Human Behaviour in Organisation - ITM University - Semester 2 - MBA

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Human Behavior in Organization
Table of Content eBook
1. An Overview and Learning 6
1.1 Introduction 7
1.2 Definition of Organizational Behavior 8
1.3 Nature of Organizational Behavior 8
1.4 What Managers Do 10
1.5 Why S t u d y Organizational Behavior 14
1.6 D i s c i p l i n e s That Contribute To the OB Field 15
1.7 OB Model 16
1.8 C h a l l e n g e s and Opportunities for OB 18
1. 9 Meaning of Learning 19
1.10 Characteristics of Learning 19
1.11 Theories of Learning 20
1.12 Learning through Reinforcement 22
1.13 From I n d i v i d u a l to Organizational Learning 23
1.14 Chapter S u m m a r y 24
2. Personality and Values 25
2.1 Introduction 26
2.2 What is Personality? 27
2.3 Personality Determinants 27
2.4 The M y e r s - B r i g g s Type Indicator (MBTI) 29
2. 5 The Big Five Personality Model 31
2.6 Other Personality Traits Relevant To OB 32
2. 7 Values in the Workplace 33
2.8 Types of Values 34
2.9 L i n k i n g an I n d i v i d u a l ' s Personality and Values to the Workplace 36
2.10 Values across Cultures 38
3. Perception and I n d i v i d u a l Decision Making 41
3.1 Introduction 42
3.2 What is Perception? 43
3.3 Factors That Influence Perception 43
3.4 Attribution Theory 44
3.5 Common Perceptual Distortions 45
3.6 Improving Perceptions 47
3.7 The L i n k between Perception and Individual Decision Making 48
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Human B e h a v i o r in Organization
3. 8 Decision Making in Organizations 49
3. 9 Common Biases and Errors in Decision Making 51
3.10 Influences on Decision Making 52
3.11 Ethics in Decision Making 54
3.12 Improving Creativity in Decision Making 54
4. Motivation: Concepts and Applications 57
4.1 Introduction 58
4.2 What is Motivation? 59
4.3 Types of Motivation Theories 59
4.4 Motivating by Job D e s i g n : The Job Characteristics Model 68
4.5 Employee Involvement 70
4.6 Using Rewards to Motivate Employees 71
4.7 Performance Management 73
4.8 Performance A p p r a i sa l 74
5. F o u n d a t i o n s of Group and Team Behavior 79
5.1 Introduction 80
5. 2 Defining and Classifying Groups 81
5.3 Stages of G r o u p Development 82
5.4 Group Properties 84
5. 5 Group Decision Making 85
5.6 Differences between Groups and Teams 88
5. 7 Types of Teams 89
5. 8 Creating Effective Teams 90
5. 9 Turning I n d i v i d u a l s into Team Players 94
6. Communication 96
6.1 Introduction 97
6.2 Definition of Communication 98
6.3 Meaning of Communication 98
6.4 Objectives of Communication 99
6.5 Characteristics of Communication 100
6.6 Significance of Communication 101
6. 7 The Communication Process 102
6.8 Direction of Communication 103
6.9 Forms of Communication 104
6.10 O r g a n i z a t i o n a l Communication 106
6.11 Choice of Communication Channel 108
6.12 Barriers to Effective Communication 109
7. Leadership 112
7.1 Introduction 113
7.2 Definition of Leadership 114
7.3 Purpose of Leadership 114
7.4 Leadership Theories 115
7.5 Leadership Styles 119
7.6 Leader's Power 121
7. 7 Bases of Power 122
7.8 P o w e rTactics 124
7.9 Difference: Leadership and Power 125
7.10 Characteristics of Managers Who Use Power Effectively 126
8. Conflict and Negotiation 128
8.2 Conflict 130
8.3 Transitions in Conflict Thought 133
8.4 The Conflict Process 134
8.5 Negotiation 136
8.6 The Negotiation Process 137
8.7 Third-party Negotiations 140
9. O r g a n i z a t i o n a l Structure and Culture 142
9.2 What Is Organizational Structure? 144
9.3 Elements of Organizational Structure 144
9.4 Common Organizational Designs 145
9.5 New Design Options 147
9. 6 Why Do Structures Differ? 148
9. 7 Organizational Culture 152
9.8 What Do Cultures Do? 154
9. 9 Creating and Sustaining Culture 155
9.10 How Employees Learn Culture 157
9.11 Creating an Ethical Organizational Culture 158
9.12 Creating a Positive Organizational Culture 158
9.13 S p i r i t u a l i t y and Organizational Culture 159
1 0 . O r g a n i z a t i o n a l Change and Stress Management 161
10. 2 Forces for Change 163
10. 3 Planned Change 164
10.4 Resistance to Change 165
10. 5 Approaches to Manage Organizational Change 168
10. 6 Creating a Culture for Change 171
10. 7 Stress 172
10.8 Potential Sources of Stress 173
10. 9 Consequences of Stress 174
10.10 Managing Stress 176
0 1 . An Overview and Learning eBook
Chapter 0 1
An Overview a n d L e a r n i n g
1 . 1 Introduction
Why is it that certain individuals remain regularly absent, or reach late for work, while
many others reach t h e i r workplaces on time, and maintain a commendable attendance
record? This is because human behavior in organizations is certainly u n p r e d i c t a b l e . It is
a fact that no two i n d i v i d u a l s can display the same behaviors, even if they are exposed
to a number of similar situations. This is what makes the study of Organizational
Behavior (OB) interesting, while it is challenging too.
OB is a field of study that explores how individuals, groups, and organizational
structures influence behaviors within an organization. OB is concerned with the way in
which individuals behave in an organization. Every organization faces challenges on its
path to attain goals. Every challenge would be of different nature and thus, there is no
predefined solution to every problem that an organization would face. But, the intensity
of these c h a l l e n g e s and issues faced can be reduced to a great extent by increasing the
u n d e r s t a n d i n g of h u m a n behavior in organizations.
Factors, such as job design and organizational culture, do affect employee behaviors.
But, to have a better understanding about the other factors that influence behaviors,
how to increase motivation levels, i n d i v i d u a l and group behaviors, emotions, the nature
of conflicts, etc., it is necessary to study OB.
After reading t h i s chapter, you will be able to:
Define O r g a n i z a t i o n a l Behavior (OB)
Discuss O B in the human relations and organizational context
Describe the management functions, roles, and activities
State the reasons for studying OB
List the major d i s c i p l i n e s that contribute to Human Behavior in O r g a n i z a t i o n s
Identify the d i s c i p l i n e s that contribute to the field of Organizational behavior
Describe the model of OB
State the major challenges and opportunities to OB
Define learning and state its characteristics
Describe the theories of learning
1 . 2 D e f i n i t i o n of O r g a n i z a t i o n a l Behavior
According to Fred Luthans, organizational behavior is "the understanding,
prediction and m a n a g e m e n t of human behaviors in o r g a n i z a t i o n s . "
Stephen P. Robbins defines organizational behavior as a "field of study that
investigates the i m p a ct of individuals, groups and structures on behavior
within organizations for the purpose of applying such knowledge towards
improving an organization's effectiveness."
A proper understanding of OB helps managers in taking steps to enhance productivity
and employee job satisfaction. It would also help in reducing absenteeism and employee
turnover. The use of O B concepts helps managers in increasing employee commitment
toward the o r g a n i z a t i o n .
1 . 3 N a t u r e of O r g a n i z a t i o n a l Behavior
When managers and employees of an organization have a good understanding of
organizational behavior, it helps them in improving the overall organizational
performance. This a l so results in the efficient attainment of goals. Organizational
behavior explores individual, as well as group behavior and the factors that influence
them. H i g h e r job satisfaction reduces absenteeism and employee turnover. It also helps
in increasing overall productivity.
The concept of organizational behavior requires a close examination and study of h u m a n
behaviors i n :
O r g a n i z a t i o n a l context (that is, the nature of organizations)
Human relations context (that is, the nature of human beings)
1 . 3 . 1 Organizational Behavior in the Organizational Context
According to Gary Johns, "Organizations are social inventions for accomplishing
goals through group efforts." This makes you look at organizations as a carefully
organized social entity that comprises two or more individuals, who work toward the
attainment of common goals.
01. An Overview a n d Learning eBook
An organization may have the following objectives:
To m a x i m i ze profits
To have a competitive advantage
To assure employee welfare
To ensure the efficient use of organizational resources
These objectives can be attained, if an organization is based on the following four
important features:
Coordination
Attainment of common goals
Proper d i v i s i o n of labor
Integration t h r o u g h well-defined authority
1 . 3 . 2 Organizational Behavior in the Human Relations Context
The human relations context of organizational behavior can be studied through the
following aspects.
Fig. 1 . 3 . 2 a : The Human Relations Context of Organizational Behavior
Individual Perspective
OB can be studied in the perspective of an individual. It tries to understand why an
individual behaves in a particular way in the organizational setting.
Interpersonal Perspective
In this perspective, attention is given to the behavior of i n d i v i d u a l s in work g r o u p s and
work teams. To attain organizational goals, it is of great importance that the employees
work in coordination. The interpersonal perspective studies this aspect of o r g a n i z a t i o n a l
behavior.
Organizational perspective
An organization may consist of a small number or large number of people. These
employees are members of work groups, committees, teams, etc. Even a small
intragroup conflict can have an impact on individual organizational behavior. To resolve
conflicts and attain group objectives, managers need to continuously use creative
team-building activities and develop cooperative-group relationships.
Integrative Perspective
An organization has to constantly interact with its environment. Today, with
organizational boundaries getting transparent, it is important to adapt to the innovations
by competitors, diversity among the workforce, and so on. Organizations must instill in
them, a culture that helps to integrate with the environment, much more easily.
1 . 4 What M a n a g e r s Do
An organization is defined by Stephen P. Robbins, Timothy A. Judge, and Neharika
A. Vohra as, "a consciously coordinated social unit, composed of two or more
people that functions on a relatively continuous basis to achieve a common
goal or set of goals."
The managers in an organization assume the responsibility of a t t a i n i n g organizational
goals, through planning, organizing, coordinating, and controlling.
Characteristics of efficient managers are:
Managers get t h i n g s done from others.
They take d ec i s i o n s with regard to the allocation of organizational resources.
Managers also direct activities of others, to reach goals.
Managers work toward achieving goals, by channeling the efforts of the
employees.
Managers perform various functions in organizations, which are discussed a h e a d .
1.4.1 M a n a g e m e n t Functions
Planning
Controlling Organizing
Leading
Fig. 1.4.la: Management Functions
Planning
Under this function, a manager has to determine the organizational goals, formulate a
feasible strategy to attain those goals, and develop plans to organize and coordinate
work activities.
Organizing
This function requires a manager to design an organization's structure. This involves
deciding on the tasks to be performed, allocation of tasks, reporting structure, etc.
Leading
Every management has to direct its employees and create coordination among them. A
m a n a g e r is said to be engaged in leading, when he/she motivates employees to perform
tasks better, directs activities, and resolves conflicts among work g r o u p members.
Controlling
Managers supervise work activities to ensure that the tasks are performed efficiently.
They also take u p corrective actions if there are any changes to be incorporated.
1 . 4 . 2 M a n a g e m e n t Roles
Fig. 1.4.2a: Management Roles
A manager has various Interpersonal Roles to perform. Managers are figureheads,
as they carry out legal and social duties and act as role models to other employees.
They also establish the principles of behavior in the organization. As leaders, managers
motivate, direct, train, and coach their employees and make important decisions. A
m a n a g e r should always act as a liaison, that is, coordinate work between managers of
various departments, and also maintain contact within and outside the organization.
Managers also take up various Informational Roles in an organization. They are
monitors and act as the 'nerve center' of internal and external communication of the
organization. Managers evaluate employee performances, and also have to adapt to
changes in the industry. Being disseminators, they communicate and share
information with others in the organization. Managers also share information with
outsiders, by being the spokespersons of the organizations.
There are also a n u m b e r of Decisional Roles undertaken by managers in o r g a n i z a t i o n s .
Managers are entrepreneurs and problem solvers. They identify opportunities and
encourage change and innovation. Managing teams, resolving conflicts, taking up
corrective measures, and handling unexpected disturbances, are functions that make
managers disturbance handlers. As resource allocators, managers prioritize,
manage budgets, and cut costs. Managers also need to be negotiators and represent
t h e i r organizations in major negotiations that affect their areas of r e s p o n s i b i l i t y .
Thus, along with management functions, a manager must also perform the various
managerial roles to be effective and efficient.
1.4.3 Effective vs. Successful Managerial Activities ( Luthans)
Allocation of Activities by Time
Average Successful Effective
managers managers managers
Traditional management II Communication
O Human resource management II Networking
Fig. 1.4.3a: Effective vs. Successful Managerial Activities (Luthans)
Source: Based on F. Luthans, R. M. Hodgetts, and S. A. Rosenkrantz, Real Managers (Cambridge, MA:
Ballinger, 1988)
Fred Luthans and his associates studied more than 450 managers. As per their
observations, a l l those managers were engaged in four managerial activities.
Traditional Management: Decision making, planning, and controlling.
Communication: Exchanging routine information and processing paperwork.
Human Resource Management: Motivating, disciplining, managing conflict,
staffing, and training.
Networking: Socializing, politicking, and interacting with outsiders.
1 . 5 Why Study O r g a n i z a t i o n a l Behavior
Over the years, most organizational behavior mentors have observed that students
concentrate more on subjects related to particular jobs like that of marketing, and
finance. But, it has also been noticed that students with some experience in the industry
give e q u a l importance to organizational behavior, along with the other subjects.
These students have observed that the study of OB does make a difference to the
success of t h e i r careers. The study of organizational behavior is thus, essential to the
employees of any firm. The following points indicate why it is important to study
o r g a n i z a t i o n a l behavior.
Fig. 1.Sa: Reasons for Studying OB
Understanding Behavior
The study of organizational behavior helps in understanding people who work with you
and why individuals behave in a certain way in a particular situation. This very
knowledge helps managers in channeling efforts and getting work done t h r o u g h others.
OB also plays a significant role in performing tasks more effectively in organizations.
Influencing Behavior
Employees spend a lot of their time at their workplaces. OB helps in understanding how
work environments, work g r o u p s , j o b descriptions, work group conflicts, etc. can affect
and influence i n d i v i d u a l behaviors in organizations.
Predicting Behavior
Understanding and influencing behavior is important. But it is also important to predict
behaviors of employees. This would help managers to have an idea as to how their
employees would react to a particular situation in small o r g a n i z a t i o n al changes (for
example, a change in regular work timings) or dramatic events (such as downsizing).
This helps managers in planning in advance and taking corrective measures accordingly.
1 . 6 D i s c i p l i n e s That Contribute To the O B F i e l d
Behavioral science Contribution Unit of analysis Output
Learning
Motivation
Personality
Emotions
Perception
Training
Leadership effectiveness
Job satisfaction
Individual decision
1
Psychology
making
I
Performance appraisal
Attitude measurement
Employee selection
Work design
Work stress
Individual -
Behavioral change
Attitude change
Communication
Group processes
Social psychology
Group decision making
Communication L..1 Group

Study of
Organizational
Power
--+ Behavior
Conflict L______,
Sociology
t- _
- Intergroup behavior
Formal organization
theory
Organizational technology
Organizational change
-
Oraanizational culture
1 -

Comparative values Organization
Anthropology t- -
Comparative attitudes
Cross-cultural analysis
Organizational culture
-
- system
---l
Organizational -
environment
Power
Fig. 1.6a: Disciplines that Contribute to the OB Field
Source: Organizational Behavior, 14th Edition- Stephen P. Robbins, Timothy A. Judge, Neharika Vohra
(Page 12)
Organizational behavior draws out aspects from a number of social scientific d i s c i p l i n e s ,
such a s :
Psychology
Psychology focuses on the way in which individuals think and behave. Psychology
attempts to measure and explain the behavior of human beings and animals.
Social Psychology
Social psychology is a branch of psychology that combines the concepts taken from
psychology and sociology. It helps in understanding how individuals influence one
another.
Sociology
Sociology is a study of people's behavior with regard to their society and culture.
Anthropology
Anthropology is a study of human beings, and the development of their societies and
cultures.
1 . 7 O B Model
Fig. 1 . 7 a : The OB Model
The OB model is a three-level model that examines the organizational behavior of
i n d i v i d u a l s in three levels.
1.7.1 Individual Level
The behavior of employees in organizations is influenced by a number of factors, such as
the employee's attitude, perception, mental framework, levels of motivation, and so o n .
The following important factors have an impact on behavior at the i n d i v i d u a l level:
Personality
The qualities that together make a person's distinctive character, refers to
personality.
Perception
Perception is a process by which individuals organize and interpret their sensory
impressions in order to give meaning to their environment.
Values
Values refer to the basic convictions of a person, on a moral or ethical issue.
Attitudes
Attitudes are a predisposition to respond in a positive or negative way to someone
or something in one's environment.
Motivation
Motivation can be defined as the process that accounts for an individual's
intensity, direction, and persistence of effort toward attaining a goal.
Learning
Learning is a relatively permanent change in behavior (or behavioral tendency)
that occurs as a result of a person's interaction with the environment.
Job Satisfaction
When people are satisfied about their jobs and are motivated to work, it refers to
job satisfaction.
1 . 7 .2 Group Level
The g r o u p level can be studied through:
Group Dynamics
This refers to the behaviors and processes that take place w i t h i n a g r o u p .
Teamwork
A group in w h i c h the i n d i v i d u a l efforts of the members result in a performance that
is greater than the sum of the i n d i v i d u a l inputs.
Power
The capacity that A has to influence the behavior of B, such that, B acts in
accordance with A's wishes, is referred to as power.
Communication
Communication is the meaningful exchange or transfer of information.
Leadership
Leadership is the ability to influence a group toward the achievement of vision or a
set of goals.
1 . 7 . 3 Organization Systems Level
This level can be studied through the following:
Human Resource Policies and Practices
Human resource policies are systems of organized decisions, which are p l a n n e d to
support the personnel and administrative functions of an o r g a n i z a t i o n .
The Organization's Culture
According Schein and Becker, an organization's culture refers to, "a system of
shared meaning held by members that distinguishes the organization
from other organizations."
The Organizational Change
As time progresses, a lot of aspects in organizations become different. Every
organization today is surrounded by a continuously changing environment. An
organization can attain its goals, only if it adapts to the environment and
incorporates the necessary changes in it.
The Organizational Design
An organization's structure refers to the hierarchical arrangement of the various
job tasks in an organization. In other words, it is the way in which jobs are
grouped and coordinated. The common organizational designs in today's
organizations are the simple structure, the matrix structure, and the bureaucracy.
There are also certain new design options like that of the virtual organization, and
the boundaryless organization, which are considered by various o r g a n i z a t i o n s .
1 . 8 C h a l l e n g e s a n d Opportunities for OB
The challenges that organizations face today can be turned into opportunities by
managers, if they use the concepts of organizational behavior. One of the most
important challenges for organizational behavior is that of responding to
globalization. Today, organizations are not confined within the boundary of a country.
The world has transformed into a global village. Thus, the functions of managers, today,
have also c h a n g ed to a great extent. Another aspect that organizations should look into
is the c o n t i n u o u s improvement of quality and productivity. This is not o n l y in terms of
the products produced by organizations, but also the services rendered by them to
customers.
Enhancing innovation and creativity is important for the survival of an organization in
the continuously changing external environment. Today's organizations have to master
the art of change to attain success in their respective fields.
Other major challenges include, responding to labor shortage and taking corrective
actions under economic pressures. Organizations must help their employees in
maintaining a work-life balance, which will in turn, reduce the stress levels. For
employees to be motivated and perform better managers must try and bring into
existence a positive working environment and empower their employees. Managers
must also facilitate the efficient working of employees in networked organizations
and improve ethical behavior of individuals within organizations.
1 . 9 M e a n i n g of L e a r n i n g
Learning is a relatively permanent change in behavior (or behavioral tendency) that
occurs as a result of a person's interaction with the environment. Learning impacts
individuals to translate their knowledge into behavior that would be observable by
others, in an organization.
1 . 1 0 Characteristics of L e a r n i n g
The characteristics of learning are:
Learning results in a 'change in an individual's behavior'.
The change that has occurred in an individual's behavior must be 'relatively
permanent.'
The change in behavior is considered as learning only if it is experience-based.
For learning to take place, it must be 'reinforced'.
1 . 1 1 Theories of L e a r n i n g
The three important theories of learning are displayed in Fig. 1.11a.
Theories of
Learning
Behavioristic Cognitive Social Learning
Fig. 1 . 1 l a : Classification of the Theories of Learning
1.11.1 Behavioristic Theories
Behavioristic theories can be explained through classical and operant c o n d i t i o n i n g .
Classical and Operant Conditioning
The concept of classical conditioning has been developed by classical behaviorists like
Ivan Pavlov and John B. Watson. According to them, learning takes place as a result
of the connection between Stimulus and Response (SR). In classical conditioning, a
neutral signal is placed before a reflex occurs naturally. In Pavlov's classic experiment
with dogs, the neutral signal was the sound of a bell ringing, and the reflex that
occurred naturally was the dogs salivating in response to food. He associated the neutral
stimulus with the environmental stimulus (here, the presentation of food), and so, the
sound of the r i n g i n g bell alone could produce the salivation response.
On the other hand, behaviorists like B. F. Skinner, who introduced operant
conditioning, believed that it is the Response+Stlmulus ( R S ) connection that is more
important. For example, if an organization pays employees for every extra hour that
they work, it is most likely that the employees would repeat this behavior. This is
because the extra pay, which is the stimulus, motivates them to work for additional
hours.
1 . 1 1 . 2 Cognitive Theories
In these theories, the focus is on the 'thinking processes' of individuals. It stresses on
the relationship between events and the expectations of i n d i v i d u a l s .
For example, if employees learn that they can attain their goals if they put in extra
efforts, then they would work accordingly. This very understanding is the result of a
cognitive event.
Edward Tolman, who is a widely recognized cognitive theorist, conducted experiments,
taking white rats as his subjects. He observed that the white rats could run through a
complex maze, in order to attain their goal, which was food. His experiments relate
Stimulus to Stimulus (SS). This means that, here, learning is the relation between
cues and expectation of an i n d i v i d u a l .
1 . 1 1 . 3 Social Learning Theory
When individuals learn from various observations, experiences, and from various other
means w i t h i n the social context, it is referred to as social learning.
Symbolic Processes Self Control
Verbal/mental images that aid Self efficacy that controls
in directing behavior behavior
Modeling Behavior
avior acquired b ob
and imitating othe
Fig. 1 . 1 1 . 3 a : Social Learning Model
The social learning theory combines the principles of both, classical as well as operant
conditioning.
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The four processes, t h r o u g h which social learning takes place, are:
Attention Processes
Retention Processes
Motor Reproduction Processes
Reinforcement Processes
1 . 1 2 Learning through Reinforcement
Reinforcement refers to strengthening the probability of a s i m i l a r behavior to occur, in a
s i m i l a r situation.
The four basic reinforcement strategies are:
Positive Reinforcement
Positive reinforcement is a reward given in return for the demonstration of desired
behavior. The most motivating form of positive reinforcement is money. For example,
when employees are paid bonus during festivals, it is a positive reinforcement.
Negative Reinforcement (or Avoidance)
Negative reinforcement, also known as 'avoidance learning', is a type of reinforcement
that takes place when a threatened negative consequence is withheld, when a certain
behavior occurs. For example, students study hard and appear for examinations in order
to avoid failing in the examinations.
Punishment
Punishment refers to creating an unpleasant situation to eliminate a behavior that is not
desired.
Extinction
Extinction is a type of reinforcement, and is carried out to reduce the n u m b e r of times
an undesirable behavior is repeated. Extinction helps in maintaining a desired behavior,
by affixing no specific consequence to it. For example, if a child is e x h i b i t i n g mischievous
behavior to g a i n attention and if attention is paid to the child, he/she may continue to do
so. On the other h a n d , if the child is ignored continuously, this behavior may reduce and
help in cultivating a desired behavior in the child.
1.13 From I n d i v i d u a l to Organizational Learning
Organizational learning is a process that enhances an organization's ability to acquire,
share, and use knowledge to respond and adapt to internal and external changes. This
would help in a t t a i n i n g organizational success. The three keywords in the definition are,
acquire, share, and use.
Knowledge acquisition is the process of drawing out information from the external
environment, as well as through intuitive framework. The next concept of knowledge
sharing engages in the distribution of knowledge to employees across an organization.
The final concept of knowledge use includes putting to use the knowledge that has
been gained (acquired), and shared, in a way that adds value to the organization as a
whole, along with its stakeholders.
1 . 1 4 Chapter Summary
OB is the study of i n d i v i d u a l s and groups in organizations.
M a na ge r s must study OB with the organizational context and the Human Relations
context of organizational behavior.
The four main functions of a manager are planning, organizing, controlling, and
directing.
According to Fred Luthans, all managers carry out four activities-traditional
management, communication, human resource management, and c o m m u n i c a t i o n .
Psychology, social psychology, sociology, and anthropology are the d i s c i p l i n e s that
contribute to the field of organizational behavior.
The model of organizational behavior comprises three levels-the individual level,
the g r o u p level, and the organization system level.
The challenges that organizations face today can be turned into opportunities by
managers, if they use the concepts of organizational behavior.
Learning is a relatively permanent change in behavior (or behavioral tendency)
that occurs as a result of a person's interaction with the environment.
The theories of learning are behavioristic, cognitive, and social.
Reinforcement encourages learning. Types of reinforcement are positive
reinforcement, negative reinforcement, punishment, and extinction.
Organizational learning improves an organization's capacity to acquire, share, and
use knowledge in ways that improves its survival and success.
Personality
and Values
02. Personality and Values eBook
2 . 1 Introduction
Have you noticed that w h i l e many people are quiet, shy, and laid-back, many others are
loud, aggressive, and energetic? Are particular job types meant for specific personality
types? The term personality is usually used when you refer to an individual's personal
characteristics, performance at work, accomplishments, and so on. However, this is a
narrow sense of viewing the concept of personality. The personality of a person does not
refer to the charm, smiling face, or positive attitude of the person toward life.
Personality actually refers to the growth and development of a person's psychological
system.
Personality shapes the behavior of employees at the workplace and also determines the
success of the i n d i v i d u a l , along with that of the organization. The concepts of personality
and values, are certainly related, but are not the same. Values are more about beliefs of
individuals, rather than their personality. Values require judgments, they lay a
foundation for the better understanding of people's attitudes. Values also influence
perceptions of employees at workplaces.
Define personality and explain the factors that determine an individual's
personality
Describe the Myers-Briggs Type Indicator (MBTI) personality framework
E x p l a i n the Big Five Personality Model and how it predicts behavior at work
Identify other personality traits relevant to OB
Define values and contrast terminal, and instrumental values
Identify the d o m i n a n t work values in today's workforce
Discuss Hofstede's framework for assessing cultures
02. Personality a n d Values eBook
2 . 2 W h a t is Personality?
The qualities that together make a person's distinctive character can be referred to as
'personality'. Gordon Allport defines personality as, "the dynamic organization
within the individual of those psychophysical systems that determine his
u n i q u e adjustments to his environment."
In s i m p l e words, personality is the sum total of ways in which an individual reacts to and
interacts with others. It represents the unique and uncommon characteristics of
individuals. Personality is usually seen as a habit of an i n d i v i d u a l that is then converted
into behavior, in response to various situations within an organization.
Different i n d i v i d u a l s demonstrate different types of characteristics when they encounter
similar situations. These characteristics can be referred to as Personality Traits.
Organizational behavior studies these traits and facilitates a much more efficient
selection of employees, by managers. It helps managers in j u d g i n g which candidate is
best suited for a particular job.
2.3 P e r s o n a l i t y Determinants
There are two main factors that determine an individual's personality within an
organization, namely, nature and nurture. These refer to heredity and environmental
factors, respectively.
Research in t h i s field indicates that the heredity of an individual and the environmental
factors are the main determinants of personality. This means that, while many
characteristics in an individual are inborn, many other traits are developed during
c o n t i n u o u s interactions with the environment.
This is represented in the following diagram.
Personality Determinants
Heredity Environmental Factors
I I I
Situational
Fig.

2.3a: Personality Determinants
2.3.1 Heredity
Heredity can be defined as the factors determined at conception, one's biological,
physiological, and inherent psychological makeup. An individual's genes are inherited
from his/her parents. Heredity, to a great extent determines an individual's overall
personality. Various studies conducted on identical twins (wherein both the individuals
were separated at birth), indicated that it was not just aspects like physical shape, eye
color, and skin tone those are influenced by heredity. Heredity also has a significant
impact on the attitudes, values, and decision making abilities of an individual.
2 . 3 . 2 En v ir on mental Factors
Though most of the physical characteristics of an i n d i v i d u a l are influenced by heredity,
an individual's personality is also influenced to a great extent by c o n t i n u o u s interactions
with the e n v i r o n m e n t . The following are important factors of the environment that also
build one's personality.
Cultural Factors
One of the factors that influence personality is the culture in which one is brought up.
Culture is the sum total of the learned behavior traits, which are expressed and shared
by members of a society. Every culture has its own set of norms, principles, and beliefs.
Individuals belonging to different cultures usually display different types of personality.
For example, individuals belonging to the western culture would have a different
personality from that of an i n d i v i d u a l who belongs to the I n d i a n culture.
Family Factors
While it is culture that generally determines what can be taught, it is an individual's
family that selects and interprets, and also hands-over the culture. Therefore, family has
the most important impact on an individual's personality. For example, a child who is
brought up in a cold and dull environment would face much more problem in adjusting
socially and emotionally, as compared to a child who is nurtured in a much more warm
and loving e n v i r o n m e n t .
Social Factors
I n d i v i d u a l s are nurtured in different environments. These environments leave an imprint
on an individual's personality. The culture of a society is formed by the values and
beliefs of the members of the social environment.
Situational Factors
Individuals come across a number of situations in their daily lives. People tend to
demonstrate different aspects of their behavior in different situations. For example,
when people go to religious places, they are composed and wear s i m p l e clothes. O n the
other hand, the same people would dress up in formal attires and d i s p l a y confidence in
t h e i r attitude while attending an interview. Thus, different situations bring out different
facets of an i n d i v i d u a l ' s personality.
2 . 4 The M y e r s - B r i g g s Type Indicator ( M B T I )
The Myers B r i g g s Type Indicator (MBTI) is a personality assessment instrument. It has
been designed by Katharine Briggs and Isabel Briggs Myers to measure the
psychological preferences of people and to understand how people perceive and make
decisions.
The various d i m e n s i o n s of the MBTI are:
Extraverted versus Introverted
While extraverted individuals are outgoing, sociable, and assertive, introverted
individuals are quiet and shy. Extroverts gain their energy from people and things
surrounding them. On the other hand, introverts gain their energy from their personal
view of thoughts and ideas. While introverts would be comfortable being alone,
extraverts would not be.
Sensing versus Intuitive
The sensing types have been observed to be practical and prefer routine and order,
whereas, the i n t u i t i v e types rely on non-conscious processes. They believe in looking at
the big picture. Sensing type individuals prefer to collect information in a systematic
and orderly manner. On the other hand, the intuitive types collect information
unsystematically. They believe and rely more on their thoughts and intuitions.
T h i n k i n g versus Feeling
Thinking types generally use reason and logic. On the other h a n d , the feeling types rely
on personal values and emotions. Thinking types use systematic collection of data while
making decisions. The feeling types however, think about how their decisions affect
others. They consider their personal values more than rational reasoning.
J u d g i n g versus Perceiving
The j u d g i n g type i n d i v i d u a l s wish to have control and prefer to resolve problems q u i c k l y .
They are also known to prefer their world to be systematic and structured. As opposed
to t h i s , the perceiving types are usually flexible and spontaneous.
The MBTI q u e s t i o n n a i r e merges the four pairs of personality traits into 16 definite types.
For example, ESTJ is one of the most observed types for managers, w h i c h indicates that
they are Extroverted, Sensing, Thinking, and Judging types. It must be noted that each
of these 16 types has their own strengths and weaknesses. However, these
characteristics suggest the preferences of individuals in organizations, and not
necessarily the way in w h i c h they behave, all the time.
2 . 5 The Big Five Personality Model
Human behavior researchers believe that there are five core personality traits. These
five traits put together, form The Big Five Personality Model.
Big Five Traits Significance Influences
Emotional Stability Thinks much more positively Enhanced job and life satisfaction
Not over-anxious Decreased stress levels
Extraversion Better people skills Better performance
Greater ability to influence Improved leadership
Much more expressive, Enhanced job and life satisfaction
emotionally
Openness More learning Training performance
Comparatively much more Improved leadership
creative Much more easily adjustable to
Better flexibility and self- change
determining
Agreeableness More liked by people Better performance
More compliant and Much more lower levels of
conforming divergent behavior
Conscientiousness Hard working and determined Better performance
Driven and disciplined Improved leadership
Much more organized and Longer tenure
planned
Table 2.Sa: The Big Five Traits
Note:
This is with reference to jobs requiring significant teamwork or frequent interpersonal
interactions.
The traits are:
Emotional Stability
Emotional stability measures the extent of an individual's ability to remain unaffected by
stress. Individuals with positive emotional stability are usually calm and confident.
Conversely, those with a negative score are usually anxious and depressed.
Extraversion
Extraversion concentrates on the comfort levels with relationships. Extraverts tend to be
talkative, sociable, assertive, and are considered to have positive emotions. Introverts
tend to be reserved, t i m i d , quiet, and solitary.
Openness to Experience
This dimension addresses the range of interests of a person and reflects the degree of
intellectual curiosity. Persons with a high score in this factor are inventive, open to a
variety of experiences and curious. On the other hand, people who score low on
openness to experience are consistent, cautious, and find comfort in f a m i l i a r situations.
Agreeableness
Agreeableness captures the inclination of a person to defer or s u b m i t to others. A person
who scores h i g h on agreeableness is k i n d , trustworthy, cooperative, and warm. A person
who scores low on agreeableness is cold, unkind, and disagreeable.
Conscientiousness
Conscientiousness measures reliability. People who score high on conscientiousness
have a tendency to display self-discipline, and are planned, rather than spontaneous.
Those who score low are easily distracted, careless, and tend to be u n r e l i a b l e .
2 . 6 Other Personality Traits Relevant To O B
Core Self-evaluation
This measures the degree to which a person likes or dislikes oneself. Those who score
h i g h on core self-evaluation are capable and confident. Those who have low scores tend
to have negative feelings and are low on confidence. People with positive core self
evaluation scores perform better than others.
Machiavellian ism
This factor, which has been named after Niccolo Machiavelli, indicates that those who
score h i g h in t h i s d i m e n s i o n maintain emotional distance and are practical.
Narcissism
Narcissism is characterized by an excessive sense of self-importance and a constant
craving for attention.
Self-monitoring
This factor refers to a person's ability to adjust to situational factors. Persons with a h i g h
score in self-monitoring are capable of behaving differently in different situations. They
have high sensitivity to external cues. However, persons with a low score cannot
d i s g u i s e themselves and hence, tend to display high behavioral consistency.
Risk Taking
Individuals differ in their willingness to take risks. Risk taking is a quality that affects
how much time and information managers need to take decisions. Whether risk taking is
right or wrong and the degree to which it must be taken depends on the i n d u s t r y and
department you work in.
Type A Personality
Such personalities are involved in a struggle to achieve more in less time and with less
information. They do not take into consideration factors such as the opposition's efforts
or other people.
Proactive Personality
Taking actions, taking initiatives, and identifying opportunities are characteristics of a
proactive personality. They create work situations in their favor. Certain actions of
proactive personalities could be positive or negative, depending on the organization, as
well as the s i t u a t i o n .
2 . 7 V a l u e s i n the Workplace
According to M. Rokeach, "Values can be defined as the basic convictions that a
specific mode of conduct or end-state of existence is personally or socially
preferable to an opposite or converse mode of conduct or end state of
existence."
Value, in other words, refers to the basic conviction of a person, on a moral or ethical
issue. For example, a person with strong family values may believe that families should
always eat meals together. Employees tend to perform well and attain better job
satisfaction when t h e i r values match with that of the organization. For example, it would
be difficult for a person who stresses on freedom to adjust in a work environment that
looks for conformity from its employees. A value system, on the other hand, is a
hierarchy of preferences.
Values are considered as the basis for studying attitudes, motivation, perception, job
satisfaction, etc. of people in their workplaces.
Thus, in today's organizations, managers seek candidates who not o n l y have the a b i l i t y
to perform job tasks, but also possess value systems that are well-matched with the
organization.
2 . 8 Types of V a l u e s
2 . 8 . 1 Terminal versus Instrumental Values
Milton Rokeach developed the Rokeach Value System (RVS). The RVS comprises
two sets of values. Each value includes 18 items each. One set of values, which is
terminal values, is also called desirable end-states. This refers to the goals that
individuals would like to attain in their lifetime. The other set is that of instrumental
values, which talks about the means of attaining terminal values. For example, the
instrumental value that can help in attaining the terminal value of true friendship is by
displaying responsibility. In the same way, to attain the terminal value of a
comfortable life, the instrumental value of being ambitious helps in the attainment.
Several studies indicate that people belonging to different groups have different RVS
values. It has been observed that individuals belonging to the same occupations d i s p l a y
the same type of values. For example, a study compared corporate executives,
members of the steelworkers' union, and members of a certain community activist
g r o u p . T h o u g h many values were similar, there were a lot of significant and considerable
differences. While the activists ranked the terminal value of equality as the most
important one, the executives and the union members ranked this value as twelfth and
thirteenth, respectively. For activists, the instrumental value of helpful was of second
highest importance. But for the other two groups, this value was at rank fourteen.
Table 2.8.la displays the mean value ranking of executives, union members, and
activists.
Executives Union Mernbers Activists
Terminal Instrumental Terminal Instrumental Terminal Instrumental
1. Self-respect 1. Honest 1. Family 1. Responsible 1. Equality 1. Honest
security
2. Family security 2. Responsible 2. Freedom 2. Honest 2. A world of 2. Helpful
peace
3. Freedom 3. Capable 3. Happiness 3. Courageous 3. Family 3. Courageous
security
4. A sense of 4. Ambitious 4. Self- 4. Independent 4. Self- 4. Responsible
accomplishment respect respect
5. Happiness 5. Independent 5. Mature love 5. Capable 5. Freedom 5. Capable
Table 2 . 8 . l a : Mean Value Ranking of Executives, Union Members, and Activists*
(*Top five only)
Source: Based on W. C. Frederick and J. Weber, "The Values of Corporate Managers and Their Critics: An
Empirical Description and Normative Implications," in W. C Frederick and L. E. Preston (eds.), Business
Ethics: Research Issues and Empirical Studies (Greenwich, CT: JAI Press, 1 9 9 0 ) , pp. 123-144.
2.8.2 Generational Values
Researchers have combined different analyses of work values into groups. These
analyses try to include particular work values of the different cohorts or generations.
Workforce of the U.S., for example, has been classified into four cohorts, namely,
Veterans (those who entered the workforce in the 1 9 5 0 s or the early 1960s), Boomers
(those who entered the workforce between 1965 and 1985), Xers (those who entered
the workforce between 1985 and 2000) and the Nexters (those who entered the
workforce after 2 0 0 0 ) . These cohorts have been found to have different work values.
The I n d i a n workforce too can be analyzed with regard to similar cohorts, as displayed in
Table 2.8.2a. While referring to this, one needs to depend on intuitive framework too.
It should be noted that values do change across generations, and you can gain some
useful i n t u i t i o n s from analyzing values in this way.
Entered the Approximate

Cohort Dominant Work Values
Workforce Current Age
Socialists 1 9 5 0 s to the 55+ Hardworking, conservative, conforming,
late 1980s loyalty to the organization, e m p h a s i s on a
comfortable and secure life
Liberals Early 1990s Mid 40s to Success, achievement, a m b i t i o n , d i s l i k e of
to 2000 mid sos authority, loyalty to career
Xers 2000-2005 Late 20s to Work-life balance, d i s l i k e of rules,
early 40s confident, want financial success, self-
reliant but team-oriented, loyalty to both
self and relationships
Millennials 2 0 0 5 to Early 20s Comfortable with technology,
present entrepreneurial, want to get rich quickly,
high sense of entitlement
Table 2.8.2a: Dominant Work Values in Today's Workforce
Source: Organizational Behavior, 14th Edition - Stephen P. Robbins, Timothy A. Judge, Neharika Vohra
(Page 1 3 9 )
2 . 9 L i n k i n g a n I n d i v i d u a l ' s Personality a n d V a l u e s to the
Workplace
2.9.1 Person-job Fit
The efforts taken to match the demands of a job with a person's personality and
characteristics are best articulated in John Holland's Person-job Fit Theory. Holland
has introduced six personality types and also has put forward that an employee's job
satisfaction and the inclination toward leaving a job depends on how well the person's
personality matches with the job.
Type Personality Characteristics Congruent Occupations
Realistic: Prefers physical Shy, genuine, persistent, stable, Mechanic, drill press
activities that require skill, conforming, practical operator, assembly-line
strength, and coordination worker farmer
Investigative: Prefers activities Analytical, original, curious, Biologist, economist,
that involve thinking, independent mathematician, news
organization, and understanding reporter
Social: Prefers activities that Social worker, teacher,
involve helping and developing Sociable, friendly, cooperative, counselor, c l i n i c a l
others understanding psychologist
Conventional: Prefers rule-
regulated, orderly, and Conforming, efficient, practical, Accountant corporate
unambiguous activities unimaginative, inflexible manager, bank teller, filer
clerk
Enterprising: Prefers verbal Self-confident, ambitious,
activities in which there are energetic, domineering Lawyer, real estate agent,
opportunities to influence others public relations specialist,
and attain power small business manager
Artistic: Prefers unambiguous Imaginative, disorderly, idealistic, Painter, m u s i c i a n , writer,
and unsystematic activities that emotional, impractical interior decorator
allow creative expression
Table 2 . 9 . l a : Holland's Typology of Personality and Congruent Occupations
The key points from the model are:
Essential differences do appear in the personality of i n d i v i d u a l s .
There are different types of jobs.
People who can match their personality with their jobs are more likely to be
satisfied, and are less likely to resign.
Person-organization Fit
If an organization faces a d y n a m i c environment, it may face c h a n g e s that may require
employees to change tasks and move between teams. Managers consider it important
that the personality of the employee fits with the organization's culture than the
employee fitting into the job specifications.
A couple of decades ago, the main concern of organizations was to e m p l o y people who
matched t h e i r job specifications. Today, though the similar concern exists, an a d d i t i o n a l
concern is to know how well an individual would match up to the organization's culture.
Managers in today's organizations focus more on the flexibility of the employees rather
than t h e i r a b i l i t y to perform a specific job.
2 . 1 0 V a l u e s across Cultures
Hofstede's Framework for Assessing Cultures
Geert Hofstede put forth a framework for assessing variations among cultures. He found
that employees vary on five value dimensions of national culture. In the most recent
study, countries are ranked on six dimensions, which are:
Power Distance
The degree to w h i c h less powerful members accept that power in an organization
or institution is distributed unequally. A high rating on power distance indicates
that large inequalities of wealth and power are being tolerated. On the other h a n d ,
a low score indicates that more emphasis has been given to equality and
opportunity.
I n d i v i d u a l i s m versus Collectivism
This d i m e n s i o n talks about the extent to which people are incorporated in a g r o u p .
Individualism is the degree to which people prefer to act as i n d i v i d u a l s than being
a group member. In collectivism, people expect their g r o u p members to look after
them.
Masculinity versus Femininity
This dimension emphasizes on the distribution of work among genders. A high
rating in masculinity means that the society considers males as the dominating
g e n d e r and has separate roles for males and females. A high rating in femininity
means that the society sees hardly any difference while assigning roles between
males and females.
02. Personality a n d Values eBook
Uncertainty Avoidance
This relates to the extent of anxiety that members feel when faced with an
unknown or uncertain situation. A high score in this dimension indicates cultures
where members are anxious about uncertainty and ambiguity. A low score in this
dimension would mean that the members of such cultures are lesser rule-oriented
and are ready to take risks. They also accept changes without m u c h reluctance.
Long-term versus Short-term Orientation
People belonging to a culture with a long-term orientation look to the future, value
persistence, and believe in saving as opposed to people belonging to a short-term
oriented society, which emphasizes more on here and now. Also, such societies
accept change without much resistance.
Indulgence versus Restraint
This is the most recent a d d it i o n to other dimensions. Indulgence stresses on the
extent to which it is alright for people to enjoy life and have fun. On the other
hand, restraint refers to the degree to which societal standards and norms govern
the satisfaction of basic human desires.
The q u a l i t i e s that together make a person's distinctive character can be referred to
as personality.
The Myers-Briggs Type Indicator (MBTI) is a personality assessment instrument,
to measure the psychological preferences of people and to understand how people
perceive and make decisions.
The Big Five Model is a personality assessment model that taps five basic
dimensions.
Attributes that are powerful predictors of behavior are Core Self-Evaluation,
Machiavellianism, Narcissism, Self-Monitoring, Risk Taking, Type A Personality,
and Proactive Personality.
Value refers to the basic conviction of a person, on a moral or ethical issue.
Today's managers take into consideration the person-job fit and the person
organization fit while selecting a person to work in their organizations, and not
only the requirements of the job.
Geert Hofstede put forth a framework for assessing variations among cultures. He
found that employees vary on a few value dimensions of national c u l t u r e .
Recent studies indicate that countries are ranked on six d i m e n s i o n s for assessing
cultures. These are power distance, individualism versus collectivism, masculinity
versus femininity, uncertainty avoidance, long-term versus short-term orientation,
and i n d u l g e n c e versus restraint.
Perception a n d
Individual
Decision Making
03. Perception and I n d i v i d u a l Decision M a k i n g eBook
3 . 1 Introduction
The real world is the same for all of us. But, it is not interpreted or perceived in the
same way. The interpretation differs from one person to another. What is considered as
a favorable and satisfactory situation to one person may seem to be a problem for
another person. It is due to this difference that people react differently in different
situations. Perception, in a way, guides our decisions.
Man ag e r s in organizations perform activities and take decisions based on their
perception. The entire process of selection of employees and their a p p r a i sa l s too is
influenced by the manager's perception.
Every organization has individuals with varied perceptions, working together to attain
the organization's goals. It is important for managers to understand the perceptions of
different employees as these perceptions directly affect their behavior at work.
Define perception and list the factors that influence perception
E x p l a i n the attribution theory
Describe the common perceptual distortions
Express how to improve perceptions
Describe the Johari Window
Discuss about decision making in organizations
Describe the common biases and errors in decision making
Explain how to improve creativity in decision making
03. Perception and I n d i v i d u a l Decision Making eBook
3 . 2 W h a t is Perception?
impressions to give meaning to their environment. An individual's perception is very
closely related to his/her personality. Every individual perceives or comprehends in a
different way. What is perceived may be different from reality. It is the way in which
people interpret various situations that makes them different from one another.
3.3 Factors That Influence Perception
Individuals may look at the very same thing but they may perceive it differently. There
are a n u m b e r of factors that may shape up, as well as alter the way in w h i c h a t h i n g or
situation is perceived. These factors can exist in the perceiver or in the object. It can
also be in the situation or in the environment of the circumstances in which the
perception is made. These factors are represented in the d i a g r a m below.
Based on the perceiver
Attitudes, Motives,
Interests, Experience,
Expectations
Based on the target
Novelty, Motion,
Sounds, Size, Background,
Proximity, Similarity
Fig. 3 . 3 a : Factors That Influence Perception
While looking at a target, your judgment of the object is influenced to a great extent by
your personal characteristics. A few characteristics, such as attitudes, motives, and
interests of the perceiver, have an influence on perception. For example, if you expect
teachers to be strict, young people to be carefree, etc. you may perceive them to be so,
without even considering their actual traits.
Factors in the target are also important. Loud people are usually noticeable in a crowd,
and so are individuals with peculiar characteristics. The main reason for this is,
individuals usually do not look at objects in isolation. The relationship between the
target and its environment also influences perception. There is also a tendency for
persons to g r o u p s i m i l a r t h i n g s or closely related things together.
The background or the environment also influences an individual's perception. The time
at which an object or event is perceived can influence the perceiver's attention. In the
same way, location, heat, light, and many other situational factors can also have an
impact on perception. For example, at a nightclub, a young guest who is dressed in
flashy clothing may not catch your attention. However, an individual dressed up in the
same way at your workplace may catch your attention. Here, as you can see, neither the
perceiver nor the target has changed. The only change was in the situation of the event.
3 . 4 Attribution Theory
Human beings try to attach meaning to their own behavior and also to that of others
through beliefs, intentions, and thoughts. People try to explain why certain things are
the way they are and why individuals behave in the way they do. An individual's
perception of another individual's actions is a result of his/her assumptions about the
internal state of that person.
People j u d g e differently depending on the meaning they attach to different behaviors.
Behaviors are considered to be caused either internally or externally. Internally caused
behaviors are behaviors that are believed to be in control of the i n d i v i d u a l . For example,
if an employee is late for work, on a daily basis, others might attribute it to poor time
management. This is considered to be an internal attribution. In externally caused
behaviors, on the other hand, it is imagined that a particular situation forced an
i n d i v i d u a l to behave in the way he/she d i d . For example, if an employee is late for work,
d u e to heavy rains, it is perceived that it is the heavy rains that caused the person to be
late for work. T h i s is an external attribution.
Individual behavior
Distinctiveness Consensus Consistency
Fig. 3.4a: Attribution Theory
Kelly's p o p u l a r model of attribution addresses the following three important elements:
Distinctiveness
Distinctiveness refers to the degree to which individuals behave in the same way in
different situations.
Consensus
The extent to w h i c h persons behave in the same way in same situations is referred to as
consensus.
Consistency
This element concentrates on to what degree individuals behave in the same way or
consistently over t i m e .
3.5 Common Perceptual Distortions
It has also been found that errors and biases tend to distort a t t r i b u t i o n s . The following
are some of the most common attribution errors:
Fundamental Attribution Error
This is an attribution error that takes place because of underestimating or u n d e r v a l u i n g
situational/external factors and overvaluing internal factors. For example, if a student
fails to complete homework given by the teacher, the teacher considers that the student
was lazy, rather than considering the situation that the student was actually i n .
Self-serving Bias
In t h i s attribution error, i n d i v i d u a l s attribute favorable or positive conditions and success
to internal factors. On the other hand, unfavorable and negative conditions are
attributed to external factors. For example, if an employee gets promoted, the employee
feels that it is because of his/her ability and hard work. On the other hand, if the
employee does not get a promotion, the employee feels that it is because the manager
d i s l i k e s h i m or her.
Other than internal and external factors that influence perceptions, there are certain
other common barriers or some common perceptual distortions. They are:
Stereotyping
Stereotyping/Prototyping refers to a perceptual distortion, wherein an individual
already has a perception about a particular group and judges a person belonging
to the g r o u p on the basis that perception.
Halo Effect
In this common perceptual error, people draw conclusions on the basis of a
person's sing le noticeable characteristic, such as appearance, humor, etc.
Selective Perception
Selective perception refers to interpreting in a selective way on the basis of one's
interests, beliefs, experiences, and so on.
Contrast Effects
When an individual compares two things that are close to one another, while
making a decision, rather than on the basis of set standards, it refers to contrast
effects.
Self-fulfilling Prophecy
This attribution error stresses on the point that people's expectations are related
to the actual performances. For example, when a manager feels that he/she has a
great team to work with, and expects a high level of performance from them, it is
likely that they would meet the manager's expectations.
03. Perception a n d Individual Decision Making eBook
3.6 Improving Perceptions
The three essentially effective ways to improve perceptions of i n d i v i d u a l s would be b y :
Improving awareness of perceptual biases
Improving self-awareness
Engaging in m e a n i n g f u l interactions
3.6.1 Improving Awareness of Perceptual Biases
One of the effective ways to reduce perceptual biases and let them not effect decisions
is to be aware that biases exist.
3 . 6 . 2 Improving Self-awareness
Another efficient way is to become aware of one's personal biases while making
decisions and also understand how these biases affect their behaviors. Knowing
oneself, that is, knowing your own beliefs and values surely helps in reducing
perceptual biases. The Johari Window, which is explained below, h e l p s in improving self
awareness.
The Johari Window
In the year 1955, Joseph Luft and Harrington Ingham created a model called the
Johari Window. This helps in improving your relationship with yourself and with others.
The main aim of the Johari Window is to increase the open area and lessen the blind,
h i d d e n , and u n k n o w n areas.
Feedback
Known to Unknown to
self self
Known to
others

Ill
ii:
ci
Unknown to
others
Fig. 3 . 6 . 2 a : The Johari Window
03. Perception a n d Individual Decision M a k i n g eBook
Open area
This area symbolizes the information about oneself, which is known to you as well
as known to others.
B l i n d area
That information about you that is known to others, but not to yourself is
represented by the blind area.
H i d d e n area
This refers to the information about you, which is only known to you and not to
others.
Unknown area
The u n k n o w n area represents your values and beliefs those are u n k n o w n to both,
you, as well as others.
3 . 6 . 3 E n g a g i n g in Meaningful Interaction
The Johari Window believes in communication, but self-awareness and mutual
understanding can also improve through meaningful interaction. This can be stated
based on the concept of contact hypothesis.
Contact Hypothesis
This is a theory that states that the more you interact with someone, the lesser
perceptually biased you would be toward that individual. Meaningful interaction thus, is
surely an effective way to reduce perceptual biases, as it helps in empathizing with
others and understanding the situation they are in.
3.7 The Link between Perception and Individual Decision
Making
Individuals in organizations make various decisions. They also need to make choices
from the various options. Managers at various levels need to make decisions d u r i n g t h e i r
day-to-day activities within an organization. Individuals have to decide as to what
actions need to be taken to meet a request by the boss. Also, today, organizations are
empowering their non-managerial employees by vesting in them the decision making
authority, which was earlier only a part of a manager's functions. Thus, individual
decision making is of great importance within an organization. These decisions are
influenced majorly by perception.
Decision making takes place as a response to difficult situations in organizations. This
means that decision making occurs when there is incongruity between the current state
and the desired state of a situation. However, not everybody views a particular situation
as a ' p r o b l e m ' . For example, while one manager may view a 5 percent reduction in sales
as a 'problem', a manager of another department may view this decline as not so
important or as acceptable. This indicates that the awareness that a 'problem' exists and
that a 'decision' needs to be made depends on the perception of i n d i v i d u a l s .
While making decisions, it is important for individuals to interpret and assess
information. Data would be available from a number of resources. But, which of t h i s is
relevant to the problem in hand, would depend on the perception of the decision maker.
This also means that and the decision maker's perception would have a direct impact on
the final outcome. It must also be kept in mind that during the overall decision making
process, there are common perceptual distortions and biases too. These influence a
decision maker's perceptions, and in turn, also influence the decisions m a d e .
3.8 Decision M a k i n g in Organizations
Management students are usually educated about the rational d ec i s i o n making models,
as a decision maker is always thought to be rational. Explained below are the three
types of decision m a k i n g in organizations
Rational Decision Making
The rational decision making model has six steps that aid in taking the best decisions in
organizations. This model relies on a few assumptions, like there is complete information
a v a i l a b l e with the decision maker; there is no bias from the side of the decision maker
w h i l e taking the decision, and so on.
The following are the steps involved in the rational decision making model.
[ 1. Define the probelm

]
2. Identify the decision criteria
3 . Allocate weights to the criteria
4. Develop the alternatives
5. Evaluate the alternatives
6. Select the best alternative
Fig. 3.Sa: Steps in the Rational Decision Making Model
However, it must be understood that in real life situations it is not always possible to
follow the rational model, as a decision maker may find an acceptable solution to a
problem being faced, rather than adopting an optimal solution. In the book, J u d g m e n t
in Managerial Decision Making, 3rd Edition (New York; Wiley, 1994), an expert in
decision making s t a t e s that, "Most significant decisions are made by judgment,
rather than by a defined prescriptive model."
Bounded Rationality
Human beings have limited information processing capability. This makes it difficult to
comprehend information and select and decide on an optimal solution. M a n y a times, it
is not easy to translate certain problems into the framework of the rational decision
making model.
Mostly, individuals operate within the confines of bounded rationality. Bounded
rationality is a process, wherein decisions are made by constructing simple models that
take out the essential features of problems without concentrating on the complexity of
the issues.
Intuition
This is the least rational way of making a decision in any organization, because it is a
non-conscious process, which has been created from distilled experiences. Earlier,
relying on intuition for decision making was considered as ineffective. Today, it is also
taken as a way to improve decision making, in certain situations. But one must not rely
too m u c h on i n t u i t i o n as it is not quantifiable and makes it difficult to know whether the
instinct is r i g h t or wrong.
3.9 Common Biases and Errors in Decision Making
The most common biases in decision making are:
Overconfidence Bias
Persons with weak intellectual and interpersonal abilities are most likely to overrate t h e i r
performances as compared to others. This also means that managers and employees
who are more knowledgeable about a particular issue are less likely to be overconfident
about their a b i l i t i e s .
Anchoring Bias
In this bias, an individual is too dependent on one single trait or on the first piece of
information offered w h i l e making decisions.
Confirmation Bias
Also called as confirmatory bias, this bias takes place when individuals tend to favor
information that favors their beliefs and confirms their hypothesis.
Availability Bias
The availability bias refers to the tendency of people to make judgments and make
decisions based on information that is recent, memorable, and readily available. The
p r o b a b i l i t y of events is decided on the basis of how easy it is to t h i n k of examples.
Escalation of C o m m i t m e n t
In spite of the availability of negative information, when an individual displays an
increased commitment to a decision that has been previously taken, it is a sign of
'escalation of commitment'.
Human B e h a v i o r i n Organization
Randomness Error
The randomness error occurs because of the tendency of i n d i v i d u a l s to believe that they
can g i v e the right prediction of the outcome of random events.
Risk Aversion
When an individual prefers a sure thing over a riskier outcome, it is considered as risk
aversion. It must be noted that though the riskier outcome may have a higher reward,
s t i l l the i n d i v i d u a l prefers the sure gain over it.
H i n d s i g h t Bias
In certain situations, the outcome of an event is already known and has been accurately
predicted. Still an individual has a tendency to believe falsely. This is referred to as
' H i n d s i g h t bias'.
3 . 1 0 I n f l u e n c e s on Decision M a k i n g
There are certain factors that affect the overall decision making of individuals in
organizations. The two main factors are individual differences and organizational
constraints.
3.10.1 Individual Differences
Decision making in organizations usually involves bounded rationality, many common
perceptual distortions and biases, as well as insight. A few i n d i v i d u a l differences result in
divergence from the process of rational decision making, those are as explained below.
Personality
Personality influences individual decision making. Certain angles of conscientiousness
also affect escalation of commitment. People, who are achievement-oriented, usually
escalate t h e i r commitment to fulfill a task much more effectively than others. They also
hate to fail. On the other hand, dutiful people are more likely to stick to performing
tasks that they are good at.
Gender
Considerable a m o u n t of study has found that women spend much more time on t h i n k i n g
and analyzing than men. Women usually overanalyze a problem. This increases the
attention paid to an issue. But at the same time it also makes it difficult to solve
problems and increase regret over past decisions. This may also lead to depression.
Women are m u c h more likely to develop depression than men.
Mental Ability
People with higher levels of mental ability are good at processing information. They
solve problems faster and much more accurately than others. Mental ability usually
facilitates people in avoiding common perceptual errors and biases. However,
intelligence matters, too. Once they are informed or warned about the possible decision
making errors, they learn faster and avoid them too.
3 . 1 0 . 2 Organizational Constraints
Even organizations can affect decision making. The organizational constraints that can
affect decision making in organizations are:
Performance Evaluation
Managers are affected and influenced by the grounds on which they are evaluated in an
organization. For example, a few division managers may have a view that the groups
that report to them are working well, if they do not receive any negative comments from
the g r o u p members. This may result in the group leaders trying t h e i r best to ensure that
no negative comment reaches the division manager.
Reward Systems
The reward systems have an impact on individual decision making as it puts forward
what options would result in better personal payoffs.
Formal Regulations
Managers in many jobs need to make decisions only from the a v a i l a b l e decision choices.
This is a p p l i c a b l e to many organizations because there are certain rules and policies that
expect employees to act in a specific or planned manner. This in t u r n , results in limited
decision choices.
System-imposed Time Constraints
In organizations, there are usually deadlines for important decisions that need to be
made. This makes it difficult for managers to collect the necessary information that they
require to take the best possible decision.
Historical Precedents
Decisions made in the past are always used as a model by managers while making
current decisions. For example, in most organizations, it is seen that it is the previous
year's budget that determines the current year's budget. This indicates that choices
made in the past have a great influence on the decisions made by managers, today.
3.11 Ethics i n Decision Making
Considering ethics is also important in the process of decision making in organizations.
There are m a i n l y three ways to frame decisions in an ethical m a n n e r .
The first measure for taking decisions ethically is that of utilitarianism. Under this,
decisions are made by considering the outcomes. This view concentrates more on
efficiency and the overall productivity. A negative aspect of utilitarianism is that it can
s i d e l i n e the rights of some i n d i v i d u a l s .
One more measure that would help in taking decisions in an ethical manner is by
stressing on the rights of i n d i v i d u a l s . This measure would protect i n d i v i d u a l s from any
injury. A negative aspect, however, could be that it may create a judicial environment
and it may deter the overall productivity and efficiency.
The third measure is to establish and implement rules and policies in a way that it
ensures justice to all the individuals. Though this criterion may represent the less
powerful people in an organization, it may also reduce risk t a k i n g , innovation, and the
overall productivity.
3 . 1 2 I m p r o v i n g Creativity in Decision Making
Man ag e r s of today's organizations surely find it useful to put into practice the rational
decision making model as it helps in improving the decisions being taken. But as a
manager, it is important for you to not only be rational, but also be creative and look
into the aspect of novelty too.
Generation of new ideas, innovations and creativity are all important to the decision
making process. These help in empathizing with others and at the same time to spot
problems that other people usually do not notice.
The Three-component Model of Creativity addresses this very aspect of how to bring
about creativity in decision making in organizations.
3 . 1 2 . 1 The Three-component Model of Creativity
F i g . 3 . 1 2 . l a : The Three-component Model of Creativity
Source: Copyright 1997, by The Regents of the University of California; Organizational Behavior, 14"
Edition - Stephen P. Robbins, Timothy A. Judge, Neharika Vohra (179)
Expertise
This can be considered as the base for creativity. The potential of i n d i v i d u a l s is certainly
further improved when they have the ability, knowledge, and expertise in their
respective fields.
Creative Th i n k ing Skills
This component i n c l u d e s personality characteristics associated with creativity, the a b i l i t y
to use analogies and to think differently about things that are usual. Various studies
have found that positive moods help in enhancing creativity, in comparison with other
moods.
Intrinsic Task Motivation
When people work on something because they find it interesting, challenging, and
personally motivating, it surely helps in bringing forth creative ideas. This very aspect is
called as intrinsic task motivation. It is what converts creativity potential into real and
actual creative ideas.
impressions to g i v e meaning to their environment.
An individual's perception is influenced by various factors in the perceiver, the
situation, and the target.
Kelly's popular model of attribution addresses three important elements:
distinctiveness, consensus, and consistency.
Errors and biases, such as fundamental attribution error and self-serving bias,
tend to distort attributions.
Stereotyping, halo effect, selective perception, contrast effects and self-fulfilling
prophecy, are the most common perceptual distortions.
The three essentially effective ways to improve perceptions of i n d i v i d u a l s would be
by: improving awareness of perceptual biases, carrying out meaningful
interactions, and improving self-awareness.
The Johari Window is a model that helps in improving your relationship with
yourself and with others.
The rational decision making model has six steps that aid in taking the best
decisions in organizations.
The most common biases in decision making are overconfidence bias, anchoring
bias, confirmation bias, and availability bias, escalation of commitment,
randomness error, risk aversion, and hindsight bias.
The Three-component Model of Creativity addresses the aspect of bringing about
creativity in d ec i s i o n making in organizations.
Motivation:
Concepts a n d
Applications
04. Motivation: Concepts and Applications eBook
4 . 1 Introduction
Motivation, which is one of the most researched areas in organizational behavior, is an
important function of managers in every organization. When managers give out orders
and directions, they have to make sure that the employees have the very interest to
follow them and perform the various tasks.
Thus, motivation of employees is of great importance to every m a n a g e m e n t . T h i s can be
ensured by u n d e r s t a n d i n g the needs of the employees and providing them with financial
as well as non-financial incentives. Motivation also influences the overall performance
and a i d s in s h a p i n g behavior of individuals in the organizational setting.
Motivation is certainly a complex aspect in any organization. The main reason is that,
the needs and expectations of employees change from time to time. Also, an
organization has certain aims in the form of organizational g o a l s . Motivation, therefore,
d e m a n d s an a m a l g a m a t i o n of the individual and organizational goals.
Successful organizations have adapted themselves in such a way that they encourage
and motivate their employees to perform better and at the same time increase the
overall productivity. This in turn, helps the organizations to meet their goals while
ensuring to have a positive influence on the lives of their employees.
Define motivation
Describe the content and process types of motivation theories
Discuss how to motivate employees through job design
Identify the m a i n ways through which jobs can be redesigned
Explain how rewards can be used to motivate employees
Discuss about performance management and performance a p p r a i s a l s
4 . 2 W h a t is M o t i v a t i o n ?
Stephen P. Robbins has defined motivation as, "the processes that account for an
individual's intensity, direction, and persistence of effort toward attaining a
goal." According to him, the three key elements in the definition are intensity, direction
and persistence. Intensity describes how hard a person tries. Direction refers to an
i n d i v i d u a l ' s choice when presented with a number of possible alternatives. Persistence
measures how long a person can maintain effort.
4 . 3 Types of Motivation Theories
4 . 3 . 1 Content Theories
Content theories deal with i n d i v i d u a l needs and act as a contextual framework in d e a l i n g
with various individuals. Content theories have been made from the 'content'
perspective and they concentrate on 'why human behavior changes with t i m e . '
Content
Theories
David
Maslow's Herzberg's
Alderfer's ERG McClelland's
Hierarchy of Two-factor
Theory Acquired Needs
Needs Theory theory
Theor
Fig. 4.3. l a : Types of Content Theories
Maslow's Hierarchy of Needs Theory
The Hierarchy of Needs Theory is a theory that was proposed by Abraham Maslow
in 1943. This theory is represented as a pyramid with the most basic needs at the
bottom of the pyramid and the self-actualization needs at the top. Through this theory
Maslow suggested that the most basic levels of needs must be fulfilled, o n l y then would
an i n d i v i d u a l desire to accomplish the needs of the subsequent levels.
Esteem Needs
...
Lower-level
needs
Fig. 4.3. l b : Maslow's Hierarchy of Needs
The five levels presented in the pyramid are:
Physiological Needs
This level represents the physical requirements of every individual-food, water,
shelter, and the need for biological maintenance.
Safety
The next level of requirements for human beings, according to Maslow, is physical
and economic security, that is, protection against any harm.
Social Needs
It is at t h i s level that the higher order needs of humans beg i n . These needs refer
to the desire of individuals to be accepted by others. A social need is associated
with the need for belongingness.
Esteem Needs
The need to feel respected, acquiring status, recognition and attention are the
main needs of t h i s level.
Self-actualization
This is the final stage or level in Maslow's hierarchy of needs. This level includes
realization of one's full potential, growth, and self-fulfillment.
Alderfer's ERG Theory
Alderfer's ERG Theory is considered to be more flexible than Abraham Maslow's
Hierarchy of N ee d s Theory.
The ERG Theory addresses three elements, which are:
Existence (E)
This element addresses the physiological needs of individuals like that of food,
water, and shelter; and also physical working conditions along with job security
needs.
Relatedness ( R )
Relatedness needs are fulfilled through significant interpersonal and social
r e l a t i o n s h i p s . This also includes a need for acceptance.
Growth (G)
This dimension highlights the desire for self-esteem as well as self-actualization.
This is attained through one's personal development.
This theory proposes that a human being can have more t h a n one need activated at the
same time, as opposed to the hierarchy of needs theory. The main aspect which
differentiates this theory from Abraham Maslow's 'Hierarchy of Needs Theory' is that,
there is no rig id hierarchy in which a lower level need must be satisfied before an
i n d i v i d u a l moves to the next level of needs.
Acquired Needs Theory
This theory was proposed by David McClelland and his associates. The Acquired Needs
Theory concentrates on three learned needs:
Need for Achievement (nAch)
Individuals with a high need for achievement avoid situations that are of both,
high risk or low risk. They do not like to work in low risk situations as they believe
that such achievements are not genuine. They usually work in a h i g h p r o b a b i l i t y of
success (a minimum of 50/o). Achievers usually ask for continuous feedback to
ensure t h e i r performance is on track.
Need for Affiliation (nAff}
U n d e r t h i s element, people have a high need for affiliation, desire for friendly and
h a r m o n i o u s interpersonal relationships and also a need to feel accepted by people.
Such individuals tend to do well in customer service related jobs and jobs that
require personal interaction.
Need for Power (nPow)
Power could be of two types-personal and institutional. The need for power
involves making other people behave in a way that they usually would not. This
need reflects a person's desire to influence, train, and encourage others to
achieve.
Herzberg's Two-factor Theory
Fredrick Herzberg conducted studies to understand the attitude and behavior of
employees in organizations. He carried out the studies to have a better u n d e r s t a n d i n g of
the factors that brought about both-satisfaction and dissatisfaction to the employees.
Herzberg developed the motivation-hygiene theory to explain this. He called the
d issatisfiers as hygiene factors, and the satisfiers as motivators. The table below
gives a list of the motivators and the hygiene factors, according to the theory.
Hygiene Factors Motivators
Company policy Achievement
Supervision Recognition
Relationship with boss Work itself
Work conditions Responsibility
Salary Advancement
Relationship with peers Growth
. .
Table 4 . 3 . 1 a : Herzberg's Hygiene Factors and Motivators
Hygiene factors are necessary to avoid dissatisfaction among employees. If these
conditions are present in an organization, they may not motivate the employees to
perform better. But if they do not exist, it will certainly lead to dissatisfaction.
On the other hand, the motivators, as the name suggests, are required to ensure that
the employees are motivated. If these conditions are not present in an organization, it is
considered that the job is not satisfying.
4 . 3 . 2 Process Theories
Process theories are concerned with the thought processes of i n d i v i d u a l s , which change
t h e i r behavior over t i m e . It deals with the process of motivation. Here, the concentration
is on how behavior changes and the process theories have been made with a process
perspective.
Equity Theory Expectancy Theory Goal-setting Theory
Fig. 4 . 3 . 2 a : Types of Process Theories
Equity Theory
When the results of an examination are out, students tend to compare their scores with
others. Why? This very a n g l e has been discussed in the Equity Theory.
The Equity Theory was introduced by J. Stacy Adams in 1963. The basic foundation of
t h i s theory, according to him, is social comparison. In this comparison, the keyword is
fairness. As per the Equity Theory, individuals compare their inputs and outcomes to
that of others and then respond in ways to eliminate inequities. Employees might
compare themselves to friends, neighbors, and colleagues. Individuals may also
compare t h e i r current jobs with their previous ones. The theory also states that people
are motivated to behave in situations that maintain equity.
The basic equity c o m p a r i so n is summarized in Fig. 4 . 3 . 2 b .
Equity Theory
Ratio Con1parisons* Perception
Inequity due to being underrewarded
0 0
Equity
Inequity due to being overrewarded
0 0
*Wher-e - represents the employee; and - r-epresents relevant others
IA IB
Fig. 4 . 3 . 2 b : Basic Equity Comparison
Source: Organizational Behavior, 14th Edition- Stephen P. Robbins, Timothy A. Judge, Neharika Vohra
(Page 2 1 1 )
Based on the theory, employees who perceive inequity tend to make one of the following
choices:
Change their inputs (may put in less efforts in their jobs, if paid less, or if
overpaid).
Change their outcomes (individuals who are paid on the basis of piece-rate, can
increase t h e i r pays by producing a higher quantity of units of low q u a l i t y ) .
Distort perceptions of self ("I used to think that I work at an average pace, but
now I realize that I work much harder than everyone else at my workplace.").
Distort perceptions of others ("Anne's job is not as desirable as I t h o u g h t . " ) .
Choose a different referent ("I may not earn as much as my brother-in-law, but I
am d o i n g much better than my father did, when he was of my a g e . " ) .
Leave the field (quitting of j o b ) .
Recent researches have expanded the study of equity. Earlier, Equity Theory
concentrated on distributive justice, which refers to an employee's perceived fairness
of d i s t r i b u t i o n of rewards among the individuals. But now, the importance is shifting to
the concept of organizational justice, which is a larger perception of what is fair in the
workplace. Another view of organizational justice is that justice is multifaceted. As per
d i s t r i b u t i v e justice, how much you get paid with regards to what you perceive, should be
paid to you. T h i s is very important. But how you get paid is of e q u a l importance. This is
why procedural justice has also been included in the model of o r g a n i z a t i o n a l justice,
which is 'the perceived fairness of the process used to determine outcome'. A recent
add it ion to this model is that of interactional justice. This refers to the degree to
w h i c h i n d i v i d u a l s feel that they are treated with dignity, concern, and respect.
The diagram below represents the model of Organizational Justice and summarizes
these d i m e n s i o n s .
Perceived fairness of outcome
Example: I got a promotion on
time and I deserved it.
Perceived fairness of process
used to determine outcome
Example: I was a part of the
appraisal process, and while
Informing me about my
promotion, my boss explained
to me, as to why I was being
offered the promotion.
Overall perception of"
what Is fair In the '

Perceived degree to which one Is
workplace.
treated with dignity and respect
Example: I t h i n k this
Example: While Informing me
Is a fair place to work.
about my promotion, my boss was
very encouraging, and warm
towards me.
Fig. 4 . 3 . 2 c : Model of Organizational Justice
Expectancy Theory
According to Victor Vroom's Expectancy Theory, the strength of a tendency to act in a
certain way d e p e n d s on the strength of an expectation of a g i v e n outcome, and on the
attractiveness.
The theory comprises three factors. The first factor is expectancy. This is the state in
which an individual 'expects' and believes that the efforts put in, will lead to the
performance d e s i r ed . The next factor of Vroom's Expectancy Theory is instrumentality.
This state is concerned with the quality of serving the purpose. Here, the individual has
the belief that the performance displayed will lead to the desired outcomes, and that it
would lead to rewards. Valence is the third factor of this theory. It refers to the value
an individual assigns to an object or situation. This value could be either positive or
negative. I n d i v i d u a l s value rewards, based on their personal needs, motives, and g o a l s .
Relationship between
efforts and performance
performance and rewards
rewards and personal aims
Fig.4.3.2d: Expectancy Theory
Goal-setting Theory
The Goal-setting Theory is one of the most utilized and established theories of
motivation. According to the theory, specific and difficult goals with feedback lead to
higher performance. The theory indicates that human actions are purposeful, and that
they are directed by certain conscious goals. Usually, i n d i v i d u a l s set g o a l s when they are
dissatisfied with their current performance levels. A systematic way to utilize goal
setting is with a Management by Objectives ( M B O ) program.
Balanced Scorecard
The Balanced Scorecard is a tool used by managers to measure the actions
executed by the employees and to also keep a watch on the consequences of
these actions. The balanced scorecard translates the organization's vision and
mission into specific and measurable performance goals related to the finances,
customers, internal processes, and also the learning processes.
The features of an effective feedback are:
o Specific and relevant
o Timely
o Sufficiently frequent
o Credible
Multisource (360 Degree) Feedback
U n d e r the Multisource or 360 Degree feedback, information about an employee's
overall performance is collected from a complete circle of people, which includes:
subordinates, peers, supervisors, and customers. Here, employees working at the
lower-level also feel that there is greater fairness and a much more open
c o m m u n i c a t i o n , as they are given a chance to express t h e i r o p i n i o n s and feedback
of t h e i r boss' performance.
4.4 Motivating by Job D e s i g n : The Job Characteristics M o d e l
4 . 4 . 1 The lob Characteristics Model
The following model indicates that any job can be described in terms of the following five
core d i m e n s i o n s .
Core job Critical Personal and
dimensions psychological states work outcomes
1 J
I
Fig. 4 . 4 . l a : The lob Characteristics Model
Skill Variety refers to the extent to which a job requires a range of activities to
be performed.
Task Identity is the degree to which a job requires performing a complete and
identifiable piece of work, and not just a portion of the j o b .
Task Significance refers to the degree to which a job is important and has an
impact on the people within and outside an organization.
Autonomy is the degree to which a job gives an i n d i v i d u a l a considerable a m o u n t
of independence and freedom to decide the procedures to be used in carrying out
a particular j o b .
Feedback refers to the degree to which an employee receives a direct response
about the efficiency of the individual's performance, after the work activities
required by the job have been carried out.
The core dimensions can be combined into a single predictive index, called the
Motivating Potential Score ( M P S } , and calculated a s :
MPS= S k i l l v a r i e t y + Task i d e n t i t y + Task significance x A u t o n o m y x Feedback
4.4.2 How Can Jobs Be Redesigned?
At times, jobs become monotonous. Many jobs lack variety and the power to make
decisions individually, and as a result, the employees are less motivated. M a n y of them
even quit t h e i r jobs due to this. This can be avoided to a great extent by redesigning
jobs. This would seem to be challenging and much more interesting to the employees. In
return, t h i s would not only motivate the employees, but also reduce the rates of attrition
in organizations.
Job Rotation
Job rotation, w h i c h is also called as 'cross-training', is a management t ec h n i q u e by
which employees are assigned to various jobs and even departments over certain
periods. This increases motivation and helps the employees to have a better
understanding of their work and also to understand how it contributes to the
organization.
Job E n r i c h m e n t
Job enrichment is a way of motivating employees in organizations, by assigning
them more responsibilities and offering them a variety in the jobs that they
perform. By presenting them with more challenges, tasks, continuous feedback,
and communication, employee satisfaction levels increase and even the level of
absenteeism is brought down to a considerable level.
The following model suggests certain guidelines for enriching a job.
Suggested Action Core Job Dimensions
Combine tasks Skill variety
Form natural work units Task identity
Expand jobs vertically Autonomy
Open feedback channels Feedback
Fig. 4 . 4 . 2 b : Guidelines for Enriching a Job
4.4.3 Alternative Work Arrangements
Flextime could be an alternative work arrangement. It refers to flexible work time
hours. This gives the employees a choice to choose their work t i m i n g s , according to t h e i r
preferred working time slot. Job Sharing is another possible work arrangement. Job
sharing allows the d i v i s i o n of a full-time job among two or more employees, as per the
hours agreed u p o n . This can be either on a weekly or a monthly basis. Telecommuting
is an arrangement that allows an employee to work either from home or from remote
locations on a computer. This arrangement is made in such a way that t h e i r computers
are linked to the employer's office.
4 . 5 Employee Involvement
4.5.1 Participative Management
A characteristic that is a part of all participative management programs is that of j o i n t
decision making. Under participative management, subordinates are also a part of the
decision making process along with their immediate seniors. This method is used in
organizations, at times, to improve employee morale and productivity.
It has been noticed that organizations that institute participative management have:
H i g h e r stock returns
Lower turnover rates
H i g h e r estimated labor productivity
But, these effects are not typically large, and also, this is not a sure method of
improving employee performance.
4 . 5 . 2 Representative Participation
Representative participation is a type of employee involvement program in which
workers participate in the organizational decision making process, by means of a small
g r o u p of representative employees.
The two most prevalent forms of representative participation are:
Work councils
Work c o u n c i l s are groups of elected employees who should be sought for o p i n i o n
when the management makes decisions about employees.
Board representatives
Board representatives are employees of an organization who sit with the
company's board of directors and portray the interests of the organization's
employees.
However, the impact of representative participation on working employees seems to be
minimal.
4.6 U s i n g Rewards to Motivate Employees
Initially, setting the pay levels in an organization could be complicated, as it involves
balancing the internal equity and the external equity. The internal equity of a company
is established through job evaluation and job analysis. It refers to the worth of a
particular job to the employer or the organization. External equity on the other hand,
is a representation of the perception of the employees of a company, about its pay
structure.
Following is a list of variable-pay programs that are used to reward employees in an
organization:
Piece-rate Pay
Merit-based Pay
Bonuses
Skill-based Pay
Profit-Sharing Plans
Gainsharing
Employee Stock Ownership Plans
Piece-rate Pay
U n d e r piece-rate pay, the employees are paid for every unit of production that has been
completed.
Merit-based Pay
In the merit-based pay system, individuals are paid depending on t h e i r performances or
performance appraisals. This helps individuals in establishing a relationship between
t h e i r performances and rewards obtained in return.
Bonuses
Bonuses refer to an extra pay to employees for good performances. Here, employees
are paid for t h e i r current good performances and not the performances in the past.
Skill-based Pay
This is a pay system that pays individuals depending on the number of skills that an
i n d i v i d u a l can perform.
Profit Sharing Plans
An organization-wide program that distributes compensation, based on some established
formula designed around a company's profitability. This plan, when executed at the
organization level, has a positive influence on employee attitudes.
Gainsharing
Gainsharing is a formula-based group incentive plan. It ties rewards to productivity
g a i n s rather t h a n to profits. H i g h e r performing workers pressurize weaker performers to
work harder, w h i c h in turn improves performance of the group as a whole.
Employee Stock Ownership Plans (ESOPs)
This is a company-established benefits plan in which employees acquire stock, often at
below-market prices, as part of their benefits. This helps in increasing employee
satisfaction. E S O P s for top management can reduce unethical behavior.
Flexible Benefits: Developing a Benefits Package
This refers to a benefit plan that allows individuals to put together a benefits
package prepared to match their needs and satisfaction. The three most popular
types of benefit p l a n s are:
o M o d u l a r Plans
Modular plans are predesigned units of benefits, each of these meeting the
needs of certain groups of employees.
o Core-plus Plans
These plans include important and essential benefits and also another list of
other benefits from which employees can choose.
o Flexible Spending Plans
Such plans help employees to pay for particular benefits, such as healthcare
benefits, by setting aside pretax money up to the amount that has been
offered in the plan.
Intrinsic Rewards: Employee Recognition Programs
Rewards are intrinsic in the form of employee recognition programs and extrinsic
in the form of compensation systems. Employee recognition programs could range
from an u n p l a n n ed and personal thanking to the commonly practiced formal
programs, which involve encouraging certain types of behavior. Also, the
procedures for attaining recognition are clearly identified. Despite this being
increasingly popular, critics argue that they are highly prone to political
m a n i p u l a t i o n by the management.
4 . 7 Performance M a n a g e m e n t
The relationship between efforts, performance, and rewards is of great significance in
the model of motivation. 'Performance Management' in an organization refers to carrying
out activities to ensure that the goals of an organization are being met, both, efficiently
and effectively. Performance management is a very important function, as it includes the
measurement of employee performance accurately, and making decisions with regard to
pay and other significant human resource management decisions. If the performance
Human B e h a v i o r i n Organization
measurement fails in an organization, it results in the decline of motivational value of
pay or reward systems. The following image gives a clear picture about the performance
management process.
Use performance appraisal for
Human resource management
decision
Measure Performance to
assess progress

Provide feedback
and coaching on
performance results

Identify clear and
measurable performance
goals
Fig. 4 . 7 a : Essentials of the Performance Management Process
4 . 8 Performance Appraisal
According to John R. Schermerhorn, Jr., James G. Hunt, and Richard N. Osborn, a
performance appraisal is a process of systematically evaluating performance and
providing feed back on which performance adjustments need to be m a d e . This is a formal
procedure of measuring the performance of employees in organizations.
Following are three comparative performance appraisal methods:
Ranking
This is a performance appraisal technique that includes rank ordering of
employees on the basis of their performances.
Paired Comparison
In this method, each individual is directly compared to the others who are being
rated. This method, however can turn out to be much more tedious than the
ranking method, if there is a large group of employees that needs to be rated.
Forced Distribution
Under this performance measurement technique, there are certain performance
categories determined, such as 'Outstanding', 'Very Good', 'Good', 'Average', and
'Poor'. Here, raters are asked to rate a specific amount of employees into these
categories. For example, 10 percent employees must be rated Outstanding, 20
percent as Very Good, and so on. This method could prove to be difficult, if most
of the employees are superior performers or if most of the employees perform the
same.
Three common absolute rating methods are:
Graphic Rating Scales
These are scales that list different types of dimensions, w h i c h are considered to
be related to high performanceoutcomes in a specific job (that an employee is
expected to demonstrate).
Critical Incident Diary
This is a performance appraisal method that makes a note or records the
events of u n u s u a l success or failure for a particular performance aspect.
Behaviorally Anchored Rating Scales (BARS)
This performance appraisal method explains job behaviors those are
observable, each of which is evaluated in order to d i s t i n g u i s h good performance
from bad performance in an organization.
4.8.1 Who Does the Performance Appraisal?
Self and Peer Evaluations
In self evaluations, individuals rate their own performances. On the contrary, in
peer evaluations, other team members and also members doing s i m i l a r jobs rate
the i n d i v i d u a l s .
360 Evaluation
In a 360 evaluation, an individual in an organization is rated by self, managers,
peers, subordinates and others (for example, customers).
Peers Subordinates
Managers
Others
Fig. 4.8. la: 360 Evaluation
Group Evaluation
The trend of g r o u p evaluations is growing. It includes evaluation of performances
of g r o u p s and teams as a whole.
4.8.2 Measurement Errors in Performance Appraisal
For an appraisal system to be meaningful, performance appraisal systems should be
reliable. It must provide persistent and valid results each time it is used. But a number
of measurement errors can interfere with the reliability and v a l i d i t y of the performance
measurement systems in organizations. The most common measurement errors during
performance a p p r a i s a l in organizations are:
Halo Error
Halo error is a tendency to rate an individual either high or low on a l l the aspects, d u e to
a global perception or impression.
Leniency /Strictness Errors
When a rater has a tendency to give a high rating to almost everyone, it is called as a
leniency error. On the other hand, when a rater generally rates a l l the employees low, it
is considered to be a strictness error.
Central Tendency Errors
Some raters avoid extremes and tend to rate the employees in the m i d d l e of the scale.
This is referred to as the central tendency error.
Recency Error
When a rater tends to rate the performance of individuals, based on the information
readily a v a i l a b l e in his/her memory, it is called as a recency error.
Personal Bias Errors
Personal bias errors occur when raters are influenced by certain biases, such as race,
age, gender, and so o n , during the performance appraisals of employees.
Cultural Bias Errors
It is very important for managers to avoid the criticism of employees based on their
c u l t u r a l differences.
4.9 Chapter Summary
Motivation is the process that accounts for an individual's intensity, direction, and
persistence of effort toward attaining a goal.
The two main types of motivation theories are content theories and process
theories.
Any job can be described in terms of five core dimensions-skill variety, task
identity, task significance, autonomy, and feedback.
Job rotation and job enrichment can be used to r ed e s i g n jobs and motivate
employees.
Flextime, job sharing, and telecommuting are alternate work arrangement options
for employees.
Participative management and representative participation are two types of
decision making processes that decide the degree to which employees are a part
of decision m a k i n g in organizations.
Price-rate pay, merit-based pay, bonuses, skill-based pay, profit-sharing plans,
g a i n s h a r i n g , employee stock ownership plans are the variable-pay programs.
The relationship between efforts, performance of i n d i v i d u a l s in an organization and
rewards, is of great significance in the model of motivation.
A performance appraisal is a process of systematically evaluating performance and
providing feed back on which performance adjustments need to be made.
Halo error, leniency/strictness errors, central tendency error, recency errors,
personal bias error, cultural bias error are the various common measurement
errors d u r i n g performance appraisals.
F o u n d a t i o n s of
Group and
Team Behavior
05. Foundations of Group and Team Behavior eBook
5 . 1 Introduction
Groups are a fundamental part of organizations. Groups are formed through natural
interaction of i n d i v i d u a l s , such as personal and social interactions. They are also formed
in organizations to accomplish tasks much more efficiently and effectively. Groups affect
the behavior and the levels of motivation of the members and have an impact on the
organizations as a whole. According to studies, the goals of organizations are met much
more effectively and efficiently through groups. When members have high levels of
coordination and contribution within a group, it leads to much better performance. On
the other hand, hostility and unresolved conflicts within groups lead to disheartenment
of employees. Thus, the understanding of groups, their functioning, and how they are
formed is of great significance to managers.
Along with groups, teams are also an integral part of any organization. Teamwork is in
practice in industries, today. Teams have been found to enhance the overall productivity
in o r g a n i z a t i o n s . They help in making better decisions and settle on the best solution to
a problem, with the members supporting each other. There is also a better
communication and understanding of decisions as every member is involved in the
process. Like groups, teams too affect employee attitude, culture, and commitments.
Hence, having an understanding of team concept is equally important.
Define and classify g r o u p s
E x p l a i n the stages of group development
Discuss the various group properties
Describe g r o u p decision making
Identify g r o u p decision making techniques
Distinguish between groups and teams
Describe the types of teams
OS. Foundations of Group and Team Behavior eBook
5 . 2 D e f i n i n g a n d Classifying Groups
Stephen P. Robbins, Timothy A. Judge, and Neharika Vohra, define a group as,
"two or more individuals, interacting and interdependent, who have come
together to achieve particular objectives."
The two m a i n categories of groups are formal and informal groups.
Formal Groups
Formal groups are designated work groups defined by an organization's structure. In
such g r o u p s , the behavior of members is directed towards attaining organizational g o a l s .
For example, the six members of an airline's flight crew can be called a formal g r o u p .
Informal Groups
A g r o u p that is neither formally structured nor organizationally determined is referred to
as an informal group. Such a group appears in response to the need for social contact.
Four or five employees from various departments in an organization who have l u n c h and
tea together can be termed as an informal group.
Groups can be further sub-divided into the following types:
Command Group
A group in which the members report to an assigned m a n a g e r can be referred to
as a command group. For example, a principal of an elementary school with 15
teachers reporting to him or her together form a command group.
Task Group
Here, the group is established for the completion of a particular job task or
activity. In a task group, the boundary is not limited to only the hierarchical
superior, but it can also cross the command relationships. For example, if a college
student is accused to have committed a campus crime, d ec i s i o n s regarding the
issue may require consultation with the dean of academics, the director of
security, the advisor of students, and so on.
Interest Group
Each member of this group has a 'specific aim' which is 'common' to all the
members. For example, when a group of employees come together to support
another employee who has been fired, it is called an interest g r o u p .
F r i e n d s h i p Group
Members or individuals of this group are brought together as they share one or
more common characteristics. Social alliances that extend even after the working
hours m a i n l y come under this category.
5 . 3 Stages of G r o u p Development
Stages of Group nevetopment

Adjourning:
Wrapping-up
action,
Performing: Task Disbandment
performance,
matunng m
Norming: Reaching relationships,
at an agreement organized

and working
Storming: Dealing together
with conflicts

Forming: Getting
to know each
other
Fig. S . 3 a : Stages of Group Development
Every group, be it a formal unit or a temporary task force, usually goes through a
predictable sequence, which is represented in Bruce Tuckman's Five Stage M o d e l .
The first stage, forming, is that of orientation. Forming is concerned with the initial
entry of the group's members. Here, the individuals identify themselves with other
members and with the group itself.
The second stage, storming, is characterized by conflicts within the group,
confrontations, and at times, heated discussions. Storming is concerned with building
tensions and emotionality between the members, and the obstacles that come in way of
a t t a i n i n g the g r o u p ' s g o a l .
The next stage, norming, is a level wherein the members have reached an agreement
and consensus. The i n d i v i d u a l s of the group have now found harmony and a sense of
closeness among themselves. This stage is mainly concerned with the group's
effectiveness.
The fourth stage in the five stage model is, performing. By this stage, the g r o u p is fully
functional, matured, and organized. Performing is concerned with getting the work done
and the g r o u p ' s performance as a whole.
Adjourning is the final stage. In this stage, more importance is given to the
w r a p p i n g - u p action, than to the task performance. After adjourning, the g r o u p s may get
back together if needed.
The Punctuated-equilibrium Model represents the phases that temporary groups go
through, between inactivity and activity.
5 . 3 . 1 The Punctuated-equilibrium Model
(High)
(Low) A (A+B)/2 B
Time
Fig. 5 . 3 . l a : The Punctuated-equilibrium Model
It has been observed that temporary groups with deadlines do not u s u a l l y follow the five
stage model of g r o u p development. Studies conducted indicate that temporary groups
follow another sequence, which i s :
The initial meeting among the members of the group decides on the direction of
the g r o u p .
This first stage of g r o u p activity is that of inactivity.
A change or transformation occurs at the end of the first stage and takes place
exactly when the group has used half of the allotted time for the completion of the
activity.
The transformation results in major changes.
After t h i s major transition, again, there is a stage of inactivity.
The last meeting of the group consists of markedly accelerated activity.
5 . 4 G r o u p Properties
Work groups in organizations are characterized by certain properties. These properties
shape and influence the behavior of groups, as a whole. Some of the most important
properties of work g r o u p s are as under.
Group Property 1: Roles
The term role refers to a set of expected behavioral patterns that an individual, who
occupies a given position in a society, is expected to display. In groups, members play
various roles, as discussed and finalized by group members. Members in groups
communicate with each other through verbal as well as behavioral messages. Individuals
are expected to play various roles, within and outside the organization. To understand
the present roles played by a member in a group, it is important to understand the other
d i m e n s i o n s of roles, such as 'role expectation', 'role perception', and so o n . The attitude
and behavior of i n d i v i d u a l s is what results in role identity. The belief of others as to how
an individual is supposed to behave in a particular situation is referred to as role
expectation. An individual's own view on how he/she must act in a given situation is
known as role perception. When an individual is challenged with diverse role
expectations in a particular situation, it leads to role conflict.
Group Property 2: Norms
Norms refer to certain standards of behavior those are accepted and shared by the
members of a group. Every group has certain norms, which are followed by the
members. This ensures smooth functioning of the group. Norms can be considered as
measures, w h i c h are used to evaluate the behavior of the group members. These reflect
the culture followed by a group. Norms may vary from group to group. Another aspect
that needs to be considered here is that of deviant workplace behavior. Deviant
workplace behavior is a type of behavior that does not comply with the standards of
an organization. It is displayed voluntarily by individuals, and has a negative impact on
the organization, as well as its employees.
Group Property 3: Status
A rank or position given by others to the groups or its members is known as status.
According to the Status Characteristics Theory, status tends to be derived from one of
the following three sources:
The power a person wields over others.
A person's a b i l i t y to contribute to a group's goals.
An i n d i v i d u a l ' s personal characteristics.
I n d i v i d u a l s , who have the power to influence the outcomes of a g r o u p , are considered to
have a ' h i g h e r status'. Also, an individual who possesses much more positive attributes
(such as a pleasing personality, friendly nature, intelligence, and so on) than others w i l l
also be perceived to have a greater status.
Group Property 4: Size
The size of g r o u p s definitely affects the behavior of the members as also the behavior of
the g r o u p as a whole. According to various evidences, while small g r o u p s complete tasks
faster, larger groups are considered to be more efficient when it comes to problem
solving. Also researches suggest that groups with odd numbers are preferred to those
with even numbers. Another finding suggests that ideal size of a g r o u p is five to seven
members, as it would utilize the benefits of both, a small group and also of a large
group.
Group Property S: Cohesiveness
When the members of a group have a collective identity and are motivated to stay as a
part of the group, the group is said to be cohesive. In other words, it refers to the
degree of unity in a group, which is reflected in the members' conformity to group
norms and interactions. Usually cohesiveness is more in groups where members spend
more time with one another, and in small groups, where interaction among the
members is much easier.
5 . 5 G r o u p Decision M a k i n g
In organizations, these days, decisions taken by groups are preferred over individual
decisions in many situations. In most organizations, the decision making process is
handled by groups. However, the process of group decision making is characterized by
various strengths and weaknesses.
5.5.1 Benefits and Drawbacks of Group Decision Making
A benefit of g r o u p decision making would be that groups produce much more complete
information and knowledge. Due to the presence of a number of i n d i v i d u a l s in a group,
g r o u p decision making results in more input and brings in more variety into the process.
A very important benefit is that groups have greater acceptance of a solution. The
members of a group support a decision and encourage each other to accept it as w e l l .
Group decision making also has certain drawbacks. A major drawback is that the entire
process is time c o n s u m i n g . Another negative point is the decisions could be dominated
by one or more members. Group decisions suffer from unclear r e s p o n s i b i l i t y as w e l l .
S.S. 2 Effectiveness and Efficiency
It has been observed that decisions made by a group are much more precise than
decisions made by an average i n d i v i d u a l in a group. But they are less accurate than the
decision or conclusion made by the most accurate member of the group. While,
decisions made by individuals are much faster, groups are superior and much more
effective when it comes to creativity. Another point to be considered is that while
making a decision, groups would take up more working hours than if an individual was
to deal with the same problem alone.
5 . 5 . 3 Groupthink and Groupshift
Two results of g r o u p decision making have the potential to affect the overall d e c i s i o n . In
addition, the results make the group consider other alternatives and arrive at the best
solution possible. According to Stephen P. Robbins, Timothy A. Judge, and Neharika
Vohra, groupthink is, "a phenomenon in which the norm for consensus overrides
the realistic appraisal of alternative courses of action. Groupthink is a disease
that attacks many groups and can dramatically hinder their performances."
Groupshift is, "a change in decision risk between the group's decision and an
individual decision that a member within the group would make; the shift can
be toward either conservatism or greater risk."
5.5.4 Group Decision Making Techniques
As managers, it is important for you to keep in mind the various g r o u p d ec i s i o n making
techniques. The most common way in which decision making takes place is through
interacting groups. It refers to typical groups in which the members interact with each
other, face to face. Another technique, brainstorming, is a process for generation of
ideas. It encourages all alternatives and does not include criticism. Brainstorming
emphasizes on the innovation and creativity of the group members. The n o m i n a l group
technique is a structured group decision making technique. Here, the g r o u p members
meet, pool their judgments, and take a decision in a systematic way. Every member
responds individually and this technique too, like brainstorming, does not include
criticism. The nominal group technique is adopted to minimize and avoid intergroup
conflicts. Electronic meetings are among the latest trends in group decision making.
Electronic meetings facilitate discussions between group members, across great
distances, using computers. This is done with the help of group decision support
systems. This t e c h n i q u e proves to be helpful for groups in which members find it difficult
to meet on a regular basis d u e to the distance constraint.
Type of Group
Effectiveuess Criteria Interacting aralnstormtnq Non1inal Electronic
Number and quality of ideas Moderate High Hrgh
Social pressure Hrgh Moderate
Money costs Hrgh
Speed Moderate Moderate Moderate Moderate
Task onentation High Hrgh Hrgh
Potential for rnterpersonal conflict High Moderate
Commrtment to solution High Not applicable Moderate Moderate
Development of group cohesiveness High High Moderate
Fig. 5 . 5 . 4 a : Evaluating Group Effectiveness
5 . 6 Differences between Groups a n d Teams
Work Groups work Teams
D
D D
D D
Share information
May or may not be visible - - - Synergy - - -
Individual - - Accountability - -
Individual
Fig. 5.6a: Comparing Work Groups and Work Teams
The terms 'work g r o u p s ' and 'work teams' are used interchangeably. But it is important
for managers in organizations to understand the difference between the two.
In a work g r o u p , though it is important to share information, the need for a j o i n t
effort is not found. On the other hand, in work teams, the emphasis is on
collective performance of the members of the team.
The performance of a work group is due to the contribution of individuals and
there is a lack of positive synergy in many groups. But in work teams, the
outcome is a result of collective efforts. This is because the attainment of the
objectives of a team depends on each team member and they must interact
regularly.
While in work groups the accountability is individual, in work teams it may be
shared or i n d i v i d u a l .
Similarly, in a work group, leadership is usually individual but work teams may
have an i n d i v i d u a l or shared leadership.
5 . 7 Types of Teams
While many teams evolve naturally in organizations, few of them are created by the
management. Due to this, there are various types of teams at the workplace. The four
most common types of work teams are displayed in Fig. 5 . 7 a .
Problem-solving Self-managed Virtual
Cross-functional
Fig. 5 . 7 a : Four Types of Teams
Problem-solving Teams
These are creative problem-solving groups in which the members meet for a few hours
every week. Problem-solving groups usually comprise S - 12 members who belong to
the same department. They collectively take decisions related to quality and
productivity.
Self-managed Work Teams
Self-managed teams are small groups of 10 - 15 members and they take up
responsibilities of t h e i r former supervisors. Here, decisions related to work design and
allocations of work are taken. Precisely, such teams deal with improving the quality of
work.
Cross-functional Teams
The main motive of cross-functional teams is to attain maximum horizontal integration.
Here, employees from various hierarchical levels and work areas come together to
accomplish a task. Cross-functional teams have an advantage of added information and
increased speed levels.
Virtual Teams
In the past, people in organizations met face-to-face to discuss issues and to take
important d ec i s i o n s . But today, with the advent of technologies and various computer
programs, individuals who are in different parts of the globe are able to meet
electronically. This is surely a very big benefit for geographically dispersed individuals
who wish to have regular meetings.
5.8 Creating Effective Teams
Many researchers have tried to identify the factors that create an effective team. The
following model represents the factors influencing team effectiveness. While referring to
this model, there are two main points that must be kept in mind. The first point is that
teams differ in t h e i r form and structures. The second point is that the model assumes
that team work is preferred over i n d i v i d u a l work.
Fig. 5.Sa: Factors Influencing Team Effectiveness
Context
The four contextual factors that are related to team performance are:
Adequate Resources
The availability of adequate resources would help team members to work more
efficiently and achieve their goals faster.
Leadership and Structure
A team can function well, only if the members have the tasks allocated and
decided on who has to carry out what task. Also, it must be ensured that all
members share the workload.
Climate of Trust
When a team is effective, it means that the members trust each other. Teams that
are cohesive have h i g h e r levels of cooperation among members.
Performance Evaluation and Reward Systems
In organizations, individuals are rewarded for their valuable contributions. In
teams, members are answerable, both individually as well as collectively. So,
along with individual appraisals, if organizations introduce group-based appraisals
and rewards, it would surely motivate teams to perform better and attain goals
faster.
Composition
This d i m e n s i o n deals with factors that are related to how the members in a team should
be staffed. This can be further explained as under:
Abilities of Members
The knowledge, skills, and abilities of a team's members is what determines the
team's performance.
Personality
The personality traits of members are very important to define a team's
effectiveness because they influence an individual's behavior.
Diversity
If members of a diverse team concentrate on their different thought processes
than their similar thoughts and take advantage of their creative potential, it will
lead to h i g h e r levels of team effectiveness.
Size of Teams
The most effective teams have five to nine members. When there are excess
members, there is a decline, not only in communication but also in the
coordination and cohesiveness among members.
M e m b e r Preferences
W h i l e many i n d i v i d u a l s prefer to work as a part of teams, and fair well in it, many
others prefer working individually. So, while creating teams, a m a n a g e r must not
only consider the skills and abilities of the employees, but also t h e i r preferences.
Allocating Roles
Organizes and integrates

Linker
Introduces creative ideas

Creator
Advocates ideas after they are initiated

Promoter
suggests insightful analysis of options

Assessor
Supplies structure
Organizer
Provides direction and conclusion

Producer
Analyzes details and implements rules

Controller
Fights external conflicts

Ma1nta1ner
Encourages the collection of more information

Advisor
Fig. 5 . S b : Key Roles of Teams
Every sing le team has different sets of needs and requirements. Managers, who
build teams, must keep these requirements in mind and select members
accordingly. Every member would have a preferred style of working. Managers
should pay attention to this factor while assigning roles and allocating tasks to
team members. Fig. 5.Sb suggests the various roles that could be assigned to the
members in a team.
Processes
The third dimension of the Team Effectiveness Model is that of team processes and it
i n c l u d e s various process variables.
Common Purpose
Effective teams analyze their mission, develop goals, and create strategies to
achieve them. When teams define what is to be done and how it is to be done,
they tend to be much more effective than teams that don't.
Specific Goals
Teams must convert their purpose into specific and measurable goals. This will
result in proper communication between the team's members and help them in
focusing on attaining their goals.
Team Efficacy
A characteristic of effective teams is that they tend to believe in themselves. This
motivates its members to work harder towards reaching the g o a l .
Conflict Levels
Occurring of conflicts and differences of opinions in teams should not be
considered to be a bad sign. On the contrary, conflicts can actually improve the
effectiveness of teams.
Social Loafing
In effective teams, members are accountable both, individually as well as
collectively. So members in teams must be clear in regard to what they are
individually responsible for and in which areas they are accountable, collectively.
Social loafing refers to when members deliberately put in lesser efforts to reach
goals when they work in a group than when they work i n d i v i d u a l l y .
5 . 9 T u r n i n g I n d i v i d u a l s into Team Players
As discussed above, teams also form an integral part of organizations. However, not a l l
i n d i v i d u a l s are inherently team players. Managers can make use of a n y of the following
three options to turn i n d i v i d u a l s into team players:
Selecting
Some individuals inherently possess interpersonal skills to be effective team
players. If managers face candidates who lack team skills, they have three
options. The candid ates could be trained to be efficient team players. Another
option is to hire them for roles that would not require the c a n d i d ate to possess
team s k i l l s . The final option is to discard their candidature.
Training
Training programs and workshops help employees in improving their problem
solving abilities, communication, coaching skills, etc. Biocon has observed that to
be a successful company, it must be staffed with employees who are not only good
with t h e i r knowledge but who are also team players. Creating a team and training
the members to make the team efficient cannot happen overnight, it w i l l certainly
take t i m e . But once developed, these teams will make positive contributions to the
organization as a whole.
Rewarding
Reward systems play a significant role in enhancing the performances of
employees within teams. Promotions, hikes in payments, and other types of
recognition given to employees who work as efficient team members would
encourage them to continue performing well. These refer to members who support
their team in its functions, ensure proper communication, and help in resolving
conflicts. It must be kept in mind that individual contributions are equally
important in terms of rewarding employees in organizations.
5 . 1 0 Chapter S u m m a r y
Groups can be defined as: two or more individuals, interacting and
interdependent, who have come together to achieve particular objectives.
Groups can be formal or informal.
Groups can be further divided into: command groups, task groups, interest
g r o u p s , and friendship groups.
The stages in the Five Stage Model of group development are: forming stage,
storming stage, norming stage, performing stage, and adjourning stage.
Important g r o u p properties are roles, norms, status, size, and cohesiveness.
The various group decision-making techniques are interacting groups,
brainstorming, nominal group technique, and electronic m e e t i n g .
The four most common types of teams are problem-solving teams, self-managed
work teams, cross-functional teams, and virtual teams.
Context, composition, and process are factors that influence a team's
effectiveness.
Communication
I T M
UNIVERSITY
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06. Communication eBook
6 . 1 Introduction
Communication happens every time, all around us. Since the existence of mankind,
human beings have used varied methods to communicate. Earlier, communication was
mainly through writing. Later, it advanced with the development of language and
symbols. Today, communication has become inevitable in the d a i l y lives of i n d i v i d u a l s . It
not only plays an important role expressing opinions and suggestions in personal lives,
but also in doing the same professionally. Thus, communication is the backbone of any
organization today. Without communication, an organization would cease to exist.
As a manager, you must understand that communication is not only verbal, but also
non-verbal. Non-verbal communication also plays a very important role in o r g a n i z a t i o n s .
The body language, facial expressions, and gestures of i n d i v i d u a l s portray the attitudes
and feelings of the speaker.
Reading and understanding non-verbal communication needs skills, experience, and a
keen observation power. Communication is the basic necessity for the functioning of any
organization. Effective communication is needed for exchange of information, opinions,
ideas, etc. between and among employees. The only way t h r o u g h w h i c h i n d i v i d u a l s can
succeed in performing in their respective roles in an organization is by the use of
effective c o m m u n i c a t i o n . The absence of communication would lead to the failure of an
organization.
Define and e x p l a i n the meaning of communication
State the objectives of communication
Identify the characteristics of communication
Discuss the significance of communication
Describe the communication process
Identify the barriers to effective communication
6 . 2 D e f i n i t i o n of C o m m u n i c a t i o n
Communication is a process through which information is exchanged between
individuals. Communication is a significant part of interpersonal behavior in
organizations. According to William Newman and Charles Summer,
"Communication is an exchange of facts, ideas, opinions, or emotions by two or
more persons."
According to Keith Davis, "Communication is the process of passing information
and understanding from one person to another."
As per Mullins, " C o m m u n i ca t i o n means that information is passed from one
place to another."
6 . 3 M e a n i n g of C o m m u n i c a t i o n
The word 'communication' has been derived from the Latin word communis, which
refers to imparting, participating or sharing. Communication is the means through
which individuals relate to one another. Thus, it is of great importance in organizations.
In organizations, the sharing of information, ideas, goals, instructions, directions,
expectations, feelings, and emotions can be possible only t h r o u g h the means of effective
communication. Over the years, it has been observed that the success of any
organization or business relies to a great extent on communication.
No individual, group or organization can exist without communicating with others. In
communication, sending of the message or information is important. But it is equally
important that the receiver understands the message in the context in w h i c h it was sent,
and also sends back feedback to the sender. For example, if a member speaks Spanish
and the others do not have any knowledge about the language, the message would not
be understood by them clearly. Here, the communication is not effective.
Communication cannot be considered to be useful unless it has been transmitted by
the sender and understood by the receiver.
In organizations, managers have to communicate in upward, downward, and lateral
directions. Managers spend 80 percent of their working day in communicating through
various forms-in a face-to-face setting, through e-mails, speeches, telephonic
conversations, and even through memos and reports.
6 . 4 Objectives of C o m m u n i c a t i o n
Communication in organizations has a number of objectives, w h i c h are as u n d e r :
Communication is needed to transmit and receive information.
Communication helps in exchanging ideas and opinions with co-workers.
It helps in imparting education to employees as well as in conducting training
sessions.
Recruitment and selection of employees is enabled through communication by
persuading prospective employees to apply for job openings. It also helps the
Human Resources department to understand their knowledge and s k i l l s and select
the best candid ate for the job.
Issuing warnings and instructions as well as improving d i sc i p l i n e is possible only
through communication.
Evaluation of every employee's performance is possible only after receiving
information and o p i n i o n s from superiors and other co-workers.
Communication facilitates the issuing of orders and instructions.
Communication also helps in motivating individuals.
It is essential for employees to be able to receive s u g g e s t i o n s .
Communication is needed for Human Resources planning as also for designing
jobs.
Orientation programs and socialization programs are enabled through effective
communication.
Employees express their grievances to their superiors with the help of
communication. The superiors also address and handle these grievances through
communication.
Collective bargaining process is carried out through the effective communication
process of the exchange of demands, offering proposals, and so o n .
Participative management can be successful only through an effective
communication process.
Information that is communicated from co-workers help employees in
understanding and managing their work environment. For example, they will get
an idea about how to complete work procedures in the rig ht manner, how to
h a n d l e irate customers, etc.
6 . 5 Characteristics of C o m m u n i c a t i o n
Effective c o m m u n i c a t i o n has certain characteristics, they are discussed ahead.
Two-way Process
Communication is essentially a two-way process. It is an exchange of ideas and
opinions. It must be understood that communication is not just the sending or
transmitting of messages by the sender. It should also be understood by the receiver. It
is a process of understanding between two parties. This is what makes it a two-way
process.
Short-lived Process
The process of c o m m u n i ca t i o n is considered to be complete once the message is
received and encoded by the receiver and also understood in the context in which the
sender had sent the message. The main purpose of communication is to ensure the
mutual understanding by sharing information, influencing others, etc.
Continuous Process
Though a one-time communication is short-lived, the achievement of desired goals and
objectives can be possible only if communication is continuous. The process of
c o m m u n i c a t i o n can be said to be ongoing, dynamic, and goal-oriented.
Clears Misunderstandings
As mentioned above, the main aim of communication is to create and enhance mutual
understanding between individuals in organizations. Effective communication, thus,
helps in creating a clear understanding between the people concerned.
Aims at Attainment of Organizational Objectives
Once the organizational goals are communicated effectively to the employees, there is
much more clarity about the goals to be attained. This will in turn direct the
o r g a n i z a t i o n a l activities towards the attainment of organizational objectives.
Circular Flow
The flow of c o m m u n i c a t i o n is always circular. This is because the process starts when
the sender transmits the message to the receiver, and the process is complete only
when the receiver decodes the message and sends a feedback to the sender.

6 . 6 S i g n i f i c a n c e of Communication
According to Thayer ( 1 9 6 8 ) , the basic functions of communication are:
Information function
Command and instructive function
Influence and persuasive function
Integrative function
Communication is significant in every organization, mainly for three reasons. The first
reason is that managers manage their functions through communications. The
managerial functions which are planning, organizing, leading, and controlling are
possible in a manager's working day only through communication. The second reason is
that managers devote a major proportion of their time in organizations to
communication. Finally, communication is the means through which interpersonal
relationships and group relations are created and maintained.
Communication is required to integrate and coordinate activities of the employees w i t h i n
a department as well as between employees belonging to different departments. In the
absence of effective communication, it may so happen that two individuals in the same
organization may work toward the attainment of two different goals due to the lack of
clarity.
Communication is significant in organizations as it performs the following functions:
Communication functions as a basis for action.
It a i d s in planning in organizations.
It facilitates decision making.
Communication helps in improving coordination.
It also helps in enhancing interpersonal relationships among peers, superiors, and
other co-workers.
An important function of communication is that it helps in motivating the
employees as well as improving their morale.

6 . 7 The C o m m u n i c a t i o n Process
Fig. 6 . 7 a : The Communication Process
Communication is a process. The sender is the one who starts the process of
communication. The sender is an individual who wishes to convey a message and is
also referred to as the encoder or transmitter.
The message is the most important component of the process, and it is the physical
product meant to be sent to the receiver. A message is the subject matter of the
process. The message to be sent across to the receiver is expressed in the form of
words, symbols, signs, and so on. This is done for the understanding of the receiver.
This stage is referred to as encoding.
Channel is the m ed i u m through which the message is being transmitted. It could be in
written form, through phone calls or face-to-face. The choice of the channel purely
depends on the situation of both, the sender and the receiver at the time of message
transmission.
Here, another important factor to be considered is noise. Noise can distort the actual
message. Few examples of noise are poor hearing and eyesight, network issues, usage
of wrong words w h i l e conveying the message, and so on. After the message is received
by the receiver, it is decoded. Decoding is the very opposite of encoding a message.
This means that, here, the receiver interprets the message sent by the sender.
If the message is interpreted near its actual meaning, then the communication is
effective. The final component in the communication process is feedback to the sender.

Feedback must be necessarily taken to understand and confirm how accurately the
message sent by the sender has been interpreted by the receiver.
6 . 8 Direction of C o m m u n i c a t i o n
Communication in organizations is mainly in two directions-vertical and lateral. The
vertical direction is further divided into downward and upward c o m m u n i c a t i o n .
Downward Communication
When communication flows from a higher level to a lower level in an organization, it
refers to downward communication. Downward communication in organizations
strengthens the authoritarian structure in organizations. Downward communication is
used by managers in organizations to:
Assign g o a l s
Issue instructions to employees
E x p l a i n the organization's policies and procedures to the employees
Offer feed back to the employees about their performance
An important aspect of this type of communication is that the employees accept the
message transmitted to them with much more readiness if they are explained about the
reason behind the action to be performed. It also increases the commitment of
employees and also their support while making decisions.
Upward Communication
When information or a message is passed from a lower level to a higher level in an
organization, it is referred to as upward communication. Upward communication includes
feedback about job tasks, problems that employees face while performing a task, any
kind of request, and suggestion or grievance from a subordinate to a superior. To
improve upward communication, managers can introduce the following:
Employee engagement
Employee newsletters
Open-door policy
Suggestion schemes

If managers listen to their employees carefully and respond to them, it would help in
building an environment of trust. Upward communication has been observed to travel
slowly, d u e to f i l t e r i n g .
Lateral Communication
When communication occurs between two or more individuals who are subordinates,
working under the same manager or who are working at the same level in an
organization, it is called lateral or horizontal communication. For example,
communication that takes place between functional managers can be considered as
lateral c o m m u n i c a t i o n .
Lateral communication provides emotional and social support to employees. The main
use of lateral communication is to solve problems, share information, and resolve
conflicts.
6 . 9 F o r m s of C o m m u n i c a t i o n
People communicate mainly in two forms of communication-verbal and non-verbal
communication. Verbal communication can be further d i v i d ed into oral communication
and written c o m m u n i c a t i o n .
Fig. 6.9a: Forms of Communication

Verbal Communication
Verbal c o m m u n i c a t i o n is considered to be the earliest form of c o m m u n i c a t i o n . It makes
use of symbols that usually have a universal meaning to all the participants in the
process. Verbal communication may be either oral or written. Oral communication is a
widely used medium in verbal communication. It includes formal one-to-one d i s cu s s i o n s ,
informal meetings, grapevine, and so on. Written communication, on the other h a n d ,
takes place in various forms, such as letters, memos, notices, e-mails, and other forms
that make use of written symbols or words.
Non-verbal Communication
Non-verbal c o m m u n i c a t i o n does not involve the use of speech or words. The process of
communication would be incomplete and ineffective without non-verbal communication.
It emphasizes on body l a n g u a g e , which includes facial expressions, eye contact, physical
distance maintained, and other physical gestures. These body movements are referred
to as kinesics. A manager has to pay close attention to kinesics, as it helps in
understanding the attitudes and feelings of the speaker. For example, a good
salesperson would understand the level of acceptance of a product from the eyes of a
customer and then can work toward convincing the customer a c c o r d i n g l y .
It is also important to observe the emotional state of an individual, while
communicating. For example, during a meeting if a person keeps looking at his or her
wrist watch, it indicates that the individual is in a hurry. In such a situation, it is best to
depend on non-verbal communication and act accordingly. Because the person in a
hurry may not concentrate on what you are talking, as he or she is in a hurry to end the
meeting. Non-verbal communication is subtle and it requires skills and experience to be
understood.

6 . 1 0 O r g a n i z a t i o n a l Communication
Formal organizational networks could be very confusing and complicated d u e to a large
n u m b e r of hierarchical levels. To simplify this, formal group networks could be classified
into three forms-chain, wheel, and all channel-which are represented in the following
diagram.
Chain Wheel All channel

Fig. 6 . 1 0 a : Common Small-Group Networks
The chain network strictly follows the formal chain of c o m m a n d . This network can be
found mostly in organizations with rigid three-level hierarchies. This network can be
practiced if e m p h a s i s is on accuracy and the task-in-hand is s i m p l e .
The wheel structure is known for acting as an aid for the emergence of leaders. It relies
on a central figure who would act as a medium for the group's c o m m u n i c a t i o n .
The all channel network is of importance, if the main concern of the members of a
group is 'high member satisfaction'. This network facilitates all the group members to
communicate with each other actively. This structure is usually adopted by self-managed
teams, where all the members are free to contribute and there is no single leader who
leads the g r o u p members.
6 . 1 0 . 1 The Grapevine
The informal communication group in an organization can be referred to as the
grapevine. Though the grapevine is informal, it is still a very important source for
information. According to Keith Davis, "Grapevine is basically a channel of
horizontal communication, for it is only people working at the same level of

hierarchy who can informally communicate with one another with perfect
ease."
Grapevine has three m a i n characteristics, which are:
Grapevine is not controlled by the management of an organization.
Most employees in organizations consider that grapevine is a much more reliable
source of information than official announcements by the top m a n a g e m e n t .
Grapevine serves the interests of the individuals within it.
6 . 1 0 . 2 Electronic Communications
Electronic communication is an essential form of communication in today's
organizations. Electronic communication includes the following forms:
E-mail
E-mails make use of the Internet to transmit and receive computer-generated
texts and documents. The growth in the use of e-mails has been stunning, and
organizations rely to a great extent on e-mails for communication.
Biogs
Biogs refer to a website wherein information or entries are written and are
displayed in reverse chronological order. Biogs provide news and events and
d i s p l a y personal d i a r y entries.
Instant Messaging
Instant messaging uses the electronic media to send and receive information.
Networking Software
Examples of networking software include facebook, MySpace, Linked In, and so o n .
Video Conferencing
Video conferencing permits employees who are geographically dispersed to have
meetings with each other.

6 . 1 1 C h o i c e of C o m m u n i c a t i o n Channel
Formal reports, Prerecorded Online discussion

Live speeches Video conferences
bulletins speeches groups, groupware
Low High
channel channel
richness richness
Telephone Face-to-face
Memos, letters Electronic mail Vmce mail
conversation coversanon
Fig. 6 . 1 1 a : Communication Channel Richness
Source: Based on R. H. Lengel and R. Daft, "The Selection of Communication Media as an Executive S k i l l , "
Academy of Management Executive, August 1988, pp.225-232; and R. L. Daft and R. H. Lengel,
"Organizational Information Requirements, Media Richness, and Structural Design," Managerial Science,
May 1996, pp. 554-572. Reproduced from R. L. Daft and R. A. Noe, Organizational Behavior (Fort Worth,
TX: Harcourt, 2 0 0 1 ) , p . 3 1 1 .
Channel refers to the medium or the means through which the message travels.
C h a n n e l s differ in t h e i r capacities to transmit or convey a message. Some c h a n n e l s are
very rich and have the ability to handle several signals at a time. They also facilitate
brisk feedback and can be very personal.
As d i s p l a y e d in Fig. 6 . 1 1 a , the richness of a communication c h a n n e l is the highest when
the communication is face-to-face (face-to-face conversation or video conference). The
main reason is that this allows oral communication along with gestures. The rapid
feedback is also positive here. It has been observed that letters, memos, formal reports
and bulletins, w h i c h are forms of written communication, are low on c h a n n e l richness as
they are considered impersonal. When the message to be conveyed is routine and
simple, a c h a n n e l that is low on richness could be used. However, when the message to
be transmitted is complex and could lead to ambiguity if not conveyed properly, a rich
communication channel must be used. Researches also indicate that managers who
perform well are much more media-sensitive than managers who are low performers.

Thus, the choice of the communication channel is very important as it affects the
effectiveness of the transfer of a message.
6 . 1 2 Barriers to Effective C o m m u n i c a t i o n
Following are the most common barriers to effective communication in o r g a n i z a t i o n s :
Filtering
Filtering refers to when the sender deliberately keeps back or manipulates the
information to be sent. This could be either because the sender tells the receiver
what the receiver wants to hear or believes that the receiver does not require all
the information.
Information Overload
When individuals have more information than they can manage, they tend to
ignore or select information. Due to a large number of e-mails, phone calls, and
messages, managers may mark the information to be processed later on, and may
thus lose out on the important information. This may result in the c o m m u n i c a t i o n
being less effective.
Selective Perception
Perception refers to the way in which individuals receive and interpret information.
Various individuals may perceive the same situation differently. This means that
receivers of information interpret selectively, as per their needs. This is called
selective perception.
Language
The same words may have different meanings to different individuals. This is d u e
to the context in which a word is used. For example, the words 'point', 'present',
and 'type' have different meanings each. In an organization, the term 'profit' may
mean efficiency to the managerial staff. However, the other employees may
understand it to be the excess of funds for the organization through paying less
wages and benefits to them.
Silence
Silence is also a common barrier to effective communication. Silence cannot be
considered as less important as it indicates the absence of information. For
example, silence from employees means that the manager lacks information

related to operational problems. Silence related to any kind of harassment or
misconduct means that the top management cannot work towards a v o i d i n g these
k i n d s of behavior.
Emotions
Emotions also affect the effectiveness of a message. For example, if the receiver is
angry, the message maybe interpreted differently than what is would have been if
the receiver was happy. When emotions are strong, it is very difficult to know the
frame of m i n d of the other person.
Gender Differences
At times, differences in perception of men and women also act as a barrier to
effective communication. It has been observed that women speak to connect. On
the other hand men speak to maintain a status. Men usually tend to hear a
problem and offer a so l u t i o n . This is done by them to maintain their status in the
hierarchical order. However, women mostly want to be just listened to. This
difference u s u a l l y acts as a common barrier during communication.
Communication Apprehension
Some people have a problem of communication apprehension. While many prefer
public speaking, many others prefer to write to express themselves. When an
individual is anxious to speak face-to-face or speak over the telephone, it may
result in ineffective communication. With many individuals the same kind of
anxiety takes place during written communication.
Politically Correct Communication
Many words that are commonly used may be 'politically incorrect'. Hence, it is of
great importance to keep in mind the diversity of the workforce and understand
how the usage of certain words may offend others. For example, it is always
preferred to use the term 'international' in place of 'foreign'.

Communication is a process through which information is exchanged between
individuals.
Communication is the means through which individuals relate to one another and
it is of great importance in organizations.
Communication is essential to transmit and receive information.
Communication has various objectives, which include: the exchange of o p i n i o n s ,
issuing of instructions and even warnings to employees, conducting training
programs, imparting education, expressing grievances, receiving suggestions, and
so o n .
The important characteristics of communication are: it is a two-way process, it is
short-lived as well as continuous, it clears misunderstandings, and it has a process
that is always circular.
Communication is a process. The sender encodes the message and sends it across
to the receiver t h r o u g h various channels. After receiving the message it is decoded
by the receiver and a feed back is sent back to the sender.
Communication can flow in three directions-downward, u p w a r d , and lateral.
Communication can be divided into verbal and non-verbal communication. Verbal
communication is of two types-oral and written.
Formal group networks can be classified into three forms-chain, wheel, and all
channel.
The choice of communication channel is very important as it influences the
effectiveness of the sending of a message.
Filtering, information overload, selective perception, language, silence, emotions,
gender differences, communication apprehension, 'politically correct'
communication, are the various barriers to effective communication.

Leadership
I T M
UNIVERSITY
ONLINE
07. Leadership eBook
7 . 1 Introduction
The success of any organization today would be impossible without effective leadership.
In most situations, a team, a group, an organization or even a military unit is as
effective as its leader.
Good leaders bring with them a positive difference to business organizations. The
concept of leadership has never remained constant. It advances and develops according
to the requirements of organizations with the changing times. Though the concept has
been constantly evolving and there are many new ideas being written about leadership,
it has been observed that there are three aspects of leadership that are prominent.
These three aspects are people, influence, and goals. Leadership can take place only
among people and it involves influencing people. Moreover, leadership is done to attain
organizational g o a l s .
Leadership is concerned with the people in an organization. It is vibrant and leaders also
make use of power to influence people and get the tasks done from t h e m . The very role
of leadership can be carried out only when there is an appropriate leadership pattern
followed. This makes it important for managers to understand the different leadership
styles a v a i l a b l e .
Define leadership
Explain important leadership theories
Identify various leadership styles
Define power and discuss the importance of power in leadership
Differentiate between leadership and power
State the characteristics of managers who use power effectively

7 . 2 D e f i n i t i o n of Leadership
According to Stephen P. Robbins, Timothy A. Judge, and Neharika Vohra,
"Leadership is the ability to influence a group toward the achievement of a
vision or set of goals."
The resource for such an influence may be formal (such as what is provided by h o l d i n g a
managerial position in an organization). Leaders take up various steps to ensure that
t h e i r followers are motivated to work toward the attainment of g o a l s and are clear about
what needs to be attained. Strong leadership and good management are essential for
o r g a n i z a t i o n a l effectiveness.
Man ag e r s at all levels in organizations must influence and motivate their subordinates
continuously. It has been observed that the most important factor that differentiates a
successful organization from an unsuccessful one is the d y n a m i c and effective leadership
that leads and g u i d e s employees in organizations.
The characteristics of leadership can be summarized as u n d e r :
Leadership i n c l u d e s people.
It is the a b i l i t y to influence the behavior of the followers.
Leadership includes uneven distribution of power among the leader and the
followers.
Leadership occurs at numerous levels in an organization.
Leadership comprises values.
7 . 3 P u r p o s e of L e a d e r s h i p
One of the main a i m s of leadership is to provide a sense of responsibility and guide
the employees of an organization. An effective leader always motivates the followers to
work toward the achievement of organizational goals. In today's constantly changing
environment, it is important for employees to understand the importance of changes and
adapt to t h e m . T h i s would not be possible without the presence of an effective leader in
an organization. A leader is known for not only motivating the employees, but also for
developing and motivating teams. Leaders encourage teamwork and help the teams to
set their g o a l s . An effective leader essentially improves the overall decision making
process too.

According to Peter F. Drucker, "An effective leader is one who can make ordinary
men do extraordinary things, make common people do uncommon things.
Leadership is a lifting of a man's sights to a higher vision, the raising of a
man's standard to a higher performance, the building of a man's personality
beyond its normal l i m i t a t i o n . "
7 . 4 L e a d e r s h i p Theories
The important leadership theories are discussed below.
7 .4.1 Trait Theories
The term trait refers to the distinguishing personal characteristics of an individual, such
as self-confidence, intelligence, appearance, adaptability, and so o n . The trait theories of
leadership emphasize that effective leaders, essentially, possess certain characteristic
traits. The trait theory of leadership seeks to determine the personal characteristics that
differentiate leaders from non-leaders.
Various trait theories suggest that the following traits are possessed by successful
leaders in o r g a n i z a t i o n s :
Physical traits (appearance, height, energy, physique, etc.)
Intelligence
Personality traits (adaptability, aggressiveness, self-confidence, etc.)
Will (initiative, perseverance, etc.)
Sociability
Edwin Ghiselli conducted the trait study in detail and concluded that there are certain
characteristics that are common to effective and successful leaders, but are not essential
for success. Ghiselli identified the following six traits (in order of importance), as
significant traits for effective leadership:
Supervisory ability (the ability to get job tasks done from others)
Need for occupational achievement (seeking responsibility and being
motivated to work towards attainment of goals)
Intelligence (capability of good reasoning and judgment)
Decisiveness (ability to make the best decisions and be a problem-solver)
Self-assurance (demonstrating such behavior that displays self-esteem)
Initiative (getting job done with minimal supervision from the boss)

7 .4. 2 Behavioral Theories
According to the behavioral approach to leadership, it is not the personal characteristics
that determine the effectiveness of leaders, but it is their behavior displayed towards
t h e i r followers. The researchers of the behavioral theories argued that i n d i v i d u a l s could
be trained to become leaders, unlike the trait theories. In other words, the behavioral
theories assume that leadership behavior is something that can be 'taught' to
individuals. Two classic research programs, which were conducted at the University of
Michigan and the Ohio State University, provide useful insights related to leadership
behavior.
University of M i c higan Studies
In 1940s, researchers of the University of Michigan studied leadership behaviors.
The two basic leader behaviors that were identified were employee-centered and
production-centered. It was observed that employee-centered leaders were
getting more productive results than production-centered leaders.
Ohio State University Studies
Similarly, when the Ohio University conducted studies, there were two d i m e n s i o n s
of leadership behavior that were identified-consideration and initiating
structure. Consideration refers to the extent to which leaders are sensitive to the
employees' requirements. Initiating structure refers to the extent to which the
leaders define the role structures of the employees. It has been observed that
leaders must be h i g h in both, consideration and the initiative structure.
7.4.3 Contingency Theories
Contingency theories emphasize that every leader displays different styles in different
situations. It believes that leaders must be intuitive and flexible. Contingency theories
believe that the most appropriate leadership style to be adopted by a leader would
depend on the situation. But, mostly every leader has a preferred style.
Fred Fiedler's Leadership Contingency Theory
Fiedler developed the first contingency model for leadership, in detail. Fied le r's
Leadership Contingency Theory indicates that effective performance relies on a
proper relation between a leader's style and the extent to w h i c h a certain situation
gives control to a leader. The theory states that a group performs effectively if
there is a match between the leader's style and the situation.

According to Fiedler, a tool called the Least Preferred Co-worker (LPC) can be used
to assess an individual's leadership style. According to him, a leader with a high
LPC has a relationship-oriented style. On the other hand, a low LPC leader would
have a task-oriented leadership style. Fiedler has identified three contingency or
situational aspects, which are:
o Leader-member relations
o Task structure
o Position structure
Task-oriented leader
Unfavorable
Favorable situations Moderate-control situations
situations
1J
cc
ro Leader-member relations

-@ Task structure
&
posmon power
I II III VIII
Relattonshlp-onented leader
Fig. 7 .4.3a: Findings from the Fiedler's Model
Other Contingency Theories
o Situational Leadership Theory (SLT)
The situational leadership theory emphasizes on the levels of readiness and
willingness for the completion of a task. The theory states that successful
leadership can be attained by choosing the correct leadership style
depending on the readiness of the followers or the degree to which they are
willing to complete a particular task.
o Path-Goal Theory
The path-goal theory has been developed by Robert House. This theory
assumes that a leader's job is to support the followers in the attainment of
t h e i r goals and also guide them and provide them with a direction.
o Leader-Participation Model
The leader-participation model, which was proposed by Victor Vroom and
Philip Yetton, has related leadership behavior to participation in decision

making. This theory assumes that a leader's behavior must adjust so as to
reflect the task structure in the organization.
7.4.4 Leader-Member Exchange ( L M X } Theory
Personal ccmpatlbihty,
subordinate competence, .. .. Leader
and/or extraverted personality
-------1 : i
Formal
I r I
I I Trust r---------- relations
'f 'f 'f'Hgh interactions
Fig. 7.4.4a: Leader-Member Exchange ( L M X } Theory
Source: Stephen P. Robbins, Timothy A. Judge, Neharika Vohra, Organizational Behavior, Pearson
Education, 14th Edition, 2 0 1 1 , pg. 372
The next important leadership theory is the leader-member exchange theory. This
theory addresses the work relationship quality between leaders and their followers. It
refers to the extent to w h i c h the leaders and the members have a m u t u a l respect, trust,
and commitment to one another.
The theory has also identified two types of groups-the in-group and the o u t - g r o u p . The
in-group members are those individuals who are closer to the leader. They usually
hand le higher responsibilities and administrative roles. They are much more committed
to t h e i r d u t i e s and are likelier to get promoted, than the others.
The out-group members, as opposed to the members of the in-group, are less loyal,
and less committed to their leader.
7 .4.5 Charismatic Leadership and Transformational Leadership
Charismatic Leadership
Charismatic leadership goes much beyond the routine leadership techniques. A
charismatic leader is someone who would motivate the followers to do m u c h better
than they would normally do. Followers tend to rise above t h e i r personal interests
for the team or organization's sake. Charismatic leaders are known to be lesser

predictable than transformational leaders. They create a work environment that
adapts to change and may possess visionary ideas that motivate employees to
work harder towards the attainment of goals. They have a strong vision of the
future. They have a n emotional impact on the employees and present t h e i r ideas
in a way that seems real and personal to the followers. A few examples of
charismatic leaders are Mother Teresa and Martin Luther King Jr.
Transformational Leadership
Transformational leaders are similar to charismatic leaders, but are differentiated
from them d u e to their special capability to introduce innovation and creativity by
recognizing the needs of their followers. They encourage their followers to view
the old problems through a new angle altogether. Transformational leaders are
known to create changes in both, their followers, as well as the organization.
Unlike charismatic leaders, transformational leaders emphasize more on the
i n t a n g i b l e aspects, such as vision, values, and ideas that facilitate the building of
relationships. Recent studies indicate that transformational leaders have a positive
influence on the development and performance of their followers. A few examples
of transformational leaders are Bill Gates of Microsoft and Steve Jobs of Apple.
7 . 5 L e a d e r s h i p Styles
A leadership style is the manner and approach of providing direction to a team,
implementing plans, and motivating individuals to complete a task. It can be said that
there are as many styles of leadership, as the number of leaders. In other words, it can
be said that every leader has a preferred style of leadership. As a manager, when you
understand these leadership styles, it helps you in becoming an effective leader. The
concept of situational leadership is of immense importance for today's organizations.
This indicates that leaders must adopt various styles, depending on the situation that
they face. Given below are the various leadership styles based on traditional theories
and modern techniques.
7.5.1 Leadership Styles Based on Modern Techniques
Autocratic Style
Under this style, leaders have a lot of power over their followers. Autocratic
leaders tend to assume the power of decision making within them. Under the
autocratic style of leadership, followers usually follow the d ec i s i o n made by the
leader. They do not have any say in the decision making process or even in the

implementation. Autocratic leaders are the ones who take up the entire authority
as well as responsibility. A benefit of this style of leadership is that decisions are
generally made q u i c k l y , and tasks get done efficiently too. However, t h i s style may
also lead to employee absenteeism and high rates of turnover. Autocratic
leadership is best used during crises, as decisions have to be made and
implemented quickly.
Democratic Style
Under democratic leadership, leaders distribute their authority to their followers.
Followers are encouraged to give their suggestions and express t h e i r suggestions
during the decision making process. They are also invited to voice their opinions
during the implementation stage. The final decisions, however, are made by the
leader. Team members are known to have high job satisfaction under the
democratic style, because they are considered as a part of the decision making
process. This style also helps in the development of people's skills. Though the
process of decision making may take time under democratic leadership, the
outcomes have been observed to be positive.
Participative Style
Similar to democratic style, the participative style of leadership also believes in
leaders decentralizing their authority. They support their followers to be a part of
the decision making as well as the implementation process in the organization.
Under the participative style, decisions are made either by the leader or by the
subordinates. This style enhances the creativity of team members as they are
always involved in some kind of project or activity. This approach is best suited for
teams, because in teams the quality of the outcome is more important than the
efficiency. The downside of participative leadership is that it may h i n d e r situations
where speed of the overall process is important.
Free-Rein or Laissez-Faire Style
This style refers to leaders who allow their subordinates to work on their own.
They prefer to avoid any kind of responsibility or authority. Such leaders rely on
the group to formulate and implement goals, policies, and programs within an
organization. Laissez-faire leaders give complete freedom to their employees to
set their own deadlines. This leadership style can be effective only if the leaders
monitor employee performance continuously and give feedback regularly. Such a
style may lead to high levels of job satisfaction as well as motivation, among the

members. However, if employees lack skills or fail to m a n a g e t h e i r time, it could
turn out to be d a m a g i n g as well.
7 . 5 . 2 Leadership Styles Based on Modern Techniques
Envisioning
This leadership style based on modern techniques believes in creating a vision or
picture of the future or that of a desired situation in the future with which the
followers can identify themselves. This leadership style causes excitement. The
main aim of envisioning is to communicate to the followers, a certain level of
vision along with setting high goals and expectations.
Energizing
The leader u n d e r this style directs the energy generated toward the motivation of
employees of the organization.
Enabling
Here, leaders empathize with the followers and help them psychologically. They
motivate the followers emotionally to face challenging goals and create positive
outcomes. The main objective of this style is to empower employees, express
personal support to them, and empathize with them.
7 . 6 Leader's Power
Power can be defined as the ability that A has to influence the behavior of B in
such a way that, B behaves in accordance with the wishes of A. The key term
here is 'influence'. In an organization, a leader's influence over the followers would
depend on a n u m b e r of factors, which are:
The nature of the leader
The nature of the followers
The behavior of the leader
The organizational situation
The behavior of the followers
The leader's capacity to influence the followers
As mentioned above, leadership is the ability to influence people. For this to happen,
leaders have to make effective use of power. At times, the terms power and influence or
power and leadership are used interchangeably. But all the three concepts are different.

Power resu Its from interactions between leaders and their followers. At times, power is
gained from the position that one holds in an organization. Power may also come from
the leader's personal interests, values, and objectives.
7. 7 Bases of Power
The bases or sources of power can be divided into two categories-formal power and
personal power. They are further classified in Fig. 7. 7a.
Coercive
Power
Reward
Formal Power
Power
Legitimate
Power
Bases of Power
Expert Power
Personal Power
< Referent
Power
Fig. 7.7a: Bases of Power
Formal Power
For a t r a d i t i o n a l manager, power comes from the organization. It is the position held by
the manager that gives the authority to reward or punish the subordinates and to
influence their behavior. The three forms of position power used by leaders in
organizations to influence behavior are:
Coercive Power
Under this power, a manager has the power to punish or suggest punishment.
Managers possess coercive power when they have the power to withdraw pay
increments, to demote people, criticize, and so on. If an employee does not
perform well, the manager possessing coercive power has the right to criticize that
employee or even put a letter with a negative remark in his/her file.

Reward Power
In reward power, the leader has the authority to reward others. Managers may
have access to the formal rewards in organizations, such as pay increments and
incentives. Rewards may be used as a tool by managers to influence employee
behavior for achieving organizational objectives.
Legitimate Power
Power that is gained from a management position in an organization and the
authority of the leader is referred to as legitimate power. If an individual is
selected as a supervisor, most of the employees understand that they are
supposed to follow the orders of the supervisor. The employees consider this
source of power as legitimate, and thus comply.
Personal Power
U n l i k e formal power, personal power comes from a leader's personal characteristics. It is
of great importance to a leader because it is not only a leader's position that matters,
even the special knowledge or certain characteristics possessed by the leader are of
great importance. The two types of position power are:
Expert Power
Power that occurs due to a special skill of the leader is referred to as expert
power. If a leader is an expert, the followers accept the suggestions because of
the leader's superior knowledge and skills. At top management, leaders may lack
expert power as their subordinates would know much more about technical details
than them.
Referent Power
Referent power is a result of a leader's personal characteristics that demand the
followers' respect and attention. This type of power does not depend on the
position held by the leader. When a manager is admired by subordinates due to
the way in which he/she interacts with them, it can be referred to as referent
power. Referent power is a trait that stands out in charismatic leaders.
Charismatic leaders gain respect from followers and have a lot of followers, mainly
d u e to personal power.

7 . 8 Power Tactics
Another area to be noted is how managers make use of their power to lead. For this,
they i m p l e m e n t a c o m b i n a t i o n of various strategies or tactics. Power tactics refer to the
ways in w h i c h leaders translate the bases of power into certain actions.
According to various researches that have been conducted, nine distinct influence tactics
that are used by leaders have been identified. They are:
Legitimacy
Legitimacy refers to relying on your authority position and making a request in
accordance with organizational policies or rules.
Rational Persuasion
Presenting logical arguments and factual evidence to express a request is
considered as reasonable.
Inspirational Appeals
Development of emotional commitment by appealing to a target's values, needs,
and aspirations is referred to as inspirational appeals.
Consultation
Consultation means increasing a target's support by involving him/her in deciding
how to accomplish a plan.
Exchange
Exchange means rewarding the target with benefits in return for following a
request.
Personal Appeals
U n d e r a personal appeal, a leader asks for compliance on the basis of f r i e n d s h i p or
loyalty.
Ingratiation
U n d e r this power tactic, a leader makes use of flattery, praise or friendly behavior
before m a k i n g a request.
Pressure
Under this tactic, a leader makes use of warnings and threats to ensure the
fulfillment of request.
Coalitions
Coalition refers to enlisting the aid or support of others to persuade the target to
agree.

7 . 9 Difference: L e a d e r s h i p and Power
The terms leadership and power are often used interchangeably. Though the terms are
related, both the concepts are different from one another. While leadership is concerned
with influencing others, power is used as a tool by leaders to influence others. The
important points of difference between the two concepts are represented in Table 7 .9a.
Leadership Power
The m a i n aim of leadership is the Power is used as a means for a t t a i n i n g
attainment of organizational goals. the goals of the o r g a n i z a t i o n .
Leadership requires compatibility Power does not require any
between the goals of the leaders and compatibility between the goals of the
the followers. leaders and followers.
Leadership focuses on the downward Power, unlike leadership, works in a l l
influence of followers. directions.
Leadership researches aim at finding Researches on power focus on
answers to questions pertaining to the understanding and finding the best
best leadership style to be adopted. methods to g a i n the compliance of
followers.
Table 7 . 9 . a : Differences between Leadership and Power

7. 1 0 Characteristics of Managers Who Use Power
Effectively
Given below are the characteristics of managers who make use of power effectively in
organizations:
M a na ge r s who use power effectively are usually sensitive to the source of their
power. They do not apply expert power from one area to another area.
These managers understand the costs, risks, and the advantage of the various
bases of power. They make appropriate use of the various types of power,
depending on the situation that they face in an organization.
Such managers realize that each power source has different uses and benefits.
They attempt to use the method that best suits the situation.
M a na ge r s who use power effectively have certain career goals too. These goals
allow them to use the power that they acquire.
These m a na g e r s act maturely and they practice self-control by a v o i d ing hasty
actions and decisions, which may not be reasonable to the d e m a n d s of others.
These managers use power comfortably as they understand that it is necessary to
make use of power to get things done from others.

Leadership is the ability to influence a group toward the achievement of a vision or
set of g o a l s .
The important theories of leadership are trait, behavioral, and contingency.
The Leader-Member Exchange (LMX) theory addresses the work relationship
quality between the leaders and their followers.
Organizations are employing managers who exhibit transformational leadership
qualities.
The four traditional leadership styles are autocratic style, democratic style,
participative style, and Free-Rein or Laissez-Faire style.
The words power and leadership are used interchangeably many times. This is
because leaders use power as a means of achieving group g o a l s . Leaders achieve
goals and power is a means to attain them.

Conflict a n d
Negotiation
08. Conflict and Negotiation eBook
8 . 1 Introduction
In organizations, i n d i v i d u a l s share different opinions on the same issues. This is because
every human being has different points of view on everything. When individuals fail to
agree with each other's opinions and do not share similar viewpoints, it results in
conflicts. There could be conflicts between individuals, departments, groups or
companies. Conflicts are usually considered to be negative. But it must be noted that
conflicts in organizations can have positive and constructive outcomes like clarification of
issues and facilitating change along with negative effects, like lower productivity from
wasteful conflicts. Conflicts are mainly caused due to lack of proper c o m m u n i c a t i o n and
personality conflicts.
O r g a n i z a t i o n s can be unaffected by negative conflicts only if m a n a g e r s identify them and
solve them quickly and successfully, in an effective way. This can be done through
negotiations. However, the timing of the negotiation is critical for success. It must also
be understood that whether good or bad, conflicts are inevitable in any organization.
Organizations can certainly benefit from conflicts if managers hand le them
constructively.
Define conflict
Discuss the transition in conflict thought
E x p l a i n the process of conflict
Define negotiation and explain the negotiation process
Identify third-party roles negotiations

8 . 2 Conflict
Usually, a conflict is perceived by people to be a situation that involves a difference of
o p i n i o n among individuals. A conflict could be a disagreement, i n c o m p a t i b i l i t y or hostility
among individuals and groups in an organization. According to Stephen P. Robbins,
Timothy A. Judge, and Neharika Vohra, "Conflict is a process that begins when
one party perceives that another party has negatively affected, or is about to
negatively affect something that the first party cares about."
Robert Kreitner and Angelo Kinicki define conflict as, "a process in which one
party perceives that its interest are being opposed or negatively affected by
another party." It must be understood that not all conflicts that take place in an
organization are negative. Some types of conflicts bring in new solutions and also
enhance creativity. Thus, it is of great importance for managers to understand the
difference between functional conflicts and dysfunctional conflicts. W h i l e a functional
conflict might take the form of a constructive argument, a dysfunctional conflict may
take the form of a destructive argument within an organization. Functional problems
address the issues in an organization and facilitate in bringing about positive changes. It
helps in producing new ideas and learning among employees. A dysfunctional conflict
includes interactions among groups, which would cause harm to the organization and
would act as an obstacle to the attainment of the organization's goals. Effective
managers must be able to differentiate these two types of conflicts in organizations.
8 . 2 . 1 Types of Conflicts
The three m a i n types of conflicts are:
Task Conflict
Task conflict refers to conflicts in regard to organizational goals. This type of
conflict takes place at the peer level, that is, between two managers working at
the same level or even between a manager and a subordinate.
Process Conflict
This is a type of conflict that occurs when individuals agree on the goals to be
achieved, but disagree on the way in which the goals must be achieved. While
they are working towards the same goals, they perceive different processes to be
the best ways to reach those goals.

Relationship Conflict
When two individuals have different value systems, it leads to interpersonal
issues. These would result in differences and personality conflicts between them,
w h i c h are referred to as relationship conflicts.
According to researches, it has been found that relationship conflicts are mostly
dysfunctional. This is because it causes personality clashes and would reduce mutual
understanding between the parties. This would also hinder the effective completion of
job tasks that lead to organizational goals. It has also been noticed that task conflicts
and process conflicts are usually functional when they occur at low levels. This is
because they encourage the employees to think more and come up with the best
solutions, thereby, enhancing their performance.
8 . 2 . 2 Advantages of Functional Conflicts
The advantages of functional conflicts are:
Release Tension
When individuals put across their opinions, they clear the confusion and release
tension. Suppression of tension can lead to frustration and stress among
employees. On the other hand, expressing opinions and releasing tension can
reduce the levels of stress that employees face at the workplace.
Enhance Creativity
Conflicts encourage individuals to think and come up with creative ideas.
Group Cohesiveness
Conflicts also result in enhanced group loyalty, which in turn increases the
cooperation among g r o u p members.
Adapting to Changes
When faced with conflicts, people may have change in attitude and thinking. They
may be ready to a d a p t to changes in the work environment.
Realizing Weakness
Conflicts also help work groups and individuals realize their weaknesses. Thus,
they can work on their weaknesses and work toward betterment.

Better Decision Making
Conflicts result in creative thinking and the generation of various ideas. This helps
members in taking better decisions.
Awareness
Conflicts help in realizing the problems as well as becoming aware of the best
solutions to them.
8 . 2 . 3 Effects of Dysfunctional Conflicts
As opposed to functional conflicts, dysfunctional conflicts may lead to unfavorable
c o n d i t i o n s in organizations, which are explained below:
Increased Tension
Unresolved conflicts could lead to increased levels of tension in organizations and
lead to frustration and anxiety among the members facing the conflicts.
Declined Productivity
Once members face conflicts, the attention would be more on the conflicts and less
on t h e i r work performance. This would lead to declined productivity of employees.
Goal Conflict
Members' attention is usually diverted from the attainment of goals to conflicts.
This would not be favorable for organizations in the l o n g - r u n .
Increased Employee Turnover
Due to conflicts, employees who are high performers may leave the organization,
w h i c h would be a loss to the organization.
Atmosphere of Distrust
The negativity in dysfunctional conflicts would create an atmosphere of distrust
among employees and they may stop interacting with others working in the
organization.

8 . 3 T r a n s i t i o n s i n Conflict Thought
It can be rightly said that there has always been a conflict on whether conflicts are
advantageous or harmful for organizations. One school of t h o u g h t a r g u ed that conflicts
are not necessary in organizations, as they lead to malfunctioning. This is referred to as
the traditional view. Another school of thought proposed the exact opposite of the
traditional view. It believed that conflicts are not only a positive force, but are also
necessary for the effective functioning of groups. This is called the interactionist view.
The resolution focused view of conflict argues that instead of focusing on whether a
conflict is good or bad, the focus must be on resolving them. These views are explained
in d e t a i l , below:
The Traditional View of Conflict
The traditional view of conflict emphasized that any kind of conflict in
organizations was destructive and harmful and that they must be avoided.
Conflicts were considered to be a negative force and were always discussed with
the usage of words like violence and destruction. The traditional view of conflict
was consistent with the attitudes related to group behavior that existed in 1930s
and 1940s. According to this view, a conflict was a dysfunctional outcome that
resulted from the lack of communication, openness, trust, and responsive
managers.
The Interactionist View of Conflict
According to the interactionist view of conflict, a conflict is necessary in g r o u p s , for
t h e i r effective performance. However, it does not support every form of conflict. It
supports only the constructive form of conflict. This view states that a certain
minimum level of conflict within organizational groups can make them creative. It
is also believed that functional conflict improves group performance, and is t h u s a
constructive form of conflict. But the view also believes that dysfunctional conflict
can act as an obstacle to a group's effective performance.
Resolution Focused View of Conflict
These days, researchers pay more attention to the context in which the conflict
occurs. The resolution focused view of conflict is concerned with resolution of
conflicts than with encouraging good conflicts and d i sc o u r a g i n g bad conflicts.
According to the view, the negative effects of conflicts can be reduced to a
considerable extent by preparing individuals to face conflicts, developing resolution
strategies, and promoting open discussions.

8 . 4 The Conflict Process
Every conflict in an organization is a process that comprises five stages, which is
represented as in Fig. 8.4a.
Fig. 8.4a: The Conflict Process
The first stage of the conflict process is that of potential opposition or
incompatibility. T h i s stage is characterized by the appearance of c o n d i t i o n s that create
opportunities for conflicts to take place. Such conditions can be caused by various
factors, such as c o m m u n i ca t i o n , structure, and personal variables. At times, conflicts
arise when there is too much or too little communication. Also, barriers like noise and
semantic barriers during communication can result in misunderstandings, causing
conflicts. Similarly, the structure in an organization can influence conflicts. For example,
if there are role ambiguities, diversity in goals among group members or improper
reward systems, these could lead to conflicts. Another important factor to be considered
is that of personal variables, which include attitudes, values, and personality of
i n d i v i d u a l s in organizations.
The second stage of cognition and personalization leads to the awareness of factors
or conditions that can result in conflicts. In this stage, effective communication can
avoid any further conflict. But if any of the first-stage factors comes into picture, the
outcome would be a conflict. Since a conflict is a 'perceived conflict', it does not make it

personalized. Conflict is felt by individuals in various forms like tension, animosity, and
anxiety, in t h i s stage.
Intentions, which is the third stage, includes emotional involvement. It is in t h i s stage
that the issues causing the conflict are defined. With the two dimensions of
cooperativeness and assertiveness, it is able identify five conflict hand ling intentions
w h i c h are Competing, Collaborating, Compromising, Avoiding, and Accommodating. This
is represented in the image below.

Q)
>
Competing Collaborating
t:
.. .
Q)
-
Ill
Ill "'
"'
<t
A
QI
c:
QI
> -
f
'
QI
Ill
Q)
>
Compromising
.............
Ill
t::
<
. ..
Q)
"'
"'
"'
c:
::) Avoiding Accommodating
Uncooperative Cooperative
Cooperativeness
Fig. 8.4b: Dimensions of Conflict-Handling Intentions
Source: Organizational Behavior, 14"' Edition - Stephen P. Robbins, Timothy A. Judge, Neharika Vohra
(Page 446)
The parties are actively involved in the conflict in the fourth stage, which is behavior.
This stage includes the actions and reactions of the parties involved, such as open
aggression and at times, destructive behavior. Also, parties who are not involved in the
conflict become aware of it. In this stage, the members or managers try to m a n a g e and
control the conflict to de-escalate it.
The final stage in the conflict process is that of outcomes. The aftermath could be
either positive or negative, depending on how the conflict was resolved. It must be
noted that if the conflict is solved at an earlier stage, there would be better cooperation
among members of a group, than when a conflict is resolved at a later stage. If a
conflict is not resolved in the earlier stage, it can aggravate and become serious. The
outcome of a conflict depends on how a manager handles the situation. If handled

tactfully, it can lead to constructive outcomes, like better d ec i s i o n making and
improvements in innovation and creativity. On the other hand, if a conflict is not handled
well, it can lead to negative consequences, such as disintegration of the g r o u p .
8 . 5 Negotiation
Negotiation is an important part of the conflict resolution process. The process of
negotiation can be defined as, "A process in which two or more parties exchange
goods or services and attempt to agree on the exchange rate for them." T h i s can
be described as a decision making process in which the parties have different
preferences. In the simplest form, negotiation occurs between two individuals who are
deciding what to do. A much more complicated form of negotiation would be when a
m a n a g e r and an employee are deciding on performance goals for the forthcoming year,
and the standards to measure them. There are two approaches to negotiation, namely,
distributive b a r g a i n i n g and integrative bargaining.
Distributive Bargaining
Take an example where you see a used bike for sale o n l i n e . You like it and go to
see it too. Once you have personally seen it, you wish to purchase it, but at a
much lesser price than what the seller is asking for. Both of you negotiate over the
price of the bike. This negotiation approach is referred to as distributive
bargaining. The significance of distributive bargaining is that, the negotiation is
over 'who gets what share of the fixed pie'. Fixed pie refers to a certain fixed
a m o u n t of goods that needs distribution. When a pie is fixed, the parties negotiate
in a distributive manner. This type of negotiation is a l so referred to as the WIN
LOSE situation.
Integrative Bargaining
As opposed to distributive bargaining, integrative bargaining is a type of
negotiation which involves the cooperation of the forces to attain something
jointly. This form includes forming of a long-term relationship that would bring
mutual outcomes. This type of negotiation is also known as the WIN-WIN
situation.

8 . 6 The N e g o t i a t i o n Process
Fig. 8 . 6 a : The Negotiation Process
The process of negotiation, which is used for conflict resolution in organizations, goes
t h r o u g h the following steps:
1. Preparation and Planning
This is the first stage of the negotiation process. In a negotiation, it is important to
understand what the problem is about. The main aim of this stage is to collect
information regarding the conflict, such as the nature of the conflict, the reasons
that lead the parties to the negotiation, the parties involved, and so on. This
information is then used to develop a strategy that is appropriate to the situation.
This is referred to as choosing the Best Alternative to a Negotiated
Agreement (BATNA). This is considered as the lowest value that is acceptable in
a negotiation. If an offer is higher than the BATNA, then it is accepted because it is
better than receiving nothing at all. While you decide on the strategy and BATNA,
it is necessary and important to know the other party's BATNA. This w i l l help you
in offering the other party a BATNA that would be considered as much more
attractive than his/her own BATNA. This would also make your position much
stronger t h a n the other party, in a negotiation.
2. Definition of Ground Rules
After collecting information and deciding on the strategy, it is essential to define
the ground rules and procedures for the negotiation process. Even the time and
place of negotiation must be decided, in consultation with the other members of
the team. Both the parties exchange or present their d e m a n d s u n d e r t h i s stage.

3. Clarification and Justification
After deciding the ground rules, the parties justify, clarify, and explain their
d e m a n d s . This h e l p s in understanding the issues and their importance. It would be
an added advantage if both the parties present each other with documentation
that supports each one's positions.
4. B a r g a i n i n g and Problem Solving
Under this stage, both the parties attempt to arrive at a so l u t i o n to resolve the
conflict. T h i s would also help in avoiding the development of a n y further conflicts.
But, both the parties would have to undoubtedly make a concession during this
stage.
5. Closure and Implementation
This is the final stage in the negotiation process. It involves finalizing the
agreement and developing processes for implementation, monitoring, and follow
up.
8.6.1 Negotiation Effectiveness
There are a n u m b e r of factors that affect the effectiveness of negotiations and influence
t h e m . They are:
Situational Factors
The various aspects of a situation that have an influence on negotiations are
location, the physical setting and the time at which the negotiation takes place.
Power and Negotiation
The power that both the parties bring to the negotiation table has an impact on
the final outcome of the negotiation. The more power a party has, the better the
outcome w i l l be of the negotiation.
Behavioral Factors
If people want favorable outcomes from a negotiation, it is better that they
prepare themselves for it. This is where behavioral factors play an important role.
The negotiators must foresee what the other party wants from the negotiation.
They must be good listeners and collect important information, which would help
them in d e v e l o p i n g proposals for the other party. The parties must also effectively
communicate with each other during the negotiation process. Another point to be
kept in m i n d is that negotiators must make concessions tactfully.

Personality
It has been observed that personality and intelligence of i n d i v i d u a l s does have an
impact on negotiations. It is generally assumed that extraverted and agreeable
individuals are not good at distributive bargaining. This is because agreeable
individuals emphasize more on cooperation, than on negotiation. Extraverted
individuals tend to share more information than they should, and these
characteristic traits of agreeable individuals and extraverts lead to liabilities. Thus,
the best distributive bargainer is considered to be disagreeable introverts. This is
because such individuals are interested in their own outcomes and do not
emphasize on pleasing others.
Moods/ Emotions
Both, integrative as well as distributive negotiations are affected by the moods and
emotions of the negotiators during the process. It has been noticed that
negotiators who are angry are better negotiators, in terms of the outcome. T h i s is
because anger would result in compromises from their opponents. This would
happen even if the negotiators pretend to be angry.
Gender Differences
Research evidences indicate that women and men negotiate differently. The
stereotypes suggest that women are much more cooperative and agreeable than
men during negotiations and men tend to negotiate better. The main reason for
t h i s is that women are considered to be 'pleasant', while men are considered to be
'tough'. Evidences indicate that women are usually hurt by their own attitudes and
behaviors during the negotiation process. Managerial women display less
confidence while negotiating than men. They even tend to be less satisfied with
the outcomes of the negotiations, even if they are equal to those achieved by
men. It has been observed that women are less likely to consider an ambiguous
situation as an opportunity, while men do. Also it has been observed that women
do not engage in negotiations, even if they are in their best interest.

8 . 7 T h i r d - p a r t y Negotiations
At times, individuals and groups find it difficult to reach a solution in a negotiation. In
such cases, they may approach a third party to help them in resolving the conflicts.
There are four basic third-party roles, they are:
Mediator
A mediator can be defined as a neutral third party who enables a negotiated
solution through persuasion and rational argument. Mediation is considered to be
effective d u r i n g conflicts of moderate levels. The perception of the mediator is also
important. A mediator must be perceived as someone who is neutral and not
forced.
Arbitrator
An arbitrator is a neutral third party who judges a negotiation and dictates an
agreement. Arbitration could be either voluntary or compulsory. An advantage of
arbitration, as compared to mediation is that, it would always lead to a settlement.
Whether there would be a negative side or not, would depend on how coercive the
arbitrator is.
Conciliator
A conciliator can be defined as a third party acting as a communication link
between the negotiator and the opponent. The effectiveness of conciliation and
mediation are difficult to compare as it has been observed that both of them
overlap to a considerable extent. Conciliators usually act as a means or medium
for communication in negotiations. They also participate in collecting information
and interpreting messages.
Consultant
A consultant is an impartial third party, skilled in conflict management, who
facilitates creative problem so l v i n g . Unlike the rest of the third parties, consultants
emphasize on improving the relationship between parties in the negotiation, rather
than the settlement of the conflict. Instead of suggesting solutions to the
problems, consultants encourage both the parties to understand and work with
each other. This is an approach that has a long-term focus. The main focus of
consultants is to create and build a positive attitude and relationship between the
conflicting parties.

8 . 8 Chapter S u m m a r y
Conflicts can be either constructive or destructive to the functioning of a g r o u p or
unit.
The five stages of the conflict process are:
1. Potential opposition or incompatibility
2. Cognition and personalization
3. Intentions
4. Behavior and
5. Outcomes
Negotiation is an ongoing activity in groups and organizations.
Distributive bargaining can resolve disputes, but it often negatively affects the
satisfaction of one or more negotiators.
Integrative bargaining, in contrast, tends to provide outcomes that satisfy all
parties and that b u i l d lasting relationships.
Five steps of the negotiation process are:
1. Preparation and planning
2. Definition of ground rules
3. Clarification and justification
4. Bargaining and problem solving
5. Closure and implementation
The four basic third-party roles are mediator, arbitrator, conciliator, and
consultant.

Organizational
Structure a n d
Culture
09. Organizational Structure and Culture eBook
9 . 1 Introduction
Organizations are social and economic bodies that comprise employees who perform
various tasks to attain the organizational goals. Though employees have personal goals,
they work together to attain organizational objectives.
Organizational design may appear to be just a structural aspect. But the design and
structure of an organization is planned after carefully analyzing work roles and
relationships. This is done so that the organization would be able to attain its specific
goals effectively. An organization is not just a place of work; it is much more than that.
Employees spend a considerable amount of time at their workplaces. Hence, culture is
as important as all the other aspects needed for the effective functioning of an
organization. O r g a n i z a t i o n s with strong cultures are stable and tend to perform well.
Structural decisions and decisions regarding an organization's culture are fundamental.
Organizational structure and culture decisions must be planned before being executed,
because they influence various significant factors like the attitudes and behaviors of
employees and the effective attainment of organizational goals.
Define organizational structure
Describe the elements of organizational structure
E x p l a i n common as well as new organizational designs
Discuss determinants of organization's structure
Define organizational culture
Identify methods of creating and sustaining culture
Discuss how employees learn culture
Explain how to create an ethical and positive organizational culture
Define workplace spirituality
Identify characteristics of a spiritual organization

9 . 2 W h a t Is O r g a n i z a t i o n a l Structure?
According to Stephen P. Robbins, Timothy A. Judge, and Neharika Vohra,
organizational structure is defined as, "the way in which job tasks are formally
divided, grouped, and coordinated." In other words, it can be said that
organizational structure refers to the formal division of work and tasks and the formal
interpersonal relationships that coordinate the various activities of an o r g a n i z a t i o n .
McShane and Hill define organizational structure as, "the location of decision
making responsibilities in the firm, the formal division of the organization into
sub-units and the establishment of integrating mechanisms to coordinate the
activities of sub-units." An organization is a formal structure for carrying out
managerial functions like planning, organizing, leading, and controlling. The formal
structure of an organization has two angles-horizontal and vertical. The horizontal
dimension shows the d i v i s i o n of departments in an organization. The vertical dimension
e x p l a i n s who reports to whom, and also gives a picture of employees' r e s p o n s i b i l i t i e s in
the o r g a n i z a t i o n .
9 . 3 E l e m e n t s of O r g a n i z a t i o n a l Structure
The organizational structure determines how jobs are divided among employees. There
are six elements that help in defining the organizational structure, which are explained
below:
Work Specialization
Work specialization refers to the extent to which tasks in an organization are s u b d i v i d e d
into separate jobs. Instead of one individual carrying out a job, every step in the job is
performed by separate i n d i v i d u a l s .
Chain of Command
The next element, chain of command, is the unbroken line of authority from the top
level of a n organization to the lowest level. This also defines who reports to whom in an
organization.
Departmentalization
After the various jobs have been divided under work specialization, they also need to be
grouped so that the common tasks can be coordinated. This is called
departmentalization. Departmentalizing is carried out on the basis of the functions

9 . 1 3 S p i r i t u a l i t y a n d O r g a n i z a t i o n a l Culture
Workplace s p i r i t u a l i t y c a n be defined as, "The recognition that people have an i n n e r
life that nourishes and is nourished by meaningful work that takes place in the
context of c o m m u n i t y . "
Following are the characteristics of a spiritual organization:
Strong sense of determination
Values creativity
Trust and respect
H u m a n i s t i c work methods
Freedom of employee expression
9 . 1 3 . 1 Criticisms of Workplace Spirituality
There are certain q u e s t i o n s or criticisms about workplace spirituality. They are:
The first question in regards to the scientific foundation is, "What really is
workplace spirituality? Is it just another m a n a g e m e n t catchphrase?"
There is very less research in regard to workplace spirituality. Its e n d u r a n c e is also
not known.
The next question is, "Are spiritual organizations legitimate?"
This is an undoubtedly valid criticism when spirituality is spoken in relation with
religion and god in the work environments. However, this criticism is seen as less
valid when the main aim is just limited to helping individuals to find meaning in
t h e i r work lives.
The third question is, "Are the concepts of spirituality and organizational
profits, compatible?"
According to a recent study, the organizations that introduced in them, techniques
based on spirituality, found improved productivity and also reduced employee
turnover to a considerable extent.

Organizational structure is defined as the way in which job tasks are formally
divided, g r o u p e d , and coordinated.
Work specialization, chain of command, departmentalization, span of control,
centralization, formalization, are the six elements of organizational structure.
Simple structure, matrix structure, and the bureaucracy are the common
organizational designs.
Strategy, organization size, technology, and environment are the determinants of
o r g a n i z a t i o n a l structure.
Organizational structure refers to a system of shared meaning held by members
that d i s t i n g u i s h e s the organization from other organizations.
Stories, rituals, material symbols, and language are the ways in which employees
learn culture.
Workplace spirituality refers to the recognition that people have an inner life that
nourishes and is nourished by meaningful work that takes place in the context of
community.

Organizational
C h a n g e a n d Stress
Management
1 0 . Organizational Change and Stress Management eBook
1 0 . 1 Introduction
Organizations are dynamic entities and hence, change is inevitable. Today, even the
most successful organizations have to adapt to the changes in the environment, to
c on tinue h o l d i n g t h e i r positions in the market. The primary r e s p o n s i b i l i t y of managers in
organizations is to identify these changes and incorporate them. But there may be
resistance to these changes from the workforce. Managers must work on reducing the
resistance and stabilizing desired employee behaviors. A good management always
adapts to changes quickly and appropriately. Change takes place at various levels and
an organization must be innovative and creative enough to come up with strategies to
cope with them. Thus, the challenge is not in deciding the strategy to be adopted, but in
the very execution of it.
Another issue in organizations is the stress among employees. I n d i v i d u a l s face stress in
all walks of life. While stress affects psychological systems, as time progresses, it
reflects on the behaviors and physical systems of the employees. Thus, today change
and stress management are major challenges in organizations. Managers must be able
to envision the possibilities and take corrective measures a c c o r d i n g l y .
Discuss change in organizations
Describe the sources of resistance to change
Discuss the ways to overcome resistance to change
Discuss important approaches to manage organizational change
Define stress and list the potential sources of stress
Discuss the consequences of stress

10. Organizational Change a n d Stress M a n a g e m e n t eBook
1 0 . 2 Forces for C h a n g e
A change refers to making things different. Organizational change is inevitable.
According to Newstorm, organizational change is, "any alteration occurring in the
work environment that affects the ways in which employees must act."
Adjustments between people, technology, and even the structural setup take place when
organizations operate for a long time. Similarly, organizations also create a relation with
t h e i r external environment. Since the environment changes rapidly, it is also necessary
for organizations to incorporate the necessary changes in them. Resistance to changes
among employees would give rise to a problem of change. Changes in organizations
however, are a must, whether brought in w i l l i n g l y or unwillingly. Some of the changes
related to organizations include, changes in employees because of transfers and/or
promotions, job-enrichment, work processes, entering new markets, introduction of new
products or services, and so o n .
The response to the external forces must be fast, so that organizations can capitalize on
the opportunities in the continuously changing environment. The important external
forces of change are explained below:
Nature of Workforce
Today, the population is going through significant changes in the demographic
characteristics ( a g i n g population, education, level of skills, c u l t u r a l diversity, e t c . ) .
This changing aspect of the workforce increases the need for organizations to be
much more focused on workforce diversity. These differences in the nature of the
workforce lead to changes in the organizational structure, relationships, etc.
Economic Conditions
The economic situation determines the supply and demand for capital, labor, and
raw material. Other economic factors like global recession, collapse of the financial
sector, etc. are also factors that lead to changes in organizations.
Competition
With high levels of competition existing in today's external environment, it is
important for organizations to innovate, come up with new ideas, and launch new
products into markets. The political and economic developments and the
improvements in transportation and communication have made markets much
more competitive than before. Companies who adapt quickly also require equally
responsive personnel.

Technology
The nature of jobs has changed to a great extent with technological innovations
like m o b i l e computers, handheld devices, and the emergence of social networking
sites. This is because technological innovations such as these have helped
organizations in reducing the overall time of processes. Technology is used by
organizations to improve their market competitiveness.
Consumer Preferences
The choices and preferences of customers have changed a lot over time a n d also
keep changing continuously. Their expectations from organizations have c h a n g e d .
They expect organizations to offer them high quality products at low prices with
h i g h levels of customer service.
Political Scenario
The regulations of the government and also the existing political scenario
determine the changes to be inculcated in organizations.
Following are the internal forces that determine organizational c h a n g e :
Behavior of M a n a g e m e n t
The behavior of the management in organizations can be one of the internal forces
of c h a n g e . This could be in the form of poor guidance and support.
Interpersonal Conflicts
Extreme conflicts between a manager and his/her subordinates could also lead to
o r g a n i z a t i o n a l changes.
Perceptions of Employees
When there is work role ambiguity and also lack of clarity about managerial
expectations, it leads to internal forces seeking organizational c h a n g e .
10.3 Planned Change
Change in organizations refers to making things different. For example, the waiters of
a restaurant of a five-star hotel talk to their manager about t h e i r rigid 7 AM - 4 PM shift.
They inform the manager that it is difficult for them to stick to the same rigid
timing every day, due to their personal commitments. They also let the manager know
that if these timings prevail, they would have to search for other job opportunities.

The manager contemplates for a while and comes up with the favorable solution of
flextime. This refers to flexible working hours. This was thus, considered as an ideal
solution by the waiters of the restaurant.
In the above-mentioned example, change was not intentional. A planned change,
as opposed to this is a carefully thought and deliberate organizational change that is
goal-oriented. Planned changes in organizations are made possible by the change
agents in an o r g a n i z a t i o n . Change agents refer to those members in organizations that
take u p the responsibility for managing the change activities in an o r g a n i z a t i o n .
1 0 . 4 Resistance to C h a n g e
Employees in organizations resist change because it threatens their security, status,
interactions, and so o n . Resistance could either be from employees or d u e to the culture
of organizations.
1 0 . 4 . 1 Sources of Resistance to Change
The sources of resistance to organizational change are discussed below.
Internal Sources
Generally, there are certain characteristics of the employees or internal sources that
make them resist changes. These characteristics could be:
Beliefs, personalities, and needs.
Employees would have already been habituated with the existing processes.
New methods and organizational changes threaten their feeling of security.
Differences related to the work routine may lead to changes in the payment
patterns as w e l l .
I n d i v i d u a l s tend to process information collectively and create a perception of the
situation.
It must be understood that resistance to change in organizations could also be positive,
if it leads to open discussions. Change agents could utilize the resistance to understand
the preferences of the organization's members and improvise on the changes to match
t h e i r convenience.

External Sources
The external sources of resistance to change are:
Structural inertia
The already existing processes and techniques give rise to inertia. This leads to
stability, making it difficult to adapt to changes.
Limited focus of change
When changes are incorporated in one section or department, it w i l l only result in
a limited success in organizations. The activities in other departments might
negate or nullify the benefits of the change.
Group inertia
Conformance to the norms of the group may act as a constraint for individuals
who want to introduce a change.
Threat to expertise
The specialized teams in organizations may feel threatened by the structural
changes in organizations, and hence, may resist change.
Threat to established power relationships
Power relationships in organizations may feel unsafe when the reallocation of
decision m a k i n g authority is done. This may make them resist the changes.
Threat to established resource allocation
Groups that m a n a g e a considerable amount of resources u s u a l l y consider change
as a threat. They may want to continue managing these resources and may as a
result, resist the c h a n g e .
1 0 . 4 . 2 Overcoming Resistance to Change
Resistance to change can be conquered through the following tactics:
Education and communication
If the reason or the logic behind the change is communicated to the organization's
members, it would help in reducing resistance. This is because it would fight the
consequences of the lack of effective communication. Effective communication
would also aid in making the employees understand 'why' the change is essential.

Participation
Allowing and making employees participate in the process change decision could
reduce their resistance to a considerable level, and a l so help in obtaining their
commitment.
B u i l d i n g support and commitment
The phase of organizational change may give rise to anxiety among employees.
The management can help them in overcoming this through counseling and
therapy sessions, enabling training for new skills or by providing employees with a
short leave.
Develop positive relationships
A research suggests that those employees who have a positive relationship with
t h e i r seniors and co-workers and those who feel that they work in a positive and
supportive environment are usually much more positive about the c h a n g e process
than others.
I m p l e m e n t i n g changes fairly
If organizations make sure that the changes are implemented fairly, it can surely
help in reducing the resistance.
M a n i p u l a t i o n and cooptation
Manipulation and cooptation are inexpensive methods to receive support from the
opposition party. However, this method will only work if the targets are unaware
of these intentions.
Selecting people who accept change
It is always beneficial for the organization to hire individuals who are flexible in
t h e i r behavior, have a positive attitude, and are willing to take risks.
The politics of change
As per politics in organizations, a higher level of resistance is likely to come from
newcomers, managers who have been removed from the main power structure
s l i g h t l y , change agents outside the organization, and so o n .

1 0 . 5 Approaches to M a n a g e O r g a n i z a t i o n a l C h a n g e
There are a few approaches to manage organizational change, they are:
Lewin's Three-step Model
Kotte r's E i g h t - s t e p Plan
Action Research
Organizational Development
Lewin's Three-step Model
One of the most widely accepted models or approaches of managing change is
Kurt Lewin's three-step model of change. According to him, change involves three
important stages, the first one being unfreezing the status quo. Lewin's model
indicates that unfreezing is necessary. It involves informing the employees why
the change is necessary and also the factors that make this change essential in
the organization. Here, managers need to concentrate on informing the benefits
that the change will bring to the employees. This will motivate them further to
accept the c h a n g e .
Desired
state
Restraining
forces
Status
!!!!!
- - - - - - - - -
quo
ii iii
Driving
forces
Time
Fig. 10.Sa: Unfreezing the Status Quo
The second stage in the model is of movement to a desired state or level. This
stage involves adopting new methods and procedures in the organization and
doing away with the old ones. This refers to moving from the stage of e q u i l i b r i u m
and overcoming any kind of resistance. Movement to a desired state can be done
by increasing the driving forces, reducing the restraining forces or by combining
both of these.

The third and final stage in Lewin's three-step model of c h a n g e is refreezing the
change to make it permanent. Refreezing is done to ensure that employees do not
go back to the practices and methods that existed before the change process. This
stage integrates or incorporates the change into the organization. In other words,
refreezing aids in sustaining the change and creating a balance between the
d r i v i n g and restraining forces.
Fig. 10.Sb: Lewin's Three-step Change Model
Kotter's Eight-step Plan
Kotter b u i l t an eight-step plan, which is a detailed approach b u i l t on Lewin's three
step model. E i g h t sequential steps are listed by Kotter after studying the common
mistakes made by managers while initiating changes in organizations. The main
aim of the steps was to help managers in overcoming these problems. The e i g h t
steps listed by Kotter are as under:
1. E s t a b l i s h a sense of urgency by creating a compelling reason for the c h a n g e .
2. Form a coalition with enough power to lead the c h a n g e .
3. Create a new vision to direct the change and strategies for achieving the
vision.
4. Communicate the vision throughout the organization.
5. Empower others to act on the vision by removing barriers to change and
encouraging risk taking and creative problem solving.
6. Plan for, create, and reward short-term 'wins' that move the organization
toward the new vision.
7. Consolidate improvements, reassess changes, and make necessary
adjustments in the new programs.
8. Reinforce the changes by demonstrating the relationship between new
behaviors and organizational success.

Action Research
Action research refers to a change process, which is based on the systematic
collection of data, followed by the selection of a change action on the basis of what
the analyzed data specifies. This method helps the change agents in
understanding the improvements that are needed. Action research has two main
benefits. The first one is that, it is problem focused. Next, it ensures that the
employees are involved thoroughly in the process, which helps in reducing the
resistance to organizational change.
According to French and Bell, the five steps of the process of action research are
as follows.
1. Diagnose
Diagnosis refers to the identification of useful information regarding the issues
in the organization and the changes that need to be incorporated.
2. Analysis
Under analysis, the problem areas are determined and it also involves
hypothesis and the method to reach it.
3. Feedback
The feed back step includes determining the extent to which the goal or
objective has been attained.
4. Action
The fourth step deals with setting the action into motion.
5. Evaluation
The final step includes evaluation and reviewing the initial data.
Organizational Development (OD}
O r g a n i z a t i o n a l development has been defined by Stoner and others as, "a long
range effort supported by top management to increase an organization's
problem-solving and renewal processes through effective management of
organizational culture."

o OD Techniques
There are various techniques in OD, which are explained below:
>- Sensitivity Training
Sensitivity training includes training groups that look out to change
behavior with the help of unstructured group interactions.
>- Survey Feedback
The method of survey feedback makes use of questionnaires to
recognize any differences among the perceptions of employees. T h i s is
followed by discussions and suggestion of appropriate remedies.
>- Process Consultation ( PC)
In process consultation meetings, consultants support clients in
understanding process events with the help of which these clients
must handle and identify those processes that require further
improvement.
>- Team B uil di ng
Team building refers to carrying out such activities that ensure high
interaction among team members to enhance the levels of
understanding, trust, and openness among them.
>- Intergroup Development
Organizational development aims at enhancing employee attitudes and
perceptions that groups have about each other.
>- Appreciative Inquiry (AI)
Appreciative inquiry is an OD technique that aims at identifying the
distinctive strengths of an organization, which can then be worked on
to improve organizational performance.
1 0 . 6 Creating a Culture for Change
For employees to accept change in an organization, it is always important to develop a
culture for c h a n g e . The two methods for this are suggested below:
Stimulating a Culture of Innovation

Innovation refers to a new concept, which is applied to improve product, method or
service. The sources of innovation are:
Structured Variables
Structured variables have been known to be the most probable sources of
innovation.
Idea Champions
Idea champions refer to individuals who take up an innovation actively and
promote the idea, build support, and overcome the resistance to change. They
also ensure that the idea is implemented.
Creating a Learning Organization
A learning organization is an organization that has developed the ongoing ability to
adapt to changes. While many organizations engage in single-loop learning, learning
organizations use d o u b l e - l o o p learning. Single-loop learning refers to correcting errors
with the aid of past routines and present policies. Double-loop learning refers to the
correction of errors by improving the organization's objectives, policies, and routines.
The following are the characteristics of a learning organization:
There is a shared or common vision that the organization's members agree o n .
Individuals adopt new ways of thinking for solving problems or carrying out work
processes and get rid of the old ways.
The organization's members perceive all the activities, functions, and interactions
with the environment as part of a system of interrelationships.
There is open communication without the fear of criticism or p u n i s h m e n t .
Individuals put together their as well as the department's interests and work
collectively towards the attainment of the organization's common g o a l s .
1 0 . 7 Stress
According to Stephen P. Robbins, Timothy A. Judge, and Neharika Vohra, stress
refers to, "A dynamic condition in which an individual is confronted with an
opportunity, a demand, or a resource related to what the i n d i v i d u a l desires and
for which the outcome is perceived to be both uncertain and important."
A few researchers have put forward that challenge stressors are related to individual
workload, work pressure, and time urgency. Hindrance stressors refer to those

10. Organizational Change a n d Stress Management eBook
stressors that restrain you from attaining your goal. Stress is related to demands and
resources. Demands refer to work pressures, responsibilities, and uncertainties faced by
employees. Resources refer to aspects that are within an individual's control, which
he/she can utilize to resolve the demands.
1 0 . 8 Potential Sources of Stress
The three potential sources of stress are discussed below:
Environmental Factors
The main cause for resistance to change in organizations is uncertainty.
Employees are affected by the changes in the environment, which are caused
because organizations are open systems. These changes could be the economic,
financial, political or even technological changes in the environment. For example,
during recession, employees may feel insecure about their j o b s . New innovations
may make the skills of employees obsolete. This would also make them feel
threatened.
Organizational Factors
There are a lot of reasons in organizations that could cause stress among
organizations. Managerial pressures, work pressures, work overload, difficult
customers, u n p l e a sa n t co-workers, etc. are the main organizational factors that
cause stress among employees. Most of these factors, however, are outside the
control of employees.
Personal Factors
Though the standards of living of employees may have improved, their general
well-being has been noticed to be deteriorating due to work pressure. Other than
this, family situations (strained relationships with family members), relocation d u e
to job transfers, a new relationship, the sudden death of a loved one, the birth of a
child, etc. can cause stress among employees. This is because it would take them
some time to adjust to the new situations.

1 0 . 9 C o n s e q u e n c e s of Stress
Certain levels of stress can have positive effects like motivating the workers to complete
their work on time and perform better. However, some of the consequences could be
potentially dangerous, not only to the individuals, but also to the organization as a
whole. The consequences of stress are as under:
Physiological Symptoms
Stressful demands of the job could lead to outcomes that may range from
increased heart rates, high blood pressure, increased glucose levels in blood, and
respiratory illnesses. Poor relationships with co-workers, making an important
presentation, being allocated with a challenging task, etc. may be some
work-related situations that may result in physiological symptoms of stress in
employees.
Psychological Symptoms
One most seen and obvious psychological symptom of stress among employees is
job dissatisfaction. However, stress in seen in employees in other psychological
states, such as anxiety, tensions, and irritability.
Behavioral Symptoms
Behavioral symptoms of stress among individuals in organizations are easily
noticeable. These include eating disorders, rapid speech, sleep disorders,
excessive consumption of alcohol and smoking, etc.
Extreme Products of Stress
The consequences of stress depend on how long the stress persists and the
recovery power of the individuals. However, severe stress may lead to effects like
trauma and burnout. Trauma is caused due to situations like natural calamities,
personal job loss, etc. Burnout, on the other hand, refers to the physical and
emotional weakness caused in employees, from trying to combat stress.

The potential sources and the consequences of stress are summarized in Fig. 10.9a.
Potential sources Consequences
Phvsiclcqical symptoms
Expenenced stress Psychological symptoms
Behavioral symptoms
Fig. 10.9a: Potential Sources and Consequences of Stress
Researchers have studied the relationship between stress and employee performance.
The most widely-studied pattern is the inverted-U, which is represented below.
High
t
QI
I.I
c
"'
E
...
Low
Low Stress ---- High
Fig. 1 0 . 9 b : T h e Inverted-U Relationship between Stress and Work Performance

1 0 . 1 0 M a n a g i n g Stress
Managing stress refers to understanding what stress is, what the potential sources of
stress are, and trying out stress reduction techniques to reduce stress levels. Every
individual has different ways of coping with or managing stress. Meditation and listening
to one's favorite music are positive ways of coping with stress. Whereas, indulging in
excessive consumption of hard drinks, smoking, overeating, etc., are negative ways of
dealing with stress. T h o u g h these negative ways may provide relief to stress for a short
period of time, in l o n g - t e rm , it may lead to negative health effects too. Thus, it is
important for individuals to find out and try such stress management tools that are
positive and beneficial for their health. There are individual as well as organizational
approaches to manage stress. They are discussed below:
I n d i v i d u a l Approaches
Individual strategies and techniques like time management, increased physical
exercise, relaxation training, and extended social support networks help
i n d i v i d u a l s in m a n a g i n g or dealing with stress.
Organizational Approaches
O r g a n i z a t i o n a l approaches to manage stress include enhanced employee selection
and job placement, proper training, realistic goal setting, redesigning of jobs,
improved employee involvement, strong organizational communication, time-off
for employees, and wellness programs.

Human Behaviour in Organisation - ITM University - Semester 2 - MBA

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Table of Content eBook

1. An Overview and Learning 6

1.2 Definition of Organizational Behavior 8

1.3 Nature of Organizational Behavior 8

1.4 What Managers Do 10

1.5 Why S t u d y Organizational Behavior 14

1.6 D i s c i p l i n e s That Contribute To the OB Field 15

1.8 C h a l l e n g e s and Opportunities for OB 18

1.10 Characteristics of Learning 19

1.11 Theories of Learning 20

1.12 Learning through Reinforcement 22

1.13 From I n d i v i d u a l to Organizational Learning 23

2. Personality and Values 25

2.2 What is Personality? 27

2.3 Personality Determinants 27

2.4 The M y e r s - B r i g g s Type Indicator (MBTI) 29

2. 5 The Big Five Personality Model 31

2.6 Other Personality Traits Relevant To OB 32

2. 7 Values in the Workplace 33

2.8 Types of Values 34

2.9 L i n k i n g an I n d i v i d u a l ' s Personality and Values to the Workplace 36

2.10 Values across Cultures 38

3. Perception and I n d i v i d u a l Decision Making 41

3.2 What is Perception? 43

3.3 Factors That Influence Perception 43

3.4 Attribution Theory 44

3.5 Common Perceptual Distortions 45

3.6 Improving Perceptions 47

3.7 The L i n k between Perception and Individual Decision Making 48

Table of Content eBook

3. 8 Decision Making in Organizations 49

3. 9 Common Biases and Errors in Decision Making 51

3.10 Influences on Decision Making 52

3.11 Ethics in Decision Making 54

3.12 Improving Creativity in Decision Making 54

4. Motivation: Concepts and Applications 57

4.2 What is Motivation? 59

4.3 Types of Motivation Theories 59

4.4 Motivating by Job D e s i g n : The Job Characteristics Model 68

4.5 Employee Involvement 70

4.6 Using Rewards to Motivate Employees 71

4.7 Performance Management 73

5. F o u n d a t i o n s of Group and Team Behavior 79

5. 2 Defining and Classifying Groups 81

5.3 Stages of G r o u p Development 82

5.4 Group Properties 84

5. 5 Group Decision Making 85

5.6 Differences between Groups and Teams 88

5. 8 Creating Effective Teams 90

5. 9 Turning I n d i v i d u a l s into Team Players 94

6.2 Definition of Communication 98

6.3 Meaning of Communication 98

6.4 Objectives of Communication 99

6.5 Characteristics of Communication 100

6.6 Significance of Communication 101

Table of Content eBook

6. 7 The Communication Process 102

6.8 Direction of Communication 103

6.9 Forms of Communication 104

6.10 O r g a n i z a t i o n a l Communication 106

6.11 Choice of Communication Channel 108

6.12 Barriers to Effective Communication 109