Orgnisational Behaviour Notes

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Contents
Module 1: Introductory topics .................................................................................. 1
Overview......................................................................................................................... 1
1.1 Thinking about organisations and management....................................................... 3
Introduction ..................................................................................................................... 3
1.1.1 Why do we need to manage? ................................................................................ 3
Conclusion ...................................................................................................................... 5
1.2 Managerial work ....................................................................................................... 5
Introduction ..................................................................................................................... 5
1.2.1 The nature of managerial work .............................................................................. 5
1.3 Founding views of management............................................................................. 10
Introduction ................................................................................................................... 10
1.3.1 Scientific management ........................................................................................ 10
1.3.2 Administrative management ................................................................................ 11
1.3.3 The human relations movement .......................................................................... 13
1.3.4 Bureaucracy......................................................................................................... 13
1.3.5 Systems theory .................................................................................................... 13
1.3.6 Other approaches ................................................................................................ 14
Module 2: Groups, teams and leadership ............................................................. 18
Overview....................................................................................................................... 18
2.1 The nature of groups and teams............................................................................. 20
Introduction ................................................................................................................... 20
2.1.1 Definitions of groups: two caveats ....................................................................... 20
2.1.2 Functions of formal and informal groups ............................................................. 21
2.1.3 Other arguments concerning the formation of informal groups ........................... 22
2.1.4 Characteristics of groups ..................................................................................... 22
2.2 Team roles.............................................................................................................. 26
2.2.1 Creating an effective team................................................................................... 27
Conclusion .................................................................................................................... 29
2.3 Leadership .............................................................................................................. 30
Introduction ................................................................................................................... 30
2.3.1 Core definitional elements ................................................................................... 31
First Published: Semester 2, 1997. This edition: Session 2 2005 Author: Mary Barrett. Edited and updated by Shaun
Saunders.
Published by the Graduate Studies Program, Faculty of Business, University of the Sunshine Coast, Maroochydore DC,
Qld, 4558
Copyright, University of the Sunshine Coast
Copyright protects this publication. Except for purposes permitted by the Copyright Act 1968 (Cwlth) reproduction by
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be made to the Manager Graduate Studies, Faculty of Business. Copyrighted materials reproduced herein are used
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We acknowledge, with thanks, those people who contributed of their time and knowledge to the development of this
course.
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2.3.2 Points of convergence across leadership theories .............................................. 31

Module 3: Motivation and persuasion ................................................................... 35
Overview....................................................................................................................... 35
3.1 Motivation ............................................................................................................... 38
Introduction ................................................................................................................... 38
3.1.1 Theories of motivation ......................................................................................... 38
3.1.2 Process theories of motivation............................................................................. 42
3.1.3 Orientation to work approaches........................................................................... 45
3.1.4 Applications of motivation theories to human resource management practices.. 46
3.1.5 Other HRM issues ............................................................................................... 46
3.2 Persuasion.............................................................................................................. 50
Introduction ................................................................................................................... 50
3.2.1 What is persuasion? ............................................................................................ 51
3.2.2 Why learn the basics of persuasion?................................................................... 51
3.2.3 Fundamental principles of persuasion ................................................................. 54
3.2.4 The four strategies of influence: .......................................................................... 59
Module 4: Organisational culture, power and politics ......................................... 64
Overview....................................................................................................................... 64
4.1 Organisational culture............................................................................................. 66
Introduction ................................................................................................................... 66
4.1.1 Elements of culture .............................................................................................. 67
4.1.2 Perspectives on organisational culture ................................................................ 70
4.1.3 Culture and organisational lifecycle ..................................................................... 72
4.1.4. Culture and strategy ........................................................................................... 72
4.1.5 Cultural change.................................................................................................... 73
4.1.6 Societal and global workplace culture ................................................................. 75
Conclusion .................................................................................................................... 76
4.2 Power and politics................................................................................................... 76
Introduction ................................................................................................................... 76
4.2.1 'Power to' versus 'power over' ............................................................................. 77
4.2.2 Sources of power................................................................................................. 77
4.2.3 Power strategies+................................................................................................ 81
4.2.4 An Australian contribution to thinking about power: the arena model.................. 81
Conclusion .................................................................................................................... 82
Module 5: Organisational structure and decision-making .................................. 85
Overview....................................................................................................................... 85
5.1 Organisational structure.......................................................................................... 87
Introduction ................................................................................................................... 87
5.1.1 Definitions of organisational structure and design ............................................... 87
5.1.2 The contingency approach to organisational design ........................................... 88
5.1.3 Applications of organisational design .................................................................. 89
5.2 Decision-making ..................................................................................................... 90
Introduction ................................................................................................................... 90
Master of Business Administration

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5.2.1 Alternatives to the rational model of decision-making ......................................... 91

5.2.2 A new form of rationality? .................................................................................... 97
5.2.3 Perspectives on what happens to information in decision-making ...................... 97
5.2.4 The escalation of commitment............................................................................. 98
5.2.5 Improving decision-making .................................................................................. 99
Conclusion .................................................................................................................. 100
Module 6: Organisational change, organisational behaviour and HRM, and
management issues of the future ........................................................................ 102
Overview..................................................................................................................... 102
6.1 Organisational change.......................................................................................... 104
Introduction ................................................................................................................. 104
6.1.1 Perspectives on managing change.................................................................... 104
6.1.2 The organisation development approach to managing change......................... 106
6.1.3 Managing change as a political process............................................................ 110
6.1.4 Contingency approaches to managing change ................................................. 112
Conclusion .................................................................................................................. 114
6.2 Organisational Behaviour and HRM ..................................................................... 114
6.2.1 Why HRM? ........................................................................................................ 115
6.2.2 The Human Resource Management Process.................................................... 115
6.3 Management issues of the future ......................................................................... 122
Introduction ................................................................................................................. 122
6.3.1 Ways of predicting the future ............................................................................. 123
6.3.2 Select leading indicators.................................................................................... 123
6.3.3 Changes in the world of work ............................................................................ 124
Implications of change ................................................................................................ 127
Graduate Studies Program

Faculty of Business, University of the Sunshine Coast
Course Work – Managing Organisational Behaviour MGT701 Page 1
Module 1: Introductory topics

Overview
The best way to think about 'Introductory topics' is to realise that to understand
management you first need to understand what is being managed – that is,
organisations. So the Module starts out with a discussion of organisations, not from any
single perspective, but by adopting a number of points of view to allow a more
comprehensive appreciation of what organisations are about. From there, we proceed
to a discussion of the nature of managerial work. Finally, the Module presents some
material on the founding schools and theories of management which, far from being
superseded in the manner typical of scientific theories in the conventional sense, tend
to persist in influencing the field of management even today.
Topics
Topics covered in this Module are:
1.1 Thinking about organisations and management
1.2 Managerial work
1.3 Founding views of management
Learning outcomes
Upon completion of this Module you should have:
• an appreciation of some of the diverse ways of interpreting organisations and how
being able to think about organisations in different ways contributes to
understanding the task of management
• an understanding of a diversity of approaches to thinking about managerial work
• an understanding of some of the formal founding theories of management, their
strengths and limitations, and their enduring contributions to modern views of
management
• some experience at applying some of these perspectives on organisations and
managerial work to examine your own approach to management, the workings of
your organisation and some case studies.
Learning resources

Managing Organisational Behaviour MGT701
Module 1 Introductory Topics Page 2

1.1 Thinking about organisations and

management
Reading 1.1
Daudelin, M.E. 2001, ‘Learning from Experience Through Reflection’, in The
Organizational Behavior Reader, eds J.S. Osland, D.A. Kolb, & I.M. Rubin, Prentice
Hall, Upper Saddle River, New Jersey. (See Chapter 3, pp. 67-73).
Introduction
This topic introduces you to management issues within organisations. It looks at the
need for management and discusses this in the context of the complex and dynamic
nature of organisations.
In learning about the organisations and management we will examine the following
issues:
1.1.1 Why do we need to manage?

As a way of getting to grips with the subject as a whole, let us first of all ask what
management is, and why we need to do it. This is a little like asking what is a 'family’,
what is 'money’, or trying to explain walking. In a way, the question is ridiculously easy,
because we know these things well and encounter them all the time. But from another
point of view, trying to explain them exhaustively, and in a way which would enable
someone who had never encountered them to understand them and try to use them for
themselves, means that the question is quite difficult.
Because we organise, we need to manage...
What we know at the outset, is that people have needs of all kinds: to eat, to entertain
themselves, to get from one place to another, to have shelter, to get an education, and
so on. We also know that, as a generality, there is a scarcity of time, energy and other
resources to meet these needs, especially if one person tries to do everything on their
own. This has always been true; we can imagine that from the time cave-people
decided that it was time to catch the next mammoth, it seemed like a good idea to work
in unison to achieve certain ends. In brief, people form organisations. It has been
argued, in fact, that it is largely because of humans' capacity to organise and work
together that they have come to dominate the planet as a species, not because they
are physically stronger. It is because they are more cognitively capable, can manage
tools, can think conceptually, and operate in groups – that is, plan things, cooperate
with each other and coordinate the doing of tasks – that humans have come to be so
successful. As we know from our own experience, people magnify their abilities by
working with others.

The needs of organisations

But organisations themselves have needs. We are all familiar with organisations which
were once vibrant and viable, but which are no longer so, and whose members have
simply slipped away. Organisations need:
A goal: some reason for being that is understood – at least in general terms – by its
members.
Mutual attraction: Of course, members of organisations will have their own needs as
well, which will not necessarily be those of the organisation. So the point about mutual
attraction is that organisations need to supply some way by which the members can
meet their own needs as well as those of the organisation. We need only think of the
fact that organisations pay employees and managers to come and fulfil the goals of the
organisation.
Resources: Organisations need something with which to work. These can be of all
kinds, but labour, land and capital – and sometimes technology – are some of the basic
resources organisations need to do their work.
Management: Because of the previous three items that we can see that organisations
need management. Keeping the organisation's goals understood, aligned with the
needs of members, keeping the organisation itself on track towards the goal by the
allocation of its various resources, starts to look like a complicated task. Organisations
need management to keep the whole show on the road.
Defining management
In the light of what and why we manage, it makes sense to define management as:
the activity whereby we obtain, allocate and use human efforts and physical
resources to get something done.
The pervasiveness of organisations

Given this obvious – and yet perhaps not quite so obvious – explanation for the value
of organisations, it is perhaps easier to see why there are so many of them. And
indeed, virtually every aspect of our lives is touched on by organisations in some form.
There is the company that made the blankets and sheets we threw off as we got out of
bed, and the manufacturers of toasters, bread, marmalade and coffee. From the
distributors of electricity, to the cars we got into to go to work; it is time to appreciate
more about these familiar, pervasive and yet mysterious creations: organisations.
Read Robbins, Chapter 1, for a discussion of some of the major

contextual and environmental influences on organisations today. Some of
these, such as ethics, are dealt with.
Textbook

Conclusion
It is clear from what has preceded that organisations are complex; they resist
explanation via a single tool or mechanism. We need multiple views to come to grips
with them. Organisations are changing entities existing within a variety of contexts that
are themselves often unstable. It is probably clear by now why studying an organisation
chart feels not much more informative than studying a faded photograph if you are
trying to capture an understanding of the organisation as a 'moving target'. Even using
more complex perspective such as the ones offered in this Module will have different
results according to the purposes and perspective of the person applying it.
1.2 Managerial work
Introduction
This topic examines the issue of work from a variety of points of view. It looks at the
motivations for work, attitudes to work and theoretical viewpoints on the nature of work.
Managerial work examines the roles and performance issues related to management.
1.2.1 The nature of managerial work
Managerial roles
For a long time, partly as a result of Fayol's work (which we will describe later in this
Module), it was thought that the best description of managerial work lay in classifying it
according to a series of roles: planning, organising, leading, and controlling. This
descriptive system remains popular today.
However, such a view of the calm and orderly approach to managerial work seemed to
be seriously questioned when Rosemary Stewart wrote up the results of a study of
what managers really do. From her observations of 100 managers she found that over
a four-week period each of them had, on average, only nine periods of half-an hour
without interruption, which is less than one every other day. This does not leave much
time for systematic planning, organising, leading and controlling.
Following this initial work, Mintzberg (1975) produced a classic paper in which he tried
to dispel some of the myths and folklore about what a manager really does. See
Robbins (textbook) for a summary of Mintzberg's findings. Mintzberg, as a result of his
study, identified ten roles for a manager. These were grouped into Interpersonal roles,
Informational Roles and Decisional roles, as follows:
Interpersonal roles
• figurehead
• leader
• liaison.

Informational roles
• monitor
• disseminator
• spokesperson
• decisional roles
• entrepreneur
• disturbance handler
• resource allocator
• negotiator.
The balance of these roles in a particular managerial job may vary, but basically all
managers will need at least some skills in each of the roles.
Reading 1.2
Mintzberg, H. 2001, ‘The Manager’s Job’, in The Organizational Behavior Reader, eds
J.S. Osland, D.A. Kolb, & I.M. Rubin, Prentice Hall, Upper Saddle River, New
Jersey. (See Chapter 2, pp. 34-49).
Management skills (or competencies)

Another relatively simple view of management – at least in terms of the number of parts
in which it classifies the management field – is Katz's (1974) conceptualisation of three
broad management skills: technical skills, human skills and conceptual skills.
It is important to note that Katz and many other authors consider the balance of skills
should not remain the same as a manager's career progresses. That is, the importance
of technical skills tends to – indeed ought to – decline in favour of human skills and
then conceptual skills as managers move further up the organisational hierarchy.
The need for this shift arises because the nature of what is required of managers
changes depending on their level in the organisational hierarchy. These variations
could be described briefly as follows:
At lower or operational levels, managers are generally involved in the supervision of
non-management personnel. They are essentially technical managers responsible for
producing products or services.
At the tactical level, middle managers translate the goals of the organisation into
specific objectives and activities. There is responsibility for the coordination of
resources particularly at the departmental level. They direct and control the work of
others.
At the strategic level, senior managers are responsible for the efficiency and
effectiveness of the organisation as a while. They manage the interaction with the
external environment. A long-term, future-oriented focus is required in order to set the
most appropriate organisational mission and goals.
The types of management associated with these levels are, respectively, supervisory,
middle management and senior management.

Another functional view

In considering the nature of managerial work, we began by discussing managerial roles
(Mintzberg) via a discussion of Fayol's basic managerial functions. From there we
moved to a discussion of managerial skills. We return now to a somewhat more
elaborate view of the functions of management work, which is now often discussed in
the context of forming effective teams. This view is presented by Margerison and
McCann (1985).
Margerison and McCann's work categories comprise nine component functions. The
authors argue that all of these work functions must be present in the various levels of
an organisation if the organisation is to achieve high performance. The functions are:
• advising acquiring and distributing information
• innovating, creating and experimenting with ideas
• promoting seeking and presenting opportunities
• developing assessing and developing practical plans
• organising implementing and pushing for action
• producing following through and completing task outputs
• inspecting auditing and controlling systems and procedures
• maintaining upholding and enhancing quality and standards
• linking integrating and coordinating the work of others through meetings and face-
to-face contact.
Effective vs successful managers

Luthans (1988) and others have made special contribution to the field by pointing out
which managerial activities lead to success (in terms of how quickly the manager is
promoted) compared to which activities appear to be associated with managerial
effectiveness. Clearly, the importance of social and political skills, which we will
examine further in Module 4, should not be underestimated. Kotter, in a 1982 study,
presents a typology that is similar to the list of managerial activities provided by
Mintzberg. He presented the following common 'job demands' on managers:
1 Setting basic goals, polices and strategies despite great uncertainty surrounding
key factors.
2 Achieving a balance in the allocation of organisational resources among the
various claimants.
3 Monitoring activities so as to be able to identify problems and quickly resolve them.
4 Getting information, cooperation and support from those further up
5 Getting cooperation from groups over which they have no direct authority (for
example, unions, customers, suppliers, other departments or divisions)
6 Motivating and controlling staff; managing conflict.
But Kotter also goes somewhat further, presenting these job demands as part of an
overall three-part process: that is agenda setting, network building and executing
(getting networks to implement agendas).

Agenda setting centres on developing a set of loosely connected goals and plans,
sometimes resulting in formal documents, sometimes remaining as ideas in the
manager's head. The managers develop these agendas based on their own knowledge
of the business and organisations involved, plus information gathered primarily from
discussions with people.
Network building involves the developing of a network of cooperative relationships
with people who could make an important contribution to the successful implementation
of the agenda. Thus managers develop relationships with superiors, subordinates,
peers and various other individuals and groups, both inside and outside the
organisation. The more dependent the managers are on a particular group or
individual, the more they try to develop the relationship. As managing generally
involves getting things done through people, it is not surprising that these managers
put a lot of effort into developing support among key people for the set agenda.
Network building involves encouraging the various network members to identify with
the managers' agendas as well as fostering a sense of cooperation and commitment
among them. It involves developing, maintaining and shaping an informal network of
relationships.
Execution involves the mobilisation of support from the network for the implementation
of the agenda. Often this is done – paradoxically – by 'standing back': giving those with
the capacity to accomplish a task successfully the authority to do just that and not
directly intervening. Sometimes direct intervention occurs to ask, demand, cajole,
threaten, praise or reward. Some actions involve the use of the manager's formal
power; others are based on informal persuasion.
Kotter's view reinforces the political emphasis of Luthans et al’s view of management.
Taken together, these studies and similar work describe the real world of managing.
Perhaps it comes as a relief to find that the frenetic reality of your job is at least being
acknowledged in research. But it is disquieting, for example, to discover that the
formula for success in management is not the same as the formula for effectiveness,
and that management is by its nature a highly political activity. In all, the research
confirms that management is a demanding and complex activity, and that chaos,
drama, power plays, bargaining, negotiating and demanding schedules 'go with the
territory'.
By now, you can perhaps add a number of new fads to the list. Consider for example
the popularity of Total Quality Management or TQM (late 80s to early 90s) and the
current predilection for various forms of corporate re-engineering. This is not to argue
that such 'recipes' have no value, but rather that any single precept in management is
unlikely to be capable on its own of solving complex problems.
In all, the readings indicate the complexity of managerial activities, including some
things various management jobs have in common as well as differences between
them, say as managers move further up the hierarchy (Mintzberg), or according to the
functional areas of the organisation they occupy. It may be useful at this point to
summarise what these studies tell us as a whole about managerial activities.
The pace of work is hectic, often fragmented and unrelenting. Particularly as managers
reach the top levels of major organisations, workloads become considerable (50 hours
and more per week for even relatively junior managers). Breaks become less frequent,
and there are continual demands for information. Despite the intention to plan and
reflect on future strategy, the manager's day tends to be subsumed in 'fire-fighting'
unexpected problems.
The content of managerial work is varied and fragmented. All the studies show that
managers typically engaged in a large number of activities covering ten or more

different types depending on whose model is being used to classify them. Such
activities tend to be disjointed, with little connection between them, because so many
are initiated by others. There always seem to be more problems than one person can
handle, and this increases the further up one goes in an organisation. Problems
present themselves 'out of the blue' and in random order. There is little time for careful
analysis, and so managers are inclined to ignore the 'fuzzy' and difficult to diagnose
areas, concentrating on areas they know best, and resorting to styles of approach born
out of habit and personal preference rather than considered analysis. They find it
difficult to think beyond their immediate domain of responsibility, or to define solutions
that involve more than their usual resources.
Interactions often involve peers and outsiders. The contributions of Luthans, Kotter,
Kanter and others show that successful managers tend to be those who can
communicate across functions, divisions and with people outside the organisation. So
networking at times surpasses even the higher level conceptual skills as managers
develop skills and sensitivity to mobilise their workforce.
The high need for lateral and external contacts is explained by managers' needs for
information to reduce levels of uncertainty. If the story of the 1990s and the early part
of the new century is the need for organisations to manage change, then the need to
reduce uncertainty increases correspondingly. As Kanter notes, the successful
entrepreneurial manager builds coalitions of supporters, starting with their peers and,
over time, adding superiors.
Interactions typically involve oral communication. Across studies, managers are
reported as using a variety of methods to obtain information. These include written
messages, phone messages, scheduled and unscheduled meetings and observational
tours. Byrne extends these terms to include idea scavengers and management by
walking around. Estimates put the amount of time managers spend in oral
communication as varying between one quarter and three-quarters. Managers need to
pay attention to gossip and rumours: they represent up-to-date information whether or
not their content is factually based. Even joking and small talk are necessary for
maintaining personal networks.
Decision processes are disorderly and political. Managers seldom make major
decisions immediately, but rather take a series of small steps towards the larger
decision. Organisational decision processes are highly political, and decisions can drag
on for months due to delays, political in-fighting and compromises. The political
phenomena associated with decision-making will be dealt with more formally in the
Module 'Organisational culture and power and politics', and also in the Module 'Control
and decision making'.
Most planning is informal and adaptive. The descriptive studies on which this part of
the Module has been based show that while some planning does occur, it tends to be
informal and implicit. Kotter's work identifies how managers define agendas that
consist of loosely connected goals. Kotter found that the achievement of agenda items
is a gradual, continuous process, in which managers use a range of influence
techniques to shape opinion and mobilise support. Contrary to conventional models of
strategic management, which portray management as an essentially top-down process,
it appears that the objectives and strategies adopted by many firms emerge from more
bottom-up processes.

Reading 1.3
Teal, T. 2001, ‘The Human Side of Management’, in The Organizational Behavior
Reader, eds J.S. Osland, D.A. Kolb, & I.M. Rubin, Prentice Hall, Upper Saddle
River, New Jersey. (See Chapter 2, pp. 49-57).
1.3 Founding views of management
Introduction
This topic examines several key models of management theory. These are standard
theories you are required to be familiar with, but you are also encouraged to critique
and evaluate them.
In this topic we will examine the following issues:
• scientific management
• administrative management
• the human relations movement
• bureaucracy
• systems theory
• other approaches.
Read Robbins, Chapter 1, for a discussion of management functions,

roles and skills.
Textbook
1.3.1 Scientific management

Formal theories of management emerged with the scientific management approach in
the early 1900s. Its proponents sought to find – and apply – 'one best way' to complete
production tasks. Selection, training of workers and the standardisation of processes,
procedures and equipment were also emphasised.
The name most commonly associated with scientific management is that of Frederick
Taylor. Taylor believed that managers should:
1 Study each job and determine the best way to do it.
2 Select and train workers capable of doing the job.
3 Monitor the work to make sure employees are doing it in the best way.
4 Assume all planning and organising responsibilities while the workers carry out
their assigned tasks.
The focus was on increasing productivity through the work of individual employees.
Lilian and Frank Gilbreth and Henry Gantt are also closely linked with scientific
management. The Gilbreths tried to improve the performance of workers by identifying
the most efficient set of motions for any task that would at the same time reduce worker
fatigue. Their study of bricklayers in action and the techniques devised to triple their

daily output is a well-known example of their work. A legacy of Gantt's work still used
today is the Gantt Chart, a means of charting production scheduling.
The major advantages of scientific management were increased efficiency and
productivity in manufacturing. Scientific analysis of the workplace including task
breakdown and selection and training of workers also had a significant impact on
managerial practice. We recognise in these practices the forerunners of today's job
descriptions and duty statements. The linking of higher performance with greater
rewards and the focus on cooperation between management and workers are also
features of the modern workplace.
In essence, however, the scientific approach considered workers as extensions of their
equipment or 'human machines’. Moreover, many of the assumptions about human
motivation were simplistic, such as the view that individuals were only motivated to
behave in self-interested ways that would accommodate their economic and physical
needs. Issues such as personal recognition, status and achievement played no part.
The scientific approach assumed that workers must be rigidly controlled by
management as, otherwise, they would be unreliable and uninterested in their work.
The approach to leadership was, accordingly, an authoritarian one. The emphasis was
on the internal functioning of the organisation rather than its capacity to respond to the
external environment.
1.3.2 Administrative management

The administrative management approach began in the early 1900s and extended into
the 1950s. The reason for its delayed influence was not only the predominance of
scientific management, particularly in the United States, but the fact that the book,
Administration Industrielle et Generale, written by the movement's principal proponent,
Henri Fayol, was not translated from the French until the mid 1940s. There were other
like-minded thinkers, however, including Chester Barnard and Mary Parker Follett.
A central theme of the administrative management approach was the identification of
the major principles and functions that managers could use to achieve superior
organisational performance. Accordingly, in place of scientific management's emphasis
on the individual job and how best to do it, administrative management thinkers took a
broad overview of management functioning. Chester Barnard, for example, recognised
the necessity of balancing the goals of the organisation with the needs of individuals
and identified the importance of informal groups within organisations. Follett
emphasised that managerial principles and techniques should be applied in
accordance with the particular requirements of individual situations – a tenet which is
equally applicable to today's managers operating in a turbulent environment.
Henri Fayol, a French mining engineer and executive, focussed on the administrative
level of organisations. He recognised that skills in technical, commercial, financial,
security, accounting and managerial activities were at least as important as
engineering approaches to enhanced productivity. Of all these activities, management
was the one least clearly defined. Despite this, Fayol believed that its skills could be
made explicit and taught as a profession.
Managers in different positions in organisations were observed to use different skills.
Generally, in lower level positions, managers needed to use high levels of specific
technical skills combined with some managerial ability for first line supervision. As they
progressed to higher levels, they needed to exercise fewer technical skills and a much
greater range of managerial ability.
We have already referred to Fayol's four principal management functions, but we
define them now more exactly as follows:

1 Planning: Deciding on the ways in which the organisation will meet its goals.
2 Organising: Allocating human and physical resources to carry out organisational
plans.
3 Leading: Directing employees to carry out required tasks.
4 Controlling: Monitoring how organisational plans are being carried out and taking
corrective action when needed.
Fayol also described fourteen principles of management, which are briefly described as
follows:
1 Divisions of labour: Tasks and responsibilities are specialised to achieve
maximum efficiency.
2 Authority and responsibility: Orders are supported by formal and personal
authority and with the associated power to apply rewards or penalties.
3 Discipline: Respect for organisational rules is accompanied by penalties for
breaking them.
4 Unity of command: Each employee should have only one direct supervisor.
5 Unity of direction: There should be only one manager and one plan for
operations of the same type.
6 Subordination: of individual interest to the organisation interest. Organisational
interests and goals take precedence.
7 Remuneration: Appropriate and fair reward for effort provides incentive.
8 Centralisation: A balance between centralisation of authority and responsibility in
a manager and delegation to employees should be maintained.
9 The hierarchy or scalar chain: The line of authority and communication should
run from top to bottom, although managers need to communicate laterally with
their peers.
10 Order: All resources should be correctly positioned to support the organisation's
direction and goals.
11 Equity: Friendliness among employees and managers and fair discipline increase
commitment.
12 Stability of staff: A lower turnover rate of employees and long-term commitment
are necessary for an efficient organisation.
13 Initiative: Employees should be encouraged to conceive new ideas and carry out
plans without fear of failure.
14 Esprit de corps: High morale and team spirit are organisational assets.
No doubt you will see applications of many if not all of these principles in your
organisation today, whether as stated or in some variant form. The need to see their
value but to adapt them for each organisation's needs may almost appear self-evident.
This was not always the case, however. While it was Fayol's intention that the
principles be applied flexibly, at first they tended to be taken as rigid prescriptions
without regard to environmental, technological, personnel or other factors. Today the
need to apply a 'customised' view of them is better recognised and the fact that
organisations still so frequently use Fayol's precepts – or some version of them – is
evidence of their fundamental value.

1.3.3 The human relations movement

The human relations' movement emerged in the 1930s. It emphasised people rather
than machines, and focussed on the recognition that informal groups in organisations
had a significant impact on organisational life. In contrast to the scientific management
approach, it held that worker satisfaction at a personal level, and the unpredictable
aspects of some facets of organisational life needed to be taken into account.
The Hawthorne Studies conducted during the 1920s and early 1930s by Harvard
researchers Elton Mayo and Fritz Roethlisberger are perhaps, collectively, the best
known research associated with this movement. The studies took place at the Chicago
factories of the Western Electric Company. They aimed – at least at first – to
investigate how physical working conditions affected the productivity and efficiency of
factory workers. It was found, however, in the course of the famous 'illumination
studies’, that worker efficiency did not go up and down with improved and decreased
quality of lighting – in fact that it increased continually. It was concluded that the
attention paid to the workers by the researchers made them feel important, take pride
in their work and increased their motivation – an effect known now as the 'Hawthorne
Effect’. Worker attitude and morale, as well as informal group norms, were recognised
as affecting productivity in powerful ways.
1.3.4 Bureaucracy
The German sociologist, Max Weber, contended that the structure of an organisation
had much to do with its level of efficiency, and that a clearly structured organisation
with well-defined roles and responsibilities – a bureaucracy – provided at least a
theoretically ideal organisational form. Some features of Weber's ideal bureaucracy
include:
• there is a division of labour where each position is well defined and appropriate
authority is delegated
• standardisation and control are achieved by using formal rules and standards
• positions are in a hierarchy of authority
• selection and promotion depend on competence and qualifications
• rewards and penalties are applied according to standardised procedures
• loyalty to the organisation results in long-term job security.
Weber's bureaucracy was designed to enable large organisations to carry out a wide
range of activities in an orderly and efficient manner. It focuses on positions rather than
on the people occupying them, implying that the structure of organisations should –
and could – remain relatively stable over the longer term. While many organisations
retain features of Weber's bureaucracy, it is generally accepted that its desirable
features are most easily achieved in routine and predictable environments. Other more
flexible and responsible organisational structures are required in situations of rapid or
unpredictable change.
1.3.5 Systems theory

Even the administrative management approach, with its attempt to look at overall
management functioning, still tended to overlook the relationship between
organisations and their external environments. Systems theory, which originated in the

biological sciences, attempts to consider the organisation as a whole system made up

of various interrelated parts of sub-systems. This theory took as its starting point the
idea that organisations are created for particular purposes and have multiple goals. In
contrast to the scientific and administrative approaches which tended to regard
organisations as complete unto themselves, that is as closed systems, systems theory
drew attention to the interaction of the organisation with its environment, that is as an
open system. Inputs, transformation processes, outputs and feedback are the key
elements of all open systems, and managers need to focus on the interrelationship of
these elements.
1.3.6 Other approaches

There are, of course, numerous other formal and informal approaches to management,
most of which combine elements of the approaches just described. Total Quality
Management (TQM), for example, aims to combine the measurement emphasis of
scientific management and its continual search for improvement in task processes with
the attention to human factors that characterises the human relations approach.
Another approach, known as Theory Z, emphasises the need for a global vision. The
Theory Z model, developed by Ouchi, attempts to integrate common U.S. and
Japanese business practices into a single middle-ground framework.
In brief, the characteristics of traditional American organisations, which include:
• short-term employment
• individual decision-making
• individual responsibility
• rapid evaluation and promotion
• explicit control mechanisms
• specialised career path
• segmented concern for employee as an employee
– are combined with elements of 'Type X' or Japanese organisations, such as:
• lifetime employment
• collective decision-making
• collective responsibility
• slow evaluation and promotion
• implicit control mechanisms
• non-specialised career path
• holistic concern for employee as a person
– to yield 'Type Z' organisations which offer the best of both, as follows:
• long-term employment
• collective decision-making
• individual responsibility

• slow evaluation and promotion

• implicit, informal control with explicit, formal measures
• moderately specialised careers
• holistic concern, including family.
The contingency perspective, which argues that managers should make decisions in a
way that is most suitable for a given situation, appears to be a general philosophy
rather than a defined approach. There is a recognition that there are no universal
principles and always more than one way to achieve the same goal. Nevertheless,
careful analysis of key variables is vital: for example the way organisational size,
technology, changes in the environment, and the characteristics and needs of human
resources are affecting the relationship between the organisation and its environment.
Managers can be either reactive, that is adapting and responding to situations as they
arise, or pro-active, that is, anticipating future opportunities or problems and taking
steps to influence the situation to the advantage of their organisations.
Activities
Note: The following activities are optional. They are designed to help you develop your
understanding of the various topics in this Course.
Thinking about organisations and management

Describe an organisation of your choosing as if it were a machine, as if it
were an organism, and as if it were a political system. Which metaphor
seemed to be the most 'natural' for you as a way of describing your
Activity 1.1 organisation? Which seemed to be the most difficult? Why do you think
Apply some this is so? (Consider your own place within the organisation as much as
organisational organisational factors when thinking about this issue.) What insights do
metaphors you gain from viewing the organisation from multiple perspectives?
Managerial work
Which of Mintzberg’s five roles are the most important in your current job
(or in the job of the manager(s) you are observing)? How do you think the
Chief Executive spends his or her time? If that is different from your job –
Activity 1.2 in terms of the balance between Mintzberg's roles – is that desirable? Why
Analyse your job or why not?
in terms of
Mintzberg's
managerial roles
Think about your current job. What are the prescribed and discretionary
work elements of your job? You might like to use a pie chart to describe
the relative balance of these components. Is this balance appropriate in
Activity 1.3 relation to the time you are spending on each component? (You might
Analyse the also want to consider here the targets you need to meet to achieve
prescribed and promotion or a satisfactory performance rating in your job.)
discretionary
components of
your job.

If you are already operating as a manager, what level of contraction do

you use when giving instructions or setting targets for people who report
to you? What level is (mostly) used when instructions are given to you?
Activity 1.4 Discuss the effects in each case. Are there any effects you hadn't
What level of anticipated as a result of the level of contraction, and do you now wish to
contraction do change something about the current arrangements in either direction?
you use?
If you are already occupying a management role in your organisation,

especially one at middle or senior management, use the categorisations of
Katz or Burgoyne and Stewart to consider the way your job has altered
Activity 1.5 since you joined (or started) your organisation. Alternatively – if you have
Analyse how the worked in many organisations – you may wish to carry out the analysis
balance of skills from the start of your career. As a further alternative, if you have not yet
you need in your moved into management, consider the ways the career path of your boss
job has changed has changed since he or she entered the workforce.
Can you observe a change in the balance of the skills you (or your boss)
have applied which corresponds to the divisions that these authors
described? Are there specific skills you will need to develop as your
career progresses? Do you miss the opportunity to do tasks that were
important at an earlier level but which you have needed to leave behind?
Compare the findings of the work by Mintzberg, Kanter, Kotter, Luthans et

al. and Kraut et al. from the Readings, the textbook and other summary
material in this Module. Compare the roles or activities of managers that
Activity 1.6 each identifies, showing the ones the authors have identified in common
Compare the and which seem to be unique. Then compare your results to the original
theorists 'Planning, Organising, Leading and Controlling' description of
findings about management which we owe to Fayol. Is Fayol's formulation still of value to
managerial work managers now, despite the attempts by Mintzberg and others to contest
it?
The work of Luthans et al, as we noted, has the advantage that it identifies
differences between successful and effective managers. Analysing your
organisation (or through discussions with people who work in another
Activity 1.7 organisation), build up a profile of cases of people who fit the 'successful'
Does your and the 'effective' categories identified by Luthans et al. Check within the
organisation organisation to see what it is doing to reward these types of managers, in
reflect the particular if these reward systems are in line with Luthans et al’s
distinction suggestions. Perhaps, on the contrary, they provide evidence to challenge
between his suggestions.
'successful' and
'effective'
managers?
Founding views of management

Which of the following best defines your approach to scientific
management?
Activity 1.8 • It makes good sense.

Define your
• It is a narrow/belittling view which tries to reduce people to the status
attitude to
of machines
scientific
management • It is idealistic, overlooking the inevitable conflict that exists between
management and labour.

• It is simplistic to assume the extra money will motivate people to work

harder.
• It is an authoritarian view that is inappropriate in today's work

environment.
If your choice suggests that you believe scientific management ought to
be superseded, do you also see any evidence of the resilience of scientific
management within your organisation? How might you reconcile the two
views?
How applicable do you believe Fayol's 14 principles of management are in

today's organisations? Consider four of the principles and discuss how
they are being applied in your own organisation. What accounts for any
Activity 1.9 similarities or differences you observe from the strict formulation of the
Re-evaluate principles? How would you change – or perhaps even reinstate – the
Fayol's application of Fayol's ideas in your organisation?
principles.

Module 2 Groups, teams and leadership Page 18
Module 2: Groups, teams and

leadership
Overview
'Groups, teams and leadership' continues the theme of 'what is managed' but on a
smaller scale by examining the nature of groups and the subtle distinctions between
groups and teams. Groups and teams are seen to present both advantages and
problems for managers as well as the people in them, and you are invited to examine
the groups you are part of to find out how their functioning can be improved. Finally, we
examine the complex area of leadership: theories about it, (which seem to multiply
despite the vast number of theories and concepts that already exist), and substitutes
for it (since we know that some jobs get done without any clear leader seeing that it
happens). Finally we look at some practical work on the kind of leader you are, and
how your style of leadership can be improved.
Topics
2.1 The nature of groups and teams
2.2 Team roles
2.3 Leadership.
Learning outcomes
After successfully completing this Module, you should have:
• an understanding of the stages involved in forming a group, as well as some of the
controversy surrounding this topic
• an understanding of the nature of groups, both formal and informal, and what
distinguishes groups from teams
• an understanding of the kinds of needs groups fulfil, and the mechanisms by which
they do it
• gained some experience at analysing a number of the groups and teams you are
involved in, and working out how their functioning can be improved
• an understanding of the theories surrounding the nature of leadership and what
they have in common
• gained some experience at analysing leadership situations and improving your
own capacities as leader.

Learning resources
Asch, SE 1951, 'Effects of group pressure upon the modifications and distortion of
judgement', in Groups, leadership and men H. Guetzkow ed., pp. 177–190,
Carnegie Press, New York.
Belbin, RM 1981, Management teams: why they succeed of fail, Heinemann, London.
Bramel, D & Friend, R 1987, 'The work group and its vicissitudes in social and
industrial psychology', Journal of Applied Behavioural Sciences, vol. 23, pp. 233–
253.
Dalton, M 1959, Men who manage. Wiley, New York.
Dunphy, D 1981, Organisational change by choice, McGraw-Hill, Sydney.
Fox, A 1985, Man mismanagement, Hutchinson, London..
Grzyb, GJ 1981, 'Decollectivization and recollectivization in the workplace: the impact
of technology on informal work groups and work culture', Economic and Industrial
Democracy, vol. 2, pp. 455–482.
Kanter, RM 1983, The change masters, Unwin, Boston.
Katz, FE 1973, 'Integrative and adaptive uses of autonomy: worker autonomy in
factories', in People and organisations G Salaman & K Thompson eds, Longman,
London, pp. 190–204.
Leana, CR 1985, 'A partial test of Janis's groupthink model: effects of group
cohesiveness and leader behaviour on defective decision making', in Journal of
Management, vol. 11, pp. 5–17.
Morgan, G 1986, Images of organisation. Sage, Beverly Hills CA.
Perrin, S & Spencer C 1981, 'Independence or conformity in the Asch experiments as a
reflection of cultural and situational factors', British Journal of Social Psychology,
vol. 20, pp. 205–209.
Schein, EH 1980, Organisational psychology, 3rd edn, Prentice Hall, Englewood Cliffs
NJ.
Sinclair, A 1989, The tyranny of the team, working paper no. 4, Graduate School of
Management, University of Melbourne.
Trahair, RCS 1985, 'The workers' judgement and informal organization', in Australian
organisational behaviour: readings, 2nd edn, eds WM Ainsworth & QF Willis,
Macmillan, Melbourne, pp. 60–74.

2.1 The nature of groups and teams

In learning about the place of groups and teams in organisations and how best to
manage them we will examine the following issues:
• functions of formal and informal groups
• characteristics of groups
• creating an effective team.
Introduction
One of the notable consequences of the human relations movement discussed in
'Introductory topics', was the greater – and more positive – attention given to groups in
management and organisation theory. To Mayo, McGregor and even Weber, groups
were a fact of life, central to psychological well-being because they reflect a basic
human need for social bonds. Researchers such as Likert continued the human
relations tradition in arguing that the primary task of management was to ensure that
groups functioned in ways which supported rather than undermined management
objectives. This contrasted with the Scientific Management view of groups which was
that they undermined productivity by determining that individual efficiency fell to the
level of the least efficient worker in the group.
Traditionally, and despite the prominence given nowadays to teamwork, managers
have generally been ambivalent towards groups. Managers are aware of the
importance of interdependent cooperative action, and even of the synergies – another
term for enhanced outputs – which can be generated, but they are also wary of the
influence that groups can have over their members (Bramel & Friend, 1987). In the first
part of this Module, we will examine a range of aspects of the significance of groups
and teams for an understanding of their behaviour and effects in organisations. Then,
in the second part of the Module, we will consider the even more vexed question of the
nature of leadership.
It will be clear from an early point that, perhaps even more than in some other Modules,
the material considered under 'Groups and teams' necessarily overlaps with issues
considered elsewhere. For example, some of the roles that individuals assume within
teams overlap with our consideration of management roles in 'Introductory topics'. This
is because managerial work usually involves coordinating participants on complex
tasks that are best carried out interdependently – more simply: 'getting things done
through other people'. As a further example, the function of socialisation and
establishment of 'norms' that we will see to be one of the functions of groups, is also
closely linked to the issue of organisational culture. Group assessment and reward
issues will be dealt with further under Human Resource Management topics in 'Human
Resource Management and Conflict Negotiation'.
2.1.1 Definitions of groups: two caveats

Robbins, our textbook, is particularly comprehensive in its coverage of groups and
teams, and the distinction it makes between the two is a useful one, namely that group
output is a result merely of the summation of individuals' efforts whereas teams
generate positive synergy through coordinated effort. However it is a good idea to
remember that individual writers vary in their use of the terms 'group' and 'team', so be

aware as you read that disparities among various authors' implied or overt definitions
are likely.
Read Robbins' textbook, Chapters 8 and 9.
Textbook
The textbook provides classic and fairly standard material on groups. The base being
used is essentially social psychology – a discipline that is both theoretically and
methodologically strong. Thus the textbook defines groups, as well as different types of
groups, and discusses the effects of various external and internal (structural) influences
on the group. In a welcome development, the textbook also provides a counterbalance
to the ideas of group formation, which are frequently presented in an uncritical way.
The section on the punctuated equilibrium model of group development (see Robbins'
textbook) provides a more realistic model for the less smooth and predictable path that
groups traverse to achieve their goals. Essentially, the textbook's definitions of groups
have a central notion of belonging, and also frequently a sense of common purpose, so
that – to invoke the classic contrast – groups are differentiated from a mere collection
of individuals waiting for a bus.
Despite this, it is important to note that, in practice, the term 'group' tends to be applied
to a range of situations where the existence of a sense of belonging or of collective
identity must be speculation at best. For example, some production processes are
organised around collectivities that have been formed by management as the basic unit
for production. Such collectivities may be labelled groups before, and in the absence
of, any evidence of the existence of the group characteristics the textbook describes.
So the study of groups in organisations is likely to be the study of:
• the collectivities that conform to the definition of 'group’, and
• collectivities to which the label 'group' has been applied.
2.1.2 Functions of formal and informal groups

The textbook's Table 8.1 illustrates the reasons people join groups. We may link this
more overtly to the notion of formal and informal groups that the textbook addresses
briefly. Schein (1980) defines the formal functions of groups as follows:
• a means of working on a complex task that cannot easily be undertaken by an
individual or by a number of independent individuals; that is, where
interdependence is important
• a means of generating new ideas where important information is widely dispersed
or where mutual stimulation enhances creativity
• a liaison or coordination device, particularly if the group includes members from
the various parts to be coordinated
• as a problem-solving mechanism, if the issue is complex, requiring inputs from a
range of perspectives and/or with ramifications for the organisation as a whole
• a means to facilitate the implementation of decisions where diverse parts of the
organisation are involved and can affect the success of the change
• a means of socialisation whereby a common message can be given and a
common perspective reinforced through group pressure.

The informal functions are:

• a means of fulfilling social needs, that is, needs for friendship and social interaction
• a means of developing, enhancing and confirming a sense of identity and self-
esteem
• a means of establishing and testing beliefs and understandings. Through shared
experiences and shared discussions, shared meanings are developed
• a means of reducing feelings of insecurity, anxiety and powerlessness
• as a problem-solving, task-accomplishing mechanism for informal objectives.
These separate lists help make it clear that formal groups such as committees or
departments may be defined as such by edict, yet it is often unclear whether they really
reflect the internalised common orientations of employees within the group. Informal
groups, by contrast, are often applied from the outside – as with the sociometry
analysis example in the textbook – as a result of observing group-like behaviour.
2.1.3 Other arguments concerning the formation of

informal groups
While the explanation above about supplying personal, mostly social, needs is the most
commonly offered reason for the formation of informal groups, there are other
explanations. They can be grouped as follows:
Political/economic reasons
Trahair (1985), Grzyb (1981) and Fox (1985) have analysed work situations where
informal groups seem to be aimed at increasing worker control over their work, forming
bonds which enhance acts of solidarity (as in industrial action) or defending and
advancing job interests. Accordingly, such groups often serve a 'counter-organisational
function’, as the basis for an alternative system of power and influence which can act to
subvert the formal goals of the organisation. Managers, in turn, may attempt to prevent
such groups forming through their arrangements of the workplace layout or by rotating
the leaders of such groups.
Structural explanations
Katz (1973), Dalton (1959) both also dispute the social needs interpretation, arguing
that informal groups develop because formal structure is never absolute in terms of its
determination of the actions of workers. That is, informal groups may fill in the gaps in
formal practices in a way that supports the general intentions of management, rather
than being a form of resistance to them. Dalton argues that informal groups contribute
to organisational effectiveness.
2.1.4 Characteristics of groups

There are several dimensions by which groups can be described. Of the many that the
textbook discusses, we will consider four in particular: roles, norms, conformity and
cohesiveness. Interestingly, much of the research on groups has focussed not so much
on what makes groups function more effectively, but on what can go wrong with groups

(Janis 1988). The phenomenon of groupthink, for example, which arises from a
combination of the effects of norms, the pressure to conform, and group cohesiveness,
has received a great deal of attention. In considering these four dimensions, we will
consider not only the problems that arise from one or more of these characteristics of
groups, but the ways in which they help groups to endure.
Roles
Our earlier discussion of the differentiation of roles in management can be extended to
a consideration of different roles within the group. Group activity requires both task-
focussed and maintenance-focussed actions. The former directly address what is
needed to carry out the work task of the group; the latter attends to the maintenance of
interpersonal relations and cohesion within the group. Dunphy (1981) has provided a
summary of these task and maintenance roles, plus those often seen as disruptive:
Role function
A TASK
Initiator: Most active in setting objectives and initiating action
Expert: Has and provides specialist advice
Evaluator: Assesses progress; analyses problems
Implementer: Focuses on implementation details, timing and methods
Procedural technician: Emphasises the importance of rules and procedures and
precedent
B MAINTENANCE
Exemplar: Spokesperson/liaison/negotiation for the group
Encourager: Praises; supports; empathises
Confronter: Brings conflicts out into the open
Harmoniser: Mediates; conciliates
Tension reliever: Reduces formality; introduces humour
C DISRUPTIVE
Dominator: Seeks to dominate discussion and to impose own views/objectives
Absentee: Withdrawn, uninvolved
Aggressor: Attacks others; ridicules, hostile, sarcastic
Smotherer: Compulsively nice; stifles attention to conflict
Recognition-seeker: Boastful; highlights own achievement
Confessor: Reveals personal fears, failings; uses group as a therapy session
Source: Adapted from Dunphy (1981)

Norms
As Robbins points out, all groups have norms, that is expectations of appropriate
behaviour for group members. But only those norms which ensure the group's survival,
increase the predictability of group members' behaviours, avoid potential
embarrassment, and express the central values of the group, tend to be regularly
enforced.
Conformity
Conformity is an issue closely linked to the issue of norms. Read carefully the account
in the textbook of the Zimbardo experiment carried out at Stanford University. There is
a further experiment you may have heard of: the Asch study in 1951 that also
demonstrated the impact of conformity pressures on group members. It is notable that
these pressures to conformity existed despite the fact that these 'groups' were hardly
groups at all in the strict sense of the word. That is, they were a collection of individuals
thrown together for the purpose of the experiment, who would have had no opportunity
to establish normative ties. The significance of this is that it would be reasonable to
assume that such tendencies to conformity would be even greater in many established
groups.
However, Perrin and Spencer (1981) question the universality of Asch's results. In their
replication of Asch's study almost thirty years later using British students, they found an
almost total lack of compliance to the unanimous majority. The difference, they argued,
could have been due to the fact that Asch's study took place during and in the
conformist culture of 1950s America. They comment:
Asch's subjects expressed their fear of 'sticking out like a sore thumb',
'being felt sorry for', 'being thought that they had something wrong with
them'. The present students, in contrast, felt that to conform to a group
majority they believed to be erroneous would make them look 'weak',
'ridiculous' and 'stupid'.
It might still be argued that, given the British students feared appearing in an
unfavourable light to others, some norms of conformity were still operating. (I have
always wondered whether students 30 years or so later hadn't gradually got wind of the
point of the experiment!) Nevertheless, it is important to note that the pressures
towards conformity are likely within well-established groups, and even those that are
less than well established.
Cohesiveness
The textbook lists a number of contributors to group cohesiveness, and also discusses
the consequences of group cohesiveness. As a general rule, it can be concluded that
greater cohesiveness leads to:
• increased quantity and quality of communication between members
• greater influence by the group over individual members' behaviour
• a higher level of job satisfaction of group members
• improved or reduced performance depending on whether the group norm is for
high or low performance.

Groupthink
Groupthink, or the tendency to suppress critical thinking as a result of the concern to
retain group unity, is one of the possible deleterious consequences of working in
groups.
See also:
http://choo.fis.utoronto.ca/FIS/Courses/LIS2149/Groupthink.html
Website
http://www.abacon.com/commstudies/groups/groupthink.html
http://www.groupthinkfilm.com/
Janis (1971) sets out a number of symptoms of groupthink, which are summarised in
the textbook as follows:
• 'rationalising away' any resistance to the group's assumptions
• pressures to conform applied to doubters
• silence on the part of those who are doubters
• an illusion of unanimity.
To these we might add:
• the illusion of invulnerability, which leads the group to dismiss potential dangers
and take great risks; a belief in the inherent morality of the group's position
• the stereotyping of enemy leaders, for example, as too evil, corrupt or primitive to
be a threat
• mindguards: some members of the group sometimes act as mindguards, keeping
adverse information from reaching members and the leader in particular.
Effects of Groupthink
As a result of Groupthink the group limits its discussion to a rather limited range of
alternatives, with little time given to identifying non-obvious gains, or to seeking
solutions to costs that could change the relative merit of alternatives. The advice of
experts – even within the same organisation – who might have more accurate and
useful data, is ignored or not even sought. The group fails to reconsider the decision if
unanticipated risks or problems are brought to their attention. Group members show
interest in information that supports their decision, and ignore those that do not. Little
time is spent considering how the decision could be sabotaged in the course of being
implemented, which means, in turn, that there is no contingency plan for such an event.
Explanation of Groupthink
Janis says that Groupthink is best understood as 'a mutual effort among the group
members to maintain self-esteem and emotional equanimity by providing social support
to each other, especially at times when they share responsibility for making vital
decisions' (1971, p 43). He argues that the prime condition for Groupthink is group
cohesiveness and that it is reinforced where the group is insulated and where the

leader is promoting his or her preferred solution. He later qualifies this by noting that it
is particularly so where cohesiveness is due to the desire of individuals to be members
of a particularly prestigious or socially pleasant group, rather than because they want to
be part of an effective and competent task-focussed group. Leana (1985) goes further,
arguing that the leadership factor (mentioned above) is the prime determinant rather
than cohesiveness.
Preventing Groupthink
Janis (1988) lists the following means of preventing groupthink:
• the leader of a policy-forming or decision-making group should assign the role of
critical evaluator to each member and encourage expression of objections and
doubts
• leaders should begin by adopting an impartial stance instead of stating
preferences at the beginning
• several groups should work on the same matter, including some from outside the
organisation
• each member should discuss the group's views with colleagues in their own unit of
the organisation
• the group should invite one or more outside experts to each meeting and
encourage them to challenge the group's views
• whenever a meeting is held at which policy alternatives are discussed, at least one
member should be assigned the role of devil's advocate
• whenever the issue involves relations with a rival organisation the group should
allocate plenty of time to a study of all warning signals from the rival
• the group should from time to time split into two or more subgroups which meet
separately, then come back together to identify and resolve any differences.
2.2 Team roles

Belbin (1981) identified a number of key roles in teams. According to this formulation,
there are eight necessary functions in a successful team.
1 Chairperson: the one who unites, communicates with and presides over the team
and coordinates its efforts to meet external goals and targets.
2 Shaper: the 'task' leader who, in contrast to the Chairperson who is concerned
with the social aspect of a project, is more concerned to give shape and urgency to
the team's efforts.
3 Plant: the ideas person, the source of creative input, suggestions and proposals.
May be more concerned with the innovative and exciting aspects of the project
than with the feasible and realistic.
4 Monitor Evaluator: the person who provides measured and dispassionate
analysis of the team's progress, and who will prevent the team from committing
itself to a misguided project.

5 Company Worker: the practical organiser who turns decisions and strategies into
defined and manageable tasks that people can actually get on with. This person is
concerned with what is feasible and logical.
6 Resource Investigator: the member of the team who goes outside the group and
brings information, ideas and developments back to it.
7 Team Worker: the person who monitors and attends to the emotional needs of
individuals within the team, and working to produce harmony especially in times of
stress and pressure. If someone produces an idea, the instinct of the Team Worker
is to build on it rather than demolish it.
8 Finisher: the person who worries about details and what might go wrong. The
Finisher maintains a permanent sense of urgency, and keeps the team to its
predetermined deadlines and standards.
In Belbin's formulation, it is clear that people may occupy more than one role within a
team. In any team of fewer than eight or nine people this would have to be so. All the
functions are necessary, but people's different personalities mean that they will find
some functions easier to fulfil than others. For example, Belbin classifies the functions
as follows:
• Chairperson, Plant, Resource Investigator and Shaper: 'outward-looking' functions
• Company Worker, Monitor-Evaluator, Team Worker and Finisher: 'inward-looking'
functions.
Note that Belbin later added a ninth team role, that of the Expert who has specialist
knowledge or expertise (e.g., Information Technology).
2.2.1 Creating an effective team

In this Module so far we have considered what distinguishes groups from a random
collection of people in terms of the functions of groups, the distinction between formal
and informal groups, some specific characteristics of groups and some of the problems
and advantages which flow from these characteristics. It is clear from all this, that some
of what makes a group effective – some people might say: what makes a group a team
– arises from these inherent features of a group. The next reading sets out the results
of a study into what features of a group can – and are most likely to – act in concert to
promote task effectiveness.
Reading 2.1
Wageman, R. 2001, ‘Critical Success Factors for Creating Superb Self-Managing
Teams’, in The Oganizational Behavior Reader, eds J.S. Osland, D.A. Kolb, & I.M.
Rubin, Prentice Hall, Upper Saddle River, New Jersey. (See Chapter 9, pp. 231-
242).
Teambuilding
Of course, managers tend not to simply leave the task of making groups effective –
creating teams – simply to the inherent characteristics of the group. The process by
which active interventions are made in order to improve the functioning of a group is
known as team building. Problems that team building processes aim to eliminate
include poor productivity, low morale, lack of coordination, complacency,

miscommunication, uncertainty as to goals and responsibilities, internal conflicts, lack

of leadership and lack of commitment. Team building interventions can be tailored to
the particular nature of the group and the problems it is facing. Dunphy (1981, p 215)
lists the following as key intervention strategies:
• Goal setting and goal classification: The purpose is to develop a clear, concrete
statement of goals which is agreed on by the group and management, and which
can then be used as a basis for defining roles and responsibilities and for
producing more detailed action plans.
• Role analysis and role classification: This approach focusses on developing
and agreement among team members as to how goals are translated into specific
roles responsibilities for team members.
• Group problem-solving and decision-making: This approach focusses attention
on such matters as the characteristics and the application of an effective problem-
solving process, and how to avoid some of the potential problems associated with
group decision-making.
• Understanding and contributing to group process: This type of intervention is
based on the idea that groups need to perform two kinds of general function if they
are to be effective: task functions directly related to the group's objectives and
maintenance functions related to the maintenance of interpersonal relations and
commitment within the group. Group process interventions develop and
understanding of the roles commonly associated with these functions and an ability
to recognise behaviour said to disrupt these general functions. These task,
maintenance and disruptive roles have been discussed previously.
• Reviewing and revising group norms: The objective is to identify and discuss
existing group norms in regard to both task and personal objectives and to see
whether they should be modified. According to Dunphy (1981, p 237), 'norms are
renegotiated and a new contract drawn up’. Given the earlier discussion about the
largely informal nature of norms, that is, the way they typically evolve
unconsciously rather than come into existence by fiat, it is advisable to be sceptical
about the notion of planned norms.
• Improving the use of group resources: This strategy is used to improve the
effectiveness of resources. It involves classifying resources according to whether
they are:
A) over-utilised
B) utilisation is OK
C) under-utilised
D) not-utilised
• Resource use is then adjusted accordingly
Reading 2.2
Rogers, C.R. & Farson, R.E. 2001, ‘The Meaning of Active Listening’, in The
Organizational Behavior Reader, eds. J.S. Osland, D.A. Kolb, & I.M. Rubin, Prentice

Do we overvalue teams?
Dunphy (1981) provides considerable detail on the nuts and bolts of the techniques
associated with team strategies in his book Organisational Change by Choice. This
book is one of the most widely used and cited, both in academic and practitioner
circles, and is deservedly regarded as a management classic. Nevertheless, like many
other similar texts, it is based on a rather uncritical concept of the group as a team, that
is, as a collectivity fundamentally driven by common interest, but which periodically
suffers from dysfunctional practices. The concept of 'team' is a highly evaluative one,
associated as it is with the idea of cooperation and a common goal. That is, it brings
with it considerable ideological baggage.
Morgan (1986) notes that its usage by managers may reflect their preference about
how their groups operate, but may not be a particularly accurate characterisation of
relations between the individuals concerned. In fact, by invoking the image of a team, a
manager may be trying to bring about a unity of purpose that is currently lacking. As
Kanter (1983) points out: 'Declaring people a "team" does not necessarily make them
one'.
Forming a team does not in itself mean that various differences in perspective and
interest, which already exist, will disappear. In the article just cited, Kanter argues that
'the myth of team' is a counterproductive one. This myth holds that differences among
members do not exist (because they are now a team). This can lead to the
delegitimisation of differences, a head-in-the-sand disinclination to confront the reality
of the situation.
The remaining readings for this part of the Module are especially useful in expanding
upon the special uses of groups and teams. They cover autonomous and
semiautonomous work groups, the importance of cultural factors in the use of teams,
and in the analysis of more participatory styles of management, with Japanese
management practices as a primary example. Observations of how Japan uses the
group are reported in the discussion of corporate social responsibility in U.S. and
Japanese organisations (Wokutch) and in descriptions of the strategic use of quality
circles in this country (McGraw and Dunford). Together these articles provide a good
interpretation of Japanese management practices, and the difficulties in developing and
running quality circles. The message is that Japanese management methods need to
be adapted carefully when applied in other places, since they can be very much at
variance with established social norms in western countries.
Reading 2.3
Lipnack, J. & Stamps, J. 2001, ‘Virtual Teams: The New Yay to Work’, in The
Conclusion
The topics covered in the textbook and the readings, highlight a major difficulty in
examining the topic of the group – the wide range of applications where group issues
affect the behaviour and decision-making of managers, and yet the difficulty of making
hard and fast rules about this. If anything, the next topic, Leadership, reinforces this
finding.

2.3 Leadership
Introduction
As the textbook points out, leadership is one of the most researched topics in the
management literature, yet it is also probably one of the most frustrating in terms of
identifiable practical and reliable applications for managers. Yet we have no difficulty in
finding stories about great military, political, religious and social leaders, and it seems
reasonable to assume that there are obvious lessons from their stories. Why did
Gandhi, Mohammed, Julius Caesar and Churchill become great leaders and why, in
many cases, did they later lose their followers' support? How did some undistinguished
people, like Adolf Hitler rise to positions of power? Some of the broad areas in which
researchers have worked in an effort to answer these questions have been:
• personality traits
• abilities
• behaviours
• sources and uses of power
• features of the situation.
Read Robbins' textbook, Chapters 11 and 12.
Textbook
Reading 2.4
Goleman, D. 2001, ‘What Makes a Leader?’, in The Organizational Behavior Reader,
eds J.S. Osland, D.A. Kolb, & I.M. Rubin, Prentice Hall, Upper Saddle River, New
The textbook provides a comprehensive treatment of the various theories that have
emerged about leadership. Not surprisingly, theories of leadership now constitute a
vast area of the applied social sciences literature.
The first difficulty in examining this literature is providing a satisfactory definition of
leadership. As the textbook points out, there are almost as many definitions as
researchers in the area, and different theorists provide various interpretations of
leadership and leadership effectiveness. There are also debates about the similarities
and differences between leadership and management. Typically both terms are used
interchangeably, but many argue quite persuasively for different definitions for both
concepts.
We will also examine the following issues:
• core definition and elements
• changes in emphasis in leadership approaches
• points of convergence across leadership theories.

2.3.1 Core definitional elements

The definitions of leadership that are made explicitly or implicitly in the theories
discussed in the textbook do appear to have at least some core elements.
Leadership generally:
• is a group phenomenon
• involves influence by a leader over followers
• this leader influences group members to comply with his or her requests willingly
2.3.2 Points of convergence across leadership theories

Theories of leadership that have considered traits, style, the situation or other factors
have resulted in numerous answers to questions such as who becomes a leader, what
is the behaviour of effective leaders, and how do leaders inspire organisational
members during periods of change. Despite the disparity in points of detail, several
significant points of convergence emerge. They concern:
• leader-subordinate relations
• relationships with peers and superiors
• the importance of information
• the importance of managerial decision-making; and
• the role of leaders as motivators and as sources of influence.
These will now be considered in turn.
Leader-subordinate relations
Effective leaders establish cooperative relationships with their staff. They achieve high
levels of mutual trust and loyalty. Leaders especially provide an important source of
influence over the effort and commitment of staff. Favourable leader-subordinate
relations are more likely for leaders who are friendly, open and helpful to their staffs
needs, and take actions to advance the careers of this group. Also, several traits and
skills are more predictive of being an effective leader. These skills include tact,
empathy for others and good listening and counselling skills. Many of these are the
human resource management skills we will review in Module 3.
Relationships with peers and superiors

In this area, evidence across the various theories indicates that leaders without 'clout'
to represent their staff lose status and influence with staff. Research on management
activities (see 'Introductory topics') shows a high incidence of interaction by leaders
with peers, superiors and outsiders. Much of their time is spent monitoring events,
network building and as a representative of their work groups. In addition, several traits
and skills are predictive of managerial success in dealing with peers, superiors and
outsiders, including tact, social insight, charm and a positive attitude to authoritative
figures.

The Importance of information

The third area of convergence across theoretical frameworks about leadership shows
that leaders exert control over information downward, laterally and upward in the
organisation. This control allows leaders to exaggerate their successes, hide their
mistakes, and to define realities and interpret events in ways that meet their personal
needs and ambitions. In terms of the behaviour, managers are information gatherers,
analysers and disseminators. Face-to-face and oral communication dominates their
daily activities, and effective managers communicate clear expectations, goals and
evaluate results via feedback from their staff.
Managerial decision-making
A fourth area of convergence is that of managerial decision-making. Successful
decision-making assists leaders in gaining and retaining power. Managers, however,
seldom make important decisions as discrete actions at a point in time. Rather – as we
saw in 'Introductory topics' – managerial decision-making tends to be confused,
disorderly, emotional rather than rational, and covers domains from high levels of
strategic importance to the highly trivial. Contingency theories of leadership reveal that
leaders are judged more highly if they use participative processes in their decision-
making. Managers with the traits of being proactive, and having an orientation towards
efficiency and decisiveness are more likely to take the initiative about decisions and to
take moderate levels of risks. Managers with a high regard for others are more likely to
encourage staff participation, and they seem less concerned about protecting their own
power base. For more on this topic, see related readings and other material on
decision-making in 'Control and decision-making'.
Leaders as motivators and sources of influence

The final area about which leadership theories provide quite a comprehensive picture is
the importance of motivating and influencing others. Successful leaders make skilful
use of reference and expert power (see further material in 'Organisational culture and
power and politics'). Power-sharing strategies improve their success via increased staff
commitment. Motivating behaviours by leaders include inspiring commitment to new
objectives and strategies, being models of exemplary behaviour and being quite explicit
in their use of recognition and rewards for desirable behaviour among subordinates. At
the same time, leaders are well aware of contingencies that influence levels of
motivation, including the level of difficulty, risk and frustration for staff associated with
tasks, staff levels of education, different cultural values and the influence of
organisational culture. Finally, trait research reveals that leaders with high levels of
self-confidence and high needs for power make more influence attempts upon staff.
Related readings on the use of power are presented in 'Organisational culture and
power and politics'.
Reading 2.5
Manz, C.C. & Sims, H.P. Jr. 2001, ‘SuperLeadership: Beyond the Myth of Heroic
Leadership’, in The Organizational Behavior Reader, eds J.S. Osland, D.A. Kolb, &
I.M. Rubin, Prentice Hall, Upper Saddle River, New Jersey. (See Chapter 13, pp.
383-397).

Activities
understanding of the various topics in this Module.
The nature of groups and teams
Think of at least three separate groups to which you belong. Include some
at work and some elsewhere. For each group, consider which – if any – of
your social needs you feel it fulfils. Does the group simultaneously fulfil
Activity 2.1 any official need? In the light of the preceding discussion, consider the
Analyse your reasons for any overlap (or lack of overlap) in each case.
groups – Part 1
Consider the same groups as in the first activity. Do you find any support
for either or both of the political/economic and structural explanations in
terms of the reasons you belong to these groups? On the basis of your
Activity 2.2 experience, which of the three basic sets of explanations – social,
Analyse your political/economic or structural – seems to you have the most value? Or
groups – Part 2. do you see some value in several of the explanations?
Consider a workgroup of which you are a member or which you know well
through interacting with it in some other way. The group should be one
which works together on a reasonably regular basis, or did so in the past.
Activity 2.3 Analyse its functioning in terms of the task, maintenance and disruptive
Analyse the functions that Dunphy (1981) sets out above. Are there some overlaps in
functions of your terms of the functions some people fulfil? Compare this analysis of group
work group. functions to the managerial roles outlined by Mintzberg in 'Introductory
topics'. Again, are there some functions which overlap, including the
disruptive ones?
Following Robbins's discussion of group roles (chapter entitled

'Foundations of Group Behaviour' and the discussion roles in the section
of the Section headed 'Group Structure'), identify five roles that you play
Activity 2.4 Are (eg parent, friend, manager, etc). What behaviour does each require? Are
roles in conflict? any of these roles in conflict? If so, how do you resolve these conflicts?
Talk to the members of a work group you are familiar with – either one to
which you belong or another one. From these interviews, identify the
norms and roles that apply, the functions of the group and the issues that
Activity 2.5 influence the effectiveness of the group, whether positively or otherwise.
Analyse your
work group's
norms.
Considering the issues of groupthink and the main symptoms given in the
textbook and in the preceding discussion, identify some examples of
groupthink in your workplace and in Australian public life. Identify specific
Activity 2.6 examples from political and organisational leaders, and then discuss ways
Identify in which groupthink could have been averted.
instances of
Groupthink.

Leadership
The art of empowering the people who report to you involves several
specific management practices. Using Conger's (1991) list, analyse
examples of the use of at least three of these strategies in an organisation
Activity 2.7 you know as a member or have learned about by talking to others or
Does empower- through your general reading. Were the strategies successful? Why or
ment work? why not?
Effective leadership involves a complex interaction between the situation

the person, and the decision-making climate of the organisation.
Managers must make decisions effectively about the kinds of leadership
Activity 2.8 qualities as expressed by Bass for those decisions to be effectively
Take action to implemented.
improve your
leadership style. Think about the managers you have encountered who have impressed
you with their abilities as leaders and as decision-makers. To what extent
did these leaders:
• Show evidence of charisma and create enthusiasm?
• Delegate tasks and activities effectively?
• Possess effective communication skills?
• Organise effectively?
• Show evidence of a developmental attitude towards the people who

report to them?
• Set high levels of intellectual standards to effectively stimulate

subordinates?
• Encourage subordinate participation in decisions that directly affected

them?
• Use the root or branch method of decision-making as Vroom and

Yetton describe?
• Exhibit transformational behaviours and qualities?
• Think about the managers you have observed who, n your opinion,
have failed miserably as managers. What qualities does this group of
managers have in common? What behaviours did they fail to
demonstrate?
• Based upon your analysis, identify a list of skills that are necessary for
effective leadership and decision-making abilities. Once your have
completed your list, review the list to determine which skills you have
already demonstrated effectively, and those that require improvement.
Develop an action plan to improve your leadership and decision-
making abilities.

Module 3: Motivation and persuasion

Overview
‘Motivation and persuasion’ examines the theories of motivation which have sought to
enlighten managers about 'what works' in terms of encouraging people to do the best
possible job. From discussing these basic theories, including their strengths and
limitations, we move to an examination of some specific human resource management
practices, which are based on one, or several of the theories of motivation just
mentioned. After all, the effectiveness of any specific practice is likely only to be as
good as the theory on which it is based. In the latter part of the Module, we examine
the use of persuasion in both society in general and organizations specifically. We’ll
examine the difference between persuasion and propaganda, discuss why we should
learn the basics of persuasion, and in some detail work through the fundamental
principles underlying persuasion and strategies of influence.
Topics
3.1 Motivation
3.2 Persuasion
Learning outcomes
After successfully completing this Module you should be able to:
• explain various theories of motivation: the differences between them and the
strengths and weaknesses of each
• describe an entirely different way of thinking about the meaning of work, the
orientations to work approach, and its relationship to other schools of thought
about what managers need to do to get the best out of their workforce
• explain the ways specific motivation theories have informed a number of human
resource management practices, such as performance appraisal and
compensation
• identify other contemporary HRM issues, and theories supporting them
• understand the fundamental principles of persuasion and influence and how they
can be used in the modern workplace.
• gain some experience in the practice of persuasion.

Module 3 Human Resource Management and Conflict Negotiation Page 36
Learning resources
Adler, JS 1965, ‘Injustice in social exchange’, in Advances in experimental social
psychology, vol. 2, ed. L Berkowitz, Academic Press, New York.
Adler, NJ 1997, International dimensions of organizational behavior, 3rd ed.
Southwestern, Cincinnati, OH.
Alderfer, CP 1972, Existence, relatedness and growth, Free Press, New York.
Aungles, SB & Parker, AR 1989, Work, organisation and change, Allen & Unwin,
Sydney.
Carrell, MR & Dittrich, JE 1978, 'Equity theory: the recent literature, methodological
considerations and new directions’, Academy of Management Review, vol. 3, pp.
202–210.
Dufty, NF & Fells, RE 1989, Dynamics of industrial relations in Australia, McGraw-Hill,
Sydney.
Fox, A 1973, Industrial relations: a social critique of pluralist ideology’, in Man and
organisation, ed. J Child, pp. 185–233. Halstead Press, New York.
Goldthorpe, JH, Lockwood, D, Bechofer, F & Platt, J 1968, The affluent worker:
industrial attitudes and behaviour, Cambridge University Press, Cambridge, UK.
Handy, Charles B 1985, Understanding organisations, Penguin, Harmondsworth.
Herzberg, F 1968, Work and the nature of man, Crosby Lockwood Staples, London.
Herzberg, F, Mausner, B, & Snyderman, BB 1959, The motivation to work, John Wiley
and Sons, New York.
Hofstede, G 1980a, Culture's consequences: international differences in work-related
values, Sage, Beverly Hills, CA.
Hofstede, G 1980b, 'Motivation, leadership and organisations: do American theories
apply abroad?' Organisational Dynamics, vol. 9, pp. 42–63.
Lambert, Field Sales Performance Appraisal. (see page 73 )
Landy, F & Becker, WS 1987, 'Motivation theory reconsidered’, in Research in
organisational behaviour, vol. 9 eds LL Cummings & BM Staw, JAI Press,
Greenwich CT, pp. 1–38.
Lee, JA. 1980, The gold and the garbage in management theories and prescriptions,
Ohio University Press, Athens OH.
Locke, EA 1980, ‘Towards a theory of task motivation and incentives’, Organisational
Behaviour and Human Performance, vol. 3, pp. 157–189.
Locke, EA & Latham, GP 1984, Goal setting: a motivational technique that works,
Prentice-Hall, Englewood Cliffs, NJ.
McClelland, DC 1961, The achieving society, Van Nostrand, Princeton.
McClelland, DC 1975, Power: the inner experience, Irvington, New York.
McClelland, DC & Burnham, DH 1976, 'Power is the great motivator’, Harvard Business
Review, vol. 54, pp. 100–110.

Macken, D 1989, 'The workers' revolution on the top floor’, in Sydney Morning Herald
Good Weekend, 6 May.
Maslow, AH 1987, Motivation and personality, 3rd edn (1st edn, 1954), Harper and
Row, New York.
Miller, Katherine & Monge, Peter R 1986, 'Participation, satisfaction and productivity: a
meta-analytic review', Academy of Management Journal, vol. 29, no 4, pp. 727–753.
Miner, JB 1980, Theories of organisational behaviour, Dryden Press, Hinsdale IL.
Morgan, G 1986, Images of organisation, Sage, Beverly Hills, CA.
Napier, 'Motivation, incentives and salesforce performance'
Pfeffer, J 1982, Organisation and organisational theory, Pitman, Boston.
Pondy, LR 1967, 'Organisational conflict: concepts and models’, Administrative
Science Quarterly, vol. 12, pp. 296–320.
Postman, N 1986. Amusing ourselves to death. London: Heinemann.
Pratkanis, A & Aronson, E 2000. Age Of Propaganda, Freeman, New York.
Schein, E 1978, Career dynamics, Addison Wesley, Reading, MA.
Schuler, Randall S & Jackson, Susan E 1987, 'Linking competitive strategies with
human resource management practices', Academy of Management Executive, vol.
1, no 3, pp. 207–219.
Spillane, R 1980, Attitudes of business executives and union leaders to industrial
relations: twenty-three years later’, Journal of Industrial Relations, vol. 22, pp. 317–
325.
Thomas, K 1976, 'Conflict and conflict management’, in Handbook of industrial and
organisational psychology, ed. MD Dunce, Rand McNally, Chicago, pp. 889–935.
Vecchio, RP 1988, Organisational behaviour, Dryden Press, Chicago.
Watson, TJ 1980, Sociology, work and industry, Routledge and Kegan Paul, London.
Watson, TJ 1986, Management organisation and employment strategy, Routledge and
Kegan Paul, London.

3.1 Motivation
• theories of motivation
• Theory X and Theory Y
• process theories
• orientation to work approaches
• applications of motivation theories to human resource management
• other HRM issues.
Introduction
In 'Introductory topics' in the context of the Human Relations' movement, we touched
on some early approaches to motivation, especially the ideas of Maslow (the 'hierarchy
of needs') and McGregor (Theory X and Theory Y). In the first section of this Module
we will return to ideas about motivation, particularly as they relate to some specific
aspects of human resource management: job design, management by objectives
(MBO) and compensation (pay) management. The reason for linking these issues is
that beliefs about what motivates people directly influence a variety of management
practices, so an understanding of both the theories and the specific practices is
enhanced by dealing with the two together. Subsequently, we will deal with some other
issues in the area of HRM, particularly career development issues, personnel selection
and performance appraisal.
Don't feel that this is the end of possible explorations within the field of HRM! This is a
vast area which is changing rapidly, especially with new legislation such as anti-
discrimination legislation and changes to dismissal laws. This Module introduces you to
the topic with particular reference to motivation theory, but you may well want to take a
number of issues further.
Robbins' textbook, Chapters 6 and 7.
Textbook
3.1.1 Theories of motivation
Content theories
Motivation theories are generally divided into two types:
• those that focus on the idea that people have a core set of basic needs which
provide the motive force for their actions (content theories), and
• those that focus on the cognitive processes which explain how people make
decisions as to how to act.
The two theories that you have met briefly in 'Introductory topics', Maslow's hierarchy of
needs and McGregor's Theory X and Theory Y, belong to the first type. You may want

to return to 'Introductory topics' to refresh your memory of the basic ideas in these two
theories.
We said in 'Introductory topics' that there had been some important qualifications to this
theory and these are outlined in the textbook. It is important to note that Maslow
himself was the author of these qualifications, which basically amount to saying that the
theory has been misunderstood as indicating a simple rather than a complex
relationship between needs and behaviour. Specifically, Maslow (1987) pointed out
that:
• needs may exist but not necessarily be acted on
• any given behaviour may be determined by several or all of the basic needs; and
• there are many determinants of behaviour other than needs and desires, such as
habit and conditioning.
In fact, 'most members of our society who are normal are partially satisfied in all their
basic needs and partially unsatisfied in all their basic needs at the same time' (Maslow,
1987, pp. 27–28).
Despite this, as the textbook notes, Maslow's theory with its intuitive logic has achieved
great popularity among managers – even if its proposals have not been borne out by
hard research. This is also despite the fact that Maslow's was a general theory of
motivation with no specific attention given to motivation within work organisations.
However Maslow came to believe that management practices provided practical
application of his ideas. He believed that people operated at their optimal level when
organisations developed practices that recognised the multidimensional nature of
human motivation and that such practices would mutually benefit workers and
management. In brief, organisational effectiveness and individual satisfaction would
both gain from the application of practices based on this theory.
Additional reading
For those who would like to explore further the criticisms of Maslow's theory, find and
read one or more of the following authors and their comments on Maslow:
Aungles, SB and Parker, AR 1989, Work, organisations and change, Allen and Unwin,
Sydney.
Miner, JB 1980, Theories of organisation behaviour, Dryden Press, Hisdale IL.
Watson, TJ 1986, Sociology, work and history, academy of management executive,
Routledge and Kegan Paul, London.
Theory X and theory Y

These contrasting approaches to motivation that were developed by McGregor were
also discussed briefly in Module 1. McGregor wanted managers to discover the way
both employees and the organisation stood to benefit from a style of management
consistent with Theory Y assumptions. However, as the textbook points out, there is a
lack of evidence that actions consistent with Theory Y assumptions lead to more
motivated workers. Watson (1986) in the article mentioned above, also discusses the
inadequacies of McGregor's theories, arguing that they make 'grandiose claims and
vast generalisations’. However Watson also argues that inviting manages to think

about the behavioural assumptions they make in their work is in itself a useful thing,
even if it has led to simplistic Theory X–Theory Y assumptions.
ERG theory
Clayton Alderfer (1972) provides a revision of Maslow's needs-based theory of
motivation in which the basic needs are reduced to three: existence, relatedness and
growth, hence ERG. These needs are arranged in a hierarchy as in the Maslow model
but the relationship between the levels is more complex. Rather than there being a
one-way progression up the hierarchy as needs are satisfied, Alderfer argues that if an
individual is not able to satisfy needs at a particular level this frustration leads to
regression. That is, a return to a focus on further satisfying needs at a lower level (the
frustration-regression effect). There is regression from a more abstract (and therefore
uncertain and ambiguous) higher level to a more concrete lower level; from a more to a
less cognitively demanding task. This provides a rationale for the frustration-regression
effect (Landy and Becker, 1987). However, as Landy and Becker note, ERG theory has
not received much more empirical support than Maslow's original foundation.
McClelland on achievement, affiliation and motivation
Reading 3.1
McClelland, D.C. 2001, ‘The Urge to Achieve’, in The Organizational Behavior Reader,
eds J.S. Osland, D.A. Kolb, & I.M. Rubin, Prentice Hall, Upper Saddle River, New
David McClelland's approach to motivation is based on the view that people have three
needs: for achievement, for affiliation and for power (McClelland et al., 1953,
McClelland, 1961, 1975). The need for achievement (nAch) is indicated by such things
as liking to set goals and having responsibility for reaching them, liking problem-solving
and getting feedback on performance. The need for affiliation (nAff) is the need to have
close, friendly relations with other people and is associated with an ability to empathise
with opposing views, a preparedness to consult and discuss, and a preference for
consultative practices. The need for power (nPow) is the need to influence. This may
be self-serving, with personal gain the driving force, or it may be based on seeking to
improve the performance of staff and, with it, management objectives for the
organisation.
McClelland was especially interested in the connection between these needs and
management performance. He argued that high-performing managers rated highly on
achievement needs, although without at least a moderate level of affiliation needs,
such individuals would sometimes fail to attend to the interpersonal aspects of
managing. A reasonably high need for power was also deemed to be important for
managers (McClelland and Boyatzis, 1967), although it is power of the social – not
person – nature which has been found to correlated with successful management
(McClelland and Burnham, 1976). High nAff without a reasonable level of nAch and
nPow is not likely to produce a successful manager, for example, because the desire to
be liked may override the necessity for important decisions to be made.
McClelland considers all people to have these needs, at least at a minor level, but
individuals vary greatly in how developed such needs are above this level. McClelland
sees the degree of development of these motives as dependent on influences felt
during childhood socialisation. He also believes that the achievement motive could and

should be developed through training programs although evidence of the success of

such programs in unclear (Vechhio, 1988; Lee, 1980). Also a major cross-cultural study
by Hofstede (1980a) has concluded that McClelland's motivation model could not be
seen as universally valid.
The Herzberg heritage

Frederick Herzberg's 'two-factor' theory (1959, 1968) has become almost as well
known as Maslow's hierarchy of needs. The textbook's Figure 6.3 portrays the results
of Herzberg's study of 203 Pittsberg engineers and accountants. According to the
study, job satisfaction depended on five to six factors, including achievement,
recognition, the work itself, responsibility and advancement; and that job dissatisfaction
was related to company policy and administration, supervision, salary, interpersonal
relations and working conditions. Given that these factors do not line up with each
other (that is, a different set of factors leads to dissatisfaction from that leading to
satisfaction), it follows that the opposite of dissatisfaction is not satisfaction but no
dissatisfaction. The reverse is also true: that is, the opposite of satisfaction is not
dissatisfaction but no satisfaction. By medical analogy, and to argue that the causes of
dissatisfaction should be prevented rather than cured, Herzberg (1959) labelled the
factors causing dissatisfaction 'hygiene' factors.
The research findings were consistent both with the underlying hypothesis that there
was a difference between the factors leading to satisfaction and dissatisfaction. The
findings also bore out Herzberg's own beliefs in the dual nature of people's needs:
those related to the 'basic drives' and 'survival needs' of human existence, and those
related to an individuals 'compelling urge to realise his [or her] potentiality for
continuous psychological growth. Herzberg acknowledges that here was some
evidence in the study of individuals who do seem to associate satisfaction with hygiene
factors, but this he explains in terms of employees not having reached a stage of
personality development at which self-actualisation needs are active. They are 'fixated
at a less mature level of personal adjustment’. The study also concluded that job
satisfaction is 'functionally related to the productivity, stability and adjustment of the
industrial working force' (Herzberg, 1968, p 96). Thus, the message to managers is: do
not expect hygiene factors to do the job that only motivators can do.
The message for managers implied by Herzberg's theory was that greater performance
was to be gained from employees not through improvements in pay or job conditions,
but through designing workplace processes an practices that enhanced sense of
achievement, of autonomy, or personal growth, etc; that is, undertaking job enrichment.
A critique of Herzberg
The textbook gives a comprehensive list of the criticisms of Herzberg's research. The
criticisms tend to be of two kinds: that Herzberg's research was methodologically
flawed, and that there is a lack of supporting evidence from other studies. As with
Maslow and McGregor, the value in Herzberg's approach has not been in the specific
details of the theory per se – because of the substantial problems listed, but because it
has been what Watson (1986) refers to as a 'sensitiser' bringing to managers' attention
the motivational prospects of intrinsic job factors.

General limitations of content approaches

It is not difficult to see that the needs approaches 'map on' to each other. That is,
Maslow's self-actualisation and esteem needs correspond roughly to Alderfer's need
for growth, McGregor's Theory Y, McClelland's nAch, and Herzberg's motivators. At the
lower level, Maslow's physiological needs correspond roughly to Alderfer's existence
needs, McGregor's Theory X, and Herzberg's hygiene factors. Despite this general
theoretical cohesion, however, the needs approaches have some generic limitations:
• Needs approaches tend to be characterised by an assumption of 'psychological
universalism’, that is, they assume the existence of a general set of human needs
applicable across time and space. All needs theories share the common
assumption that normal health individuals seek intrinsic rewards from their work
organisation. There is no allowance made for differences that may exist on the
basis of gender or class or any number of other factors. Needs-based theories are
blind to cultural variations, leading to the accusation that they are expressions of
the high individualisation characteristic of American culture with limited universal
application.
• Needs approaches have tended to treat the workplace as the site at which
fulfilment of needs is sought rather than just one site.
• Content approaches to motivation focus on what are supposedly the fundamental
motives influencing behaviour. This approach ignores the process aspect of
motivation. That is, in content models the connection between needs and
behaviour is assumed to be unproblematic, rather than as a process to be
investigated. The process theories of motivation seek to deal with this latter
deficiency.
3.1.2 Process theories of motivation

As noted earlier, process theories of motivation seek to explain the cognitive process
whereby individuals decide how to act. In contrast to content theories, they direct
attention to explaining motivation as a dynamic process. The following three
approaches, goal setting, equity theory, and expectancy theory, are all examples of
attempts to examine this process.
Goal setting
The goal setting approach to motivation focuses on the role of goals in determining
behaviour. In this approach the motivation process involves the conscious intentions of
an individual – that, his or her goals – being the critical intervening variable between an
incentive and actual performance (Locke and Latham, 1984).
Key assumptions within the goal-setting approach are:
• specific goals motivate more than general ones such as the exhortation to 'do your
best’
• difficult but attainable goals motivate more than easily attained ones
• participation in the setting of a goals is likely to lead to a higher level of motivation
than goals issued as directive, but primarily due to its effect on increasing the
chances of a goal being accepted as a target for action

• feedback on performance enhances the motivational effect.

Acceptance of the goal is the critical factor, that is, the effect of all other factors that
may affect the motivational process is filtered through this factor. For example, it is
argued that if a person accepts a goal as his or her target, then whether or not this was
arrived at by participative means becomes of little significance in terms of its
motivational effect.
Research evidence has substantially supported the goal-setting approach, although
there are certainly reservations as to whether acceptance deserves to be given quite
the overwhelmingly dominant role as a causal factor that it is generally assigned.
Pfeffer (1982) provides a useful and succinct discussion of this and other reservations
about the goal-setting model of motivation.
Equity theory
J Stacy Adam's equity theory is based on the belief that employees' behaviour is
influenced by their perception of the degree of equity in the outcomes (for example,
salary, position) they receive for the input (for example, effort, experience) they make.
Equity is assessed in a continuing process of comparison with the inputs and outputs of
someone they see as in an equivalent position. Workers who believe that their
outcome-to-input ratio is either higher or lower than those with whom they compare will
have resulting feelings of inequity that lead them to take action to remove the inequity.
Those who feel deprived may ask for higher pay (increased output), reducing the effort
they put into their work (decreased input), revising downward their assessment of the
difficulty of their job, or changing the person they use as their point of comparison.
Alternatively, they may focus on the others, hoping to bring about a reduction in their
pay, or an increase in their effort or a reassessment of the difficulty of that job. If the
other's job is newly perceived as more demanding the inequity may disappear. If none
of these solve the problem, or are simply not tried, the perceived inequity may be
resolved by internal transfer or resignation. Adams argues that parallel reactions also
exist for those whose assessment of equity leads them to believe that they are
relatively privileged. According to the theory, the privileged will also seek to restore
equity.
A detailed view of the evidence on the validity of equity theory found that there was
support in laboratory tests but that studies in actual organisations provided little clear
evidence of such validity (Carrell and Dittrich, 1978).
Expectancy theory
Expectancy theory, as the term implies, draws on the notion that, in addition to the
preferences and desires that someone has (which might be addressed through one or
more need theories of motivation), they have a certain level of expectation of achieving
that outcome, given other factors. The theory thus combines the strength of individual
needs with the level of expectation.
Accordingly, the motivational effect varies according to the strength of each of the
following three factors:
• a certain outcome to be desired and available (valance)
• a belief that specific behaviours will lead to that outcome (instrumentality)

• a belief that one has the ability to complete the required behaviours successfully
(expectancy).
As an example, a middle level marketing manager, Jim, may be told by his boss, Mary,
that part of his job will now involve accessing computer records held elsewhere in the
organisation. In addition, using some new computer packages, he will be required to
devise and draw up new information about the company's marketing performance.
Mary promises that if Jim is able to carry out the additional tasks successfully, she will
strongly recommend him for a promotion and a performance bonus at the end of the
year.
According to expectancy theory, the degree to which this proposition influences Jim's
motivation is dependent on how Jim judges all of the following:
• how much he wants the promotion and bonus
• the extent to which he believes that he will actually be recommended for the
promotion and bonus, and whether the recommendation will in fact result in the
promised rewards.
• (NB: You may wish to consider this latter point in relation to views of leadership
that argue that leaders with 'clout' tend to be better respected and more successful
within their organisations.) See the 'Groups, teams and leadership' Module.
• the extent to which he believes he can learn the new packages and produce
reports of the required standard.
(The textbook's discussion of self-efficacy is relevant here.)
In addition to the interaction of these factors, the situation may be complicated by
efforts on Mary's part to influence the various judgements. For example by providing
information on why Jim ought to be interested in the promotion, reassurances about
her capacity to provide it, and her views on how confident Jim ought to be about
reaching the goal.
The textbook discusses attempts to validate expectancy theory, and outlines some
ways in which experimental design has been improved and how these, in turn, have
lent support for the theory.
A more complex integrative model of expectancy theory is presented in the textbook;
see the diagram and the accompanying discussion.
Reading 3.2
Kouzes, J.M. & Posner, B.Z. 2001, ‘Recognize Contributions: Linking Rewards with
Performance’, in The Organizational Behavior Reader, eds J.S. Osland, D.A. Kolb,
& I.M. Rubin, Prentice Hall, Upper Saddle River, New Jersey. (See Chapter 4, pp.
104-118).
Reading 3.3
Kerr, S. 2001, ‘On the Folly of Rewarding A, While Hoping for B’, in The Organizational
Behavior Reader, eds J.S. Osland, D.A. Kolb, & I.M. Rubin, Prentice Hall, Upper
Saddle River, New Jersey. (See Chapter 18, pp. 508-515).

3.1.3 Orientation to work approaches

The textbook's Chapter 6 concludes, rightly, with the caveat that motivation theories
are culture-bound, and that they have probably been overly influenced by the
individualism and achievement orientation that derives, firstly, from their American
origins and secondly from their basis in psychology. Briefly, students should be aware
of motivation theories' universalist assumptions, and their implicit view that specific
needs or processes are innate.
Simply knowing this does little to rectify the problem, however, and it must be admitted
that Robbins is not alone in not taking the issue further. Many other textbooks also say
nothing more on the topic. For a more complete understanding of wants and
expectations regarding work, and the extent to which management interventions can
influence these, students should also be aware that there is a separate disciplinary
stream about the meaning of work which originates in the sociological literature. Its
main research base has been Britain rather than the United States which is probably
another factor in its lack of prominence in management textbooks. This approach is
known broadly as 'orientations to work’. It incorporates issues of class, gender, family
situation, education and other socialising influences as a way of explaining the ways
people derive meaning and motivation from work.
The study of orientations to work has its origins in the work of Weber and the
assumption that human beings are on the whole rational, although the form of
rationality might differ amongst different people and groups, and at different times for
the same person or group. This approach encompasses the idea of a 'negotiated order'
existing in organisations and avoids some of the problems associated with the
definition and attribution of needs implied by the discussion of 'higher' and 'lower' order
needs in the human relations tradition. A demand for higher wages may reflect needs,
wants or preferences like holidays and travel. These, while not 'basic' still play an
important role in the quality of life.
One of the earliest, and most important applications of the orientation approach was
made in Goldthorpe, Lockwood et al. (1968) in their study of the impact of affluence on
the behaviour and outlook of manual workers in the car industry. Given the 'alienating'
conditions of these 'narrow' and 'repetitive' jobs, it was hard to explain why the workers
said they liked both their jobs and the employer. The explanation was offered that the
workers had what is referred to as an 'instrumental' orientation to work. In the workers'
own rationality, and given their relative lack of skills, a certain standard and quality of
life outside work could only be supported by undertaking a particular type of work, that
is, relatively high paid, at best semi-skilled, repetitive work on automobile production
lines.
While the orientation approach is consistent with expectancy theory, it goes further by
locating the expectations that influence workplace behaviour outside the workplace.
Also, factors outside work can account for the fact that orientations, expectations and
even needs will change over time, as will behaviour. For example, at different periods
in the life cycle expectations will differ, as will needs, wants, preferences and
behaviour.
Equally important can be changes in the work situation itself. Changes in job design
may or may not be consistent with the orientations of the workers and so may be
rejected if they offer rewards not sought by the people concerned.
Watson (1980) develops the distinction between 'prior' orientation to work (derived from
past experience, family, education etc) and the notion of 'dynamic' orientations which
derive from the experiences in the workplace itself and the impact of non-work factors.
Important in this is the idea of the 'wage-effort' bargain, in which a worker establishes

some notion of 'balance' between effort (input) and the offered wage (output). Factors
that change the wage-effort bargain or ratio will induce changed behaviour as the
worker tries to re-establish the old ratio or establish a new one. Thus changes in job
design (see later in this Module), even if they are accompanied by extra pay and more
enriched jobs may well radically disturb the wage-effort relationship. The fact that many
job-redesign exercises are often associated with increased payments for some workers
at least means that there are two possible explanations for a subsequent increase in
output – the satisfaction derived from the new job, or the desire to earn the new pay
rate.
3.1.4 Applications of motivation theories to human

resource management practices
Compensation management
Goal-setting theory has been the basis for major management systems such as
Management by Objectives (MBO). MBO, or systematic approaches to judging the
extent to which employees have met their performance objectives, has, in turn, been
the basis of many compensation schemes. Equity theory has been the basis for
compensation management systems such as the Hay scheme – a points-based system
for evaluating the worth of particular jobs. The textbook in the latter part of Chapter 7
provides a comprehensive overview of the application of these and other motivation
theories to compensation management.
Worker participation in decision making

As mentioned at the outset of this Module, one of the vexed questions in applied
organisational theory is whether participation in decision making leads to worker
satisfaction, which then leads to increased and sustainable productivity. Or whether the
reverse is true, that is, that satisfaction comes about as a by-product of increased
productivity brought about by an increased range of better ideas associated with more
people participating in decision making.
Miller and Monge (1986) present a scholarly review of a large number of articles on this
issue. Their conclusion is that there is considerable evidence that participation does
lead to higher satisfaction and productivity but that participation does not necessarily
lead to better ideas.
Schuler, Randall and Jackson (1987) make the additional point that the kind of
participation may be important. Specifically, such participation must reinforce a
competitive strategy if it is to be maximally effective in helping the organisation to
survive.
3.1.5 Other HRM issues

The remaining readings in this part of the Module relate to some other prominent
issues in human resource management in the middle to late 1990s: cultural diversity,
career development and performance appraisal, and the way management handling of
them needs to change if organisations are to prosper.

Cultural diversity
An important theme in contemporary HRM is that managers must be concerned with an
increasingly culturally diverse workforce.
Reading 3.4
Hofstede, G. 2001, ‘Cultural Constraints in Management Theories’, in The
The question managers need to face, is how to capitalise on the benefits of cultural
diversity while minimising their potential costs. Adler (1997) argues that the diversity
represented in multicultural work groups gives them both the potential for higher
productivity than homogeneous groups and a greater chance of productivity losses.
Advantages of group diversity

The advantages of group diversity include:
Increased creativity: A wider range of perspectives, more and better ideas, less
Groupthink. It can lead to better problem definitions, more alternatives, better solutions
and better decisions. Groups can become more effective and productive.
Diversity forces enhanced concentration to understand others' ideas, meanings and
arguments.
Disadvantages of diversity
The disadvantages of group diversity include:
Lack of cohesion, leading to mistrust, miscommunication and stress: This can
cause inability to validate ideas and people, agree when agreement is needed, gain
consensus on decision. Groups can become less efficient, effective and productive.
Diversity is most valuable when the need for agreement (cohesion) remains low
relative to the need for invention (creativity). This has implications for the effect of
diversity at different stages of group activity. Thus, at the stage of group and trust
formation, and also at the stage of decision-making and implementation, diversity
makes the process more difficult since these processes are facilitated by recognition
and creation of similarity. However, at the stage of creating ideas, which relies on the
creative use of different, diversity makes the process easier.
Diversity at a national level

In the group formation stage members need to develop relationships and build trust,
but members from more task-oriented cultures such as Germany and the United States
tend to want to get down to business and therefore spend relatively little time on this
process. Members from more relationship-oriented cultures such as China, the Middle
East and Southern Europe will, as a result, feel rushed and distrustful. Managers
experienced with multicultural groups will tend to direct the attention of group members
to areas of similarity, such as their equivalent professional status and qualifications to
compensate for these differences in cultural backgrounds. The intention is to create

bonds at the level of professional similarity, and allow cultural differences to emerge as
a resource rather than a threat. The second stage involves a focus on setting
objectives collecting and analysing information and developing alternative courses of
action. Diversity is an advantage at this stage. The third stage involves deciding what
to do and how to do it. Reaching agreement is usually easier for homogeneous groups.
Adler's general guidelines for managing culturally diverse groups include the following:
• select group members of a similar level of ability to enhance communication, but
with a diversity to enhance creativity
• give attention to cultural differences but avoid stereotyping
• help the group to agree to a superordinate goal, one that transcends the individual
differences
• avoid cultural dominance. Power should be distributed according to each
member's ability to contribute to the task
• mutual respect by group members should be encouraged. This can be done by
selecting members of equal ability and minimising early judgements based on
cultural stereotypes.
Career development
Career planning is generally regarded as being a deliberate process for:
• becoming aware of self, opportunities, constraints, choices and consequences
• identifying career related goals
• programming of work, education and related developmental experiences.
Appendix B: Careers and Career Development
Textbook
Looking to the next promotion or job is an important skill, but we also have to consider
long-term-goals or constructing a career path. The choice of the term 'careers' rather
than 'jobs' suggests an orientation towards a connected, motivated and developing
series of work stages rather than an unrelated series of activities and events. It may
also imply that reaching a long-term-goal may mean spending some time in a job that
is not particularly congruent with our work preferences, but necessary if we want to
take a broader, long term perspective.
Career anchors
A tool long used in helping people get a grip on the longer-term career development is
the concept of 'career anchors', as used by Schein, among other researchers. Schein
defines five career anchors that, through a process of ability testing in different jobs,
tasks and positions, should become apparent by mid-career. These are:
Technical/ functional competence: the actual technical or functional content of the
work. The self-image of people in this group is tied up with their feeling of competence
in the particular area they are in. As a result, they are not especially interested in
management per se, but rather, without disregarding promotions and pay increases

entirely, generally tend to seek increasingly challenging work in their technical area as
a primary measure of success.
Managerial competence: Unlike members of the previous group, people whose
anchor is managerial competence do seek management as a specific goal. Specific
technical or functional jobs are seen only as necessary interim stages on the way to the
higher, general management areas. Such people measure their success by
promotions, rank and income, all of which indicate 'amount of responsibility’.
Security and stability: People anchored in security tend to do what is required of
them by their employers in order to maintain job security, a decent income and a stable
future. By implication, such people will, more than others accept an organisational
definition of their careers and will trust the organisation to do the right thing by them.
Within this orientation there are two types. For some people the source of stability and
security rests primarily with being stable members in a given organisation. For them,
security is more geographically based and involves a feeling of settling down,
stabilising the family and integrating themselves into the community.
Creativity: People anchored in creativity need to build or create something that is
entirely their own product. Achievement or self-extension, creating something that
bears one's name, a company of one's own, a personal fortune that is a measure of
one's accomplishments seems to be the key to such people. This is essentially an
entrepreneurial profile, and the qualities needed – management – that is, to be
analytically, interpersonally and emotionally competent in order to exercise high levels
of responsibility are quite different from the creativity requirements of entrepreneurship.
Autonomy and Independence: Those with this career anchor seek work situations in
which they will be maximally free from organisational constraints to pursue their
professional or technical/functional competence. What distinguishes this group from the
others is that its members' need for autonomy is higher their needs in other areas.
Autonomy is the anchor because that is what they would not give up if forced to
choose.
This group can be distinguished from the technical/functional competence group in
particular in that the autonomy group members experience little conflict about missed
opportunities for promotion, and have little sense of failure or guilt about not aspiring
higher.
On the surface it is not too easy to differentiate the autonomy and creativity groups,
because the entrepreneurs also enjoy autonomy and freedom as they become
successful. But as one listens to the entrepreneurs, it is clear that they are much more
preoccupied with building something whereas the primary need of the autonomy
seekers is to be on their own, setting their own pace, schedules, lifestyles and work
habits.
(Source: Abridged from Schein, E 1978,Career dynamics, Addison Wesley, Reading, MA, pp. 124–172.)
Implications of career anchors

While it may be useful to know your own career anchor, career anchors have many
implications for your supervision of associates' careers. It is important to realise, for
instance, that not all your subordinates are headed for or indeed suited to a
management career. You could make it your business to consider career anchors
when managing other people.

Selecting the performance areas that need to be assessed

The general wisdom about which are the relevant performance areas for assessment is
that you should choose the critical areas that relate to success. The job description is a
good place to start searching for these.
It is also important to choose areas that are quantifiable, and based on observable
actions or results. An alternative method is to develop a list of the factors that 'really
make a difference' by interviewing past or present jobholders, their supervisors,
subordinates, customers, or training managers. One way to do this is by using the
critical incident technique.
Yet another way – and one of the most common – is to come to an agreement with the
appraisee on the critical facets of the job and use these. This way one can be sure both
the appraisee and appraiser understand the areas that are rated and their importance.
All this is not to say that choosing relevant areas for appraisal is always easy. Many
skills are difficult to demonstrate in observable ways, or may only become crucial at
certain times, for example, for an airline pilot, in emergency situations. In short,
however, performance areas should be selected on the basis of their relevance to the
job, their freedom from contamination by external factors, and their reliability (which is
usually a function of visibility and ease of rating).
3.2 Persuasion
Introduction
Persuasion relates directly to the management of meaning in organizations: i.e., “why
we are all here, what we do and how we do it”. This can also be described as the
process of articulating and reinforcing a clear sense of purpose for organisational
participants. Managers not only deal with material resources, but also manipulate the
symbolic aspects of organizations, which in turn effects:
• how information is disseminated; decision making and the way in which problems
are framed;
• networking, politicking & influencing;
• motivating employees & shaping org. culture & gaining commitment from followers.
• what is persuasion?
• why learn about it?
• fundamental principles of persuasion
• four strategies of influence
There is no specific chapter in the textbook covering this topic. Use the
following notes as a guide to study. For more detailed information on this
topic, students might consult the main source for the following notes:
Textbook Pratkanis, A & Aronson, E 2000. Age Of Propaganda, Freeman, New
York.

3.2.1 What is persuasion?

The management of meaning in organisations can take two forms:
• persuasion: discourse which illuminates the issue at hand
o argument
o debate
o discussion
o or a well-argued speech
• propaganda: suggestion or influence through the manipulation of symbols and the
psychology of the individual.
o The first documented use of propaganda was in 1622 by Pope Gregory 15th,
who realised that establishing faith by force of arms in holy wars was not
particularly successful, and thus established the papal propaganda office to
bring people to “voluntarily” accept church doctrines.
o First widespread use of persuasion tactics during WW1 when it was
specifically defined and recognised as the dissemination of biased ideas and
opinions, often through use of lies and deception.
Armed with these definitions, it is not too difficulty to see the possible use – and abuse
– of persuasion and propaganda when used to shape an organisation’s culture
specifically, and employees’ expectations and understanding of work events generally.
3.2.2 Why learn the basics of persuasion?

Firstly, let’s take a historical perspective: In ancient Greece, all citizens were
considered equal and expected top be able to speak on their own behalf. The Greek
court system required citizens to plead their own cases before a jury of their
neighbours. With this in mind, the average Greek citizen was interested in learning how
to argue, lest he lose his possessions or be banished from his community as a result of
a petty lawsuit.
Keep in mind that the average Greek citizen’s education in the 3rd century BCE
included 4 yrs of rhetoric designed to teach them how to understand persuasive
arguments and how to construct their own. Roman students in the 1st century also took
courses in persuasion, while students at Harvard in the US in the seventeenth century
also studied how to argue and, for four years, would spend every Friday afternoon
demonstrating their proficiency at this by taking a stand on an issue, defending it and
attacking the view of others (i.e., debating).
Could the average person today do this or defend themselves in court with the same
degree of proficiency? Remember also that these people lived in a world very different
to ours – in the absence of television, radio, and before newsprint, how many religious
sermons might a church attendee hear in his or her life? 3000? And how long does a
sermon last for? Perhaps fifteen minutes to an hour, depending on the attention span
of the congregation?
We, on the other hand, live in a message-dense or “over-communicated society”. For
example, the average (north) American will be exposed to approximately 7 million
advertisements in their lifetime … and this apples equally to the workplace – since the

advent of email, how much information do you receive, and how much attention do you
give to it? And what about paper mail?
As a result of this, a burden is placed on both the communicator and the recipient of a
message intended to persuade:
• the communicator must design a message that will not only be appealing but
attract special notice in this cluttered environment, and
• the recipient is so inundated by messages that it is difficult to devote the cognitive
processing energy to make full sense of the important issues each day
To gain some perspective of that last point, let’s go back to the modern world at large
for some examples…
• The average news story lasts only forty-five seconds, then, the next is presented
(or an advertisement). A typical political advertisement runs for 30 seconds or less.
Hence, time is not allowed for consideration, debate, or emotional attachment to
any particular ‘news frame’. There is no context, and no intellectual confrontation.
Each item is a discrete event, separated in terms of context & emotional
attachment from the next. Epistemologically, without context, there can be no
contradiction. Similarly, magazine advertisements often consist of little more than a
picture and a phrase. Therefore, these discrete items cannot have ‘implications’,
as the frame of reference moves every forty five seconds on to a ‘new’ story.
Credibility (is divorced from the rigours of debate and intellectual assessment of
discourse, and) is placed in the hands of the appearance (and public acceptance)
of the presenter.
Robert MacNeil (cited by Postman, 1986, 105): had the following to say about the aims
and objectives of news presentation on television:
“… keep everything brief, not to strain the attention of anyone but instead to
provide constant stimulation through variety, novelty, action, and
movement. You are required ... to pay attention to no concept, no
character, and no problem for more than a few seconds at a time” and,
importantly, “complexity must be avoided” and that “nuances are
dispensable ... that visual stimulation is a substitute for thought, and that
verbal precision is an anachronism”.
Postman (1986) describes televised news as “a world of fragments”, but it is not limited
to that – it could be quite reasonably argued that the same descriptor applies to the
modern world in general: internet, email, handyteller adds, billboards, radio, etc.
And what is the result of this …

• Stern (1973) reported that 51% of subjects could not recall a single item of news at
the conclusion of a (standard) televised news program.
• Similarly, Katz, Adoni and Parness (1977) found that 21% of subjects were unable
to recall any news item within one hour of the broadcast.
• Salomon (1979) concluded that “the meanings secured from television are more
likely to be segmented, concrete and less inferential, and those secured from
reading have a higher likelihood of being better tied to one’s stored knowledge and
thus are more likely to be inferential”.

But, while the mass media (and the organizations we work and manage in) might not
be able to tell you specifically what to think, they do strive to tell you what to think about
and how to do it.
For example, the combined/cumulative effects of car advertising on television will
suggest what factors are important to consider when making decisions about transport.
Product attributes that regularly appear in such advertisements such as prestige,
luxury, or sportiness, are likely to be very different to other factors that might influence
your choice of transportation, such the impact on the environment from private
vehicles, or whether you’ll get to work or enjoy the scenery on the way to your
destination.
But, in the situation where the consumer views more adds for a specific product – or
receive greater exposure to a political message – then they are more likely to switch to
that product or party.
When only one side of an issue is presented by the mass media (as in the car example
we just looked at – i.e., cars are the answer to your transport problem, and perhaps
also means of asserting your success in life!), those who keep track of the coverage
are far more likely to adopt that view than those who watch little television , and what
applies for cars also applies to politics as well. For eg, in 1990 when Bush decided to
send troops to the Persian gulf, his decision was supported by congress, and of those
Americans who kept good track of current news events in August of that year, 76%
supported the decision, while only 23% of those who watched very little news were
supportive. But, of those who supported the decision to send troops, they differed in
terms of how the intervention should proceed, and that was shaped by the preferences
of their parties – so, television reinforced their original party beliefs & alliances (i.e.,
conservatives favoured immediate & direct military action, while liberals favoured more
economic sanctions first).
Ok, so what is going on here and why is it relevant to us?

“Influence depends upon on how a message is interpreted and responded
to by the recipient, which could vary depending upon the individual, the
situation and the appeal. For eg, sometimes we think carefully about what
is said, at others we hardly think at all and follow our prejudices and
stereotypes, while at other times our fears, hopes and insecurities cloud our
judgement.” (Pratkanis & Aronson, 2000)
The underlying mechanisms of persuasion when used as propaganda apply equally to
either a biased news item, an advertisement, a policy speech, or even a shareholder or
department meeting. Although persuasive messages are frequently successful in
capturing our attention in a message-dense environment, they substitute slogans and
images for well-reasoned arguments, and constrain the breadth and depth of the
issues under ‘consideration’ and hence turn complex issues into simplistic black and
white dichotomies which preclude consideration of alternative issues and perspectives.
Although we are bombarded with persuasive messages every day – wherever we are –
we don’t usually have the opportunity to learn about the techniques of persuasion and
to understand how they work.

3.2.3 Fundamental principles of persuasion
The goal of persuasion

“The successful persuasion tactic is one that directs and channels
thoughts so that the target thinks in a manner agreeable to the
communicator’s point of view; the successful tactic disrupts any negative
thoughts and promotes positive thoughts about the proposed course of
action” (Pratkanis & Aronson, 2000)
All persuasion tactics are based on two fundamental principles which describe peoples’
cognitive responses to persuasive communications.
1. The first is that humans have finite cognitive processing power and seek to
conserve cognitive energy by taking mental shortcuts whenever possible.
For example, we often respond to propaganda with little thought and in a mindless
fashion because:
• any reason will do: (Langer, Blank & Chanowitz, 1978)
o In a university study, confederates would walk up to people who were busy
photocopying and ask either, “Excuse me: may I use the photocopy machine?”
o Responses fall into two general categories, either, “Yeah, why not, I’m a
helpful person” (in fact, just over half of the responses complied with the
request) or, “Is this person stupid? I was here first and I’ve got work to do”
(just under half)
o But, if a stupid reason was given, such as, “Excuse me: may I use the
photocopy machine because I have to make copies,” most people complied.
This is a non-reason – of course you need to make copies, or you wouldn’t be
asking to use the machine, but most people complied with it - even supplying
a non reason saved the subject from having to think of one…
• Advertisers also understand this – many adds either
1. trumpet trivial differences as if they were important, such as “our cigarettes are
2mm wider that usual”
2. state non-facts that appear impressive (“Bloke Cola is it”)
3. or include meaningless superlatives (“Mayer – the world’s best aspirin”; when
all aspirin are the same…)
Even when we’re thoughtful …

The common response to being asked for “spare change” is to answer with a rude
word and walk away, but one study found that if people were given an unusual figure –
i.e., instead of a neat denomination such as 20c or 50c, but 17c or 58c – that 60%
more people contributed …Why? The ‘non-reason’ prompted them to think of
hypothetical reasons why it might be needed, and this personalised the plight of the
person asking (i.e., “Do they need it for a bus fare, or have they run short at the
checkout?”)

There are two routes to persuasion – the peripheral and central:

Peripheral – here, the recipient devotes little attention and effort to processing the
communication. Persuasion is determined by simple cues such as the attractiveness of
the communicator; peer pressure and whether or not the people around you agreed
with the position presented; the utility – i.e., pleasure or pain – associated with
agreeing with the position; or whether a reason is given – no matter how trivial or
meaningless – for complying with the request.
Central – here the recipient engages in careful and thoughtful consideration of the
merits of the information presented. In this mode, the recipient might argue against the
message, or want additional information. So in this mode, the persuasiveness of the
message is determined by how well it can stand up to close scrutiny.
Example: 1988 and George Bush is campaigning against Michael Dukakis:
• Bush ad told the story of ‘Willie Horton’, a black man who had been sent to prison
for murder. When Dukakis was governor of Massachusetts, Horton was released
on prison furlough program, and during this time out raped a white women and
stabbed her husband.
• This was influential because it required little thought for a person in the peripheral
route to get to the point – the typical response elicited might have been “Dukakis
let Horton out of prison to rape and kill. Dukakis is weak on crime, especially those
committed by black people,” because it follows the classic propaganda formula:
- a simple image (Horton – black) that plays on prejudices (i.e., some white
Americans’ stereotypes of black people) and emotions (fear of crime) to
produce a simple but effective response in favour of George Bush. So,
Dukakis was soft on crime, and Bush would protect Americans (especially the
white ones who process in the peripheral route) from people like Horton, who
are also black.
In the central route to persuasion, a person might ask:
- is this program in Massachusetts unique, or a one-off?
- what are the real percentages here? How many prisoners involed in the
program complied? I.e., what is the success rate?
- have instances like this happened in other states, and to other governors?
What determines which route we’ll choose to process a

message?
If it is personal and relevant to us, we’re more likely to use the central route, and hence
the strength of the argument is the most important factor.
However, if the message is not considered to be of great personal relevance to us,
then we’re more likely to process it via the peripheral route and be influenced by the
perceived credibility of the source instead.
For example, in one study university students heard a message which advocated that
their university adopt a compulsory comprehensive exam in their final year which they
would all have to pass in order to graduate. One half were told that it would not take
effect for ten years, one half were told that it would come in the following year, making
it personally relevant for them. The messages were also written so that some were

from a credible source, some not, and some had strong arguments (based on research
etc), and some were full of personal opinions & anecdotes.
The study found that the route to persuasion was determined by the personal
relevance of the issue. For students for whom the issue was personally relevant, a
strong argument was most important. Where the issue was not seen as being relevant,
source credibility was the deciding issue. So how might we influence both groups (i.e.,
personally relevant / not relevant)? Use a strong argument and a credible source.
Summary
Due to our limited processing ability, we often use the peripheral route to simplify
complex issues. That is, we mindlessly adopt a position or accept a conclusion
because it is triggered by a simple persuasion strategy.
How can we break out of the trap?
By making a conscious effort to process messages via the central route, and not
settling for what is presented to you without questioning and examining the premises
that it is based on. Try to think what the ultimate aim of the message is and who it will
serve best, and then work backwards and pick it apart.
Fundamental principle No 2:
2. Humans have a strong tendency to rationalise our thoughts and behaviours so that
they appear reasonable to ourselves and preserve our self-esteem.
“Nomatter how irrationally we behave, we attempt to appear reasonable to

ourselves and others” (Pratkanis & Aronson, 2000)
The end of the world & cognitive dissonance

• Marian Keech: described as a “charismatic, middle-aged woman” in the USA
• in the 1950s, she claimed to receive messages from the planet ‘Clarion’ informing
her that the world would be destroyed on Dec. 21 by a flood.
• But, she and those close to her would be rescued by a fleet of flying saucers.
• Keech attracted a small but loyal group of followers, who quit their jobs, gave away
their money, houses, and other earthly possessions, and withdrew from their
friends and normal social circles.
• Keech also attracted the attention of social psychologists who infiltrated the group
and found that they were “gentle, benign & reclusive” and who “shunned publicity
and discouraged converts”. They were confident in their beliefs, without any
grandiosity or flamboyance.
• Well, the world didn’t end, but what happened next is very interesting despite that:
The followers had been told to prepare for pick-up at midnight on the 21st – but by
4am, things were looking grim, as the world hadn’t ended. At 4.45 Keech
announced that their unflagging faith had convinced God to save the world)
o within 24hrs, the formerly reclusive group members began calling newspapers
& TV stations to talk about the prophecy & why it failed – they made speeches

and handed out pamphlets on street corners Æ suddenly it was incredibly

important to get their message out Æ why?
o They had given up a great deal but the world didn’t end, and they were without
homes, jobs, possessions, and in some instances, partners.
o The only way they could convince themselves they had done the right thing
and that their actions were not in vain was to convince others that their
sacrifices were not in vain and that their beliefs had saved the world.
o Believers Æ zealots
o The mechanism at work here is that of cognitive dissonance (Festinger, 1957).
Dissonance occurs when a person holds two inconsistent cognitions (ideas,
beliefs, opinions) Æ i.e., belief that world will end and possessions are
irrelevant is dissonant with the fact that the world has not ended and it gets
cold at night…
o This inconsistency is uncomfortable, and we reduce it by changing one or both
of the cognitions so that they reconcile. To do so, individuals will go to great
lengths to distort facts & events, denial, and self-persuasion to justify their past
behaviour. (We change cognitions because behaviour is in the past and hence
unalterable.)
o These sort of defences are most strong when a person’s self-esteem is at risk.
For example, there are a lot of lay-offs occurring at work as a result of org. change and
re-structuring / downsizing / becoming more efficient (or however you wish to frame the
situation) and a friend of yours is retrenched and you remain. This triggers survivor
syndrome (i.e., “why am I still here when…”), and you experience cognitive dissonance
because:
1. X was your friend. In response, you might change that cognition to Æ “well, we
weren’t really that close,” (and to make it so, you avoid him in the future, because
his presence reminds you of the reality of what occurred).
2. X was a good worker, Æ “well, he did slip up on occasions”
3. and X is in a dire situation Æ “well, he could have planned better,” or “his wife
works,” or …
4. and you’re not in a dire situation because you’re still employed Æ “well, I’ve got a
mortgage and problems of my own...”
So to recap here, the strategies to reduce dissonance here can be summarised as:
1. reduce the humanity of the person involved / not really a friend, I didn’t know him
that well… and
2. maximise their responsibility Æ not such a great worker any way…
Depending on the context, the effects of these strategies can spiral Æ once you explain
away one retrenchment, the others become easier… (same applies to war
propaganda)
Remember, “when food is short, table manners change”… serve the self, in whatever
form Æ basic survival, or maintaining self-esteem.
What can you do? He’s been terminated, so you can’t change that, but you can change
the way you think about the underlying premises (see above)

The rationalisation trap

• Here, a propagandist intentionally arouses feelings of dissonance by threatening
self-esteem. For example, she might make a person feel guilty about something,
by arousing feelings of shame or inadequacy, or making you look like a hypocrite.
• Next, the propagandist offers one solution, one way of reducing this dissonance,
which involves complying with whatever request they have in mind. So, to reduce
that guilt, and restore your feelings of worthiness and self-esteem, you give to that
charity, buy that car, vote for that political leader.
Example: a charity collector knocks on your door and requests

a donation Æ
• normally, it is fairly easy to quickly think of a reason not to give, but
• if the plea is followed by “any coin will help” your excuses vaporise – after all, what
sort of person would not even give 5 or 10 cents to a charity? So, your self-concept
is challenged.
• There is only one way to reduce the dissonance and restore your concept of being
a decent person; so you give to the charity.
• Research has shown that the “even a small coin will help” receive almost twice as
many donations than those who use the standard plea, but they also receive as
much money as the standard plea, even though they asked for less. Why? Once
the justification for not contributing is nullified by the “even a small coin” plea, it is
no longer a decision of whether to contribute, but how much, and this reflects on
their self-image and how they wish to be perceived as not being stingy but
generous and / or able to afford more. Either way, their self-esteem is restored.
The irony in all of this is that the rationalisations we undertake in order to avoid thinking
of ourselves as stingy, uncaring, or stupid, or whatever, set the stage for increasing
acts of stupidity or immorality.
How to break out of the trap?

Admit to your mistakes and shortcomings, as well as to the apparent inequities that you
and others face in life and at work, and strive to learn from them instead of
automatically rationalising them.
This can be achieved by first understanding our inherent tendency to protect our egos
and the ways in which we reduce dissonance, and also by building our ego-strength or
sense of self-esteem without having to fall back on justification. So, face the
shortcomings in yourself and life in general and try to learn something from them,
instead of rationalising over them.
The one thing that perhaps separates us (or at least some of us!) from other animals is
that we have an ability – if and when we choose to use it – to think past our instinctive,
evolutionarily derived urges to self-protect and instead reflect on our actions. This is
easier if we encourage a culture – whether it be in the home or at work, where
mistakes are looked upon as learning opportunities rather than opportunities to hang
someone and improve our position in the org, or social pecking order or momentarily
boost our fragile egos.

3.2.4 The four strategies of influence:

1/ pre-persuasion: take control of the situation and establish a favourable climate for
your message. This refers to
• how the issue is structured (eg, downsizing = becoming more efficient) and
• how the decision is framed – eg, in the case of car advertisements, the impact on
the environment is mentioned far less than prestige, sportiness, sex appeal etc, so
environmental issues are ‘screened’ from the selection process.
• framing the decision by staging release of information, so that the less optimal
choice wins:
Brand Special-Grip bottle Easy on the stomach Pain-relief strength
W Yes Good Very good

X Yes Good Good
Y Yes Poor Excellent
Z No Excellent Excellent
Four pain relievers are lined up in a row in a TV advertisement:

• Which of these pain relievers gives you a special-grip bottle? (which pre-supposes
that it is important to you and hence frames the question) – brand Z is removed
from view, which just happened to be the best, special grip not-withstanding
• Which of these brands won’t upset your stomach? Y is removed
• Which brand gives you the most pain relief? X is removed, leaving only W “The
choice is W”
This is also known as the ‘card stacking’ approach.

Factoids: assertions or suggestions of facts not backed by evidence, and which have
no existence before appearing in some news media. (Eg, Orson Well’s ‘War of the
Worlds’ 1938 radio drama)
They include:
Rumour: presentation of rumour as the guise of ‘news’ (as occurs frequently in the
tabloids, especially when ‘reporting’ on the behaviours of movie stars)
Innuendo & ‘whispering campaigns’: upon hearing that section head X has been
promoted/ taking on a new project etc, respond with “oh, so X will be staying…”
followed by a slightly raised eyebrow…suggesting that you might have thought he
would have in fact been leaving! Such an approach is easily defensible, as nothing
concrete has been said, and a report on body language doesn’t hold weight
Flaming – use of the internet to propagate vicious attacks and unfounded rumours
• Example: a major cookie maker gave free cookies to O.J. Simpson, resulting in a
nation-wide boycott of the cookies (how convenient for the competition…).
Also, answer the question for the target audience Æ present a scenario as a ‘fate
accompli’ – i.e., “you know you want to” – ergo – there is no reason for me to think

further, and if framed generally enough to cover basic physical & emotional needs /
drives, that would preclude most from expending cognitive resources to analyses and
perhaps refute the statement.
If successful, pre-persuasion establishes “what everyone knows” and “what everyone
takes for granted”, even if it shouldn’t be, and should, instead, be taken as a point of
discussion. By establishing how an issue is defined and discussed, one can influence
cognitive responses and processing and obtain consent without even appearing to be
attempting to persuade us.
To sum up – define the issue in such a way that you can’t help
but win!
• Source credibility – i.e., the communicator needs to establish a favourable image
in the eyes of the target audience. So, the communicator – or persuader – needs
to appear to be likeable, or trustworthy, or possessed of whatever other attribute
that would facilitate persuasion in a particular instance.
o Remember, this especially applies when the message is not considered to be
personally relevant, as in the student example above.
• Construct and deliver a message that focuses the target’s attention and
thoughts on exactly what the communicator wants them to think about – for eg, by
distracting the targets from arguing against the proposal, or by focussing the
target’s attention on a vivid and powerful image, or by inducing the targets to
persuade themselves.
o Example, refer to our forefathers, soldiers in battle fighting to protect us and
our children from whatever …
or,
• make certain that the message is personal to the target audience… (if you want to
cast a broad net, employ the ‘Barnum Effect’, and include ‘something for
everyone’…)
o This is where is where rationalising and cognitive dissonance come in handy
also … i.e., inducing the target (us) to persuade ourselves, and this usually
requires manipulating our emotions, which is the last strategy.
• Finally, effective influence controls the emotions of a target and follows a simple
rule: “arouse an emotion and then offer the target a way of responding to that
emotion that just happens to be the desired course of action”. Hence, the target
becomes preoccupied with dealing with emotions , and complies with the request
in hope of escaping a negative emotion or maintaining a positive one.
A final example
A company delivering an ‘environmentally friendly message’…
“Protecting the environment for future generations is not a simple
problem (pre-persuasion: already excludes ‘quick’ solutions which might
come to mind, like solar power, wind etc; or that there may already be
relatively simple / logical / available solutions – which the company already
owns the patents on but would rather not use!) – it’s tempting to want to
do what seems best and just rush in without thinking (show pictures of

‘feral greenies’ being dragged away by police / chained to trees etc – use of
classical conditioning & pairing the notion of green activist with dirty,
unemployed, socially irresponsible Æ this in turn shapes the argument Æ
by excluding the traditional activist green approach), but it takes time to
find the right solutions (suggesting that tree huggers reacted without
thinking – framing the issue), solutions which help the environment and
provide jobs (emotional context, also can be linked with tree-huggers as
‘dole bludgers’, while company is actually working and being productive
and contributing to society and providing jobs at the same time – hence
emotion raised – hope - and solution offered – we will provide jobs if you
support us, which targets the message also) while we’re doing it Æ switch
to image of university graduate (expresses environmental concern - hence
likeable & trustworthy - and ambition to work for a company that shares
that, which provides source credibility) Æ we’re improving our methods
(but you don’t say how – non-reason) and providing more funding for
research into alternative energy sources than before (how much is
that??? Was any money spent before??? Non-reason)
Conclusion
Keep in mind that these influence strategies rarely work in independently. That is, each
is to some degree dependant on the successful use of the other strategies. Also, we’ve
barely touched on the psychological processes which have been researched over the
years and which are available to supplement these strategies, particularly pre-
persuasion.
Reading 3.5
Conger, J.A. 2001, ‘The Necessary Art of Persuasion’, in The Organizational Behavior
Activities
understanding of the various topics in this Course
Motivation
Consider the criticisms of Maslow's theory mentioned in the textbook. You
may wish to undertake some additional reading, listed below. When you
have completed this, comment on Watson's rather scathing conclusion
Activity 3.1 about Maslow:
Consider the
criticisms of 'The significance of Maslow's work does not lie in its scientific validity. It
Maslow's theory clearly has little. Its role has really been a propaganda device:
mentioned in the propaganda in a good and humanistic cause, but propaganda
textbook. nonetheless'.
Do you agree with this view? Why, in your view, do managers sometimes
cling to theories which, while intuitively logical, are unable to be
empirically substantiated?

What are the major factors that motivate you to work? Some mentioned
directly or indirectly in the preceding discussion of needs theories are
financial security, non-financial material rewards, prestige, recognition,
Activity 3.2 fear, self development, achievement, power and affiliation.
Find your
personal Take 10–15 minutes to order these into some priority. Speculate how this
motivating list may have looked at two other stages of your working life and suggest
factors. the reasons for these differences.
Consider the extent to which trends such as it describes relate to your

own experience or that of other people whom you know. What do your
conclusions suggest about the value of orientation to work approaches
Activity 3.3 (with which this kind of discussion is broadly consistent) compared with
Apply other, more psychologically oriented approaches to explaining work
orientation to motivation?
work
approaches to
motivation.
What practices, if any, does your organisation employ to promote worker

participation in decision-making. What is the implied or explicit reasoning
behind them? To get better ideas or to enhance worker satisfaction and
Activity 3.4 productivity? Perhaps a mixture of both? To what extent do you consider
Examine your that they meet their objectives?
organisation's
practices to
promote worker
participation.
Think back through your own career and identify your own career anchor.
Can you narrow it down to one anchor, or are there several? Second,
interview your immediate supervisor (if you have one) and another close
Activity 3.5 associate, and attempt to discern their career anchors. Remember that
Identify your they may not become apparent until mid-career.
career anchor
and compare it When you have identified your own, an associate's and your immediate
with others. supervisor's career anchors, discuss how you came to your conclusions.
Finally critique Schein's (1978) scheme in terms of its practical usefulness
to managers.
As a further issue, consider the extent to which some career anchors are
being affected by changes in the general economic environment. For
example, in many fields the concept of the career ladder with a series of
Activity 3.6 steps leading with reasonable certainty to middle and higher management
Are some career levels has been under attack. Employees have been urged to think of
anchors developing a career in terms of broadening their experience rather than
disappearing? moving upward. People are commonly being advised to consider the
possibility of three or four distinct careers in the course of their working
lives. How do these issues relate to your experience and that of your
supervisor and one or more associates? Do they affect the value of the
notion of career anchors for you?

Persuasion
With the four strategies of influence as a guide, create examples of
organisational messages designed to be processed in the peripheral route
(i.e., propaganda at work!)
Activity 3.7
Propaganda at These messages can be intended to achieve any objective and directed at
work: creating any audience: for eg, shareholders at the annual general meeting; a public
the message press release; or the outline of an org. change plan; or simply a general
motivational speech or for the more general purpose of (re)shaping org.
culture.
Analyse examples of propaganda from the national media and evaluate

them in terms of the four strategies of influence. What was the target
audience? Was the influence attempt successful? How could it be
Activity 3.8 improved?
Analysing
propaganda in
the general
media
Think of some more tactics that can be used to achieve each of the above
four strategies of influence
Activity 3.9
Tactics &
Strategies of
influence
Debate the ethics of the use of persuasion and propaganda in the

workplace. Is it ever ethical to attempt to influence employees by using the
strategies outlined above? Can there be mitigating circumstances? And
Activity 3.10 who decides? Who benefits
The ethics of
persuasion and
propaganda

Module 4 Organisational Culture, Power and Politics Page 64
Module 4: Organisational culture,

power and politics
Overview
'Organisational culture, power and politics' examines organisational culture: a
phenomenon which is simultaneously one of the most ephemeral and difficult to come
to grips with, and yet also the most difficult to change. We deal with the elements of
culture – since it exists at various levels – as well as the controversies (practical and
theoretical) surrounding how managers seek to deal with culture to improve the
performance of their organisation. We also invite you to examine some elements of
your own organisation's culture and the degree of 'fit' that this presents for you as a
manager and as an individual. In the second part of the Module we examine another
'difficult' issue, that of power and politics. We examine what sources of power people
have in organisations, and – from a personal, practical perspective – how you can
improve your power-base.
Learning outcomes
At the end of this Module you should have:
• an understanding of the elements of culture
• a critical understanding of perspectives on culture, particularly how they inform
views about whether and how culture can be manipulated as part of a deliberate
organisational strategy
• an appreciation of national cultures and 'best practice' cultures as they relate to
your organisation and Australia generally
• gained some appreciation of the ways your own organisational culture operates,
and the degree to which this suits you both as a manager and as an individual
• an understanding of the controversies about power and politics in organisations,
particularly the extent to which they are endemic and useful to organisational
functioning
• an understanding of the sources of power
• some experience in analysing and applying sources of power at both a personal
and an organisational level.
Learning resources
Allaire, Y & Firsirotu, M 1984, 'Theories of organisational culture', Organisation Studies,
vol. 5, pp. 193–226.
Crozier, M 1964, The bureaucratic phenomenon, Tavistock, London.
Deal, TE & Kennedy, AA, 1982, Corporate cultures, Addison-Wesley, Reading MA.

Degeling, PJ 1977, 'The politics of organising and managing'. Unpublished paper.

Dunford, RW 1989, 'Corporate culture at Partnership Pacific Limited', Unpublished
case study.
Edwards, JD & Kleiner, BH 1988, 'Transforming organisational values and culture
effectively', in Leadership and Organisational Development Journal, USA, vol. 9, no.
1, pp13–16.
French, JRP Jr & Raven, BH 1959, 'The bases of social power', in Studies in social
power, ed. D. Cartwright, Institute for Social Research, Ann Arbor, pp. 150–199.
Frost, P, Moore, L, Lundberg C & Martin, J, eds 1991, Reframing organisational
culture, Sage, Newbury Park CA.
Handy, C, 1987, Understanding organisations, Penguin, Harmondsworth.
Hickson, DJ, Hinings, CR, Lee, CA, Schneck, RH & Pennings, JM 1971, 'A strategic
contingencies theory of intraorganisational circuits', Administrative Science
Quarterly, vol. 16, pp. 216–229.
Lee, R & Lawrence, P 1985, Organisational behaviour: politics at work, Hutchinson,
London.
Morgan, G 1986, Images of organisations, Sage, Beverly Hills, CA.
Louis, MR 1985, 'An investigator's guide to workplace culture', in Reframing
organisational culture, 1991, eds Frost et al., Sage, Newbury Park CA, pp. 73–93.
Lundberg, CC 1985, 'On the feasibility of cultural intervention in organisations', in
Reframing organisational culture, 1991, eds Frost et al., Sage, Newbury Park CA,
pp. 169–185.
Macken, D 1988, The making of melrosses', in Sydney Morning Herald, Good
Weekend, 22 October, pp. 31–38.
Martin, J 1985, 'Introduction' in Reframing organisational culture, 1991, eds Frost et al.,
Sage, Newbury Park CA, pp. 95–98.
Martin, J & Siehi, C 1983, 'Organisational culture and counterculture: an uneasy
symbiosis', Organisational Dynamics, vol. 12, pp. 623–647.
Meyerson, D & Martin, J 1987, 'Cultural change: an integration of three different views',
Journal of Management Studies, vol. 24, pp. 623–647.
Pascale, RT & Athos, AG 1981, The art of japanese management, Simon and
Schuster, New York.
Peters, TJ & Waterman, RH 1982, In search of excellence, Harper and Row, New
York.
Sathe, V 1985, Culture and related corporate realities, Irwin, Homewood IL.
Schein, EH 1985, Organisational culture and leadership, Jossey-Bass, San Francisco.
Smircich, L 1983, 'Concepts of culture and organisational analysis', Administrative
Science Quarterly, vol. 28, pp. 339–358.
Turner, BA 1986, 'Sociological aspects of organisational symbolism', Organisation
Studies, vol. 7, pp. 101–115.
Wright, JP 1979, On a clear day you can see general motors, Wright Enterprises,
Grosse Point MI.

4.1 Organisational culture
Introduction
The very existence of the topic 'organisational culture' within this course is evidence of
a shift in em-phasis within management thinking. At one time, up to about the late 70s,
textbooks and management thinkers generally were focussed on the organisation
essentially only as a group of individuals who had come together for the rational reason
that their combined energies and resources would lead to certain outcomes. Since that
time, the ideas of organisational culture and organisational change have become buzz
words of a more than usually enduring kind. They have been popularised by the writing
of management gurus such as Peters and Waterman and the 'excellence movement'
generally, which aimed to mobilise organisational culture in the pursuit of organisational
success. Peters and Waterman's research suggested that successful organisations
should have a single, integrated set of values and practices that are shared by all
members of the organisation. This is a view which is now contested – or at least felt to
be an inadequate description of what actually goes on in organisations. It is no longer
even felt to be the most helpful view of culture for the best functioning of organisations.
Nevertheless, while ideas about what constitutes an appropriate culture might differ,
and even whether it is realistic to posit a single culture within an organisation,
management thinking now consistently takes account of the fact that not only do
organisations operate within a cultural/social context, they are also themselves culture-
bearing entities (Louis 1985). As a result, it is appropriate to apply the concepts
associated with cultural analysis – which originated in anthropology – to the
interpretation of behaviour in organisations. These concepts include the notions of
'meaning’, 'symbols’, 'values’, and 'beliefs’.
While this overt emphasis on culture and the use of terms from anthropology has been
relatively recent, a cultural focus has in fact been part of some of the classics of
organisational analysis. In the first part of this Module, we will examine varying views
on culture, and a change in the ways culture has been felt to be manageable.
Robbins' textbook Chapter 16, Organisational Culture
Textbook
Reading 4.1
Schein, E.H. 2001, ‘Uncovering the Levels of Culture’, in The Organizational Behavior
Reader eds J.S. Osland, D.A. Kolb, & I.M. Rubin, Prentice Hall, Upper Saddle River,
New Jersey. (See Chapter 14, pp. 398-405).
• elements of culture
• perspectives on organisational culture
• culture and the organisational lifecycle
• culture and strategy
• cultural change

• societal and global workplace culture.
4.1.1 Elements of culture

There are no uncontested definitions of culture; the diverse schools of thought within
the originating discipline, anthropology, have led to equally diverse conceptualisations
of the term. Smircich (1983) identifies five schools of thought; Allaire and Firsirotu
(1984) identify eight. Schein (1985) provides a tripartite schema that has been widely
used in the cultural analysis of organisational activities: basic assumptions, values and
artefacts.
Basic assumptions
Basic assumptions are the taken-for-granted, not easily articulated interpretations of
the nature of reality. They include such items as:
• the need for hierarchy
• the trustworthiness of people
• the basis of competitive success
• the identity of the market in which an organisation operates
• the competitive nature of the market
• how conflict is to be treated
• the importance of consultation.
Values
Values are less 'deep' than the taken-for-granted subconscious phenomena of basic
assumptions. Values are seen in expressed beliefs about how and why things are
done. However, it is important to note that while they may provide an accurate picture
of what actions may be taken in a given situation that may also differ. Espoused and
actual values concerning innovation are a case in point.
Artefacts
Artefacts draw attention to culture as it is manifested in more or less observable forms
and practices which can be 'read' to give clues about the values and beliefs underlying
them. The classic cultural artefacts are those described by such terms as language,
myths, ceremonies, rituals and norms. To take an example, the jargon of an
organisation is a way of reinforcing distinctions between those inside and outside the
culture (see the table on 'McSpeak' adapted from Macken 1988, below). Changes in
language may signal changes in the relative influence of professional groups.

McSpeak
The following list notes a selection of terms used within McDonalds:
Crew tracking: knowing what the staff is doing.
Rush-verified people: staff who can cope with rush hour.
Cross-rotation: moving staff to different areas of the store.
Performance mistakes, bad attitudes.
discrepancies:
10 to 1: the hamburger griller.
Staff observation checks check up on staff.
(SOCs):
Unannounced SOCs: sneaking up on staff to check their work.
QSC: The McDonalds motto: quality, service and
cleanliness.
Unit producing people: staff involved in cooking or selling.
PIMS: Planned maintenance systems.
Premiums: give-aways such as balloons.
Corrective feed-back: kicking butts nicely.
Negative cliques: gangs of disgruntled staff.
Positive cliques: gangs of keen staff.
Confidence cushion: being nice to new staff.
Suggestive sell: suggesting products to customers.
Upsell: suggesting big servings of food if the
customer doesn't specify size.
Dumpster: big rubbish bin.
Pride chart: pasting up staff performance levels.
Hill: the top part of a burger bun.
Crown: the bottom part of a burger bun.
Travel path: walking around the store to check on staff
and store, another form of SOC.
(Source: Macken 1988, p. 34)
Artefacts may include such items as office layout, as the following example
illustrates.
Office designed at Partnership Pacific

Partnership Pacific Limited, a large Australian merchant bank, had for many
years operated from a building where individual managers worked in their
own offices, with doors closed. Where offices shared a common glass wall
venetian blinds would be left down to maintain the seclusion.

A newly appointed managing director wished to encourage more

interaction, discussion and consultation within the bank. He saw the
physical layout as a physical and symbolic representation of a way of
working that he wished to change. The bank moved buildings and $6
million was spent on establishing a completely new office layout. Interior
architects were employed to design the office according to the new
managing director's philosophy.
The new layout involved open plan offices, with status indicated by the
location of desk (managers next to the outer windows), size of chairs and
the shape of the wooden desk area. 'Pink noise' was fed into the office
area, which made it difficult for people not involved in conversation to
overhear such a conversation. The new office area had an open, light and
airy feel, compared with the enclosed offices previously used. This was
reinforced by the use of light 'modern' materials and styles in contrast to the
'mahogany and velvet' feel of the previous offices.
(Source: Dunford 1989)
Stories
Stories may reinforce some predominant value in the culture as the example of the
textbook illustrates. However they may also act to undermine an opposing culture, as
the example of 'the refrigerator' (see below) highlights.
The refrigerator
Division head John DeLorean expressed his opposition to the General
Motors' cultural emphasis on deference to authority through telling the
following story:
While preparing for a senior executive's trip to a particular city, the
Chevrolet zone people learned from Detroit that he liked to have a
refrigerator full of cold beer, sandwiches and fresh fruit in his room to eat at
night before going to bed. They booked a suite in one of the city's better
hotels, rented a refrigerator, and ordered the food and beer. However, the
door to the suite was too small to accommodate the refrigerator. The sales
people planned to rip out the door and part of the adjoining wall but the
hotel manager refused to allow this. However, permission was given for
their next proposal which involved hiring a crane and operator, putting them
on the roof of the hotel, knocking out a steel set of windows in the suite,
and lowering and shoving the refrigerator into the room through this gaping
hole.
That night the Chevrolet executive devoured the sandwiches, beer and
fruit. The next day he was off to another city – and probably another
refrigerator – while back in the city of his departure the sales people were
once again dismantling hotel windows and removing the refrigerator by
crane.
This story had its impact in that it highlighted the ridiculous extremes to
which deference to authority could be taken, thus undermining the
dominance of this cultural value.
(Source: Wright 1979 cited in Martin and Siehi 1983).)

Rituals
Rituals are routinised activities that maintain cultural beliefs and values. While 'Friday
night drinks at the pub' is a widely acknowledged ritual, there are others that are more
subtle. The appearance of having undertaken a full and unbiased assessment of all
information can lead to a ritual which produces the appearance of this having been
done, even though in fact the decision had been taken in advance.
Ceremonies
Ceremonies, such as retirement dinners and speeches, are formalised rituals. The
strength of the cultural constraints inherent in such rituals is clear when someone
transgresses the unspoken 'rules' about such rituals.
4.1.2 Perspectives on organisational culture

Given an understanding of the 'building blocks' of culture, the question arises as to
what 'construction' results. Do the blocks give rise to one integrated edifice where the
various parts reinforce each other, or do they associate randomly or even act against
each other? Meyerson and Martin (1987) and Frost et al (1991) have identified three
distinct perspectives on organisational culture: the integration perspective, the
differentiation perspective and the fragmentation perspective.
Integration perspective
The integration perspective treats culture as a unified phenomenon, both in the sense
that assumptions, values and artefacts are shared by all organisational members, and
in the sense that these various phenomena are consistent with each other and mutually
reinforcing. This is the perspective inherent in such definitions as 'the way we do things
around here' or 'normative glue' (Deal and Kennedy, 1982), or in short hand
descriptions of the culture such as 'innovative' or 'entrepreneurial’. The various case
studies of Wait Disney, MCI, and Time Warner in the textbook onwards are examples
of this perspective.
Integrationist portrayals of culture frequently concentrate on a leader as the source of
cultural content. It is assumed that the vision of the leader permeates the culture and
that the lack of a vision is tantamount to a message of impending organisational failure.
Little attention is given to the fact that visionary leaders have frequently been at the
helm of organisations, which do, in fact, fail.
Such a perspective leads naturally to the view that culture is relatively easily
manipulable. Sathe (1985) provides an integration-perspective six-step model of how
managers can control the character of the culture:
• pre-selection and hiring of members
• socialisation as per the textbook discussion
• removal of members who deviate
• reinforcement of desired behaviour, e.g. through rituals of integration such as
promotion or other forms of recognition or induction/orientation, or rituals of
punishment, such as disciplinary procedures or demotion
• reinforcement of values and beliefs in a similar way to the above

• cultural communication through artefacts such as stories and ceremonies as

described earlier. Communicating 'vision' to staff is also important here. It is clear
that this perspective has strong links with the idea of transformational leadership.
While the integration perspective is neat and provides a view of culture as something
that is coherent and manageable, it may not be the most useful if managers wish to
understand the complexity of organisations from a cultural framework.
Differentiation perspective
The differentiation perspective focuses on culture as characterised not by harmony
and unity but by diversity and even inconsistency (Meyerson and Martin, 1987).
Attention is given to sub-cultures rather than to the organisation as a whole as the key
unit. So the different cultures in different parts of the organisation's structure, and those
parts of culture that are imported into the organisation from the outside, such as class,
gender and occupation, are important in this perspective. From the differentiation
perspective cultural diversity and hence cultural conflict are taken as normal, rather
than deviant or unusual.
From this perspective, what is called from the integrationist perspective 'The culture' of
an organisation is simply the dominant subculture. Martin and Siehi (1983) refer to
three other typologies of subculture:
Enhancing: those that manifest an extreme adherence to the core values of the
dominant sub-culture.
Orthogonal: those where there is simultaneous acceptance of both the core values of
the dominant sub-culture and of another non-conflicting set of values, such as those of
a profession.
Countercultural: those that present a direct challenge to the core values of the
dominant sub-culture.
In addition, the differentiation perspective, with its attention to those aspects of culture
that are 'not for public consumption’, focusses on the fact that espoused values and
actual practices in organisations will often be different.
The ambiguity/fragmentation perspective

The differentiation perspective acknowledged at least some notion of shared meaning,
even if it is attached to a sub-culture rather than across the organisation. According to
the ambiguity perspective, there are no clear patterns. Rather, the natural state is for
meanings, values and behavioural norms to be diverse and resist easy explanations.
Consensus, divergent views and confusion coexist, but in a fluid fashion rather than
organised around the existence of groupings. Consensus, when it exists, is likely to be
on an issue-specific, transient basis (Frost et al, 1991). Typically, progress is made
through the unique contributions of individuals rather than through groups, whether
such groups represent a dominant culture or a sub-culture. To some, the fragmentation
perspective may appear to be an alternative to an analysis based on culture, rather
than an aspect of it.

The value of the three perspectives

It is important to give due attention to the particular 'take' on culture that is being
adopted in any discussion or action, since it will inevitably constrain what we are likely
to find. Overarching shared views of culture will inevitably focus on common elements,
for example. However it is difficult for people not to become attached to one view rather
than another, and the integrationist perspective has definitely come to predominate in
most management textbook discussion. However command of several perspectives
leads to a more skilful and comprehensive analysis of organisational behaviour. Briefly,
• The Integration perspective attunes us to factors pervading the whole
organisation as a result of certain factors. An example is the textbook's typology
of organisations as Academies, Clubs, Baseball Teams, and Fortresses.
• The differentiation perspective attunes us to variation and diversity, so that
we see organisationally pervasive culture as merely one option that may arise.
• The fragmentation perspective alerts us to the importance of not assuming
that attribution of meaning necessarily falls into set categories based on
either the organisation or groups/sub-cultures.
4.1.3 Culture and organisational lifecycle

Edwards and Kleiner (1988) link the evolution of an organisation's culture to the stages
of its lifecycle as follows:
Establishment: The culture is strongly influenced by the founder's views, personality,
way of doing business, etc.
Growth: The culture retains the founder's influence often for many years, but forces for
change occur when outside managers are brought into the organisation, especially if
they include a new leader. New people bring different assumptions.
Mid-life: The culture is now well developed. As the organisation spreads its activities
geographically, diversifies its activities or divisionalises its structure, powerful
subcultures are likely to emerge, making it difficult and time-consuming to attempt to
change the culture.
Maturity: In this stage an organisation may find that its culture no longer helps the
organisation meet a more challenging environment, and attempts may be made to
revitalise the organisation and its culture. According to Edwards and Kleiner, this can
be difficult to do without major 'corporate surgery' that is, major restructuring or
retrenchments of managers or employees.
4.1.4. Culture and strategy

As noted, interest in organisational culture has been a recent phenomenon and has
largely been due to the assumption that 'getting the culture right' has an impact on
organisational performance. After all, the interest in organisational culture emerged at a
similar time to interest in Japanese industry and its startling growth and successes in
the early '80s. The search for 'the secret of Japanese success' has tended to focus on
how organisations operate overall rather than on technical areas such as finance,
production or marketing. Thus the focus has included a strong emphasis on culture.

Additional reading (not in the Reader). For examples of this early

attention to culture as an aspect of organisational strategy, see Ouchi
(1981), Pascale and Athos (1981), Deal and Kennedy (1982) and Peters
Reading and Waterman (1982).
The message of virtually all of these writers is that a 'strong' culture underpins the
organisation's success. Equally, a strong corporate culture has been nominated as the
primary reason for failure, as when Burck (1986) argues that the dominance of a 'can-
do' culture in NASA stifled the open assessment of risk in the space shuttle program.
For a detailed exposition of this case, see Module 2. In all of these cases, a unitarist or
integrationist perspective on culture is being taken. You may wish to refresh your
memory of these terms by referring to the 'HRM and conflict negotiation' heading
'Perspectives on conflict'.
Once the link has been made between culture and success (or failure) it is only a short
step to evaluating cultures as good or bad. Thus advice to organisations to hire people
who will fit in with its (positive) culture, or help redirect organisational culture in positive
directions, or to weed out people who do not fit the culture has become prevalent.
Quite aside from the issue of whether it is appropriate to characterise cultures in such a
simple manner, there is an important question here about the value of diversity in
organisations. In Module 3 it was argued that it was both unrealistic and counter-
productive to construe all organisational conflict as treacherous and dangerous, and
that differences in viewpoint sometimes needed to be actively cultivated. If that
standpoint is upheld it seems likely that some tension between subcultures could be
healthy in terms of organisational performance. It would mean that organisations would
be less likely to fall into the trap of freezing out alternative perspectives on their taken-
for-granted assumptions and beliefs.
4.1.5 Cultural change

While virtually all management textbooks, including the one set for this course, give
attention to the 'how-to's' of changing or at least revitalising organisational culture, the
extent to which organisational culture is manageable is in fact a matter of major
dispute. Martin (1985) characterises the debate as being divided between the 'cultural
pragmatists' and the 'cultural purists'. Cultural pragmatists argue that culture is a
relatively manageable phenomenon. From this position, culture is a variable, like
structure or technology or marketing strategy, to be moulded and shaped more or less
at will. The management literature since the 80s has been replete with advice about
'building culture' – the assumption is that one can choose and build in an attractive
(designer?) culture, or that one can fill in 'culture gaps', which suggests that an existing
culture may deviate from that which would best serve the interests of management.
Edwards and Kleiner, while addressing initially the general and unplanned evolution of
culture, still suggest that organisational culture can fall into a rut, and will at some stage
need radical overhauling.
Lundberg (1985) is rare among the pragmatists in outlining some enabling factors that
will allow cultural change to take place:
• external enabling conditions, such as market conditions or society-level cultural
factors
• internal permitting conditions, such as the preparedness of some organisational
members to invest time and resources in support of such change

• precipitating pressures, such as changed consumer demands or changed nature

of staff
• cultural visioning, that is 'key organisation members with a raised consciousness
of the need to redesign their culture enter into the non-ordinary task of making their
present organisational culture explicit and sketching out a more preferred one'.
(Lundberg, 1985, p179)
• cultural change strategy, whereby the vision is turned into a plan for the pace
and scope of change
• cultural change action plans, whereby the commitment to change and
consolidation of the new culture occurs
• culture pursuits such as Turner (1986) argue that, given the fact that culture
emerges over time as a result of myriad diverse influences, and not as a result of
conscious decision, it is laughable to talk about changing it. They are scornful of
'pop culture magicians' who promise stunning changes in performance and sell the
belief that corporate culture can be 'controlled, changed and manipulated from the
top down for specific cost effectiveness and productivity gains' (Turner, 1986, p
104)
To some extent, evaluating the truth of either position requires an examination of what
definition of culture is being used. Many advocates of cultural change are arguing in
favour of changing relatively superficial behaviours and norms, and this makes cultural
change – at least according to that definition – more realistic. Changing deep-seated,
even unconsciously held assumptions and beliefs is likely to be much more difficult.
Where cultural change is argued to be possible, there appear to be some common
threads among organisations attempting it:
• determine the desired corporate strategy
• assess the cultural characteristics of the organisation
• forge a mission or vision for the organisation
• communicate the desired culture
• secure participation by managers and employees in the new desired culture and
shape their behaviour with new job accountabilities, training, office layouts etc
• reinforce the desired behaviour by implementing salary incentives, promotions,
recognition, etc.
Reading 4.2
Schein, E.H. 2001, ‘Three Cultures of Management: The Key to Organizational
Learning’, in The Organizational Behavior Reader, eds J.S. Osland, D.A. Kolb, &
I.M. Rubin, Prentice Hall, Upper Saddle River, New Jersey. (See Chapter 14, pp.
405-417).

4.1.6 Societal and global workplace culture

Another strand of the management literature on culture is concerned with the larger
aggregates of organisations and industry sectors within national groups. Societal
culture is assumed to be integrated, or differentiated into sub-societies, so that shared
values, beliefs, artefacts and behavioural patterns differ from national culture to
national culture. The work of Hofstede reviews national culture in 40 countries across
four dimensions: power distance, uncertainty avoidance, individualism/collectivism and
masculinity/femininity, as follows:
• power distance: the extent to which unequal distribution of power is accepted as
right and proper
• uncertainty avoidance: the extent to which people feel threatened by ambiguous
and uncertain situations
• individualism/collectivism: the extent to which people define themselves as
autonomous individuals or through their membership of groups
• masculinity/femininity: the extent to which the dominant social values are
assertiveness, acquisition of money and things, and not caring for others. The
results for Australia and some other countries are presented below:
National culture in four dimensions

Power Uncertainty Individualism Masculinity
Distance avoidance
Australia Low Low High High
Hong Kong High Low Low High
Japan High High Low High
Philippines High Low Low High
Singapore High Low Low Low
Sweden Low Low High Low
U.S. Low Low High Low
(Source: Hofstede 1980)
The implication is that theories of motivation or related management theories

developed in one country may be inappropriate when applied to another.
On the other hand, an alternative strand of thinking and research tends to stress what
is common across all cultures and work places in a world of global competition. That is,
it relates aspects of work culture to what is felt to be needed to achieve world class
best practice. The following is one suggestion about the features of world-class work
culture:

World-class Workplace Culture

• open style, participative management
• flexible, learning organisation, customer focus
• quality mind-set, every employer a 'supplier' and 'customer'; quality problems
• handled at the source
• multi-skilled employees self-directing, task-oriented work groups
• innovative organisation, initiatives for improvements in all directions
• industry-based unions, shared values, shared goals
• short-term and long-term focus; strategic thinking and management rewarded
(Source: Report on National Summit on Management Skills, discussed in Business Review Weekly, 11
October, 1991, p69.)
Conclusion
The perspectives on organisational and societal cultures are themselves diverse and
aimed in different directions. Each perspective has different implications for what
change would mean and how it would be achieved. Theoretically, it is often the act of
negotiation of meaning of what the culture of an organisation or society is or should be.
In other words, it is associated with changes within the organisation that affect
performance, and not the culture itself.
4.2 Power and politics
Introduction
Read Robbins' textbook, Chapter 13, Power and Politics.
Textbook
The textbook points out that power and politics are among the more 'difficult' and
inadmissible topics in management, and in fact all of us would be aware of the drain on
people's time and energy that comes through what we customarily call 'playing politics'
or 'power struggles’. However, this is not the only possible view of power. In other
Modules we have occasionally referred to management as 'getting things done through
other people’. In the light of this definition, it is easier to accept that power and politics –
with politics defined as the exercise of power, which is perhaps the simplest distinction
between the two – are not merely necessary evils in organisations. If management is
getting things done through people, then it is possible to think of power as the fuel
behind the action of getting things done.
This is not to deny that excessive politicking can indeed be the drain on personal and
organisational resources that we intuitively feel it to be. But it may be interesting and
instructive to examine the argument that the oppressive actions that we often label as
power are more likely to be the result of a lack of power – that is, the lack of the
supplies, information and support needed to make things happen. But to deny the
reality – and the usefulness – of power in organisations, is to rely on an unduly

mechanistic, efficiency driven model of organisations which suggests that any intrusion
of 'irrational' elements such as power or politics is an undesirable aberration.
• power 'to' versus power 'over'

• sources of power
• power strategies
• an Australian contribution to thinking about power: the arena model.
4.2.1 'Power to' versus 'power over'

We might characterise the two interpretations as something like the difference between
'power to' and 'power over’. In the derogatory sense of the term, 'power over' refers to
the ability of one party to impose its will on another. In the sense of 'power to' it is clear
that power is not a fixed-sum game. That is, managers who enhance the power of
people who report to them may not lose power, but rather gain it as their subordinates
become more effective.
There is a difficulty with the 'power to' approach however, in that it tends to assume
that goal consensus always applies, that is, that everyone is working towards the same
or at least compatible ends. In other words, it assumes a unitarist stance on
organisations. You might also want to review the traditional approach to conflict in this
context. The 'power to' approach tends to assume that there is no necessary conflict of
objectives within organisations. In contrast, however, if we adopt the view that at least
at times there will be divergent and conflicting interests within organisations, it is clear
that at least at times there will be some contestation between conflicting parties,
especially if there are limited resources available. Either way, however, the operation of
power is simply part and parcel of the nature of organisations. Put in another way,
political behaviour does not simply occur within organisations, it is part of what it is to
be an organisation.
It is also important to note that the divergent or conflicting interests and the resulting
contestation being referred to here do not only arise out of the subordinate-superior
relationship, although such 'vertical' conflicts may be one important source. As noted in
the part of Module 3 on sources of conflict and hence power struggles, conflict can also
result from various horizontal relationships as well as vertical relationships. In order to
see the variety of sites or locations within organisations in which individuals or groups
are likely to be involved in attempts to influence actions and outcomes, it is useful to
consider sources (or bases) of power.
4.2.2 Sources of power

As we might expect, the power that someone has available to them in one situation is
not necessarily available to them in another. The tennis umpire has power at the
match, but cannot transfer this to his or her job at the bank. Similarly, within an
organisation, the influence that someone can exert in one situation will not necessarily
be available in another. The textbook considers five broad types of power, which
accrue from different situations: coercive power, reward power, legitimate power,
expert power and referent power.
These are based on the categories originally proposed by French and Raven (1959),
but it is interesting to note how lists of power sources have grown with increasing

interest in the topic. The following are the lists of power sources of five prominent
authors in the field:
French & Raven (1959) Paton (1984) Stephenson (1985)
Reward power Position power Power over scarce
resources
Coercive power Expert power Formal authority
Legitimate power Dependence power Information power
Referent power Control over uncertainty
Expert power Stakeholder power
Prestige power Personal power
Hunt (1986) Morgan (1986)

Authority Formal authority
Function Control of scarce resources
Personal characteristics Use of organisational structure and rules
Intellect Control of decision processes
Charisma Control of knowledge and information
Interpersonal skills Control of boundaries
Access Ability to cope with uncertainty
Wealth Control of technology
Connections Interpersonal alliances, networks and control
Family Informal organisation'
Performance Control of counter organisations
Referent power Symbolism and the management of meaning
Reward power Gender and the management of gender relations
Coercive power Structural factors that define the stage of action
Information power The power one already has
(Source: Dunford 1992, p.197)
The following discussion represents a summary of some of the more important of the
various sources of power. Note: this doesn't mean that they are necessarily the most
important for any particular person. The Activity following the discussion gives you the
opportunity to consider your personal sources of power.
Formal authority: the acknowledged right to give orders and make decisions. Note
that this has nothing to do with competence, although staff's perceptions of the boss's
competence may affect how readily the boss's requests and instructions are obeyed.
Reward power: This has both formal and informal aspects. Formal position is likely to
involve some control over rewards both in the positive sense of additional pay and in
the negative sense of coercion, withholding of promotion and termination of
employment.

Control of scarce resources: The ability to control access to any resource that others
value – including money, materials, technology, employees with required abilities,
customers – is an important source of power. Even access to the CEO – since it may
be controlled by the CEO's Executive Assistant – makes the assistant a powerful
individual, even though he or she may not be paid as much as those seeking the
access. The amount of power increases with increasing scarcity and increasing
dependence.
Control of uncertainty: Organisations are likely to face various forms of uncertainty,
including environmental uncertainty, which relates to markets and the supply of needed
resources, and operational resources, which are those within the organisation such as
a breakdown in computer systems of production machinery. The 11 strategic
contingencies(tm) approach to explaining the various parts of an organisation sees this
power as tied to a given part's capacity to cope with uncertainty on behalf of other parts
of the organisation (Hickson et al. 1971). Again, scarcity and dependency are key
factors. Power is enhanced to the extent that the coping ability both cannot be carried
out by others (substitutability) and is critical to the performance of other parts of the
organisation (centrality) (Hickson 0/8/1971). The classic example is draw from research
undertaken in France by Crozier, which considered the case of the maintenance
workers in a continuous production process, who were often in a position to stop the
production process (Crozier, 1964).
This approach has its critics, however, since it may suggest that positions of power are
determined solely by situational factors beyond the control of the parties involved. With
the maintenance workers studied by Crozier, it has been pointed out that they were
active in perpetuating their position of power by not allowing repair procedures to be
recorded in written form. That is, they took action to enhance their power situation. In
more recent times, the power of the central computing department, once greatly
enhanced by perceptions of the difficulty of programming work, has been eroded by the
greater familiarity of people generally with computers. The message is, first, that those
in power can act to perpetuate their centrality – power can define centrality, not just
vice-versa, and second, that centrality and unsubstitutability are, perceived, not merely
indisputable facts carved in stone.
Expert power: To varying degrees, organisations involve specialisation. With this
comes a degree of power relating to the expertise inherent in that specialisation. As
people move up the organisational hierarchy, however, their formal power increases,
but they normally must forgo a mastery of all the areas of expertise represented
amongst the people who report to them. (See 'Introductory topics'.) Maintaining a broad
overview conflicts with the demands and advantages of specialisation. Put another
way, the sites of expert knowledge and the sites of formal position power are likely to
differ.
It is also important to note that expert power is likely to be due to the maintenance of
the claim to legitimacy that a profession may make in specific areas. That is, the power
is due not only to the knowledge, but also to the general acceptance that only a certain
group has the right to pronounce on matters in a certain area.
Information power:. Information – about what's going on, or as an element in
decision-making – may be as important a resource as any other. Hence the ability to
control the flow of information can influence the very definition and understanding of
organisational situations and create patterns of dependency (Morgan, 1986). Thus in a
political view of decision-making the determination of the form items take in a meeting
agenda, or indeed whether they make it onto the agenda at all, is a vital and
particularly subtle form of power.

Use of organisational rules and regulations: Rules and regulations are not always
obeyed; indeed they are not always known. Nonetheless, they may be invoked in
support of, or to prevent a particular course of action. The ruled are of course most
obviously subject to this form of power, but the rulers are also often constrained by
rules, and doing what the rules require provides the rules with protection from arbitrary
action. 'Working to rule' or working strictly according to one's job description and not
doing the 'little extras' is an important source of industrial muscle. Finally, it is important
not to see rules as subject to only one interpretation. Indeed power is more accurately
described as residing in the ability to have one's interpretation of rules accepted than
simply in knowledge of rules per se.
Control of decision-making: The relationship between power and decision-making is
a multi-dimensional one. It involves, at a minimum:
• who is involved in the decision-making process.
• how issues get discussed.
• what issues get discussed.
The involvement of a person in decision-making gives the opportunity for that person to
be influential, provided the decisions have an effect.
How a decision is made is important. We have already touched on this issue, in an
oblique way. As noted in Module 1, the form of an instruction from a manager – its
penetration – has an impact on the discretionary content of the work of an employee
reporting to that person, and hence on their power. Moreover, defining an issue as a
matter of corporate image or prestige rather than short-term gain may defeat an
opponent's argument. Or couching it in terms of a particular context, for example that
the whole organisation is under threat, may undermine the arguments of others who
oppose a course of action on the grounds of its effects on their particular part of the
organisation.
Finally, the fact that a topic is off the agenda may not be evidence of genuine
consensus, but rather that a particular party is able to stifle discussion in either a real or
a metaphorical sense. So, control of what is discussed is an important source of power.
Network power: Formal or informal alliances and networks can form important power
bases for members, whether as a means to have certain actions taken, or as a source
of information. Network power can also derive from influence in some powerful non
work-related organisations, or from specific extra-organisational relations, such as
being closely connected to a company's major client.
The management and interpretation of meaning: We have discussed in the
Modules which addressed leadership and organisational culture the power that comes
from being able to define the nature of the situation that organisational members
confront. So, meaning may be able to be managed, but it may also be able to be
interpreted. Having skill in 'reading' the symbolic significance of apparently trivial issues
such as office layout, body language and so on, can gain one the reputation – and
perhaps the reality – of being a skilled organisational politician.
Gender: Morgan (1986) includes gender as a basis for power, arguing that many
organisations involved gender-related values that favour one sex, usually men.
Moreover, the difficulty is not always overcome even if women adopt the dominant,
male-oriented behaviours, since identical behaviour on the part of women is not
necessarily perceived or treated in the same way as when it emanates from men. If this
is the case, a direct implication is that women cannot necessarily overcome a power

deficit by copying male behaviour because it is the interpretation, not the behaviour
alone, which produces the outcomes.
Personal power: Thus far, we have considered power as a function primarily of the
situation, and have given little attention to the difference contributed by an individual.
Yet it is clear that, even given the same situational factors, one person will not be as
successful as another in a certain situation. Interpersonal style, the capacity to create
goodwill, and so on, as well as an individual's capacity to be a shrewd analyst of the
situation and its potential, can all play a part.
4.2.3 Power strategies+

Rather like the notion of power itself, the term 'power strategies' tends to get a bad
press. We often see it in terms of simplistic recipes guaranteed to solve all one's
problems by revealing the secret of being powerful. A more sophisticated approach,
however, recognises that power strategies indicate how individuals, without having
complete control over their situations, are nevertheless active agents in the
construction of the situation in which they are located.
Taken as a whole, power strategies or tactics are centred on actions, which enhance
power, enact power or challenge power sources. These involve the following:
• to enhance power is to increase one's power source(s). This involves developing
either more of one's existing power sources or adding new power sources.
• to enact power is to call on the potential inherent in one's power sources. This
involves taking action to utilise one's power sources. (Note that in many cases, it is
not necessary to utilise one's power sources to have actions taken that are in line
with your wishes. Just the knowledge that one has the capacity to coerce, for
example, may be sufficient.)
• to challenge the role of a factor as a power source. This is likely to be the most
difficult strategy of all to pursue because it may involve questioning some
fundamental and taken for granted understandings that most people have about
what is right and proper.
Reading 4.3
Cohen, A.R. & Bradford, D.L. 2001, ‘Influence with Authority: The Ude of Alliances,
Reciprocity, and Exchange to Accomplish Work,’ in The Organizational Behavior
4.2.4 An Australian contribution to thinking about

power: the arena model
Pieter Degeling (1977) has used the model of organisations as political entities to
develop an analytical model of the diverse interests, resources and relationships within
them. By 'arena' is meant the idea that any one player (or stakeholder) is involved in,
generally, several networks of relationships. For example, a manager may be involved
in a network of managers (the corporate area), a network of those in his or her
particular part of the organisation (the workplace arena) and networks beyond the
boundary of the organisation (the professional arena, the client arena). Other arenas
are likely to form around particular issues.

Within a given arena, there will be players, objectives, resources, tactics and
outcomes.
• players are the parties involved in the particular issue at stake. They may be
individuals or collectivities such as departments
• objectives constitute the intentions that lie behind action
• resources refer to the power sources available to a player
• tactics are the actions taken by each player
• outcomes are the product of the particular series of actions.
Systematically listing the objectives, resources, likely tactics and outcomes for each
player in a situation can give a comprehensive view of the political strength of each.
The arena model is thus a form of power audit. It can be used either to interpret a past
situation or to predict the outcome of a currently evolving situation, or even to prescribe
what action to take in a current situation. Note that it is an analytical device rather than
necessarily an accurate description of the exact process whereby outcomes are
produced.
Conclusion
Having an understanding of the power and politics, which are inherent in any
organisation, is central to an analysis of organisational behaviour, and how to manage
it. Political models of organisations have raised the profile of power as an explanatory
concept, and gone some way towards removing the idea that the exercise of power is
always detrimental to organisational functioning.
There are a variety of power sources that include reward power, control of scarce
resources, control of uncertainty, expert power, information, use of organisational rules
and regulations, control of decision-making, network power, membership of counter-
organisations, the management and interpretation of meaning, gender and personal
power. The effect of these power sources needs to be understood in the context of
taken-for-granted understandings to understand how they operate. A number of tools
and strategies for both enhancing and challenging power add to the value of this notion
as both an analytical and a practical tool.
Activities
Organisational culture
Consider the list of basic assumptions above. What shared views does your
organisation hold about each of these? Do you have any way of checking these
assumptions or do you 'just know'?
Activity 4.1
Examine your
organisation's
culture (I)

What evidence is there in your organisation for the existence of one or more
sub-cultures?
Activity 4.2 What aspects of Schein's elements of culture did you use to help you come to
What evidence your conclusions? Would you describe the sub-culture as enhancing, orthogonal
is there in your or countercultural?
organisation for
the existence of
one or more
subcultures?
What evidence is there in your organisation for differences between its espoused
values and actual practices? If so, why have these differences appeared?
Activity 4.3 Are these differences in values associated with one or more sub-cultures?
Examine your
organisation's
culture (II)
There are several other typologies of (overall) organisational culture along the
lines of the one presented by Sonnenfeld in the textbook on p 638. Other
examples include the following from Edwards and Kleiner (1988):
Activity 4.4
Find the • the Apathetic Culture which lacks concern for both people and performance,
commonalities and is preoccupied with "playing politics" as a means of attaining rewards;
across
• the Caring Culture which reflects a parental "we will look after you"
typologies of
approach;
organisational
culture (1) • the Exacting Culture which is orientated towards performance and success,
in which, although jobs are well paid, people are considered expendable;
• and the Integrative Culture which reflects both a high concern for
performance and a great respect for people. This perspective is in terms of
the contributions they can make to the organisation, not a parental
approach.
and this one from Handy's Understanding Organisations:
• the Power Culture: often found in small entrepreneurial companies, depends

on a central power source with rays of power spreading out from that central
figure. Size is a problem; the web can break if it seeks to link too many
activities. Power cultures put a lot of faith in the individual, little in
committees.
• the Role Culture: often stereotyped as a bureaucracy. Relies on procedures

and rules, and is coordinated at the top by a narrow band of senior
management. The role organisation will succeed as long as it can operate in
a stable environment, but they are insecure when the ground shakes.
• the Task Culture: job or project-oriented. Its accompanying structure can be

best represented as a net, with some of the strands thicker and stronger
than the others. The so-called "matrix organisation" is one structural form of
the task culture. It words well where flexibility and sensitivity to the market or
environment are important, but has difficulty producing economies of scale
or great depth of expertise.
• the Person Culture: exists only for the people in it without any superordinate
objective. Barristers' chambers, families and some small consultancy firms
are typical examples. A cluster is the best description of it, or perhaps a
galaxy of individual stars.
Source: adapted from Handy (1987)

Describe your own organisation's culture at this stage of its history. What sub-
cultures, if any, have also become noticeable, and how do they interact with the
main culture? Using the argument of Edwards and Kleiner (1988) which links the
Activity 4.5 evolution of an organisation's culture to the stages of its lifecycle, describe what
Examine your organisational lifestage factors may be influencing the evolution and nature of
organisation's your organisation's culture.
culture (III).
How has the culture in an organisation of your choice been managed? Where
has the management been successful and where has it been unsuccessful?
Why?
Activity 4.6
How has the
culture in an
organisation of
your choice
been managed?
Fill out the questionnaire from Robbins called "What Kind of Organizational
Culture Fits You Best?" and score it according to the directions. Compare the
results to one of more of the culture typologies from this Module, to build up a
Activity 4.7 picture of the kind of workplace in which you would feel most comfortable. Now
Choose your compare the results to the culture of your present workplace. How well does
preferred your workplace's culture correspond to the kind of culture that best suits you? If
organisational there are discrepancies what aspects of the culture would need to be changed,
culture. and how feasible are such changes?
Consider the lists from the authors above. They are unlikely to be exhaustive,
since most things have the potential to be the source of power in some situation.
Neither do they present mutually exclusive categories. Use the five authors' lists
Activity 4.8 to assemble your own single, summarising list of sources of power. Add any
Devise your sources that you feel are inadequately covered in the lists given and comment
personal list of on why you added them. In addition, comment on any items that you have
power sources combined, and comment on the links between them.
Consider the list of power sources you compiled from the previous Activity, or
the list of power sources we have just elaborated on. Which of them figure
among your own most prominent power sources? Which do not really rate as a
Activity 4.9 source of power for you? Assuming you would like to increase your personal
What are the power in your organisation, what might you do to improve your personal power?
most important
of your personal
sources of
power?
Use the arena model to analyse a contested situation with which you are familiar
– not necessarily one in which you are or have been personally involved. Do the
outcomes correspond to the analysis the arena model would predict? Why or
Activity 4.10 why not? Remember that outcomes are not always worked out on the basis of a
Analyse the conscious decision or strategy, and that not all strategies lead to predictable
political content outcomes!
of a current or
past situation.

Module 5: Organisational structure

and decision-making
Overview
The right organisational structure can play an important role in an organisation’s
evolution and success. The process of organising - the second of Fayol’s management
functions - is how an organisation's structure is created. In the first part of this module,
we’ll look at organisational structure dimensions and the concepts and contingency
factors that affect decision making surrounding various configurations of organisational
structures and design. In the section on decision-making, which is clearly part of the
essence of management, we examine – paradoxically, perhaps – how most decision-
making fails short of the ideal or rational model. In examining a variety of other
approaches to decision-making we gain a broader and more realistic view of what
makes a good decision, and how to achieve it.
Learning outcomes
At the end of this Module you should have:
• an understanding of organisational structure and organisational design and be able
to explain why they are important to an organisation.
• knowledge of the four contingency factors that influence organisational design
• gained an understanding of matrix organisations, project structures, autonomous
internal units, and team-based structures and why organisations are using them.
• an understanding of the characteristics of a boundaryless organisation and this
structure's appeal, and be able to explain the concept of the learning organisation
and how it influences organisational design.
• an understanding of the rational model of decision-making and its practical limits
• an understanding of a variety of alternatives to the rational model of decision-
making, both those that present themselves as variants on the model and more
radical alternatives
• tested the applicability of the various models in your organisation
• gained an understanding of some common problems in decision-making and some
ways of remedying them.
Learning resources
Anderson PA 1983, 'Decision-making by objection and the Cuban missile crisis',
Administrative Science Quarterly, vol. 28, pp. 201–222.
Bergman, R, 2000. Instructor’s resource manual, in Robbins, S, Bergman, R, Stagg, I &
Coulter, M. 2000. Management, Prentice-Hall, Australia.

Module 5 Control and Decision-making Page 86
Blum, D 1987, 'Ishtar', Weekend Australia Magazine, 21–22 March.

Burawoy, M 1979, Manufacturing consent, University of Chicago Press, Chicago.
Cohen, MD, March, JG & Olsen, JP 1972, 'The garbage can model of organisational
choice', Administrative Science Quarterly vol. 17, pp. 1–25.
Colebatch, HK & Degeling, PJ 1986, Understanding Local Government: Action-
Linkage-Outcome, Canberra College of Advanced Education, Canberra.
Feldman, MS & March, JG 1981, 'Information in organisations as signal and symbol’,
Administrative Science Quarterly, vol. 26, pp. 171–186.
Hickson, DJ, Butler, RJ, Cray, D, Mallory, GR & Wilson, DC 1986, Top decisions:
strategic decision making in organisations, Basil Blackwell, Oxford.
Hurst, D 1986, 'Why strategic management is bankrupt', Organizational Dynamics, vol.
15, pp. 4–27.
Lindblom, CE 1959, 'The science of 'muddling through' Public Administration Review,
vol. 19, pp. 78–88.
March, JG 1982), 'Theories of choice and making decisions', Society, vol. 20, Nov–
Dec, pp. 29–39.
Robbins, SP & Mukherjee, D 1990, Managing organisations, Prentice-Hall, New
Jersey.
Robbins, S, Bergman, R, Stagg, I & Coulter, M. 2000. Management, Prentice-Hall,
Australia.
Thompson, P & McHugh, D 1992, Work organisations: a critical introduction,
Macmillan, Melbourne.

5.1 Organisational structure
Introduction
Organisations are experimenting with different approaches to organisation structure
and design. For example, Ericsson created a highly organic section within the
organisation's structure called the ‘Inside Partners Group’, consisting of internal
professionals who are available to work on assignments across the organisation. Whilst
this approach may not be suitable in all organisations, it does answer Ericsson's need
for flexibility as well as maintaining expertise in-house and an ability to share it across
the organisation. At the same time, it saves Ericsson from continually employing
external consultants or contract workers, and hence doesn’t just save employees from
retrenchment but also provides an opportunity to attract staff who prefer the variety of
working across the organisation, rather than in a single long-term role.
Robbins' textbook, Chapter 15, 'Foundations of Organization

Structure'.
Textbook
In this topic we will briefly examine the following issues:

• a definition of organisational structure and design
• the contingency approach to organisational design
• some applications of organisational design
• the implications of technology on organisational design
5.1.1 Definitions of organisational structure and design

While organising is the process of creating an organisation’s structure,
organisational structure is the formal framework by which job tasks are divided,
grouped and coordinated. In turn, organisational design is the process of developing
or changing an organisation's structure. It involves decisions about six key elements:
work specialisation, departmentalisation, chain of command, span of control,
centralisation/ decentralisation, and formalisation. The goal is to find structural designs
that will best support and facilitate employees in their work.
Work specialisation or division of labour refers to the degree to which tasks in an
organisation are divided into separate jobs. Historically, work specialisation was initially
seen as the most efficient utilisation of workers' skills because workers would be placed
in jobs according to their skills and (supposedly) paid accordingly. Other advantages of
work specialisation included improvement in employees' skills at performing a task,
more efficient employee training, and encouragement of special inventions and
machinery to perform work tasks. In summation, work specialisation was viewed as a
source of unending productivity improvements, where employees and managers might
both reap the economic benefits of efficient job design. However, the reality was
usually different, with employee boredom, fatigue, stress, lowered productivity, poor
quality of work, increased absenteeism, and higher job turnover resulting from the
inappropriate use (and abuse) of work specialisation and managers’ reluctance to allow
employees to fully share in its actual economic benefits.

Once work tasks have been defined, they must be grouped together in some way
through a process called departmentalisation—the basis on which jobs are grouped
in order to accomplish organisational goals. The five major ways to departmentalise are
Functional departmentalisation (i.e., grouping jobs by functions performed), Product
departmentalisation (grouping jobs by product line), Geographical
departmentalisation ( grouping jobs on the basis of territory or geography), Process
departmentalisation (grouping jobs on the basis of product or customer flow) and
Customer departmentalisation (where jobs are grouped on the basis of common
customers.
Customer departmentalisation continues to be a highly popular approach, whilst
Cross-functional teams – which are a hybrid grouping of individuals who are experts
in various specialties (or functions) and who work together – are being used along with
traditional departmental arrangements.
The chain of command is an unbroken line of authority that extends from the upper
levels of the organisation to the lowest levels and clarifies who reports to whom.
Authority is the rights inherent in a managerial position to give orders and to expect
the orders to be obeyed. Responsibility is the obligation or expectation to perform,
and Unity of command is the classical management principle that a subordinate
should have one and only one superior to whom he or she is directly responsible.
Span of control within an organisation refers to the number of subordinates a
manager can supervise effectively and efficiently, and is important because it
determines how many levels and managers an organisation will have. The ideal
number of subordinates in a given span of control will be influenced by factors such as
the skills and abilities of the manager, the skills and abilities of the subordinates, the
nature of the job, the strength of the organisation's culture.
Centralisation refers to the degree to which decision making is concentrated in the
upper levels of the organization, while Decentralisation is the handing down of
decision-making authority to lower levels in an organisation.
Highly formalised organisations are characterised by employees with little discretion
and high levels of consistent and uniform output. These organisations have explicit job
descriptions, lots of organisational rules, and clearly defined procedures. On the other
hand, less formalised organisation, employees have a lot of freedom and can exercise
discretion in the way they do their work.
As organisations empower employees and as technology breaks down the barriers
between organisational levels, chain of command, authority, responsibility, and unity of
command are not as significant in many contemporary organisations, and this has
been mirrored by a trend towards larger spans of control with decentralised decision
making and greater employee discretion in their work.
5.1.2 The contingency approach to organisational

design
There are two generic models of organisational design, the mechanistic and organic
approaches. A mechanistic (or bureaucratic) organisation is an organisational
structure that is characterised by high specialisation, extensive departmentalisation,
narrow spans of control, high formalisation, a limited information network, and little
participation in decision making by low-level employees. An organic organisation, on
the other hand, is a structure that is highly adaptive and flexible with little work
specialisation, minimal formalisation and little direct supervision of employees. The
applicability of each approach to organisational design depends upon the

organisation’s strategy, its size, and the degree of uncertainty in the environment in
which it must operate in. Technology is also an important factor. From a systems
perspective, every organisation uses some form of technology to transform inputs into
outputs, and hence organisational structure adapts to the direct application of
technology.
The original work on the strategy-structure relationship in organisational design came
from Alfred Chandler, who maintained that organisational structure must follow followed
organisational strategy.
Contemporary strategy-structure frameworks tend to focus on three strategy
dimensions: innovation (which depends upon the flexibility and free flow of information
of the organic organization); cost minimisation (which depends upon the efficiency,
stability, and tight controls of the mechanistic organisation); and imitation (which uses
characteristics of both the mechanistic and organic organisation).
5.1.3 Applications of organisational design

A simple structure is an organisational design with low departmentalisation, wide spans
of control, authority centralised in a single person, and little formalisation. Its strengths
are its flexibility, speed, and low cost to maintain, but a major is that it's most effectively
only in small organisations. But as an organisation grows, the structure tends to
become more specialised and formalised. When contingency factors favour a
bureaucratic or mechanistic design, one of two options is likely to be used. Firstly,
functional departmentalisation can be expanded into the functional structure, which is
an organisational design that groups similar or related occupational specialties
together. The other option is the divisional structure which is an organisational structure
made up of autonomous, self-contained units. However, many of today's organisations
are finding that the traditional hierarchical organisational designs aren't appropriate for
the increasingly dynamic and complex environments they face. A response to this is
the team-based structure made up of work groups or teams that perform the
organisation's work.
In a matrix organisation, specialists from different functional departments are
assigned to work temporarily on one or more projects being led by project managers,
while in the project structure, employees are more permanently assigned to projects.
Another approach involves autonomous internal business units, each with its own
products, clients, competitors, and profit goals. Then there is the boundaryless
organisation, whose design is not defined by, or limited to, the horizontal, vertical, or
external boundaries imposed by a predefined structure. Finally, some organisations
have adopted an organisational philosophy of a learning organisation—an
organisation that has developed the continuous capacity to adapt and change because
all members take an active role in identifying and resolving work-related issues.
5.1.4 The implications of technology on organisational

structure and design
Technology has had a profound impact on organisations and the way they are
structured, particularly with regards to how if affects communications, and, in turn, how
communications affects organisational design.
Information technology has radically changed the way organisational members
communicate. Two of the most important developments are networked computer
systems and wireless capabilities (which are making it possible for organisational
members to be linked anytime, anywhere, with obvious impacts on work and job
design). In a networked computer system, an organisation links its computers together

through compatible hardware and software. Examples include electronic mail or e-

mail, voice-mail (where a spoken message is digitised, transmitted over a computer
network, and stores the message on disk for the receiver to retrieve later), facsimile
(or fax), teleconferencing, which allows a group of people to confer simultaneously
using telephones or e-mail (and can also be used to form virtual groups, thus saving
time and money, and allowing for better access to intellectual capital), electronic data
interchange (EDI) (allowing organisations to exchange standard business transaction
documents), and intranets (which are internal organisational communication systems
that use internet technology and are accessible only by organisational members).
Telecommuting is a work design option in which workers are linked to the workplace
by computers and modem, while virtual workplaces are offices that are characterised
by open spaces, movable furniture, portable phones, laptop computers, and electronic
files.
Properly employed, the above options can remove geographic boundaries from both
work and job design and the deployment of team-based roles. As a result, there are
also time savings, allowing for increased employee and organisational productivity,
and, when aligned with an appropriately flexible organisational culture, a more optimal
balance of work, leisure and family concerns.
Reading 5.1
Nadler, D, & Tushman, M. 2001, ‘The Organization Of The Future’, in The
5.2 Decision-making
Introduction
We tend to see decision-making as lying at the heart of management. That is, we think
of a decision-action-outcome linkage as a chain of causality that is at the heart of the
ways managers and organisations operate. Despite this, we also know from
'Introductory topics' that managers spend a good deal of time making decisions without
being aware of all the facts available. This is borne out by the textbook chapter on
perception and individual decision-making.
Robbins' textbook, Chapter 5, 'Perception and Individual

Decision-Making'
Textbook
In the middle section or the chapter, Robbins outlines the 'rational' or 'optimising' model
of decision-making, which is usually taken as the starting point for portraying an ideal
picture of decision-making by managers. Note particularly the list of conditions that
need to be satisfied before it is even likely that the rational model would prevail. From
this, it becomes clearer why the psychological and physiological limitations associated
with bound rationality and decision biases make the rational model just that: a model.
So this part of the Module will essentially consider other, more realistic alternatives to
this model.
Also note that the discussion of decision-making in Robbins is largely bound up with
decisions taken by individuals, not by groups. At this point, you may also wish to review

the discussion of the problems of group decision-making in 'Groups teams and

leadership'.
• alternatives to the rational model
• a new form of rationality?
• perspectives on what happens to information in decision-making
• the escalation of commitment
• improving decision-making
5.2.1 Alternatives to the rational model of decision-

making
Bounded rationality or 'satisficing'
According to this view, time and cost factors may mean that although everyone
involves is agreed on what outcome is sought and how options are to be evaluated, the
logical course of action is to ensure that the marginal cost (time, money etc) of an
extended search for alternatives does not outweigh the marginal benefit. Put briefly, a
satisfactory course of action taken now may be preferable to a 'superior' course of
action discovered in six months time. Moreover, factors may change in the intervening
period to render the later superior option redundant. Opportunity costs also play a part
in making early choices desirable. For example, if a company delays investing funds in
an available option expecting research to reveal a superior one, the company is
forgoing a return on the funds that may be critical to the continued existence of the
company. On the downside, there may be a tendency for decision-makers to reject
solutions too easily found. For an example of this, see 'The case of the perfect camel',
below.
The case of the perfect camel

It was September 1985, and production was about to begin on Ishtar ... [a
movie starring Dustin Hoffman and Warren Beatty who play two down-and-
out singers who've gone to Morocco for a night-club gig and get caught up
in foreign intrigue]. Much of the movie was set to be shot on location in
North Africa, where the two superstars were to ride across the desert on a
camel.
So one of the first things the production needed to buy was a camel.
Specifically, it needed a wide-eyed camel that would look blind on screen.
A couple of production staffers were dispatched to Marrakesh with a blank
cheque to find a perfect camel and four stand-in perfect camels.
In a matter of minutes on their first day of talking to camel dealers and
salesmen, they found a perfect camel for about $700. It also happened to
be the first camel they looked at. So they didn't buy it.
'We had lots of time to spend, and lots of money', recalls a production
source close to the camel. 'We didn't want to back to the office and say,
'...guess what, we bought the very first camel we looked at'. We figured
what the hell. We'd keep looking. We told the camel dealer thanks a lot.
We'll get back'.

Two days went by. The camel buyers continued their search through the
Sahara for the perfect camel and the necessary backups. But every camel
they looked at suffered by comparison with that first exquisite camel. The
humps would be too large or too small. The facial hair would be beige or
brown. It was always something. (It's important to know that a camel search
is no cheap date. Every minute of a production staffer's time on a location
shoot – at union wages with costly travel and hotels – is worth money, and
days of it can cost thousands of dollars.)
Finally they figured they'd been looking long enough. 'Let's see if we can
buy that first camel we looked at', the buyers agreed. So they went back to
the dealer who'd showed them that lovely specimen.
'Remember us? We'd like to buy that camel of yours that we looked at the
other day'.
The dealer shook his head. 'Sorry', he said. 'We ate it'.
(Source: Blum 1987)
The concept of bounded rationality is essentially a variant of the rational model. It

assumes that decision-making is essentially a technical matter. If only complete
knowledge were available quickly and cheaply, optimality would prevail.
The incremental model

Lindblom (1959) also argues that the rational model is not realistic because 'it is
impossible to take everything important into consideration unless 'important' is so
narrowly defined that analysis is in fact quite limited. In this classic article Lindblom
argues that decision-makers are much more likely to make incremental decisions –
decisions that do not vary greatly from the status quo. This is because it is much easier
to assess the significance of marginal changes than of significantly different
alternatives.
Again, like the bounded rationality model, the incremental model may be considered a
variant of the rational model. Just as bounded rationality involves smaller, rather than
larger alterations to the decision rules, the incremental model involves only minor
alterations to the outcomes. As such they reduce the extent to which change disrupts
the existing weave of understanding and commitments (Colebatch and Degeling, 1986,
p. 49). Similarly March (1982, p. 34) argues that incremental decision-making is
influenced by 'the logic of obligation, duty and rules'. It is seen as a process of
muddling through – assessing what is possible by taking into account the political
reality of the situation. Lindblom's implicit view of the nature of organisations is a
political one. It is political in the sense that successful action is determined by action
that has taken into account the contested nature of organisational activity, in which
collective action is constructed over time by the parties involved, and in which common
objectives are the result of negotiation and bargaining.
In this way, the conservative bias of incrementalism and satisficing become clear. In
particular, they both mean that if present practices are satisfactory, there is no
particular pressure to look further afield. This may mean that considerably superior
options – perhaps identifiable if only minimal amounts of resources were expended –
remain dormant.
The models we consider hereafter do more than challenge the rational model on the
grounds that it tends to be technically infeasible. The 'implicit favourite' model, the

'intuitive' model and the others acknowledge the impact of distinctly non-rational or
political elements in decision-making.
The implicit favourite model

The textbook describes the 'implicit favourite' model in which, once a problem is
identified, an early favourite alternative is chosen – sometimes without the conscious
awareness of the decision-maker. Other parts of the decision-making process
thereafter, despite appearing to resemble rational sequential evaluative steps, are
really only bolstering a decision which was effectively taken some time back on an
intuitive basis.
The intuitive model

This model attempts to re-value the role of intuition in decision-making, arguing that
instead of being an essentially irrational and therefore undesirable element in the
process, it may actually represent the accumulation of experience and tacit knowledge
being brought to bear on a problem.
There is a clear link between the implicit favourite and the intuitive models in bolstering
and, in the latter instance, defending the role of intuition in decision-making. They are
also linked by the tendency in our culture to de-value intuition. Rational analysis is still
more defensible than intuition in management circles, so many decision-making
processes must have the appearance of rationality, if not the reality.
The decision-making by objection model

Anderson (1983) undertook a detailed analysis of the 1962 Cuban missile crisis as a
study in organisational decision-making. Specifically he studied archival records on the
workings of the Executive Committee of the National Security Council as they sought to
determine what action to take to have Soviet nuclear missiles removed from Cuba. On
the basis of archival evidence he came to the following conclusions:
Sequential yes/no choices: Whereas the rational model assumes that a decision
involves choosing one alternative from a number of alternative, decision-making more
commonly involved sequential yes/no choices over an array of compatible course of
action.
Discovering goals: Whereas the rational model assumes that identifying goals is the
first step in making a decision, a more accurate description is that goals are discovered
in the course of making a decision. 'Global goals' start things off by identifying a
situation as a problem, but identifying something as a problem does not directly identify
a solution. 'Discovered goals' are often produced through the process of arguing about
various possible causes of action.
Not making things worse: Whereas it is normally assumed that the whole point of
making a decision is to solve a problem, the evidence from Anderson's study suggests
that decision-makers may be primarily driven by a search for a course of action that will
not make matters worse.
Anderson (1983, p. 220) argues that these actions are neither random nor 'irrational'
but are instead 'sensible adaptations to the demands of the task environment of
decision-making'. He argues that in complex policy matters, to genuinely consider all
alternatives at once would overwhelm the information-processing capacity of decision-

makers; that goals discovery means that decision-making processes can begin without
waiting for clarification of all goals, and that the risk avoidance decision is an
uncertainty reduction practice.
The garbage can model

Cohen et al. (1972, p. 3) argue that:
'... an organisation is a collection of choices looking for problems, issues
and feelings looking for decision situation in which they might be aired,
solutions looking for issues to which they might be the answer and
decision-makers looking for work'.
The result, from the point of view of thinking about decision-making, is that once again
the usual situation of setting out to solve a problem and achieve goals is displaced.
This time, however, the model points out that sometimes the solution exists before the
problem.
This is not as odd as it first sounds. We know that the kinds of solutions and
perspectives available for solving a problem tend to be determined by the skills and
outlooks of those already there. When an organisation like a hydroelectric authority,
which is heavily staffed with hydroelectric engineers, is asked to consider the problem
of generating more electricity, there is a predisposition to find answers in terms of the
ways such a group would normally solve such problems, for example, in terms of
building more dams. In the same way, we should be alert to the possibility that rather
than the decision necessarily being activated by the existence of a problem, there are
likely also to be situations where the problem is more like a convenient opportunity to
apply perspectives and solutions that were present within the organisation well before
the problem arose.
From this perspective, 'choice opportunities – occasions where an organisation is
expected to produce behaviour that can be called a decision – can be viewed as 'a
garbage can into which various kinds of problems and solutions are dumped'. (Cohen
et al., 1972, p. 3).
The 'top decisions' or 'political models'

Hickson's et al., 1986 book, Top decisions, set out the results of 150 cases of decision-
making, in thirty organisations ranging in size from 100 to 57,000 employees, with a
median size of 2,600 employees. A wide range of kinds of decisions were studied,
including new product launches, organisation restructuring and take-over decisions.
Central to this model is the idea that an organisation is set up by and sustained by a
'dominant coalition' of powerful stakeholders, including its owners, main suppliers, main
users of its products or services, managerial and other employees. These groups
determine its basic purposes and are therefore the ultimate cause of what decision
matters come to the surface and how they are processed. From this perspective the
organisation and its norms are the framework for decision-making which fixes what
topics are allowable and which are not. For example, as we have seen, its norms may
determine:
• what is mentionable or unmentionable
• what interests matter
• how things should be done, and so on.

Once the matter for decision has been determined, the decision-making process must
be understood in terms of both the complexity of decision problems and the politicality
of decision interests.
Complexity has four components:
1. Rarity the frequency with which similar decisions occur
2. Consequentiality the consequences of the decisions as indicated by:
a) how radically a decision changes things
b) the seriousness of something going wrong as a result of the decision
c) the diffusion of the consequences in terms of the number of organisational
aspects (for example, costs, morale, market share) affected by the decision
d) how long the consequences of the decision will endure.
3. Precursiveness: the extent to which decision sets parameters within which later
decision-making is constrained.
4. Involvement: the number of parties that become involved in the process of making
a decision.
As Hickson points out, 'as the number builds up, so it becomes more and more taxing
to remember who has yet to be asked and who was asked and what they said, who
may know what, which meetings expressed what views and which committees have yet
to report, what is significant and what can be ignored (Hickson et al., 1986, p. 44).
Politicality is the degree to which influence is exerted through a decision-making
process on the outcome. The 'decision set' that is, the interest groups implicated in any
particular decision, will vary from decision to decision, but some stockholders in that
group will tend to have more frequent involvement and influence – and hence
politicality – than others. The table below shows the relative importance of various
entities in the strategic decisions analysed by the researchers.
Infrequent Involvement Frequent Involvement
Infrequent Influence Trades unions Auditors
Competitors Trade associations
Purchasing Shareholders
Maintenance Government bodies
Personnel Suppliers
Frequent Influence Customers, clients Production

Research and design Sales, marketing
Liaison Accounting
Quality control
Autonomous divisions
(Source: Adapted from Hickson et al. 1986)
What is important, as a result of politicality, is not so much 'the decision' as 'the

deciding'. Trying to define a single individual as responsible for a decision is not an
adequate approach, and there is no decision that seems concerned only with
technicalities and not with politicalities.

On the basis of their research, Hickson et al. classified decision-making processes in

terms of three types: sporadic, fluid and constricted. These vary in two ways:
• discontinuity, or the degree to which the process is smooth and unbroken, and
• dispersion, or the extent to which the process is spread throughout the
management structure of the organisation.
As a result:
• sporadic processes are clearly discontinuous as well as dispersed. They are
characterised by multiple sources of expertise, variation in the quality of
information and high levels of informal interaction. Highly complex and highly
political decisions, such as the decision to launch new products, are likely to be
made in this way.
• fluid processes are continuous and dispersed. They flow smoothly and a decision
is reached relatively quickly. Typically, they involve formal meetings, which help
maintain the momentum. They involve many interests, but there is a fairly high
degree of confidence in the information provided. Decisions of medium complexity
and low politicality are likely to be made in this way. An example would be a
decision about sources of finance for a major share issue, which, though complex,
is not especially contentious.
• constricted processes are slightly discontinuous and narrowly channelled rather
than dispersed. Information needed for the decision exists, and while it may be
spread around various people it is not particularly hard to access. Decisions of low
complexity and medium politicality, such as the annual budget, typify a constricted
process decision. While they are serious they have been made before, and so the
matter can proceed along recognised channels drawing on just the usual sources
of information when they are needed.
The table below presents the characteristics of the process for different levels of
complexity and politicality in decisions.
Types of decision-making process

Type Characteristics Application
Sporadic Clearly discontinuous High complexity

Dispersed High politicality
Fluid Continuous Medium politicality

Dispersed Low politicality
Constricted Slightly discontinuous Low complexity

Narrowly channelled Medium politicality
(Source: Adapted from Hickson et al, 1986)

Reading 5.2
Vroom, V.H. 2001, ‘Two Decades of Research on Participation: Beyond Buzz Words
and Management Fads’, in The Organizational Behavior Reader, eds J.S. Osland,
D.A. Kolb, & I.M. Rubin, Prentice Hall, Upper Saddle River, New Jersey. (See
Chapter 15, pp. 429-436).
5.2.2 A new form of rationality?

Hickson et al. add to the critiques of the rational model, but not by suggesting that
rationality does not exist. Rather, in their view, the problem-solving rationality is only
one possible kind, and, considered alone, is not adequate for dealing with the social
process of reaching a strategic decision. At least two other forms of rationality need to
be considered:
Interest accommodating rationality whereby action occurs having taken account of
the significance of the various involved and influential interests.
Rationality of control, which is the source of both problem-solving rationality and
interest-accommodating rationality.
As we might expect, given this wider definition of rationality, Hickson et al. reject the
garbage-can model. They argue that while the image of solutions and problems being
thrown around together in a dented wheelie bin is a fun idea, there is generally a hand
on the steering wheel. An organisation is certainly 'a collection of choices looking for
problems’, but decision-making does not lack all direction.
5.2.3 Perspectives on what happens to information in

decision-making
According to Feldman and March (1981), there is evidence that information is rarely
used in the way the rational model would assume, that is, we often do not find that
information:
• is collected and analysed before the decision is made
• is actually used in making the decision
• additional information is only called for if available information is found to be
inadequate
• is gathered in response to pre-determined information needs
• irrelevant information is not gathered.
On the contrary, according to Feldman and Marsh:
• much information that is gathered and communicated has little relevance to
decision-making.
• much of the information that is used to justify a decision is collected and
interpreted.
• much of the information gathered in response to requests for information is not
considered in the making of the decision for which it was requested.

• regardless of the information available at the time a decision is first considered,

more information is requested.
• complaints that an organisation does not have enough information to make a
decision occur while available information is ignored.
• the relevance of the information provided in the decision-making process to the
decision being made is less obvious than the insistence on information.
There are a variety of reasons for this, all of which paint a more messy, less rational
model of the world than the rational model of decision-making suggests:
• information overload: Organisations are often unable to process all the
information that they receive
• inappropriate data: The information may be the wrong sort.
• incentives to gather data: Organisational procedures lead to the underestimation
of the costs of information relative to its benefits. Also, since decision-makers must
often justify a decision after the event, there would seem to be more chance of
being criticised for having not collected enough information than for collecting more
than was needed.
• surveillance: Organisations collect information as part of a general surveillance of
their environment. It may have no immediate relevance but services to reduce
nasty surprises and to enhance creative speculation as to possible future
directions.
• the political function of data: Information is often collected in order to persuade
someone to do something. Information that one receives is thus likely to be
confounded by unknown misrepresentation’. That is, information is a weapon in the
conflicts of interest within the organisation, so it is likely that some at least reflects
strategic misrepresentation, further complicating the information-decision
relationship.
• information is ritual: The decision-making process, as opposed to the outcome,
is important as a symbol of the rationality of the organisation. Accordingly, being
seen to make a decision in the right way may be even more important than the
quality of the decision. Again, this leads to an incentive to collect more information
rather than less.
It has also been argued that, in the face of increasing uncertainty, forecasting has
become increasing important – not because it really makes things more predictable,
but because it relieves anxiety. In similar vein, collecting an apparent excess of
information is not necessarily wasteful or inefficient, since it increases the perceived
legitimacy of a decision and hence the likelihood of gaining support for its
implementation. Finally, the ritualistic aspect of data gathering can be seen in the post-
hoc rationalisation of action already taken.
5.2.4 The escalation of commitment

In general, escalation of commitment is the term used for situations where individuals
become committed to a course of action in a way that nullifies the effect of information
unfavourable to that action. This escalation may occur for a number of reasons,
including a disinclination to face the fact that one was involved in making a bad
decision, a desire to save face by retrieving a bad situation, and the belief that past
failure somehow makes future success more likely (the gambler's fallacy).

5.2.5 Improving decision-making

Etzioni (1989) provides some practical suggestions for improving managerial decision-
making. Again, he quickly reviews a number of the models already covered here and in
the textbook. Etzioni, however, does it in a particularly readable manner. According to
Etzioni, good managers know how to make decisions based on sketchy information.
They also do not avoid emotional issues. You will see that this non-avoidance of
emotional issues plays a critical role in the remaining readings.
In 'Why strategic management is bankrupt' Hurst (1986) reviews the history of the
growth in strategic decision-making within managerial circles. He suggests that many
of the big decisions managers are faced with are described as strategic decisions. As
such, steps for strategic management decision-making that many of the people above
you in the organisational hierarchy, as well as yourself, may have been exposed to
include:
1. scanning the environment to identify relevant corporate strengths and weaknesses

(SWOT analysis)
2. setting objectives
3. developing options
4. selecting operating policies consistent with organisational resources and purposes
5. developing action plans and timetables that take into account competitive
responses, and
6. periodically reviewing the strategy.
As Hurst points out, these steps of strategic management evolved rapidly during the
60s and 70s, and were used by companies facing logistical problems more complex
and planning horizons more distant than they had previously known. Planners such as
Ansoff and Steiner became particularly strong advocates for the creation and spread of
strategic planning units as central to management in all undertakings. Hurst not only
provides an interesting history of the development of strategic decision models, but
presents a case for its demise. The underlying problem for Hurst, is that such decision-
making formats assume that organisations are like complex mechanical clock works
operating in an environment that can be objectively determined by senior managers (or
anyone else).
Hurst then presents an alternative model, one that like the reading by Nonaka,
highlights the negotiation of meanings about the organisation's mission as part of a
non-deterministic creative management process. Hurst suggests that we need to
abandon our notions of managers as decision-makers who must rationally solve the
problems of the world. Rather we must assemble teams to handle the total process to
combine 'the two great human gifts – reason and passion'. In so saying, Hurst is
referring to more than emotion. He is invoking the need for ethical principles in
decision-making.
Reading 5.3
Klein, G. 2001, ‘How People Really Make Decisions’, in The Organizational Behavior

Conclusion
The latter part of Module 5 has mostly been concerned to point out how decision-
making is imperfect in a rational sense, and to point out how this might be rectified,
both by bringing the decision-making process closer to a rational model, and by
widening the definition of what is rational. The latter part of the Module also examines
ways in which more intuitive processes of decision-making operate, and how they can
be valuable additions to the process. Finally, however, it is also impossible to avoid the
realisation that decision-making is imperfect also in the sense that it has a subjective,
moral component. This issue is examined further in the course 'International Law and
Ethics for Managers' elsewhere in the MBA program.
Activities
Organisational Structure and Design

In traditional organisation you divide up the tasks within the organisation,
define a chain of command and reporting relationship, then build in
coordinating mechanisms so that various parts don’t get out of kilter with
Activity 5.1 each other. This seems to be pulling apart then putting together again.
Re-building the Can you think of a better way of organising?
organization (1)
As organisations become leaner and meaner and their structures flatter,

will this pose problems for organisations? If so, how can these problems
be dealt with?
Activity 5.2
Re-building the
organization (2)
Today, many organisations are looking at issues such as job redesign,

multi-skilling and quality assurance. How do these changes affect the
organising function?
Activity 5.3
Re-building the
organization (3)
Consider a workgroup or organisation of your choice. How might you re-

structure it to achieve the twin aims of greater organisational efficiency
whilst also allowing for a more optimal work/life balance for employees?
Activity 5.4 What structural, political, cultural and other difficulties do you envisage
Apply the ideas and why?
of organisational
structure and
design to an
organisation of
your choice.

Decision making
Cadbury claims that not making decisions may be the least ethical
principal course of action. On the other hand, Etzioni seems to argue that
putting off decisions may be the most humble act. Which do you agree
Activity 5.5 with and why?
Compare the
views of Etzioni Give some examples from your experience.
and Cadbury on
decision-
making.

Module 6 Organisational Change and Management Issues of the Future Page 102
Module 6: Organisational change,

organisational behaviour and HRM,
and management issues of the
future
Overview
In 'Organisational change’ we approach the issue of change which, again, is at the
heart of management and is the supreme test of good management. We devote
particular attention to the 'organisational development' (or OD) approach to change
management which is a particularly popular one, but which, in the view of some
practitioners fails to take sufficient account of the political realities of organisations.
Whether or not an organisation has a human resource department, every manager is
involved with human resource decisions, and in organisational behaviour and HRM, we
briefly look at the relationship between organisational behaviour and each step in the
human resource management process. The effectiveness with which each of these
steps are carried out will to a large degree be determined by the way in which
managers view the work relationship, and the way in which they interact with
organisational stakeholders. Finally, we briefly invite you to consider a range of
reasons for the common observation that, organisations – and the world in general –
are changing more rapidly than ever before, and ask you to analyse your own and your
organisation's preparedness to respond to this situation.
Learning outcomes
At the end of this Module, you should have:
• gained some practical and theoretical experience at dealing with change from a
variety of perspectives
• analysed the phenomenon of resistance to change, both as an issue in change
management and as an ideologically laden theoretical term
• considered and worked with Organisational Development (OD), politically-based,
and contingency-oriented strategies for managing change
• understand the application of organisational behaviour to the HR process
• considered a range of issues concerned with the way changes in the world of work
relate to management.

Learning resources
Bergman, R, 2000. Instructor’s resource manual, in Robbins, S, Bergman, R, Stagg, I &
Coulter, M. 2000. Management, Prentice-Hall, Australia.
Bolman, LG & Deal, TE 1991, Reframing organisations: artistry, choice and leadership,
Jossey-Bass, San Francisco.
Coates, JF, Jarratt, J & Mahaffie, JB 1991, 'Future work', The Futurist, vol. 25, no. 3,
pp. 9–19.
Coyle, W 1992, Human Resource Monthly, Melbourne, February.
Davis, S 1987, Future perfect, Addison Wesley, Reading, Massachusetts.
Dunphy, DC & Stace, DA 1988, 'Transformational and coercive strategies for planned
organisational change: Beyond the OD model', Organisational Studies, vol. 9, pp.
317–334.
Dunphy, DC & Stace, DA 1990, Under new management: australian organisations in
transition, McGraw-Hill, Sydney.
French, WL & Bell, CH Jr. 1978, Organisational development behavioural science
interventions for organisation improvement, 2nd edn, Englewood Cliffs, New Jersey.
Handy, C 1989, 'The end of the world we know', Management Review, April.
Huse, EF 1982, Management, 2nd edn, West Publishing Co., St Paul.
Kanter, RM 1983, The change masters, Simon and Schuster, New York.
Kotter, JP & Schlesinger, LA 1979, 'Choosing strategies for change', Harvard Business
Review, vol. 57, pp. 106–114.
Paterson, J 1983, 'Bureaucratic reform by cultural revolution', Canberra Bulleting of
Public Administration, vol. 10, pp. 6–13.
Pettigrew, A 1985, The awakening giant continuity and change in ICI. Basil Blackwell,
Oxford,
Robbins, S, Bergman, R, Stagg, I & Coulter, M. 2000. Management, Prentice-Hall,
Australia.
Schwartz, P 1991, The art of the long view planing for the future in an uncertain world,
Doubleday, New York.
Stephenson, T 1985, Management a political activity, Macmillan, Basingstoke.
Ulrich, D & Lake, D 1991, Organisational capability: competing from the inside out,
John Wiley and Sons, New York.
Woodworth, W & Nelson, R 1979, 'Witch doctors, messianics, sorcerers and OD
consultants: parallels and paradigms', Organisational Dynamics, vol. 8, pp. 17–33.

6.1 Organisational change
Introduction
The management of change has been at least an underlying theme of every Module in
the course. For example, the ways in which people act and react with regard to
decision-making, or leadership or cultural phenomena, are fundamentally influenced by
comparisons between the nature of past, present and possible future practices.
Organisations by their nature are sites of change, whether incremental or revolutionary.
The first part of this Module seeks to highlight behaviour in the context of change and
to identify ways in which people seek to manage the change process. In the second
part of this Module, 'Management Issues of the Future', we set out some of the forces
which are increasingly acting on organisations from both the interior and the exterior
which heighten the need for them to change and adapt.
• perspectives on managing change
• the OD approach to managing change
• managing change as a political process
• contingency approaches to managing change.
6.1.1 Perspectives on managing change

It could be argued that there are as many schools of organisational change as there
are perspectives or metaphors of organisation. However, in this Module we will focus
on two perspectives, which have dominated the literature. The first is based on the
assumption of the Human Relations 'organisation as organism' metaphor. To refresh
your memory of this approach, see the section on metaphorical perspectives in
'Introductory topics'. In this context, organisational change is referred to as
organisational development (OD). This is the perspective, which predominates in this
and most management textbooks. Another perspective, however, which has been at
least as important in research, has been based on the view of the 'organisation as
political system', in which conflict, change and resistance to change are inevitable.
As mentioned in Module 1, the idea of the organisation as organism emphasises the
related notion that it needs to adapt to ensure its survival. For an organisation its
environment includes such factors as competitors' activities, consumer preferences,
process technologies, legislation (for example equal employment opportunity, trade
practices or dismissal laws), resource costs and economic conditions (interest rates,
and so on). As we discussed in 'Control and decision-making' keeping an eye on all
these sources of change is one of the reasons organisations put so much time and
effort into scanning their environment in the hope of predicting and hence minimising
the impact of such change.
Robbins' textbook, Chapter 18: Organisational Change and Stress

Management.
Textbook

Reading 6.1
Kanter, R.M. 2001, ‘Change is Everyone’s Job: Managing the Extended Enterprise in a
Globally Connected World’, in The Organizational Behavior Reader, eds J.S.
Osland, D.A. Kolb, & I.M. Rubin, Prentice Hall, Upper Saddle River, New Jersey.
(See Chapter 20, pp. 562-576).
Focal points of change

Common focal points for organisational change are structure, strategy, culture,
technology and job design.
Structural change occurs when there is an alternation to the formal 'clustering' of
tasks and responsibilities in the organisation. A common reorganisation is to move from
a functional structure whereby all the activities involved in a given function (e.g.
marketing) are located together, to a marketing based structure, where organisation is
determined by what is produced, for whom and where. Other common structural
changes today include lowering the number of levels in the hierarchy, changing the
level in the organisation at which specific decisions are made (centralising or
decentralising) refer to 'Introductory topics' for further information about the effects of
this type of change on managerial work.
Strategy changes when the underlying premises – generally set by senior
management are changed, for example to expand an organisation's product base
(diversification), to 'reposition' a product in the market or to sell off 'non-central' aspects
of a business and rely on subcontracting.
Culture changes when the taken-for-granted beliefs and understanding of people in an
organisation change.
Technology changes when the means of provision of goods or services is altered, for
example through computerisation.
Job redesign occurs when the tasks or responsibilities associated with a job are
changed. This may involve the further fragmentation of task leading to individual jobs
becoming more specialised. In itself, this says nothing about whether de-skilling or
'enskilling' is involved in such fragmentation but the possibility of one or other occurring
is very likely.
The notion that organisational change can be explained in terms of an organisation
responding to environmental pressures is a useful one, but it needs to be recognised
as a very general and potentially simplistic idea. The textbook makes a start by alerting
you, first, to the difference between planned and unplanned change and, within the
arena of planned change, the differences between linear and continuous change,
which is referred to as 'first order change' and change that is multi-dimensional, multi-
level, discontinuous and radical, which is called 'second order change'. The second
part of this Module will enlarge more on the latter type of change.
Even so, however, the discussion needs to be taken further to avoid an impression of
organisations being simply passive recipients of the winds of change, and their
members reacting in concert to a clearly defined course of action. For example,
organisations themselves may seek to alter environmental factors rather than
themselves being the ones to change. Consider tactics such as political lobbying,
public relations and collusion between competitors as means to this end.
The 'organisational as political arena' model alerts us to the idea that there is likely to
be considerable diversity in what various organisational participants see as the

objective of organisational activities, and diverse interpretation of appropriate courses

of action even where a common objective is agreed on.
It is not uncommon, as Kanter (1983, p. 281) points out, for managers to make
strategic choices based on their own areas of competence and career payoff. The
textbook discusses this issue, and there it is clear that the very real losses of status
and position in the hierarchy that would come from some forms of change would be
sufficient to motivate change that favours particular managers' career preferences. But
in addition, as the discussion in 'Control and decision-making' on the garbage-can
model of decision-making pointed out, it can be difficult for managers – and others –
even to see the avenues for change which arise from areas other than their specific
type of competence.
Finally, change can play a symbolic role. When external constituencies question the
worth of existing practices, organisations promise reform and stage a ritual drama
called change (Bolman & Deal, 1991, p. 274). For further discussion on change in
terms of its political and cultural elements, see Pettigrew (1985, 1987).
Resistance to change
Overcoming resistance to change is an understandable concern of those seeking to
implement change. Indeed, one of the reasons change tends to be studied as an issue
in itself (and the early studies by Coch and French go back to 1948) is to try to find
answers to this perceived problem. While it is most common to talk of resistance to
change as a problem that managers confront, it is also a behaviour they may manifest,
as the preceding discussion makes clear.
Reasons for resistance to change

It is sometimes proposed that resistance is a natural response, and indeed the
textbook does this in citing habit, security, and fear of the unknown as 'basic human
characteristics’. However, a problem with this argument is that change within
organisations is likely to be sought because somebody or some group is seeking it.
This means that it is not particularly productive to talk about whether it is either natural
or unnatural to be either for or against change.
6.1.2 The organisation development approach to

managing change
The term most usually associated with planned organisation change is organisation
development (OD). It has been defined by Huse (1982, p 555) as:
the application of behavioural science knowledge in a long range effort to
improve an organisation's ability to cope with changes in its external
environment and increase its internal problem-solving capabilities.
Exponents of OD also usually stress the importance of various forms of collaborative
management, rather than purely hierarchically imposed kinds. It also usually assumes
incremental rather than revolutionary change – an assumption that is a possible source
of problems, as is explained later in this Module.

Doing OD
Any given OD exercise is based on the application of one or more structured activities
(called 'interventions') and it is typically orchestrated by a 'change agent' – generally an
external consultant. The OD approach has traditionally emphasised and sought to
enhance the process of learning by the group. That is, rather than make
pronouncements as 'experts' on the solutions to problems, change agents have sought
to develop problem-awareness skills and problem-solving skills among their clients.
The change agent may undertake a preliminary diagnosis and data collection but from
there the group takes charge of both problem and data, discussing it, interpreting it,
and developing action plans for their own preferred courses of action. OD is also
intended as an ongoing interactive process (French and Bell, 1978).
Huse identifies the following assumptions within OD about the behaviour of people:
• most people want and need opportunities for growth and achievement
• when the basic needs have been satisfied, most people will respond to
opportunities for responsibility, challenge and interesting work
• organisational effectiveness and efficiency are increased when work is organised
to meet individual needs for responsibility, challenge, and interesting work
• personal growth and the accomplishment of organisational goals are better
attained by shifting the emphasis of conflict resolution from smoothing to open
confrontation
• the design of individual jobs, group tasks, and organisational structure can be
modified to more effectively satisfy the needs of the organisation, the group and
the individual
• people hold many false assumptions about individuals, groups and organisations
that could be rectified through open confrontations
• many so-called personality clashes result from problems of incorrect organisational
design (Huse, 1982, p. 256).
From this list it is possible to discern the strength of the Human Relations and unitarist
thinking within the OD approach, especially in the assumptions concerning individual
motivation, the appropriate view of conflict, and so on. Robbins reviews a number of
the specific technologies of OD, including sensitivity training, survey-feedback, process
consultation and team building. To these classic OD approaches have been added
interventions that incorporate a focus on structure, that is on the design of jobs, on the
technology used and on the structure of the organisation. These interventions include
job enrichment (expanding the range of skills in a job) (see textbook discussion) and
the greater use of teams. However the focus on process remains central, through the
emphasis on the need for a consultative participative approach.
Does OD work?
The effectiveness of OD as a strategy for managing planned change has been difficult
to assess for the following reasons:
• the wide range of interventions to which the term OD has been applied means it
is difficult to talk about a single overall OD effect

• the Inability of researchers to distinguish clearly the effect of an intervention

from that of other variables
• lack of clear empirical evidence: Few studies have been carried out with
sufficient methodological soundness and incorporating sufficient numbers of
organisations for conclusions to be drawn.
However, according to the prime proponents of OD, its originators French and Bell
(1978, p. 226), failures in OD interventions are not an indicator of problems with the
method itself, but rather are due to 'mistakes or inattention' with regard to the following
'conditions for optimal success:'
• perceptions of organisational problems by key people
• perceptions of the relevance of the behavioural sciences in solving these problems
• the introduction into the system of a behavioural scientist consultation
• initial top-level involvement, or at least support from a higher echelon with
subsequent top management involvement
• participation of intact work teams, including the formal leader; The operationalising
of the action research model (see the discussion by Robbins of action learning on
pp. 730–731)
• early successes, with expansion of the effort stemming from these successes
• an open, educational philosophy about the theory and the technology of OD
• acknowledgement of the congruency between OD and many previous effective
management practices
• involvement of personnel and industrial relations people and congruency with
personnel policy and practice
• development of internal OD resources
• effective management of the OD process
• monitoring the process and the measuring of results.
As noted earlier, French and Bell's explanation of problem with OD is essentially
'technical'; that is, it relates to incorrect implementation rather than the fundamental
characteristics of the approach. However other theorists of change management point
to three other issues: the pace of the change, participation in the change process and
power as an organisational issue.
The pace of the change

OD involves an 'ideology of gradualism' (Dunphy & Stace, 1988), whereby effective
change is assumed to require small incremental steps. The pace of change is to be
slow and steady, continuous rather than abrupt. However, as Dunphy and Stace (1988)
argue, this assumes that there are no conditions that are so pressing that a rapid
response is required.

Participation in the change process

A classic, OD-based paper by Coch and French (1948) introduced a new paradigm for
introducing change in organisations. This paradigm was that of consulting workers in
advance of the change, and allowing them to make suggestions. It means that
management can greatly modify or virtually remove group resistance to changes (Coch
and French 1948, p. 531). However, as with the Interpretation of Hawthorne this may
be a case of the perpetuation of management mythology. A review of the original
evidence for this claim showed that the evidence was thin, the experimental design
faulty, and the conclusions took no account of other possible explanations for the
results.
Overall, perhaps too much can be expected of participation. Where proposed change
conflicts too greatly with the interests of one or more parties, participation will provide
at most a way of confronting the political issues involved in change, not a way of
smoothing them away.
Power as an organisational issue

OD practitioners have paid little attention to the 'organisation as political arena'
metaphor in their approach to change management. It has been argued (Woodworth &
Nelson 1979; Dunphy & Stace, 1988) that this has been to the advantage of
management in keeping change focussed on individual and group adaptation, and not
on issues that may lead to a more fundamental reassessment of organisational
practices. On the other hand, even some OD practitioners have argued more recently
that lack of attention to power has affected the efficiency of OD. Schein (1985)
presents the following range of strategies as useful aids to successful OD
interventions:
• present a non-threatening image by learning the range of acceptable arguments
and cast proposals in these terms. This does not amount to distortion, rather a
presentation in a manner likely to increase receptiveness.
• diffuse opposition and bring out conflict – rather than stifle opposition; seek to
diffuse it by encouraging open suggestions and criticisms. This may help to keep
conflicts within manageable boundaries as well as allowing 'die-hard' resisters to
be identified and monitored.
• align with powerful other – develop support from both top management and key
line managers.
• develop information interaction patterns and regular formal contacts between
change and staff members in line departments.
• first give attention to aspects that are small but important to the client, thereby
building up credit for larger, more complex tasks.
• 'strike while the iron's hot' – follow up a success quickly to cash in on the credit
established.
• research can provide the consultant with credibility and expert power in
difficult situations, especially those where the topics is particularly emotionally
charged.
• a small experimental study may be viewed as non-threatening and its success
may provide the basis for a more widespread application.

• start with a small change, get key people on side, build up their confidence, and
then push for more significant changes.
• if a number of groups become involved in the change, all claiming
organisational change expertise, it may sometimes be wisest to withdraw fro the
melee, especially if too many cooks are spoiling the broth. When the change
program is assessed as less than successful, the group that withdrew from the
exercise may have retained or even enhanced its influence.
Schein's approach, while 'grafting on' some attention to political dynamics to the key
dynamics and assumptions of OD, is a modification rather than a radical overhaul of
the approach. We move now to a consideration of organisational change as a political
process.
6.1.3 Managing change as a political process

In contrast to the OD approach to organisational change, there is a school of thought,
which emphasises the inherent politicality of change. A typical tenet of this approach is
that the method of producing change is not a critical issue 'because the ability to
produce change is more a function of power – the ability to influence – than method'
(Lee, 1980, p. 249). Stephenson, in similar vein, produces a set of ten tactics that he
argues can be used to enhance the prospects of successful change:
• seek out quick successes so as to provide an easy reward for participants in the
change
• if there is resistance, take advantage of 'natural' occurrences to modify
proposals for change without losing face
• go with the grain – use as much of the existing status and power systems as
possible, incorporating elements of previously accepted arrangements into the new
proposals
• stress structure modifications such as location, control and the division of
labour, rather than conversion or attitudinal changes
• use ceremony to gain recognition for both the profundity and the legitimacy of the
various elements of change
• give assurances that those affected will be fairly treated, and recognise that the
response to this will depend in part on the previous history of similar assurances
and in part on the perceptions of those affected by the change
• be realistic about the amount of time required for adaptation, the longer the
time span, the greater the probability of modification
• managers and employees who feel threatened need substantial support, there
needs to be a moratorium on critical evaluation
• expect to have to deal with three different situations at the same time: the
old methods, the in-between-not-certain and the new methods
• be prepared for the unexpected, it may help or hinder the change.

Power, anxiety and transition

According to Nadler and Tushman (1988) there are three types of problems that
accompany any significant attempt at organisational change:
The problem of power: the upsetting of the existence of the existing balance of
power.
The problem of anxiety: the likelihood that the proposed changes will generate fears,
anxiety and uncertainty among some organisational members and hence
counterproductive behaviour from the standpoint of those introducing the change.
The problem of organisational control: the likely disruption to existing control
systems during periods of change.
All three need to be managed. To manage power, you need to:
• get support of key power groups
• demonstrate leadership in support of the change
• use symbols
• build in stability.
To motivate constructive behaviour, you need to:
• create dissatisfaction with the current state
• obtain appropriate levels of participation in planning implementing change
• reward desired behaviour in transition to the future state
• provide time and opportunity to disengage from the current state.
To manage the transitional stage of the change you need to:
• develop and communicate a clear image of the future state
• use multiple and consistent leverage points
• use transition devices
• obtain feedback about the Transition State, evaluate success.
Wholesale destruction of the status quo

Paterson (1983) is critical of the assumption inherent in OD approaches that change
can be accomplished incrementally. He uses the headings 'Bases', 'Strategy and
'Tactics' to outline a series of recommendations to destabilise the existing system:
Bases
• ensure that you have support from above
• speak directly and often to employees as a whole. Direct communication reduces
the possibility of your message being distorted
• ensure that your personal behaviour is above reproach to avoid any incident being
used against you. Do not pretend to have knowledge you do not have

• build your prestige outside the organisation. Understand and use the media
• symbolic significance will be read into your actions; ensure that they convey the
message you intend
• be well-read and well-practised in basic organisational and interpersonal skills.
Strategy
• identify weak links in the current system that can be attacked at little cost for early
victories. If necessary attack by exploiting existing divisions
• identify individual strengths and weaknesses. Make maximum use of internal
expertise but bring in external expertise in its absence
• reform senior management first. Testing incumbents will speed up the departure of
those who must go and build up the confidence of those who measure up.
Tactics
• pace is the key tactical variable; your average pace must be such as to defeat the
adaptive processes of the old system. Vary the pace on different 'fronts' to dictate
the terms of battle
• timing should, as far as possible, conform to a planned schedule for change
• never cease scouting for recruits. Use selection and training processes to improve
desired skills
• handle industrial relations skilfully. Reliance on the old industrial system should
decline as managerial skills improve, but where the old system is involved, act with
competence and promptly in order that the old system doesn't benefit
• make the client your ally. Properly mobilised, external pressures can be used
against internal resisters.
Reading 6.2
Shepard, H.A. 2001, ‘Rules of Thumb for Change Agents’, in The Organizational
Behavior Reader eds J.S. Osland, D.A. Kolb, & I.M. Rubin, Prentice Hall, Upper
Saddle River, New Jersey. (See Chapter 20, pp. 589-594).
6.1.4 Contingency approaches to managing change

As with contingency approaches to leadership, which stressed the way variations in the
situation should influence the style and/or tactics of the leader, contingency
approaches to managing change focus on the way the context does or should influence
the nature of change practice. Rather than relatively generic courses of action, such as
proposed by Nadler and Tushman, and Paterson, these approaches emphasise
variation by context.

The centrality of resistance to change

Kotter and Schlesinger (1979) identify and discuss six approaches to managing
change, using resistance to change as the key variable whereby the context for the use
of each is described. Kotter and Schlesinger's approach involves the following broad
approaches:
• education and communication
• participation and involvement
• facilitation and support
• negotiation and agreement
• manipulation and cooptation
• explicit and implicit coercion
• depending on the demands of the situation.
Fit, resistance and urgency

Dunphy and Stace (1990) have produced a model for change strategies that vary along
two dimensions: scale of change and style of change leadership.
Scale of change refers to whether the changes are based on:
• fine tuning of existing practices, or
• small changes (incremental adjustments), or
• major change in some part of the organisation (modular transformation), or
• major change, which is organisation-wide (corporate transformation).
The key distinction is between the first two types and the latter two types. The first two
involve incremental approaches characterised by a series of adjustments. The latter
two types involve discontinuous but substantial change. (Compare this to the
textbook's distinction between first-order and second-order change).
Style of change leadership refers to whether the change process:
• involves employees in decision about both the goals and means of change
(collaborative), or
• requires managers to consult employees (consultative), or
• is characterised by managers issuing edicts based on their formal authority
(directive), or
• is characterised by the use of explicit or implicit force (coercive).
On the basis of these two dimensions, Dunphy and Stace define four change
strategies:
• participative evolution: characterised by incremental change and participation
(OD strategies are typically of this type)

• charismatic transformation: characterised by transformative change and

participation
• forced evolution: characterised by incremental change and non-participation
• dictatorial transformation: characterised by transformational change and non-
participation. (This resembles the approach recommended by Paterson, 1983)
• according to Dunphy and Stace there should be a definite relationship between the
circumstances of the organisation and selection of a change strategy.
Specifically:
• participative evolution is appropriate when the organisation is either 'in fit' but
needs minor adjustment, or is 'out of fit' but time is available and key interest
groups favour change
• charismatic transformation is appropriate when the organisation is 'out of fit', the
need to change is urgent and key interest groups support substantial change
• forced evolution is appropriate when the organisation is either 'in fit' but needs
minor adjustment or is 'out of fit' and, although time is available, key interest
groups oppose change
• dictatorial transformation is appropriate when the organisation is 'out of fit', the
need to change is urgent, but key interest groups oppose substantial change.
The authors recognise that the model is necessarily a simplification. For example, the
two change dimensions (scale and style) are continuous rather than discrete variables
and that different sections of the organisation or workforce may be subject to different
strategies. They also recognise that managers have different 'interpretative schemes'
and that this may limit management's recognition of the changes necessary to attain fit.
These things are not incorporated into the model, and as a consequence, the degrees
of fit, or resistance and of urgency are treated as relatively unambiguous.
Nevertheless, the model is valuable in that it encourages reflection in regard to the
change strategy-context relationship.
Conclusion
Despite the shortcomings of the organisational development approach, it is still
regarded as a very attractive model for guiding change. The 'organisation as political
arena' change model, on the other hand, has the advantage that it takes into account
the complex and non-deterministic nature of organisations. The contingency
approaches do something of both, allowing for the possibility of both OD and political
approaches depending on the external circumstances of the organisation and
managers' capacity to judge them.
6.2 Organisational Behaviour and HRM

Introduction
The quality of an organisation is, to a large degree, determined by the quality of the
people who work for the organisation. With this in mind, it could be soundly argued that
the most important goal for present and future managers is to develop a progressive
philosophy for managing our most important resource, people.

Jack Welch, the head of the 220,000-employee General Electric Corporation, had this
to say about succeeding in today's highly competitive global economy:
"If you're not thinking all the time about making every person more
valuable, you don't have a chance. What's the alternative? Wasted minds?
Uninvolved people? A labor force that's angry or bored? That doesn't make
sense."
To become a highly performing organisation starts with being able to recruit and select
the best applicants for various positions within the organisation. Job training and
personal and professional development are other activities that are also an important
part of managing a company’s human resources.
• Why HRM?
• The Human Resource Management Process
6.2.1 Why HRM?

Whether or not an organisation has a human resource department, every manager is
involved with human resource decisions.
Various studies have concluded that an organisation's human resources can be a
significant source of competitive advantage.
To achieve this, managers have to fundamentally rethink the organisation's workforce
and how they view the work relationship. It also involves working with and through
people and seeing them as partners, not just as costs to be minimised or avoided.
Studies that have looked at the link between HRM policies and practices and
organisational performance have found that certain ones have a positive impact on
performance.
These high-performance work practices are human resource policies and practices that
lead to high levels of performance, and include self-directed work teams and total
quality management, coaching and mentoring, use of employee suggestions and
attitude surveys, employee involvement and problem solving groups.
Reading 6.3
Pfeffer, J, & Veiga, J, 1999, ‘Putting People First For Organizational Success’, in The
Organizational Behavior Reader eds J.S. Osland, D.A. Kolb, & I.M. Rubin, Prentice
6.2.2 The Human Resource Management Process

Human resource planning is the process by which managers ensure that they have
the right personnel who are capable of completing those tasks that help the
organisation reach its objectives.
Managers begin with a current assessment of the organisation's human resources and
reviewing their status. This is typically done through a human resource inventory or
audit – i.e., what mix of skills & experience do we have? For example, such a report or

database might include education, training, prior employment, languages spoken,

specialised skills of each employee.
Another part of the current assessment is the job analysis, which is an assessment
that defines jobs and the behaviours necessary to perform them.
From this information, management can draw up a job description, which is a written
statement of what a jobholder does, how it is done, and why it is done.
From this, management can also develop a job specification, which is a statement of
the minimum acceptable qualifications that an incumbent must possess to perform a
given job successfully.
Future assessment involves a determination of future human resource needs by
looking at the organisation's objectives and strategies. Demand for human resources
(i.e., employees) is a result of demand – or estimated future demand - for the
organisation’s products or services.
Developing a future program involves matching estimates of shortages of needed
personnel with forecasts of future labour supply.
Recruitment is the process of locating, identifying, and attracting capable applicants.
Decruitment involves techniques for reducing the labour supply within an organisation.
Sources for recruitment are varied and should reflect:
1. Local labour market – for eg, if the University of the Sunshine Coast wanted a
lecturer in org. behaviour, they would have to advertise nationally, or even
internationally, as the local supply is virtually non-existent.
2. Type or level of position – forklift driver, or CEO?
3. Size of the organization – family business or office of a national firm?
Obviously, these considerations all interact.

Note that recruitment and selection AND decruitment both lead to ‘competent
employees’ – the rationale behind this has been explained elsewhere as the
importance of getting the ‘weeds out of the garden’.
What skills do employers want?

In 2000, Morgan & Banks reported that in a national survey of Australian workplaces,
employers stated that new graduates were most lacking in communication skills (oral &
written) and the ability to think critically – this is ironic, given that one might assume
that those are the very core skills that universities might be expected to equip any
graduate with…
The major sources for recruitment include internal search, advertisements, employee
referrals, public employment agencies, private employment agencies, school
placement, temporary help services, and employee leasing and independent
contractors.
Decruitment options include firing, layoffs, attrition, transfers, reduced workweeks,
early retirements, and job sharing.
The selection process is screening job applicants to ensure that the most appropriate
candidates are hired. It is also an exercise in prediction, since any selection decision
can result in four possible outcomes.

Correct decision = prediction that the applicant would be successful, and that applicant
later proved to be successful on the job.
Problems arise when we make errors by rejecting candidates who later perform poorly
(accept error – which can cost money in terms of wasted selection resources and
ongoing effects on org. performance), or who would have performed successfully (i.e.,
more than just the cost of selection procedure; eg, discrimination by using a biased test
– which can also cost money and damage the firms reputation).
Therefore, we want to reduce the probability of making accept errors or reject errors.
Validity describes the proven relationship that exists between a selection device and
some relevant criterion.
Reliability is the ability of a selection device to measure the same thing consistently.
Hence, for a selection test to be useful, it must be both valid and reliable.
There are numerous and varied selection devices to choose

from:
The application form is used by almost all organisations for job candidates.
Written tests can include tests of intelligence, aptitude, ability, and interest.
Performance-simulation tests involve having job applicants simulate job activities.
Two well-known ones are:
a) Work sampling is a selection device in which job applicants are presented with a
miniature replica of a job and asked to perform tasks central to that job. For eg,
asking an applicant to perform data entry.
b) Assessment centres are places in which job candidates undergo performance
simulation tests that evaluate managerial potential. Here, we might look at a range
of activities related to a job, such as leadership potential and the ability to lead a
group, intelligence testing, psychological testing (eg, assessing candidates
motivational needs), or observing candidates as they sought through an in-tray.
Typically, these activities are observed by either assessment centre staff, and/or a
team of persons representing a cross-section from the organization.
Interviews are very popular as a selection device although there are many concerns
about their reliability and validity. Whilst carefully planned and structured interviews can
have similar predictive ability to cognitive tests, most interviews are unplanned and
unstructured, and have no validity at all.
For example, it has been suggested that most information gleamed from an interview is
forgotten within ten minutes of the termination of the interview.
A common objective of interviewing is too ascertain whether applicants have
represented themselves truthfully. I think it is a rather common tendency for applicants
to ‘over-state’ their abilities and achievements, and hence interviewers should strive to
validate the applications.

Guidelines for employment interviews

• establish a plan & standardise questions – i.e., same questions & situations for
all candidates – this increases validity across interviews & helps ensure that info
appropriate to the job & person specifications is obtained.
This will also help establish job relatedness by avoiding questions which are not
related to any particular job. These are the most commonly asked interview
questions – although they appear to be preferred by HR staff, there is no evidence
of their ability to predict job performance.
• assign multiple interviewers – i.e., a panel
• as the main purpose is to find out about the applicant, it is important to establish
rapport and put them at ease. Also, be aware of the applicants status & be
respectful, listen carefully and re-phrase what they say (as opposed to thinking
about your next question), and pay attention to non-verbal cues (body-language)
– some people claim that these provide up to up to 90% of the total information.
• Provide information – interviews are about determining job-fit, so it is really a
two-way process …
• Questioning – be as objective as possible, and don’t lead the candidate – don’t
indicate the desired response
• Separate facts from inferences – and compare with other interviewers (i.e.,
assume that someone is a registered psychologist simply because they applied for
a job that required that qualification….)
• Recognise biases & stereotypes – if an interviewee’s personality & attitudes are
similar to that of the interviewer, interviewees tend to receive higher scores,
although neither racial or gender similarity appears to affect scores.
In general, physically attractive candidates have an advantage over less
attractive candidates – but for women, it is dependant upon the level of position
they apply for – for non-managerial jobs, more attractive women score higher, but
the reverse applies for managerial positions.
Finally, interviewers are influenced more by negative information than by positive
information (negative information bias) when interviewers are not aware of the
job requirements.
• Contrast effects – if a terrible applicant precedes an average applicant, the
average applicant will score higher than if no applicant or a very qualified applicant
preceded him.
• Primacy effects – info presented early in an interview carries more weight than
does info presented later. Interviewers often make up their mind about a candidate
in the first five minutes of a 15 minute interview – this also makes you wonder how
much info they will retain after the interview if they make up their mind so early….
• Control the interview – give the candidate the opportunity to express herself &
ask questions, but make sure that the objectives of the interview are reached.
If these suggestions and warnings are followed, interviews can be as predictive of
future job performance as cognitive ability tests, work sample tests, or job knowledge
tests.

Summary of interviews
• a flawed tool: the typical (unstructured) interview favoured by so many is almost
useless in predicting employee performance.
• artificial situation - people who do best at interviews are those who have had
more practice at them, and a manager at an interview is not managing, while a
computer programmer is not computing – they’re arguably only playing the role
that they feel is expected of them.
• with this in mind, it probably is a good tool for predicting interpersonal skills.
• belief by managers that they know best – i.e., only they know what is best, and are
able to decide who will fit the job & org. best.
Background investigations can be done by verifying application data and/or
reference checks. In the case of sensitive government positions, these may also
include security checks (in Australia) by both federal Police and ASIO. The Federal
Police might perform a records check to ascertain whether an applicant has a criminal
record, while ASIO might perform more in-depth checks which could involve
interviewing relatives etc, as well as investigating records of overseas travel for both
the applicant and relatives.
Physical examinations are often used for jobs with physical requirements. In the event
of a claim for workers compensation, they also provide a baseline against which an
employee’s future medical status may be compared against.
Reference checks generally have little predictive ability of an applicant’s future job
performance, whilst assessment centres work well for mid to high level managers.
Work samples are appropriate for routine operatives, and tests of general cognitive
ability are amongst the best predictors of future performance, particularly in higher level
positions.
Orientation or induction is defined as the introduction of a new employee into his or
her job and the organisation.
The major objectives of orientation include:
1. Reduce initial anxiety and remove unrealistic expectations the employee may hold.
2. Familiarise new employees with the job, the work unit, and the organisation. The
latter often involves outlining the history of the company and its founders and
current key personnel – this also helps to establish the culture of the company (i.e.,
the written and unwritten rules about how things are done at that company)
3. Facilitate the outsider-insider transition.
Formal orientation programs are quite prevalent in many organisations, particularly

large ones.
Employee training is a critical component of the human resource management
program. Skill categories fall into three types.
1. Technical skills, which include basic skills (reading, writing, math) and job-
specific competencies.
2. Interpersonal skills, which involve the ability to interact effectively with co-
workers and managers.
3. Problem-solving skills, which involve the ability to solve problems that arise.

There are two different approaches to training

1. On-the-job training is extremely common. It can involve job rotation, which is
on-the-job training that involves lateral transfers in which employees get to work at
different jobs. It can also involve understudy assignments, and mentor or coach
relationships.
2. Off-the-job training is training in which employees learn through classroom
lectures, films, and simulation exercises. One specific form of off-the-job training is
vestibule training in which employees learn on the same equipment they will be
using but in a simulated environment. An example of this could be a flight or
driving simulator.
Compensation and benefits

How do organisations decide on the compensation levels and benefits that employees
will receive? The purpose of having an effective reward system is to attract and retain
competent and talented individuals who can help the organisation achieve its mission
and goals.
A compensation system can include base wages and salaries, wage and salary add-
ons, incentive payments, and benefits and services.
What factors determine the compensation and benefits packages for different
employees?
One key factor is the kind of job an employee performs:
Typically, the higher the skill level, the higher the pay. Many organisations have
implemented skill-based pay systems in which employees are rewarded for the job
skills and competencies they can demonstrate.
Another factor is the kind of business the organisation is in (private sector versus public
sector).
Whether or not a company is under awards or other statutory regulations in relation to
wages and salary levels.
Another factor is whether the business is labour- or capital-intensive. For eg, capital
intensive organisations (such as the IT industry) need fewer workers to do the
organisation’s work, but these need higher levels of knowledge & skills, and so usually
demand higher rates of pay.
Management's philosophy toward compensation can influence the compensation
system. That is, do we “only pay what we have to” or, pay more where possible to
attract and retain a committed workforce.
Geographic location can also affect the compensation system. For example, when I
was in the hospitality industry, working outside of a capital city like Sydney mean that
my workplace was classified as a country area and I was paid less. This was due to
estimates of the cost of living.
Other considerations include the profitability and size of the company, and the
employee's tenure and performance at his or her job can influence the level of
compensation received.
Flexibility is becoming a key consideration in the design of an organisation's
compensation system. The traditional approach to compensation reflected a time of job

stability; i.e., when pay was determined largely by seniority and job level. But since
most organisations must cope with dynamic environments, they are looking to make
pay systems more flexible and with fewer pay levels.
An example of this is broadbanding compensation in which the number of job levels
or salary grades is reduced – eg, 8 pay grades with a range of $200 month to 3 grades
of $700 month. This can allow managers more flexibility when linking compensation to
individual skills & contributions (i.e., without having to formally promote staff).
Performance appraisal is defined as the evaluation of an individual’s work
performance in order to arrive at objective personnel decisions such as merit pay
increases, feedback from org’s on how they view employee’s performance, and to
identify training and development needs.
There are seven major performance appraisal methods.
1. Written essays method is a performance appraisal technique in which an
evaluator writes out a description of an employee’s strengths; weaknesses; past
performance; and potential, and then makes suggestions for improvement.
2. Critical incidents method is a performance appraisal technique in which an
evaluator lists key behaviours that separate effective from ineffective job
performance.
3. Graphic rating scales method is a performance appraisal technique in which an
evaluator rates a set of performance factors on an incremental scale.
4. Behaviourally anchored rating scales (BARS) method is a performance
appraisal technique in which an evaluator rates employees on specific job
behaviours derived from performance dimensions.
5. Multiperson comparison method is a performance appraisal technique in which
individuals are compared to one another. There are three types of multiperson
comparisons.
a) The group order ranking groups employees into ordered classifications.
b) The individual ranking ranks employees in order from highest to lowest.
c) Paired comparisons compare each employee to every other employee and
rate him or her as superior or weaker of the pair.
6. Accomplishment of objectives, such as that done in an MBO program, can also
be used as a performance appraisal method.
7. One newer approach to performance appraisal is 360 degree feedback which is a
performance appraisal review that utilises feedback from supervisors,
subordinates, and co-workers—the full circle (360 degrees) of people with whom
the person interacts.
No matter which performance appraisal method is used, managers need to provide

feedback during the appraisal review.
Formal performance appraisals are a common practice around the world. However,
there are some exceptions. For eg, they might sometimes be carried out done in the
absence of the staff member (and hence no feedback) and used for salary control, not
employee development. This takes us back to management philosophy and org
culture.

Reading 6.4
Kerr, S. 1995, ‘On The Folly Of Rewarding A, While Hoping for B’, in The
Organizational Behavior Reader eds J.S. Osland, D.A. Kolb, & I.M. Rubin, Prentice
Career development
A career is defined as the sequence of positions occupied by a person during his or
her lifetime. We need to look first at career development the way it was:
In the past, career development programs were typically designed by organisations to
help employees realise their career goals. However, widespread internal changes have
altered the idea of a traditional organisational career.
Now, it is the individual, not the organisation, who is responsible for his or her own
career. This has also been termed as the “new employment contract” where employees
have to make their own opportunities – but this impact on their level of trust in the
organisation they work for, because it seems very one way – i.e., it is very clear what
the employee is responsible for (results driven), but what is the org responsible for –
eg, contract versus tenure etc.
The idea of increased personal responsibility for one's career has been described as a
boundaryless career in which individuals rather than organisations assume primary
responsibility for career planning, career goal setting, education & training.
The optimum career choice is one that offers the best match between what a person
wants out of life and his or her interests, abilities, and market opportunities. The most
recent trends in career development have actually been in the reverse direction, known
as the ‘sea change’ or ‘down shifting’, where workers as young as thirty years or age
(and less) have opted for increased time for family and personal interests at the
expense of career progression and promotion.
6.3 Management issues of the future
Introduction
Perhaps wisely, considering the difficulty of making predictions about the future,
Robbins has not devoted a specific chapter to management issues of the future.
Nonetheless, the chapter on organisational change which was prescribed reading for
the first part of this Module points out some of the trends which organisations appear
likely to need to deal with as the new century approaches.
There is no shortage of theorists of the future, including for the future of management.
The following classic reading has been selected as a way of introducing to you some of
the most prevalent thinking about the ways organisations and ways of managing them
are changing as we move into the future.

6.3.1 Ways of predicting the future

As noted in the chapter on decision-making, managers are normally preoccupied with
predicting the future in an ongoing effort to reduce uncertainty. Ulrich and Lake (1989)
have identified four major methods that are used for arriving at predictions about the
future:
• extrapolation
• developing models, games or simulations
• scenario development
• paradigm shifts.
Extrapolation, also called trend analysis or forecasting, involves researchers making
assumptions about future growth or development based on historical, well-documented
occurrences. While this seems plausible given that it is easy to assume that current
trends will continue, there are many examples of second-order change which, by
definition, resist the kind of prediction that relies on current trends extending in a linear
manner into the future.
Developing models, games or simulations that represent the future is familiar to us
from the practices of car manufacturers using dummies to test safety features, and
airlines using the approach to prepare pilots for various situations.
Scenario development is an approach of which Royal Dutch Shell has become an
outstanding exemplar. According to Schwartz (1991), the key to their success seems to
be their philosophical approach to constructing scenarios, as follows:
• identify focal issue or decision
• determine key forces in local environment
• identify driving forces
• rank by importance and uncertainty
• select scenario logic
• flesh out the scenarios
• tease out implications.
6.3.2 Select leading indicators

This approach relies for its success on the specification of quite different scenarios and
consequently quite different strategies and possible outcomes. Too often, managers
believe they are constructing scenarios when they estimate a high, low and middle
position on the future of their company or the economy. However, true scenario
developments assume the impact of various factors and hypothesise the range of
outcomes along a variety of dimensions, leading to quite different scenarios.
According to its supporters, scenario planning is superior to other approaches because
it focuses on:
• being prepared for a variety of possibilities and having strategies ready for
implementation once a particular trend becomes clear

• anticipating future needs and preparing the workforce, organisation, customers

and suppliers for how to deal with them
• constantly questioning old assumptions about the world. This allows managers and
employees to develop the skills needed to copy with new situations.
Paradigm shifts are difficult to illustrate from present experience because, by definition,
they involve moving beyond present ways of thinking. Davis (1987) invites us to think
'outside present paradigms' in the following example:
What if we shifted the management paradigm from one which believes that the
essential management task has to do with people, capital and technology, and treats
time, space and mass as obstacles to overcome, to a paradigm in which time, space
and mass are the resources to be managed?
At first sight this is difficult to understand, but Davis's specific examples help. Managing
time better is the hallmark of a lift company that installs computerised diagnostics to
alert the service team whenever a malfunction occurs or a component requires service.
This means that service engineers can visit the site to rectify the problem or
performance maintenance before the client even knows a problem exists.
Manufacturers of office equipment can adopt similar approaches.
6.3.3 Changes in the world of work

Several major shifts are upon us now or are looming large in the world of work whether
we face Drucker's new realities, live in Ohmae's border-less world, Handy's world of
unreason or Drucker's post-capitalist society, embrace Peter's newly liberated world of
management, or accept Naisbitt and Aburdene's megatrends. The following list gives
some idea of the magnitude of the changes:
• Transition to the knowledge economy
• Globalisation and internationalism:
• Increased competition
• Deregulation
• Removal of business barriers internationally
• Relocation of work
• Shifts in world gross domestic product
• New organisational structures:
• Changes to the way work is organised
• Rearrangements to the nature of employment
• Changes to the mix of industries
• Rapid technological change
• Shifting demographics
• Environmental issues

Many of the most successful companies in the world, including those nominated in
Peter's work on 'excellence' in the early 1980s are fighting to survive a decade and a
half later.
Economic and social shifts

Crawford (1991), outlines the characteristics of four basic societies. The one we are
moving into, the knowledge society, started in the late 1960s and early 1970s. Its
critical variables are knowledge and information, and it is felt likely to be the dominant
economic and social force over the next 20 to 30 years. This new world will be
characterised by access to instantaneous information across the street or around the
globe, and the added value of information to all aspects of industry. Knowledge
becomes the most important asset for the organisation. The resources that hold and
can apply the knowledge, that is, the people, become the most vital asset a company
can have.
Globalisation and internationalisation

Large numbers of companies now regard the world as one huge market. Car
manufacturers, television and news networks, consumer goods companies, banks,
insurance companies and airlines enjoy a reach and market penetration that takes
them to every corner of the globe. Coates, Jarratt and Mahaffie (1991) point out that in
the future mergers and acquisition will continue, with more international actors
involved, aided by the enhanced flow of capital that globalisation makes possible.
From an Australian perspective, globalisation means an effort to expand operations
into world markets, particularly Asia which, despite the recent recession, is witnessing
rapid growth (23% of world GDP now and projected to be 30% by 2010). But as well,
we can expect the shape of work and industries in our region to be conditioned by large
multinational companies to seek to invest here. They will bring a diverse cultural set,
different loyalties and objectives and will focus on issues that we may not regard as
being in our best interests. Yet we have little choice.
Reading 6.5
Donaldson, T. & Dunfee, T.W. 2001, ‘When Ethics Travel: The Promise and Peril of
Global Business Ethics’, in The Organizational Behavior Reader, eds J.S. Osland,
D.A. Kolb, & I.M. Rubin, Prentice Hall, Upper Saddle River, New Jersey. (See
Chapter 5, pp. 131-144).
Where will work be located?

Organisations will continue to look for ways to reduce the costs of housing large
workforces in prime city locations. As communication technologies become faster and
more reliable, options such as telecommuting will become more common. The benefits
sound wonderful: the ability to choose our own hours, communicate regularly and
efficiently with colleagues across the street or around the world with equal ease,
minimise travel time and spend more time with our families. However the reality
remains very different, at least so far, for the following reasons:
• technology has not been fast, reliable, cheap or efficient enough to allow the
average person to work from home

• the glamour of independence has faded once the realities of combining family
responsibilities with paid work set in
• loneliness is increased; the incidental social discourse that occurs as a necessary
part of people's day at work disappears.
New organisational structures

Handy (1989) and others predict significant changes to the structure of organisations.
The 'Shamrock Organisation' is a phrase coined by Handy to reflect an organisation
arranged as a central core of staff and skills, supported by external or part-time
workers as and when necessary. He asserts that the shamrock organisation is not new,
but is becoming increasingly popular.
Building on the work of Atkinson, Sadler identifies three different types of flexibility
needed by the organisation of the future:
Functional flexibility: the ability to redeploy skilled people between the tasks and
activities of the business as required.
Numerical flexibility: having the right number of people available to do the work at
any time.
Financial flexibility: The ability to adjust wage and salary costs as needed.
Organisational structures such as depicted in the diagram based on Sadler allow
organisations to pay for people they need them.
A further structural consideration – in the broadest sense – is the increased prevalence
of strategic alliances and linkages. Kanter has coined the phrase PALS: 'pooling,
allying and linking’, to highlight the idea of companies collaborating with each other.
Changes to the mix of industries

Handy points out that thirty years ago nearly half of all workers in the industrialised
countries were making or helping to make things. In another thirty years he projects
that it may be down to 10%. It is also important to note the blurring of the former clear
distinction between manufacturing and service industries. Incorporating permanent
press fabrics into clothing is one of many examples of how manufacturers an build
service directly into their products (as are self-diagnostics in any electronically
controlled equipment).
Shifting demographics
Several different but related changes are occurring in the demographic makeup of the
industrialised world:
• the 'baby boomers' are ageing. As they enter middle age and later they are poised
to become the dominant group in society
• older people are becoming a larger part of society, living longer and in better
health than previously. As a result they are wielding greater influence politically,
socially and economically
• birth rates are failing almost everywhere

• women are tending to have their babies later, especially in two-career families.
They also return to paid employment faster than their mothers and grandmothers
• migration patterns continue to add to many countries' cross-cultural workforce
• more women are emerging into senior ranks of the workforce through sheer weight
of numbers.
Implications of these developments include:
• a changing balance between the number of people receiving pensions and the
number in the paid workforce whom can support them
• older people will alter buying habits and consumer preferences
• organisations will need to develop more flexible policies on parent leave, child care
and elder care, and also for managing diversity in the workplace
• many more of the male-oriented policies in organisations will be challenged and
changed.
Environment issues
Some authors argue that environmental considerations will be the greatest single
source of influence on the way organisations do business in the 21st century. Some
companies are already converting formerly wasteful and environmentally harmful
activities into potentially profit-making ventures.
Implications of change
Retaining and ongoing development

In a situation analogous to the industrial revolution, where people who had worked on
the land needed to be retrained to use machinery in factories, the move to the
knowledge economy will similarly require retraining for a workforce which will comprise
70%–80% 'knowledge workers’. One of the key skills that people will need to learn is
team skills, which are currently not well practised in most organisations, and yet are
among the most necessary given the demands of the new economy.
Flexibility in work practices

A range of different ways for people to do their work will need to be devised. These
include:
• different ways of working the hours, such as flexitime and compressed work weeks
• part-time work, including both regular and irregular forms of part-time work with
and without benefits equivalent to those of full-time employees
• sharing options, such as job sharing and work sharing (where some or all of the
workforce temporarily reduce their hours to avoid layoff)
• retirement options, including phased retirement, part-time work and early
retirement. In addition, it has also been argued that some skills have been

'downsized out' of organisations in the push to cut costs in the 80s and 90s, and
that some of those who have retired will need to be enticed back to the
organisation
• leave, such as parental leave and other leave options, not necessarily for a
specified purpose.
Managing the International Environment

Identifying and relocating executives able to perform well in the new global
environment is a pressing issue. The failure rate for expatriate personnel is
unacceptably high, and management practices to support success in this arena are the
exception rather than the rule. Coyle (1992) suggests the following questions to guide
international placement:
• is the international relocation short or long haul?
• is it to a remote area or a city location?
• is it to a Third World country or a developed country?
Are the cultural differences between the home and host cultures significant or subtle?
• is language ability a criterion?
• does the job involve knowledge of the management cultures of local nations?
• is the person being thrust into a supportive corporate culture?
Implications for HRM

Several fundamental changes will occur to the business environment as a result of
demographic and other change:
• workforce planning will occupy a larger share of corporate budgets; active
searching out of the right people will be more prevalent than at present
• corporations will adopt new programs to support employees' family responsibilities
• reward structures will undergo significant revisions to accommodate non-financial
rewards, rewards for individuals and teams, and productivity awards. Choices
between rewarding employees on the basis of competency possessed, work done
or some combination will come to the fore
• empowerment will become the basic approach for team leaders and managers.
Growth in Service industries

Not everyone will wish to or be able become knowledge workers. Retailing, transport,
cleaning, catering and leisure are all industries with large requirements for competent
but semi-skilled workers.

Reading 6.4
Cartwright, S. & Cooper, C.L. 2001, ‘The Growing Epidemic of Stress’, in The
Activities
Organisational change
Consider a change that your organisation has undergone recently. Which
external factor(s) were the prime cause of the change? Into which of the
above five categories did it fall? If it is difficult to classify in terms of a
Activity 6.1 single category, also discuss the links that the change has with other
Classify a recent categories. What are the likely spin-off effects of the change?
change in your
organisation.
Consider again the change you discussed in Activity 1 of this Module.

Think now about the change in terms of the discussion above that sets out
how organisations and managers within them are not always merely
Activity 6.2 passive reactors to external forces for change. Did any of these
Consider again arguments hold true in the instance of change you are considering?
the change you Explain.
discussed in the
previous activity.
Consider once again the change you discussed in the previous two
activities. Did it encounter any resistance within the organisation? Was
this resistance, if any, on the part of management, employees or both?
Activity 6.3 What reasons were behind the resistance of either of these groups? How
Can external was this resistance 'framed' or 'discussed' by either management or
change be employees? From this specific incident, do you see any basis for the
managed? argument that terming reluctance to change a form of 'resistance' may be
ideologically based? Discuss.
Consider an organisation of your choice. Describe an instance of planned

and successful organisational change that did not follow the principles of
Organisational Development. Why did it work? Analyse it in terms of two
Activity 6.4 of the non-OD models of organisational change described in this chapter.
What makes What would have made it work even better, in your view? Why?
organisational
change work?
Consider an organisation of your choice, and recall an instance of planned

change which was unsuccessful due to resistance to the change. What
were the reasons behind the resistance, in the view of those who did not
Activity 6.5 want the change? What means were used to resist the change? Why
Resisting were they successful?
change.

Do you agree with the underlying assumptions of Organisational

Development? Why or why not? Explain with reference to a change in
your organisation which you either plan to undertake or which is affecting
Activity 6.6 you.
Is OD for you?
Organisational Behaviour and HRM

The HR Director of a large, progressive organisation have asked you – a
HR team leader – to provide a brief report on the following problem:
Activity 6.7 The company have been seeking to recruit a new CEO, and the board of
Managers’ directors specifically urged that the new CEO must have the personal
perspective of qualities compatible with dealing with a turbulent environment which is
others and characteristic of their market. A previous HRM specialist (who has left on
influences on short notice and cannot be contacted) had the three short-listed
the HR process candidates for the CEO position fill in a short questionnaire which she said
was designed to measure the “candidates’ attitudes towards other
people”, claiming that this questionnaire would satisfy the board of
directors’ demands. The HR director has asked you to interpret the
candidates’ scores on this instrument. One candidate scored very low,
one very high, and another a mid-range score.
Upon looking at the questionnaires, you realise that they in fact measure
McGregor’s Theory X and Y views of human nature.
The HR manager requests that you specifically report on the relevance of
the instrument and the subsequent significance of the candidates’ scores,
and how they might influence the company culture, steps in the HR
functions, and finally, general employee values and behaviours.
Management issues of the future

What techniques do people in your organisation (or an organisation with
which you are familiar ) use to predict the future? How could they improve
the usefulness of their estimates?
Activity 6.8
Examine your
organisation's
prediction
techniques.
What impact has the knowledge economy already had on the way you
work? What changes can you anticipate for the future?
Activity 6.9 Think of some organisations you know well. How will they change as a
Examine the result of the knowledge economy?
impact of the
knowledge
economy

What changes in structure do you believe will be necessary in your

organisation in the future. How will these changes help? Use the types of
flexibility outlined above to help you reach your conclusions.
Activity 6.10
Consider the
need for
changes to your
organisation's
structure.
Will the changes mentioned in this part of the Module affect your
organisation? List as many impacts as you can. For which of them, if any,
has your organisation made definite plans? Which are the influences for
Activity 6.11 which most urgent planning is needed?
List the external
sources of
change affecting
your
organisation.
What type of management initiative or programs do you believe your

organisation will need to introduce over the next ten years to compete in
the world of the future? Why?
Activity 6.12
Consider the
management
initiatives your
organisation
needs for the
future.

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2.3.2 Points of convergence across leadership theories .............................................. 31

Master of Business Administration

5.2.1 Alternatives to the rational model of decision-making ......................................... 91

Graduate Studies Program

Module 1: Introductory topics

Graduate Studies Program

Master of Business Administration

1.1 Thinking about organisations and

1.1.1 Why do we need to manage?

Graduate Studies Program

The needs of organisations

The pervasiveness of organisations

Read Robbins, Chapter 1, for a discussion of some of the major

Master of Business Administration

1.2 Managerial work

1.2.1 The nature of managerial work

Graduate Studies Program

Management skills (or competencies)

Master of Business Administration

Another functional view

Effective vs successful managers

Graduate Studies Program

Master of Business Administration

Graduate Studies Program

1.3 Founding views of management

Read Robbins, Chapter 1, for a discussion of management functions,

1.3.1 Scientific management

Master of Business Administration

1.3.2 Administrative management

Graduate Studies Program

Master of Business Administration

1.3.3 The human relations movement

1.3.5 Systems theory

Graduate Studies Program

biological sciences, attempts to consider the organisation as a whole system made up

1.3.6 Other approaches

Master of Business Administration

• slow evaluation and promotion

Thinking about organisations and management

Graduate Studies Program

If you are already operating as a manager, what level of contraction do

If you are already occupying a management role in your organisation,

Compare the findings of the work by Mintzberg, Kanter, Kotter, Luthans et

Founding views of management

Activity 1.8 • It makes good sense.

Master of Business Administration

• It is simplistic to assume the extra money will motivate people to work

• It is an authoritarian view that is inappropriate in today's work

How applicable do you believe Fayol's 14 principles of management are in

Graduate Studies Program

Module 2: Groups, teams and

Master of Business Administration

Graduate Studies Program

2.1 The nature of groups and teams

2.1.1 Definitions of groups: two caveats

Master of Business Administration

Read Robbins' textbook, Chapters 8 and 9.

2.1.2 Functions of formal and informal groups

Graduate Studies Program

The informal functions are:

2.1.3 Other arguments concerning the formation of

2.1.4 Characteristics of groups

Master of Business Administration