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PAN African eNetwork Project

MFC
Organisation theory and management
SEMESTER 1
Ms. Neha Puri

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1

LECTURE 3

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m
MODULE 3
Interpreting the Organizational Reality

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Topics to be covered: Organizational power


Organizational Politics
Organization Decision Making

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3.1 Organisational Power


Power refers to a capacity that A has to influence the
behaviour of B so that B does something her or she
would not otherwise do. This definition implies (1) a
potential that need not be actualized to be effective, (2) a
dependence relationship, and (3) that B has some
discretion over his or her own behaviour. Lets look at
each of these points more closely.
Power may exist but not be used. It is, therefore, a
capacity or potential. On can have power but not impose
it.

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Definition

A capacity that A has to influence the behaviour of B


so that B acts in accordance with As wishes.

The ability of one party to change or control the


behaviour, attitudes, opinions, objectives, needs or
values of another party.

The ability of one person or group to cause another


person or group to do something that they otherwise
might not have done.

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The Meaning of Power


Power is the capacity of a person, team, or
organization to influence others.
The potential to influence others
People have power they dont use and may
not know they possess
Power requires one persons perception of
dependence on another person

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Power and Dependence


Person Bs counter
power over Person
A

Person
A

Person
B

Person
Bs Goals
Person As power
over Person B

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Dependency
The party exposed to power must be
dependant.
The powerful party controls something that is
desired.
There often exists a counter-power. e.g. a
powerful manager who controls rewards may
be dependant on the employee to achieve
his/her goals.

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Why does having power matter?


With power you can
Get a desirable placement for a talented
subordinate
Get approval for expenditures beyond the budget
Get items on and off agendas
Get fast access to decision makers
Maintain regular, frequent contact with decision
makers
Acquire early information about decisions and
policy shifts
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Probably the most important aspect of power is


that it is a function of dependence. The greater
Bs dependence on A, the greater is As power in
the relationship. Dependence, in turn, is based
on alternatives that B perceives and the
importance that B places on the alternatives that
A controls. A person can have power over you
only if he or she controls something you desire.
If you want a college degree, have to pass a
certain course to get that degree, and you
current instructor is the only faculty member in
the college who teaches that course, he or she
has power over you.
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Your alternatives are definitely limited, and you place a


high degree of importance on obtaining a passing grade.
Similarly, if youre attending college on funds provided
entirely by your parents, you probably recognize the
power they hold over you. You are dependent on them
for financial support. But once youre out of school, have
a job, and are making a solid income, your parents
power is reduced significantly. Who among us, though,
has not known or heard of the rich relative who is able to
control a large number of family members merely
through the implicit or explicit threat of writing them out
of the will.
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For A to get B to do something he or she would


otherwise not do means B must have the
discretion to make choices. At the extreme, if Bs
behaviour is so programmed that he is allowed
no room to make choices, he obviously is
constrained in his ability to do something other
than what he is doing. For instance, job
descriptions, group norms, organizational rules
and regulations, as well as community laws and
standards constrain peoples choices.
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As a nurse, you may be dependent on


your supervisor for continued employment.
But, in spite of this dependence, youre
unlikely to comply with her request to
perform heart surgery on a patient or steal
several thousand dollars from petty cash.
Your job description and laws against
stealing constrain your ability to make
choices.
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Types of Individual Power


Individual Power

Position Power
Legitimate power
Reward power
Coercive power
Information power

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Personal Power
Referent power
Expert power

Bases of power
The bases of power can be classified as follows:
Coercive power
The coercive power base is defined by French and
Raven as being dependent on fear. One reacts to this
power out of fear of the negative results that might occur
if one had failed to comply. It rests on the application, or
the threat of application, of physical sanctions such as
the infliction of pain, the generation of frustration through
restriction of movement, or the controlling by force of
basic physiological or safety needs.

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In the 1930s, when John Dillinger went into a bank, held


a gun to a tellers head, and asked for money, he was
incredibly successful at getting compliance with his
request. His power base was coercive. A loaded gun
gives its holder power because others are fearful that
they will lose something that they hold dear their lives.
At the organizational level, A has coercive power over B
if A can dismiss, suspend, or demote B, assuming that B
values his or her job. Similarly, if A can assign B work
activities that B finds unpleasant or treat B in a manner
that B finds embarrassing, A possesses coercive power
over B.

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Coercive Power
Coercive Power: the opposite of reward power: the
power that is based on fear of negative results.
The power to give or withhold punishment, such
as suspension, termination, or even the
withholding of praise and goodwill.

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Reward power
The opposite of coercive power is reward power.
People comply with the wishes or directives of another
because doing so produces positive benefits; therefore,
one who can distribute rewards that others view as
valuable will have power over them. These rewards can
be anything that another person values. In an
organizational context, we think of money, favourable
performance appraisals, promotions, interesting work
assignments, friendly colleagues, important information,
and preferred work shifts or sales territories.

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Reward Power

It is the extent to which a person control reward that


are valued by the other.
The person is able to give special benefits or rewards
to people, and you find it advantageous to trade
favors with him or her.
Based on one's control over things that others desire
such as vacations, raises, promotions, and office
locations.

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Coercive and reward power are actually


counterparts. If you can remove something of
positive value from another or inflict something
of negative value upon him or her, you have
coercive power over that person. If you can give
someone something of positive value or remove
something of negative value, you have reward
power over that person. As with coercive power,
you dont need to be a manager to be able to
exert influence through rewards .
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Rewards such as friendliness,


acceptance, and praise are available to
everyone in an organization. To the
degree that an individual seeks such
rewards, your ability to give or withhold
them gives you power over that individual.

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Legitimate power
In formal groups and organizations, probably the most
frequent access to one or more of the power bases is
ones structural position. This is called legitimate power.
It represents the power a person receives as a result of
his or her position in the formal hierarchy of an
organization.
Positions of authority include coercive and reward
powers. Legitimate power, however, is broader than the
power to coerce and reward. Specifically it includes
acceptance by members of an organization of the
authority of a position

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When school principals, bank presidents,


or army captains speak (assuming that
their directives are viewed to be within the
authority of their positions), teachers,
tellers and first lieutenants listen and
usually comply.

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Legitimate Power
Ones structural position
The power a person receives as a result of his or her
position in the formal hierarchy of an organization
The power to control and use organizational
resources to accomplish organizational goals.

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Information Power
Information power is power stemming from
formal control over information people need
to do their work.
A sales manager who controls the leads from
customers inquiries holds considerable
power.

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Expert power
Expert power is influence wielded as a result of
expertise, special skill, or knowledge. Expertise has
become one of the most powerful sources of influence
as the work has become more technologically oriented.
As jobs become more specialized, we become
increasingly dependent on experts to achieve goals.
So, just as physicians have expertise and hence expert
power most of us follow the advice our doctor gives us
so too do computer specialists, tax accountants, solar
engineers, industrial psychologists, and other specialists.

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Expert Power
Informal power that stems from superior
ability or expertise (knowledge, skills &
abilities)
The perception by others that one has
superior judgment or knowledge on some
topics, often specialized in nature.
Influence is based on special skills or
knowledge

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Referent power
The last category of influence that French and Raven
identified was referent power. Its base is identification
with a person who has desirable resources or personal
traits. If I admire and identify with you, you can exercise
power over me because I want to please you.
Referent power develops out of admiration of another
and a desire to be like that person. In a sense, then, it is
a lot like charisma . If you admire someone to the point
of modelling your behaviour and attitudes after him or
her, that person possesses referent power over you.

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. Referent power explains why celebrities are paid


millions of dollars to endorse products in commercials.
Marketing research shows that people like Bill Cosby,
Elizabeth Taylor, and Michael Jordan have the power to
influence your choice of photo processors, perfume and
athletic shoes. With a little practice, you or I could
probably deliver as smooth a sales pitch as these
celebrities, but the buying public doesnt identify with you
and me. In organizations, if you are articulate,
domineering, physically imposing, or charismatic, you
hold personal characteristics that may be used to get
others to do what you want

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Referent Power
Informal power that stems from being liked, admired,
and respected.
Develops out of subordinates' admiration for leader
and his/her desire to model behaviour and attitudes
after that person. The person builds feelings of
support, liking, admiration, and respect with
subordinates.
Power of ones personality (charisma).

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Importance of power
It is very important aspect and plays significant role in the
organisations. Its not only organisations but people in
the organisation also seek power. It is important for the
organisation and for its people due to the following
reasons and they are:1. Power helps in controlling the people and other
resources in the organisations so that they cooperate
and help to achieve an organisations current goals.
2. Power is used to engage in politics and influence
decision-making process. It helps in promoting new and
more appropriate organisational goals.
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3. Power influences complexity, formality and


centralisation of activities in the organisations.
4. The individuals who posses power can
determine the size of the organisation, allocation
of rewards, selection of technology etc.
5. Power is an important aspect that is required
for the efficient functioning of the organisation

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POWER
Organizational politics may exist to
acquire the power .
POWER
FREEDOM

SUBORDINATE
S
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INFLUENCE&
ADVANCEMENT

SENIORS

The Evolution of Power: From Domination to Delegation


Degree of Empowerment

High

None

Influence Sharing
Manager: leader
consults followers
when making
Authoritarian
decisions.
Power Manager:

Power Sharing
Manager: leader &
followers jointly
make decisions.

Power Distribution
Followers: granted
authority to make
decisions.

leader imposes
decisions.

Domination

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Consultation

Participation

Delegation

Why do politics exists in


organizations?
Difference in values; goals and interests of
the employees.
Scarce organizational resources.
To acquire the power .

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Factors influencing political behavior


Individual factors

High self monitors


High mach personality
Organizational investments
Perceived job alternatives
Expectations of success

Low

political behavior

High

Organizational factors

Reallocation of resources
Promotion opportunities
Low ambiguity
High performance pressures
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Unclear
performance evaluation system
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favorable outcomes:
Rewards
Averted
punishments

Employee Responses to Organizational


Politics
Organizational
politics
may threaten
employees

Decreased job
satisfaction

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Increased anxiety
And
stress

Increased
turnover

Reduced
performance

Organisational politics
Attempts to influence others using discretionary
behaviours to promote personal objectives
discretionary behaviours neither explicitly prescribed
nor prohibited
Politics may be good or bad
for the organisation

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POLITICS
Politics refers to the structure and process of the use of
authority and power to affect definition of goals, directions
and the other major parameters of the organization.
Decisions are not made in a rational or formal way but
rather through compromise, accommodation and
bargaining.
M. L. Tushman

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Organizational politics is the process whereby individuals or


groups use whatever power they can amass to influence
organizational decision in the direction of their own interests.
-R. Miles
Organizational politics refer to intentional behaviors that are
designed to enhance or protect a person's influence and selfinterest.
-Amos Drory and Tsilia Romm

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To help us understand organizations, we might consider


them as political systems. The political metaphor helps
us understand power relationships in day-to-day
organizational relationships. If we accept that power
relations exist in organizations, then politics and
politicking are an essential part of organizational life.
Politics is a means of recognizing and, ultimately,
reconciling competing interests within the
organization. Competing interests can be reconciled by
any number of means. For example, resorting to "rule by
the manager" might be seen as an example of
totalitarian rule. On the other hand, politics may be a
means of creating a non coercive, or a democratic work
environment

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Interplay between
leadership, authority,
influence and followers
How organizational politics is
related to leadership can be
better understood from the
fact that organizational
leadership occurs in the
context of groups, where
followers are influenced by
the leader to ensure their
commitment and voluntary
involvement towards
predetermined outcomes
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Understanding of organizations political systems key to success


Understanding of organizations political systems is
absolutely essential for leadership to maneuver the
company towards the goals. Internally grown leaders will
have an advantage of knowledge of general political
conditions prevailing in the company (different coalitions
and centers of influence which can create buy in or
create road blocks). Leaders from outside must put
efforts to learn and understand the existing
organizational politics through keen observation and
focused interaction with different groups of people.

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Some of the indicators available for leaders to


assess political climate is general job
satisfaction levels, responsiveness to innovative
ideas, efficacy of decision making machinery
and speed of implementation of decisions.
Understanding is the key for leaders to exploit
and smother organizational politics and also to
enhance their own leadership credibility.

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ORGANIZATIONAL POLITICS
According to Tushman , Politics refers to the
structure and process of the use of authority and
power to affect definition of goals, direction and
the other major parameters of the organization.
Decisions are not made in a rational way but
rather through compromise, accommodation and
bargaining.
In the words of Farrell and Peterson, Politics in
an organization refers to those activities that are
not required as part of ones formal role in the
organization, but that influence or attempt to
influence the distribution of advantages and
disadvantages with in the organization
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Two key points emerge from above definitions: (i)


Political behavior is outside ones specified job
requirements, and (ii) it generates efforts to influence the
goals, criteria, or processes used for decision-making
that will result in the distribution of advantages and
disadvantages with in the organization. Thus political
behavior includes such activities as withholding key
information from decision-makers, whistle blowing,
spreading rumors, leaking confidential information about
organizational activities, entering into coalitions,
exchanging favors for mutual benefit, lobbying on behalf
of or against a particular individual or decision, horse
treading, ingenious compromises, trade-offs and so on.

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Farrell and Petersen talk of the legitimate-illegitimate


dimension of political behavior though a vast majority of
political behavior is of legitimate variety. Legitimate
political behavior refers to normal everyday politicscomplaining to the supervisor, bypassing the chain of
command, forming coalitions, obstructing organizational
policies or decisions through inaction or excessive
adherence to rules, and developing contacts outside the
organization through ones professional activities. On the
other hand, illegitimate political behavior is of extreme
type that violates the implied rules of the game. Those
who pursue such activities are often described as
individuals who play hard-ball. Illegitimate activities
include sabotage, whistle blowing, a group of employees
simultaneously calling in sick etc.
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Causes of Political Behavior


Politics has been a classic human activity since the
beginning of civilization, so it is not unique to modern
organizations. In fact, modern organizations are a fertile
place for politics to thrive. Individuals resort to politics in
organizations because of the following reasons:
Lust for Power. People play politics within the
organization to gain power for control and decision
making. They aim at increasing the area of their
influence. Conflict between line and staff elements is a
typical example in this regard. Nobody wants to lose
power in the power struggle because power can be used
in the way liked by the holders of power. If a person is
able to gain more power, his area of influence over other
organizational members would increase.
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Competition or Command over Resources.


Organizations are composed of coalitions. A coalition is
a group of persons formed to achieve some common
interest. Coalitions are formed when individuals feel
that they cant gain more power if they operate
individually. The formation of different coalitions gives
rise to political struggle in the organization. These
coalitions compete with one another for command over
organizational resources. A strong coalition is able to
manoeuvre the things in its favor and acquire more
power than others.

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Protection of self-interests. Various coalitions seek


to protect their interests and positions of influence by
moderating environment pressures and their effects.
They will not like that any other coalition takes away
the privileges they are enjoying.
Discretionary Authority. There are some positions in
the organization which have discretionary powers to be
used in case of emergency. The use of power depends
upon the sole judgment of the position-holder. That is
why; people indulge in politics to grab such positions or
to be very close to such a position holder.

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Unequal Distribution of Authority. Sometimes, there is


unequal distribution of authority at a particular level in
the organization or there is a big difference between the
authorities of two levels. This may have dehumanizing
effects and lead to start of political activities in the
organization.
Saturation in career. Promotion in ones career is
based on competence. But when a person cannot rise
above a certain level because of lack of competence for
the higher job, he may resort to political behavior to
move up in the organization hierarchy. In other words,
each employee tries to achieve and remain at his level
of incompetence. This is what the peter principle states.
This type of behavior is a universal phenomenon in
modern organization.

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Need for Inter-Department Coordination.


Relationships between major organization groups
typically are not well defined. When joint issues arise,
managers have to meet and work out solutions on an
ad hoc basis. These on-going coordination activities
are often political in nature. The ability of one group to
achieve is goal often involves the cooperation of other
departments. Interdepartmental coordination tacks
rules and precedents to guide it. Uncertainty and
conflict are common, especially when the issue is
departmental territory and responsibility. Political
activities are resorted to by different departments to
meet such challengers.

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Dysfunctional aspects of Politics


Politics provides a ground for determining the
distribution, allocation and maintenance of power,
privilege, and patronage. It is essentially concerned with
who gets what, when and how. Organizational politics
has certain negative effects also on the working of the
organization which are described below:
Political behavior is generally guided by self-interest. If
self-interest obstructs the achievement of organizational
goals, then politics is said to be dysfunctional. For
instance, a manager seeks the appointment of his son,
who is not fully competent, in the company.

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If he succeeds in manipulating the selection process,


the impact on the organization will be dysfunctional. In
some cases, political behavior may be functional also.
For instance, to promote self-interest, a member
behaves in a way that is compatible with the interest of
the organization, such behavior is functional.
Power politics may weaken morale, demotivate the
employees, victims and victors may be created, and
energy and time may be frittered away on planning
attacks and counter-attacks instead of concentrating
on task accomplishment.

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There is empirical evidence to suggest that


those managers who engage in more political
activity are relatively more successful in terms
of promotions but also relatively less effective
in terms of subordinate satisfaction and
commitment and the performance of their unit.
Organizational politics may generate
organizational conflicts due to which
organizational time, efforts and energy may be
wasted.

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This will affect the organizational


effectiveness adversely.
Because of organizational politics, some
individuals may be able to acquire a
major portion of organizational power.
This power may be used to promote selfinterest, exploit other people and
displace organizational goals.

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Handling Organizational Politics


Organizational politics has several unintended
consequences such as self-servicing behavior, goal
displacement, conflicts and demotivation of
organizational members, etc. In order to check
undesirable behaviors, following steps may be followed:
Clearly Defined Jobs. The top management should
clearly define duties to recognize individual contributions.
This will enable employees to know what they are
expected to accomplish and provide a criterion for
evaluation.
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Consequently, they will be less prone to


use politics as a means to gain
recognition. For another thing, jobs should
be designed to stimulate excitement and
enthusiasm. If employees are busy and
concentrate efforts on getting work
completed, they are less apt to have spare
time for engaging in politics.

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Proper Managerial Behavior. The managers should


demonstrate proper behaviors because subordinates are
often perceptive and follow their example. They should
not support directly or indirectly any political behavior of
the subordinates. Unintentionally, managers may
encourage undesirable political behaviors. If managers
are perceived to be insecure, incapable, or irresponsible,
its an invitation to political maneuvering by subordinates.
Insecurity conveys the impression that a leader can be
persuaded easily or is afraid to rebuff requests. If viewed
as incapable, the possibility increases for employees to
attempt getting their own way, even though its not in the
best-interest of the manager or organization. Under
irresponsible leadership, politically motivated behavior
becomes the dominant course of action. To avoid
manipulation, managers should portray themselves as
being knowledgeable, equitable and confident
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Effective Communication. There should be two-way


communication throughout the organization. The top
management must know the perceptions of the
subordinates on various issues. If management is
responsive to the needs and aspirations of the
employees, undesirable political behavior will be
reduced to a great extent. The management should not
condone or promote gossips which usually lead to
spreading rumors and inaccurate information.
Fair Evaluation System. There should be an objective
system of performance appraisal of subordinates. The
scope for bias in appraisal should be reduced to the
minimum. Moreover, performance should be the only
basis of rewards such as increments, promotion, etc.
This will check political activity on the part of
subordinates to gain more and more awards. They will
be compelled to concentrate on their jobs.

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Organizational Politics

The activities managers engage in to increase their


power and to use power effectively to achieve their
goals or overcome resistance or opposition.

Involves intentional acts of influence to enhance or


protect the self-interest of individuals or groups.
Political behavior is a general way of getting and using
power for personal gains.

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Factors contributing to politics

Pyramid- shaped organization structure.


Subjective standards of performance.
Environmental uncertainty and turbulence.
Emotional insecurity.
Machiavellian tendencies.
Disagreement over major issues.

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Managing Organizational Politics


Burton and Thakur has suggested the three strategies to
minimize the dysfunctional effects of politics:
Limiting Strategies
POLITICAL
BEHAVIOR

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Open communication
Reduction of Uncertainty
Awareness

Effects of
Political
Behavior

Strategies aimed at building relationships

Display loyalty
Manage your impression
Ask satisfied customers to contact your boss
Be courteous , pleasant, and positive
Ask advice
Send thank-you notes to large numbers of
people
Flatter others sensibly
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Judicial Distribution of Resources. Within an


organization, various factions compete for
financial and human resources. A systematic
approach for allocating resources according to
justifiable criteria is advantageous and has the
potential of reducing excessive political behavior.
Firmly established policies are mandatory and
top management must be careful to apply them
consistently. Otherwise, politics can evolve as a
primary competitive approach in which empire
building predominates. If this occurs, it would be
difficult to develop teamwork and cooperation
among various units of the organization.

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Organizational decision making


The process of responding to a problem by searching for
and selecting a solution or course of action that will create
value for organizational stakeholders.
Organizational decision-making occurs when problem
solving includes seeking & selecting a solution to create
value for stakeholders.

Managers make programmed and non programmed


decisions.programmed & non programmed decisions.

programmed & non programmed decisions.


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Organizational decision making: Types


Programmed decisions are routine decisions, developed in
advance through rules, standard operating procedures
(SOPs), and norms.
Programmed decisions increase efficiency and reduce
costs.
Non programmed decisions are new and unstructured
decisions, without programmed rules to manage them.
Managers rely on intuition and judgment, and solutions are
found as problems occur.
It require more search activity.
It assist in adapting and managing a changing
environment.
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Organisational Decision making


An overview of organisational decision making
Guidelines for managers to make effective decision
making in todays fast moving world:
Know when its time to call it quits. When its evident that
a decision isnt working, manager should not be afraid to
pull the plug. Many decision makers block or distort
negative information because they dont want to believe
that their decision was bad. They become so attached to
the decision that they refuse to recognise when its time
to move on .In todays dynamic environment this type of
thinking doesnt work.

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Practice the 5 whys. When the environment is highly


uncertain, one way to encourage good decision making
is to get people to think more broadly and deeply about
the issues. Because of the intense time pressure that
managers face, it may be tempting to do just a
superficial analysis. The five whys approach suggests
that employees learn to ask why not just once, but five
times. Asking the first time, why this is happening usually
results in a superficial explanation for the problem;
subsequent whys force decision makers to probe more
deeply into the causes of the problem and possible
solutions.

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Be an effective decision maker. An effective decisionmaking process has these six characteristics
(1) It focuses on whats important;
(2) Its logical and consistent;
(3) It acknowledges both subjective and objective
thinking and blends analytical with intuitive thinking
(4) It requires only as much information and analysis as
is necessary to resolve a particular dilemma;
(5) It encourages and guides the gathering of relevant
information and informed opinion; and
(6) Its straightforward, reliable, easy to use, and flexible.

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Types of Business Decisions


1. Programmed Decisions These are standard decisions which always
follow the same routine. As such, they can be written down into a series
of fixed steps which anyone can follow. They could even be written as
computer program
2. Non-Programmed Decisions. These are non-standard and nonroutine. Each decision is not quite the same as any previous decision.
3. Strategic Decisions. These affect the long-term direction of the
business eg whether to take over Company A or Company B
4. Tactical Decisions. These are medium-term decisions about how to
implement strategy eg what kind of marketing to have, or how many
extra staff to recruit
5. Operational Decisions. These are short-term decisions (also called
administrative decisions) about how to implement the tactics eg which
firm to use to make deliveries.

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Levels of decision making

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Decision making in management is an important skill and making the right decisions is essential. Every
manager should be looking to improve their decision
making skills.
The process of corporate decision making is of the
utmost importance for effective management. Your
decision making process in management must be
informed by expert knowledge and experience.
Decision making for managers is comprehensively
covered in the articles below and within them you will find
decision making tips and advice and examples of the
different types of decision making needed in business.

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Good decision making is an essential skill


for career success generally, and effective
leadership particularly. If you can learn to
make timely and well-considered
decisions, then you can often lead your
team to spectacular and well-deserved
success. However, if you make poor
decisions, your team risks failure and your
time as a leader will most likely, be brutally
short .
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A Systematic Approach to Decision Making


A logical and systematic decision-making process helps you
address the critical elements that result in a good decision. By
taking an organized approach, you're less likely to miss important
factors, and you can build on the approach to make your decisions
better and better.

There are six steps to making an effective decision:


Create a constructive environment.

Generate good alternatives.

Explore these alternatives.

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Copyright Amity University

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To: nehabajaj1984@gmail.com
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Copyright Amity University
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Thank You
Please forward your query
To: nehabajaj1984@gmail.com
CC:
manoj.amity@panafnet.com
78

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