to the full truth, strength
of character and behavior in accordance with ethical standards.
 PAST PERFORMANCE AS A MANAGER

Another important characteristic for selection is past performance as a

manager.

It is probably the most reliable forecast of a manager’s future performance.

In a survey of fortune 500 companies, most CEOs said that experience

within the company was the key to their successful careers.
 Are Leaders Born or Made?
It's about impact, influence and inspiration.
Impact involves getting results, influence is about spreading the for work,
and good leaders inspire team-mates and customers.
Leadership is an influence process; therefore, leaders are people who, by
their actions, encourage a group of people to move toward a common or
shared goal.
A leader is an individual; leadership is the function that the individual
performs. Individuals within an organization who have authority are often
referred to as leaders, regardless of how they act in their jobs.
But just because someone is supposed to be a formal leader in an
organization, he or she may or may not exercise leadership.
In fact, informal or emergent leaders can exhibit leadership even though
they do not hold formal leadership positions.
 Management and leadership
 Harvard’s John Kolter compares management and leadership.
 Management, is about dealing with complexity: drawing formal plans, designing
organizational structures and monitoring outcomes.
 Leadership, in contrast, is about cope up with change.
 Leaders establish direction by developing a vision; then they communicate this
vision to people and inspire them to overcome obstacles.
 Robert House of the Wharton School of Business says that mangers use formal
authority to obtain compliance from organizational members.
 Management consists of implementing the vision and strategy provided by leaders,
coordinating and staffing the organization, and handling day-to-day problems.
 While both management and leadership promote organizational effectiveness, most
companies are over-managed and under-led.
 Leadership
 Leadership is an integral part of management and plays a vital
role in managerial operation.
A leader is an individual; leadership is the function that the
individual performs.
 Individuals within an organization who have authority are often
referred to as leaders, regardless of how they act in their jobs.
 Leading is defined as the process of influencing people so that
they will contribute to organisation and group goals.
 Important functions of leadership

 1. To motivate employees

 2. To develop teamwork

 3. Better utilization of man power

 4. To create confidence to followers

 5. To directing group activities

 6. To keep high morale

 7. To maintain discipline
 Trait Theory (trait means quality)
Leadership Traits: represent the personal characteristics that
differentiate leaders from followers.
• Historic findings reveal that leaders and followers
vary by
- intelligence
- dominance
- self-confidence
- level of energy and activity
- task-relevant knowledge

• Contemporary findings show that

- people tend to perceive that someone is a leader when he or
she is intelligence
- people want their leaders to be credible (Capable of being believed ).
- Credible leaders are honest, forward-looking, inspiring, and
competent
 Key Leadership (Traits to Develop)

 Self-Confidence
 Trustworthiness
 Assertiveness
 Emotional stability
 Sense of Humor
 Self-Awareness and Self-Objectivity
 Cognitive Skills (Skills that are used in the process of acquiring knowledge;
these skills include reasoning, perception, and intuition.)
 Emotional Intelligence (ability to identify, assess, and manage the emotions of
one's self, of others, and of groups)
 Passion and Enthusiasm
 Leadership Styles
 Leadership style is the manner and approach of providing direction,
implementing plans and motivating people.
 Kurt Lewin (1939) led a group of researchers to identify different styles of
leadership.
 The three major styles of leadership are:
 Authoritarian or autocratic (strict)
 Participative or democratic (independent)
 Delegative or Free Reign (to possess or exercise power or authority).
 Although good leaders use all three styles, with one of them normally
dominant, bad leaders tend to stick with one style.
Authoritarian (autocratic)
 Authoritarian (autocratic)
 Authoritarian Leader take all decisions by himself
without consulting subordinates.
 Never delegate authority to others.
 Three types
Strict autocrat- Follows negative motivation

Benevolent autocrat – Taking decision himself and motivates

positively.

Incompetent autocrat – Hide his inabilities.

 Authoritarian (autocratic)
 Authoritarian style is used when leaders tell their employees what they
want done and how they want it accompished, without getting the advice
of their followers.
 Some of the appropriate conditions to use it is when you have all the
information to solve the problem, you are short on time and your
employees are well motivated.
 The authoritarian style should normally only be used on rare occasions.
 If you have the time and want to gain more commitment and motivation
from your employees, then you should use the participative style.
 Authoritarian (autocratic)
 Advantage

Quick decision making

Highest productivity

Positive outcome under stress

 Disadvantage

Employee morale will be low

Absence of leader will affect the output

Employee turnover will be more

Full potentials of subordinates and their ideas will not be utilized.

Participative (democratic)

 Subordinates are consulted and their feedback is taken into

decision making process.
 Discussion are taken after group discussion.
 Authority is decentralized.
 Provides freedom of thinking and expression.
 This style involves the leader including one or more employees in the
decision making process (determining what to do and how to do it).
 However, the leader maintains the final decision making authority.
 Using this style is not a sign of weakness, rather it is a sign of strength
that your employees will respect.
 This is normally used when you have part of the information and your
employees have other parts.
 A leader is not expected to know everything -- this is why you employ
knowledgeable and skillful employees.
 Using this style is of mutual benefit -- it allows them to become part of the
team and allows you to make better decisions.
 Advantage

Increase job satisfaction

Absence of leader does not affect output

Labor absenteeism and turnover will be minimum.

 Limitations

Time consuming

If subordinates are lazy and avoid work then controlling them is

difficult.

It is very difficult to implement with low level of management.

Delegative (free reign)

 Leader will not take part in the decision making process.

 The authority is completely decentralized.
 In this type, complete freedom is given to the subordinates so
that they can plan, motivate, control and otherwise be
responsible for their own actions.
 Provided, the subordinates are skillful and knowledge.
 They should fully aware their roles and responsibilities.
 Delegative (free reign)

 In this style, the leader allows the employees to make the

decisions
 However, the leader is still responsible for the decisions that are
made.
 This is used when employees are able to analyze the situation and
determine what needs to be done and how to do it.
 You cannot do everything!
 You must set priorities and delegate certain tasks.
 Delegative (free reign)

 This is not a style to use so that you can blame others when
things go wrong, rather this is a style to be used when you
fully trust and confidence in the people below you.
 Do not be afraid to use it, however, use it wisely!
 This is also known as lais…sez faire (or lais…ser faire),
which is the noninterference in the affairs of others.
 Delegative (free reign)

 Advantage
Positive effect on job satisfaction
High morale
Team sprit
Full utilization of the potential of subordinates.
 Limitations

Lack of discipline
Lowest productivity
No control or coordination
Some members may put their own interests above the group
interest.
 Good leadership qualities

A good leader uses all three styles, depending on what

forces are involved between the followers, the leader and
the situation.
 Some examples include:
 Use a authoritarian style on a new employee who is just
learning the job. The leader is competent and a good coach.
The employee is motivated to learn a new skill. The
situation is a new environment for the employee.
 Use a participative style with a team of workers who know
their job. The leader knows the problem, but does not have
all the information. The employees know their jobs and want
to become part of the team.
 Use a delegative style with a worker who knows more about
the job than you. You cannot do everything! The employee
needs to take ownership of her job. Also, the situation might
call for you to be at other places, doing other things.
 Using all three: Telling your employees that a procedure is not
working correctly and a new one must be established
(authoritarian).
 Asking for their ideas and input on creating a new procedure
(participative). Delegating tasks in order to implement the new
procedure (delegative).
FORMAL AND INFORMAL LEADERSHIP
 Formal leadership occurs when a manager leads by
exercising formal authority.
 The exercise of formal authority through acts such as
assigning duties, derives from the manager’s official
position within the organization’s hierarchy of authority.
 Any employee who is assigned a managerial position has the
opportunity and responsibility to exercise formal leadership in
relation to subordinates.
 Some managers have a better understanding of the authority
and formal relationship with subordinates provided by a
managerial position.
 Thus they are more influential in ensuring that subordinates’
work effort are productive.
 These managers are better leaders.
 Informal leadership arises when a person without formal
authority is influential in directing the behaviour of others.
 Although not formally appointed or elected, he becomes a leader
through his actions or personal attractions.
 Formal and informal leadership coexist in almost every work
situation.
A manager must often work with subordinates who defer to a
strong informal leader within their peer group.
 Managers themselves may act as formal leaders in some
situations and as informal leaders in others.
 When acting as a formal leader, the manager follows the chain
of command and exerts influence downward in the hierarchy of
authority from manager to subordinates.
 By contrast, when acting as an informal leader, the manager
influences employees outside the formal organizational chain
of command.
 UNIT IV GROUP DYNAMICS

Groups – Contributing factors -Group Behaviour –– Group Norms,

Communication – Process – Barriers to communication – Effective
communication, leadership – formal and informal characteristics –
Managerial Grid – Leadership styles – Group Decision Making – Leadership
Role in Group Decision, Group Conflicts – Types –Causes – Conflict
Resolution – Inter group relations and conflict, Organization - centralization
and decentralization – Formal and informal – Organizational Structures –
Organizational Change and Development – Change Process – Resistance
to Change – Culture and Ethics.
 Introduction

 What is conflict
 Levels of conflict
 Stages of conflict
 Sources of conflict
 Inter group relations and conflicts
 Resolution techniques for solving conflict or
approaches to conflict management
 WHAT IS CONFLICT?
 Conflict is defined as a difference of opinion at different levels of an
organization.
 Conflict is a process that begins when one party or group perceives that
another party has negatively affected something that the first party is
concerned.
 Conflicts may be at individual level, group level and at organizational level
 It is a disagreement between two or more organization members or groups
arising from the fact that they must share scarce resources or work activities.
 Organization members or groups in disagreement, attempt to have their own
cause or point of view prevail over that of others.
 Conflicts affect the work efficiency of the individual and of the groups as a
result productivity is reduced.
Why to Manage Conflict?

 We must expect conflict to occur in our organizations.

 Conflict exists only within the context of interdependence.
 Conflict is a relationship between segments of an interrelated
system: persons, a group, an organization, a community, a
nation.
 Managers/Leaders need to manage conflict in order to obtain
profitable return from it.
 Advantage of conflict

1. Conflict enhances capacities

2. Drives the group together.
3. Prevents stagnation
4. Increases competition
 Disadvantage of conflict

1. Diversion of energy
2. Create tension in the organization
3. Reduced cooperation
4. Reduces productivity.
 LEVELS OF CONFLICTS

Between Organizational
organization conflict MACRO

Intergroup
conflict

Interpersonal
conflict

Intrapersonal MICRO
conflict
Features of conflict

 Conflict occurs when two or more person pursue mutually

exclusive goals , values or events.
 Conflict also occurs when perceptions of 2 or more persons differ
from each other.
 Conflict refers to deliberate behavior.
 Conflicts are sometimes concealed or expressed outwardly.
 Conflict is different from competition.
 Conflicts may arise due to economic, social and psychological
reasons.
 Conflicts may also arise due to lack of consideration, lack of
appreciation, misunderstanding or bad handling of situation and
problems.
 Sources of Conflict
 Miscommunication

 Organizational Structure (size of organization, specialization of

task, leadership style, reward system, level of dependence)
 Personal variables (individual opinions due to levels of education,
hierarchy, etc).
 Unrealizable expectations
 Organization change
 Modern technology
 Motivational factors
 Conflict between individual and organisational goals.
Types of conflict

1. Goal Conflict
2. Role Conflict
3. Interpersonal conflict
STAGES OF CONFLICT

1. Latent conflict
2. Perceived conflict
3. Felt conflict
4. Manifest conflict
5. Conflict aftermath
LATENT CONFLICT

 Latent conflict provides the necessary antecedent conditions

for conflict in organization.
 Here the members anticipate conflict.

BASIC TYPES OF LATENT CONFLICTS

 Competition for scarce resources

 Drive for autonomy

 Divergence of subunit goals and

 Role conflict.
PERCEIVED CONFLICT
 Perceived conflict is due to the parties
misunderstanding of each others true position.
 Such a conflict can be resolved by improving
communication between the parties.
FELT CONFLICT

A person X may be aware that he is in serious

disagreement with Y over some policy.
 It makes X, tense and affects his relationship with Y,
then the conflict is felt by the two.
 Conflict arises only after the differences become
personalized or internalized.
MANIFEST CONFLICT

 This is the stage for open conflict.

 It takes the form of open aggression, sabotage, apathy, withdrawal,

etc
 CONFLICT AFTERMATH

 The aftermath of a conflict may be either positive or negative for

the organization depending on how the conflict is resolved.
 If conflict is resolved to the satisfaction of all the parties
involved, the basis for a more co-operative relationship may be
laid.
 On the other hand, if the conflict is merely suppressed the latent
condition of the conflict may be aggravated and explode in a
more serious and violent form at a later stage.
CLASSES OF CONFLICT

 INDIVIDUAL CONFLICT

 GROUP LEVEL CONFLICT

 ORGANIZATIONAL CONFLICT.
 INDIVIDUAL CONFLICT

 Intra-Individual conflict is internal to the person and is probably

the most difficult type to analyse.
 Non-satisfaction of needs frustrates an individual and it leads to
behaviour that negatively affects job performance.
 When two individuals are in confrontation with each other, it
may be said an inter-individual conflict.
 GROUP LEVEL CONFLICT

Conflicts at the group level may be classified as:

Intragroup conflict : It arises when differences over an issue

between the members of the group.

Intergroup conflict: Every group is in at least partial conflict

with every other group it interacts with. They differ in goals,
work activities, power, prestige, resource allocation, reward
systems, etc.

Inter group conflicts over authority, jurisdiction and resources are

exceedingly common.
 Inter group Conflicts
 Inter group Conflicts occurs over authority, jurisdiction, sharing
resources, etc are common.
The sources for Inter group Conflicts are
 Incompataiable goals
 Task interdependence
 Resource allocation
 Incentive and reward system
 Line and Staff conflicts
 Difference in values and perception
 SOURCES OF INTERGROUP CONFLICTS

 Incompatible goals
 Task interdependance
 Resource allocation
 Competitive incentive &reward system
 Line, staff conflicts
 Differences in values &perception
 STRATEGIES APPLIED TO OVERCOME
INTERGROUP CONFLICTS
 Avoidance strategy (It is very useful when the conflict is very serious
and requires quick action)
 Diffusion strategy (It is cooling of the emotions of groups involved)
 Containment strategy (by clearly spelling out the real issues)
 Confrontation strategy (the issues of conflict are confronted directly)
 OTHER STRATEGIES

 Settinghigher level goals for conflicting groups

 Reducing the dependancy factors of groups on each
other
 Expanding the existing resource
 Making the conflicting groups to meet each other
 Creating a formal appeal
 Merging of conflicting groups together
 ORGANIZATIONAL CONFLICT

 The interorganizational conflicts are assumed between

two organizations or between a business organization
and the government.
 The intraorganizational conflicts comprise of all
intraindividual, interindividual, intragroup and
intergroup conflicts because they are the parts of the
same organization.
 SOURCES OF CONFLICT

1. Complex organization structure

2. Resource constraints

3. Manager style of functioning

4. Resistance to change

5. Lack of communication
 FACTS: Sometimes the disagreement occurs because
individuals have different definitions of a problem.
 GOALS: Sometimes the disagreement may be about
what should and what should not be accomplished
 METHODS: Sometimes the disagreement may be
about the procedures and strategies to follow to
achieve the desired goal.
 VALUES: Sometimes the disagreement is over ethics,
the way power should be exercised or assumptions
about justice, fairness and so on.
 RESOLUTION OF CONFLICTS

Efforts for conflict management may be divided into two groups:

 Preventive measures
 Curative measures
 PREVENTIVE MEASURES

 Development of effective leadership,

 Participative decision-making,
 Two-way communication system,
 Improvement in interpersonal relationship,
 Revision for facilities and opportunities to develop
informal groups.
 CURATIVE MEASURES

 Collect full details of the conflict and note the stage of

conflict.
 More efforts are required to resolve a conflict of
advanced stage.
 Issues involved in the conflict should be analyzed and
understood.
 Conflict may be due to facts, goals, methods or values.
 CONFLICT HANDLING MODES

 Problem solving: May be done by the management or

mutually by the parties involved in conflict.
 Mediation through persuasion: Management may
attempt to sweep out the differences and smoothen the
affair.
 Avoidance
 Diffusion
 Confrontation - Negotiation
 Smoothing
 APPROACHES TO CONFLICT MANAGEMENT

Dominance
Avoidance
Smoothing
Compromise
Hierarchical decision making
Appeal procedures
System restructuring
Altering human variables
Alternatives to Resolve Conflict
Independent Intervention
Mediation Prevention
Resolution
 Negotiation Resolves Conflict
Ineffective Effective

Positional Principled
Negotiations Negotiations

 Principled Negotiations result in win-win agreements

 Focus on the problem, not individuals
 Focus on the interests of parties involved, not positions
 Focus on creative resolutions
 Ensure that the outcome provides mutual gain
 Results
 Both sides win because both are enriched and improved
 Working relationships are strengthened
SUMMARY

 Definition of conflict
 Various classes, stages of conflict
 Sources of conflict
 Strategies applied to overcome conflict
 UNIT IV GROUP DYNAMICS

Groups – Contributing factors -Group Behaviour –– Group Norms,

Communication – Process – Barriers to communication – Effective
communication, leadership – formal and informal characteristics – Managerial
Grid – Leadership styles – Group Decision Making – Leadership Role in
Group Decision, Group Conflicts – Types –Causes – Conflict Resolution –
Inter group relations and conflict, Organization - centralization and
decentralization – Formal and informal – Organizational Structures –
Organizational Change and Development – Change Process – Resistance to
Change – Culture and Ethics.
CENTRALIZATION AND DECENTRALIZATION
 CENTRALIZATION
• Centralization, is the process by which the

activities of an organization, particularly

those regarding planning decision-making,

become concentrated within a particular

location and/or group.

• The more centralized an organization, the

higher the level at which decisions are made.

 CENTRALIZATION
•In a centralized organization, the decision-making has been
moved to higher levels or tiers of the organization, such as a head
office, or a corporate center.

•Knowledge, information and ideas are concentrated at the top,

and decisions are cascaded down the organization.

•The span of control of top managers is relatively broad, and there

are relatively many tiers in the organization.
CENTRALIZATION
 STRENGTHS OF CENTRALIZATION.
CHARACTERISTICS
•Emphasis on: top-down control, leadership, vision, strategy.

•Decision-making: strong, authoritarian, visionary,

charismatic.
•Organizational change: shaped by top, vision of leader.

•Execution: decisive, fast, coordinated.

•Able to respond quickly to major issues and changes.

•Uniformity. Low risk of dissent or conflicts between parts of

the organization.
 DECENTRALIZATION
• Decentralization is the process of dispersing
decision-making governance closer to the
people and/or citizen.

• It includes the dispersal of administration in

sectors like engineering, management,
political science, sociology and economics.

• Law, science and technological

advancements lead to highly decentralized
human endeavours.
FACTORS INFLUENCING CENTRALIZATION AND
DECENTRALIZATION

• ENVIRONMENTAL INFLUENCES:
1.Market characteristics
2.Competitive pressures
3.Availability of materials
• ORGANISATION’S SIZE AND GROWTH
• TOP MANAGEMENT PREFERENCE
• ORGANISATION CULTURE
 MAKING IT EFFECTIVE

• Centralized top policy.

• Appreciation of concept of decentralization.
• Development of managers.
• Competition among units.
• Open communication.
• Effective co-operation.
 DELEGATION OF AUTHORITY vs DECENTRALIZATION

• Any manager may delegate authority to his

sub-ordinates .
• Thus delegation may be a highly individual
relationship.
• When delegation is used systematically and
extensively throughout an organization, it is
decentralization.
 CHALLENGES

• More individual authority at the store level

requires more through manager training.
• Decentralization usually entails bringing in
additional staff.
• Decentralization is important in enabling
decision making at appropriate levels in
organization.
 INDUSTRIAL EXAMPLE
• Employees receive class-room style training
from company executives, company training
staffs and college professors.
 ADVANTAGES
 It reduces burden of the management so that it can focus more
attention on strategic management

 It encourages decision making because decisions are made closer to the

scene of action.

 It enables the department staff members to complete work early.

 It encourages development of superiors by providing them opportunities to

take more responsibility.
 It facilitates growth and diversification in the organization.
 Advantages of decentralization

Management can focus more attention on strategic management

It encourages decision making and assumption of authority and

responsibility.

It facilitates growth and diversification in the organization.

It enables the department staff members to complete work early.

 Disadvantages of decentralization

• It is difficult to have a uniform policy and procedure.

• It leads to increase in cost of operation.

• It requires high degree of self-motivation and self-

control because of the autonomy of managers.
• It may be limited to external factors like trade labour
unions, government control ,tax policies.
 Disadvantages of decentralization

There is an increase in complexity of coordination of decentralized

organizational units.

If it is not followed properly, decentralization will create confusion in the

organization in the absence of proper control.

There is a possibility of duplication of work.

 SUMMARY
• Centralization
• Hierarchies
• Decentralization
• Factors
• Effectiveness
• Delegation Vs Decentralization
• Challenges
UNIT IV GROUP DYNAMICS

Groups – Contributing factors -Group Behaviour –– Group Norms,

Communication – Process – Barriers to communication – Effective
communication, leadership – formal and informal characteristics –
Managerial Grid – Leadership styles – Group Decision Making –
Leadership Role in Group Decision, Group Conflicts – Types –Causes –
Conflict Resolution – Inter group relations and conflict, Organization,
centralization and decentralization – Formal and informal –
Organizational Structures – Organizational Change and Development –
Change Process – Resistance to Change – Culture and Ethics.
 Organisational change

 The term organisational change refers to an alteration in a system

whether physical, biological or social.

 Thus organisational change is the alteration of work environment in

organisation.

 Organisational change is a continuous process

 Any changes may affect the whole part of organisation positively or

negatively

 When change occurs in any part of the organisation, it disturbs the

old equilibrium necessitating the development new equilibrium

 Factors influencing organisational change

Organisational change

External factors Internal factors

1.Technolohies 1.Change in mangerial
2.Social personnel.
3.Political 2.Deficiency in existing
organisation
External factors

1.Technological factors:
Organisation has to adopt new technology to improve the
efficiency.
When the organisation adopts new technology its work structure is
affected and a new equilibrium has to established
2.Social changes:

Social changes wears change of people’s aspirants,

feelings, attitudes in the organisation.

These social changes affect the behavior of people in the

organisation.

3.Political change:

Any change in these political may affect the organisational

operation.
 Internal factors

1.Change managerial personnel:

Old managers are replaced by new manager due to retirement, transfer,
promotion, etc.

New manager has new ideas and new concept.

The result is that an organisational has to change accordingly
2.Deficiency in existing organisation:
Deficiency in the present organisational arrangement and process changes
are necessary.
The deficiency in the form of lack in co-operation , lack of communication,
lack of uniformity in the policy decisions etc.
Process of change or Change Process

Process of
Unfreezing Moving Refreezing
change
Unfreezing:
Unfreezing creates motivation for change.
If people feel uncomfortable with the present situation may request for
change

Moving:
This is the stage at which the individuals being changed learn new behavior
like new thinking new attitude, new perception, new technical
knowledge.
Proposed changes are introduced systematically and gradually
Refreezing:
Refreezing means stabilizes the change.
In this stage the individuals adopt new feelings, attitudes, perception,
beliefs learned during the changing phase.
The people do not return back to old system
Resistance to change
Resistance to change in organisation are
often due to the following changes:
 Fear of technological unemployment
 Fear of job
 Fear of demotion
 Fear to reduced monetary benefits
 Potential threat to power and influence
 Pressure peers
 Lack of resources
 Fear of unknown
 Organisation structure
How to overcoming resistance to change

Communication:
Reduces the communication gap in the organisation
Co-operation:
To improve the co-operation between the all the departments in the
organisation
Incentives:
To provide special incentives to the employers for every change in the
organisation
Overcoming resistance to change

Involvement:

Participation and involvement of the all the employees enhances changes in the
organisation

Management support:

The management offers training programs, emotional support to the employees

to reduces resistance of change.

Punishments:

The management is threatening jobs loss or transfer lack of promotion etc

These punishments reduces the resistance of change

 Organisational development

1.Introduction:

Organization development is a systematic and continuous process and

growth.

Organization development is basically long range programmer .

Organization development is attempting to change the behavior

attitudes and performance of the total organisation.

Organization development is an educational strategy which focuses on

the whole culture of the organisation in order to bring about planned
change

Organization development improves the managerial effectiveness

 ORGANIZATIONAL DEVELOPMENT
or OD techniques

 Defn: organizational development is a systematic,

integrated & planned approach by intertwining for
improvement of organizations effectiveness or techniques
traditionally used.
 Training & development of personal
 Team building
 Process consultation : job enrichment , modifications, job
design, stress management, career planning, job rotation.
Characteristics of Organization development

1. Organization development is a planned process.

2. Organization development is a dynamic process

3. The organization development effort should start at top

level of the management and reach to the low levels of the
organization structure

4. Organization development is educative strategy

5. Organization development is a broader perspective

 Role of Organization development

1. Organization development provides better management from top to bottom

2. Organization development improves co-ordination and team work in the

organisation

3. Organization development helps to understand the strength and weakness

of the organization

4. Organization development improves communication skill and conflict

resolution skills

5. Organization development provides opportunities of personal growth and

development

6. Organization development keeps the organisation healthy

7. Organization development increases the levels of enthusiasm and

personal at all levels of the organisation
 The organisation development process

(i)Problem recognition:

Organization development programme normally starts with the

problem recognition.

Organization development consultant various problem because of

which the organisation is not able to achieve its objectives.

For example customer, complaints is the problem of the

organisation
The organisation development process

(ii) Organization diagnosis:

Diagnosis gives correct identification of the problem .

It determine the nature of the future course of action.

For example customers complaints problem is identified correctly, the chief

executive contacts an organization development expert to discuss the problem.

The consultant then collects information from several organisational units by

interviews and observation.

The organization development consultant try to solve the problem with the use

of the above information

 The organisation development process

(iii)Development of change strategy:

The executive consult with other manger and sets up a meeting with
them.

At the meeting the organization development consultant gives lecture

about the customer relation.

The problem is diagnosed the organization development consultant

plans the various courses of action .

Short lectures, decision building and problem solving are integrated

in to the process.
 The organisation development process

(iv)Intervention:
Intervention is considered to be the action phase in organization
development process.

The success of an organization development intervention depends

upon the acceptance of it and willingness to implement or
maintain the change.
The organisation development process

(v)Evaluation and feedback:

Organization development is lengthy process so need for careful and
feedback.
This will help in suitable modification whenever necessary.
Feedback can be used as an energizing factor which will indicate what
further action is necessary.
 Difference between organizational development and management
development
Organizational Development
Management Development
1. It is a strategy which is planned 1. Management development is the device
and implemented from the top with to increase the skill and ability of
a view to bring about planned managers of an organization
change in the organization for the
purpose of increasing
organizational effectiveness
2. The goal of management development
2. The ultimate goal of organization programme is to help managers to
development may be the creation of discharge their responsibilities
a new team, changing the attitudes effectively.
of organization members and
developing values.
3. Management development’s approach
3. Organization development has
is education and training
problem solving approach
4. Organization development is a long
range strategy for organizational 4. It has short range programmes.
innovation and renewal.
5. Trained specialists are required 5. There is no special requirement of
specialist service
ORGANIZATIOANAL CULTURE

 It is the norms, general pattern of

behavior, shared beliefs and values that
members of organization have in
common.
 Culture can be inferred from what
people say, do and think within an
organization.
ORGANIZATIONAL CULTURE

 Organizational culture refers to a system of shared meaning held

by its members that distinguish their organization form the other
organizations.
PRIMARY CHARACTERSITICS OF ORGANIZATIONAL
CULTURE

 Innovation & Risk Technique

 Attention to details (Regarding products, process etc.)
 Outcome Orientation
 Team Orientation
 Aggressiveness
 Stability
COMPONENTS OF ORGANIZATIONAL CULTURE

 MATERIAL CULTURE

 NON-MATERIAL CULTURE
MATERIAL CULTURE

 This includes tools used by the organization, Transportation

methods, Processes, Systems, Uniforms etc.

NON-MATERIAL CULTURE

 This includes the beliefs, habits, customs, philosophies of the

organization or society.
ORGANIZATIONAL FUNCTIONS

 It has a boundary defining role

 It conveys a sense of identity for organizational members
 It enhances social systems stability
 Culture serves as a control mechanism that guides & shapes the
attitude & behavior of employees
ORGANIZATIONAL ETHICS

 Ethics are concerned with the truth & justice in conducting personal

and business affairs.

 It is not compulsory whereas it is most desired

TYPES OF ETHICS

 PERSONAL ETHICS

 ACCOUNTING ETHICS

 BUSINESS ETHICS
PERSONAL ETHICS

 PUNCTUALITY

 NEATNESS

 INVOLVEMENT IN WORK
ACCOUNTING ETHICS

 TRANSPERANCY IN BOOK KEEPING

 HONESTY IN ACCOUNTING
BUSINESS ETHICS

 It involves expectations of society (full-filling) fair competition

 Advertising Ethics
 Corporate Social Responsibility
 Consumer Autonomy
 Corporate Behavior
 CORPRATE SOCIAL RESPONSIBLITY

 Corporate social responsibility is voluntary involvement &

commitment in attacking social evils & problems.

 Eg., Eradication of illiteracy, Health Improvement, running a school,

Hospital, Free clinics, free tribal development centers.

CORPORTATE SOCIAL RESPONSIBILITY ALSO INCLUDES

 Using quality materials

 Safe Working Products

 Using Bio-Degradable and Recycled products

 Non release of chemicals, nuclear wastes, etc.