Organizational Behaviour – Answer Bank


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Organizational Behavior is build up on certain basic concepts. Explain in context of nature of people and organizations.

Nature of People

  1. Individual differences – Every human being is different and have their own uniqueness. The differences present among people increase due to the unique experiences that each individual goes through in his entire life. The law of individual differences is a belief that each person is different from all others. This is a very important fundamental concept that the managers must recognize. It is vital that managers acknowledge that each employee is different and that it is not right to deal with all employees in the same way.


  1. Perception – Perception is the unique way in which each person sees, organizes and interprets things. Perception is the reason why two people see the same object in two different ways. An important aspect of perception is that it is selective in nature. Selective perception is the tendency of people to selectively interpret what they see on the basis of their interests, backgrounds, experience and attitudes. This is often the cause of managers being rigid and misinterpreting situations. Organizational behavior recognizes the important role of perception in organizations. Managers must accept that employees are emotional beings and see workplace differently due to perceptual differences. It is perception that determines how individual respond to situations.


  1. Whole Person – When a manager hires a person, he hires the person as a whole and not only his specific qualities and talents. People working in organizations function as a total human beings and not a mere employee. Hence, one of the fundamental concepts of organizational behavior is not merely to develop a better employee but to develop a better person. Management needs to care about the job’s effect on the whole person and they must focus on improving the whole person. This will not only benefit the organization, but also society as a whole.


  1. Motivated Behavior – Most human actions are intentional and purposeful. There are certain causes of such behavior. These causes may be related to a person’s need and/or consequences that results from the acts. Motivating behavior is another fundamental concept of organizational behavior. It plays a vital role in the operation of organizations. All other resources such as money, technology and equipment will be of little use unless handled by motivated people.


  1. Desires for Involvement – Employees today have a strong desire to contribute to their organization. They eagerly seek opportunities to utilize their knowledge and skills to the success of organization. They also have a strong desire to share their ideas and be involved in decisions that affect them. Hence, it is desirable that the management provide employees with opportunities to make meaningful contribution to their organizations. Meaningful involvement is possible through empowerment. It provides greater autonomy to the employees through sharing of relevant information. Empowerment will make employees feel competent and valued.
  2. Value of Person – Human dignity is of fundamental importance to organizational behavior. Organizational objective must not to be attained at the cost of human dignity. Whatever may be the objective of the organization it is important that organizations treat their employees with care, respect and dignity. Management cannot treat humans as economic tools and must be valued for their skills and abilities.

Nature of Organization

  1. Social Systems – An organization is not a place where people work in isolation. People in an organization interact with each other as individuals and groups. Hence organizations are known as social systems. The behavior of people in this social system is governed by social laws as well as psychological laws. Besides psychological needs, the social roles and stats of people influences their behavior in organizations.
  2. Mutual interest – Organizations are formed and maintained due to their mutuality of interest. Organizations need people and people need organizations. Management needs employees to attain organizational objectives and goals, and people need organizations to fulfill their individual needs. The mutuality of interest provides a common platform to build upon.
  3. Ethics – Ethical practice is a fundamental concept that organizational behavior strongly advocates. When organizations engage in ethical actions and practices the result is a triple reward system. The objectives of the individual, organization and society are met. Individual gain by way of greater job satisfaction and a spirit of cooperation and teamwork develops. Organizations function more effectively and are more successful. Their quality of product and services improves and costs are reduced. Society gains because it has better products and services, more capable citizens and an environment of cooperation and progress.

Discuss the different models of Organization Behaviour, to manage the behavior of people in the organization.

Autocratic Model 

This model is based on the classical approach. This model is driven by the assumptions of Theory X that people are basically lazy, not ambitious and that they dislike work and responsibilities. In this model, the managerial approach towards the employees is very dictatorial in nature. The use of power by the managers is at the heart of this model.


The model suggests that there must be very strict and clear supervision of employees in order to get the desired performance from them. Managers exercise total control over the employees and hire and fire them as per their wish. Communication with the employees is minimal and employees are motivated through the use of threats, punishments and occasional rewards.


The employees are paid minimal amount and in turn they give minimal performance. This model generated a lot of insecurity and frustration among the employees. The model has come for a lot of criticism for its treatment of employees. It is considered as exploitative in nature with very little concern for human values. It is driven by organizational goals with little concern for human cost involved.not

Custodial Model 

The custodial model was a little improvement over the autocratic model. This model was concerned with improving the satisfaction of the employees and reducing the negative feelings generated by the autocratic model.


Unlike the autocratic model which focused only on the satisfaction of the employees basic physiological needs[anna,Vastra,nivara], the custodial aimed at satisfying the higher level needs of the employees. The emphasis was on improving the physical working conditions of the employees and satisfying their security needs. Under this model the employees were provided with welfare benefits and other fringe benefits. This model increased the employee dependence on the organization and reduced their dependence on their bosses.


This model increased the overall satisfaction and contentment of the employees but did not have much of an impact on the productivity of the employees. The drawback of the custodial model was that although employees were provided with greater benefits, it was the managers who decided the benefits. The manager decided what was good for their employees and the employees themselves weren’t consulted.

Supportive Model

The supportive model is driven by the assumptions of Theory Y that people have a need for responsibility and growth but they become passive and lazy due to the environment created at work. Hence, in order to get the desired result, the managers need to display a supportive attitude. The supportive model focuses on satisfying the social and psychological needs of the employees to make them more productive.


Leadership is at the heart of this model. It is the leader who has to ensure that the employees get opportunities for participation and decision making. This will ensure that the employees’ higher order needs are met.


The model works best when the employees are self-motivated and in organizations that are using sophisticated technology and employing professionals. It is not effective in less developed countries where people are driven by lower order needs.

Collegial Model

This model is an extension of the supportive model. The model focuses on teamwork for realization of organizational goals. Authority and responsibility is shared at all levels in an organization. Instead of the formal authority, everyone works as a partner and contributes towards the goal. The custodial model emphasizes on empowerment of the employees and control on the employees is in the form of self-discipline.


Partnership is at the heart of this model. The collegial model is suitable for organizations that have employees with high level maturity and are driven by the need of self- actualization.

Define organizational structure. What are the key elements of organizational structure?

Organizational Structure describes the pattern of inter-relationship existing between the various units of organization. It describes the roles people play in the organization and their responsibilities and job dues. Organizational structure is defined as a formal configuration between individuals and groups with respect to the allocation of tasks, responsibilities and authorities within the organization.


Key Elements


1. Work specialization

Organizational structure describes the way in which the many tasks to be performed within an organization are divided into specialized jobs. This process is known as division of labor or work specialization. The main idea behind this is that rather than an entire job being done by one individual, it is broken into a number of steps, each step being completed by a separate individual. The individual specializes in doing part of an activity rather than the whole activity.


The drawback of work specialization is boredom, fatigue and stress resulting in increased absenteeism and high employee turnover.

2. Departmentalization

After work specialization comes departmentalization. In this, jobs are grouped together so that common tasks can be coordinated. This can be done in various ways:

  1. Functional departmentalization – This is the most popular form of departmentalization. In this form, individuals are grouped together according to the nature of functions they perform. People who perform similar functions are assigned to the same department.
  2. Product departmentalization – This kind of departmentalization is based on the type of product the organization produces. This type of departmentalization creates self-contained divisions, each of which is responsible for everything to do with certain product or group of products.
  3. Geographical departmentalization – In this form of departmentalization, a department is formed on the basis of area, territory or region.
  4. Process departmentalization – In process departmentalization, each department specializes in one specific phase of production such as casting, pressing, finishing, inspecting, packing, shipping etc.
  5. Customer departmentalization – This kind of departmentalization is based on the particular type of customer that the organization tries to reach. The idea behind this form of departmentalization is that customers in each department have common problems which are best met by having specialists for each.


3. Chain of Command

The chain of command is an unbroken line of authority, which extends from the top of organization to the lowest employee and clarifies who reports to whom. It is also known as hierarchy of opportunity. The chain of command goes hand in hand with authority and unity of command. Authority is the rights given to a person in the chain of command to give orders and expect the orders to be obeyed. Authority helps manager to meet his responsibilities.


Unity of command states that a person should have one and only one superior to whom he or she is directly responsible. If the unity of command is broken then the subordinate will experience conflict as to whom he should report.

4. Span of Control

The span of control is the number of subordinates in an organization who are supervised by managers. Those managers who are responsible for many individuals are said to have a wide span of control whereas those responsible for few are said to have a narrow span of control. The span of control determines the number of levels and managers an organization has and thus the organizational structure.

5. Centralization and Decentralization

Centralization refers to the degree to which decision making is concentrated at a single point in the organization. That is decision making is concentrated in the hands of a few powerful individuals. In centralized organization, the top management makes all the key decisions with little or no input from the lower level employees.


The process of delegating authority and decision making powers from higher to lower levels within an organization is known as decentralization. In such organizations the lower level has a greater say in decision making.

6. Formalization

Formalization is a degree to which jobs within the organization are standardized. On highly formalized jobs the employee has very little freedom at work. Everything about the work or task is already decided such as what should be done, when it should be done, how it should be done and so on. On jobs where formalization is low, employees have considerable amount of freedom and flexibility with regard to how they do their work.

Explain the Team structure and Virtual organizations under new organizational designs.


Virtual Organization

A virtual organization is a small, core organization that outsources major business functions. Virtual organizations are highly centralized and have little or no departmentalization. Virtual organizations create a network of relationships that allows them to contract out manufacturing, distribution, marketing and other business functions to outside organizations who they feel can do it better and more cheaply than them. Nike, Reebok, Dell computers are some of the world leading brands who function this way.


Major advantages of virtual organizations are:

  1. It allows an individual with a brilliant idea but no money to successfully compete against larger companies.
  2. Each participating company contributes core competencies – they bring what they are best at. Hence the joint product created is better than one that any single company would create.

Major drawbacks are:

  1. Management has little control over key part of its business.
  2. It is possible that the outsourced company may leak out the trade secrets of the virtual organization.

Team structure

Organizations with team structures use teams as the central device to coordinate work activities. The focus is on teams as they have become extremely popular in modern organizations. Organizations today schedule work activities around teams.


Main Characteristics are:

  1. It breaks down departmental barriers.
  2. Decision making is decentralized to the levels of the work team.


In smaller companies, the entire organization is defined by team structures. In large organizations, team structure also serves as a bureaucracy. It allows the organization to have the efficiency of bureaucracy’s standardization but be flexible at the same time.

Define organizational culture. What are the characteristics of organizational culture?

Organizational culture is the personality of organization. Culture comprises of assumptions, values, norms and tangible signs of organizational members and their behavior. According to Baron and Greenberg, organizational culture is defined as a cognitive framework consisting of attitudes, values, behavioral norms and expectations shared by organization members.


  1. Innovation – Some organization encourage its employees to be creative and generate new ideas. However there are other organizations that expect the employees to strictly go by the rules laid down in the company’s manual.
  2. Stability – Some organizations emphasize on maintaining the status quo. That is, they prefer to maintain a stable and predictable work environment. On the other hand, some organizations resist too much stability and encourage change.
  3. People Orientation – it is the degree to which the management takes into consideration the effect a decision will have on its people before a decision is made. For example, Infosys Technologies views its employees as assets and decisions are made only after considering what impact it will have on them.
  4. Results Orientation – it is the degree to which management focuses on results or outcomes rather than the methods used to obtain results. For example, Reliance Industries is often described as a result-oriented company.
  5. Easygoingness – In some organizations the work atmosphere is relaxed and laid back whereas in some organizations the work atmosphere is charged, aggressive and competitive. For example, public sector banks in India have a very easy going attitude towards work.
  6. Attention to detail – it is the degree to which employees in the organization are expected to show precision, analysis and attention to detail.
  7. Team Orientation – It is the degree to which work activities are organized around teams rather than individuals. For example, most software development companies emphasize team approach towards work.

Explain the organizational culture as a function and a Liability.

Culture plays several important functions in organizations. While there are some clear benefits of organizational culture, there are also some negative benefits. The positive benefits are as follows


  1. Sense of identity – Organization culture creates a sense of identity among the employees. Employees develop a feeling of being a part of something special. They thus experience a sense of belongingness to the organization. The more strongly an organization’s perceptions and values are defined, the more strongly the employees associate themselves with the organization’s mission and feel a vital part of it.
  2. Commitment to the organization’s mission – A strong organizational culture motivates employees to think beyond their narrow personal interest. Culture reminds people what their organization is all about and encourages greater commitment to the organization goals and mission.
  3. Appropriate standards of behavior – Organizational culture guide the words and deeds of employees. It conveys to the employees what kinds of behavior are acceptable or unacceptable in the organization. Culture tells the employee what they should do or not do in a given situation. Thus, organizational culture is an important force influencing behavior.


Despite the obvious benefits of culture, organizational culture can sometimes become a liability. Some of the shortcomings of organizational culture are:

  1. Barrier to change – In a stable environment culture works to the benefit of the organization but can prove to be a major obstacle in an environment of rapid change. Organizational practices which were previously successful may now prove to be the cause of failure. Under such circumstances, organizational culture comes to be a burden.


  1. Barrier to diversity – Organizations hire individuals with diverse background because they bring various strengths to the workplace. They expect these new employees to accept the organization’s core cultural values. They often put tremendous pressure on the employees to conform to these values. This places restrictions on the range of values and styles that are acceptable. Often strong cultures result in organizations becoming insensitive to people who are different.


  1. Barriers to mergers and acquisitions – In the past management paid attention to the possible financial and product benefits while acquiring or merging with another organization. But these days cultural compatibility has become a  major concern. Often mergers and acquisitions are not successful because of the diverse culture of the two organizations.

Explain J. Stacy’s Equity theory of motivation.

The equity model focuses on the social comparisons people make among themselves and its influence on motivation. The equity model states that people are motivated to obtain what they think is a fair reward for their efforts rather than get as much as they can. It proposes that individuals are motivated to maintain a fair or equitable relationship among them and to change those relationships that are unfair or inequitable. Adams proposes that workers make social comparison between themselves and other people in two areas –


  1. Outcomes – What workers believe they and others get out of their job. A worker’s outcome may include such benefits as pay.
  2. Inputs – What workers believe they and others contribute to their jobs. Inputs may include such contributions as the amount of time worked, the amount of effort put, the number of units produced or the qualifications and experience the worker brings to job.


According to equity theory, employees compare their input with the input of others to determine whether they are being treated fairly or not. These comparisons result in 3 states:


  1. Over rewarded inequity – A person fees over rewarded when his outcome/input ratio is greater than the corresponding ratio of another person with whom the person compares himself. Equity theory states that overpaid workers feel guilty.
  2. Under rewarded inequity – A person is said to experience under rewarded inequity when the ratio of his outcome/input is less than the corresponding ratio of another person with whom the person compares himself. Equity theory states that underpaid workers feel angry.
  3. Equity – A condition of equitable payment is said to exist when the outcome/input ratio of a person is equal to the corresponding ratio of another person with whom the person compares himself. Equitably paid workers are said to feel satisfied.


According to equity theory, a sense of inequity can be motivating. Under conditions of inequity people experience tension, which in turn creates motivation to reduce inequity. Employees who feel over rewarded may try to reduce inequity and restore balance through any of the following four responses:


  1. Internal physical – The employee works harder at his job.
  2. Internal psychological – The employee might discount the value of rewards received.
  3. External physical – the employee tries to convince other workers to ask for more rewards.
  4. External psychological – The employee might choose someone else for comparison purpose.


Similarly, people who feel under rewarded may try to reduce inequity and restore balance through any of the following four responses:

  1. Internal physical – the employee may deliberately lower the quantity or quality of work.
  2. Internal psychological – The employee might inflate the value of the rewards received.
  3. External physical – The employee might bargain for more rewards.
  4. External psychological – The employee might choose someone to compare himself more favorably.


Individuals are concerned not only with the absolute amount of rewards they receive for their efforts but also with the relationship of this amount to what others receive. Research on equity model has yielded favorable results. The results have been more supportive of under rewarded inequity but less so for over rewarded inequity.

Explain Goal setting theory of motivation.

Goals are targets and objectives to be achieved in the future. They are a measure of future performance. Goals are a source of motivation because they indicate what has to be done and how much effort should be exerted. They help in focusing attention on items of organizational importance. Goals encourage better planning and utilization of resources such as time, money, materials etc.

Goal setting works as a motivational process because it creates a tension in the employee due to the difference between current and expected performance. The employee succeeds in reduction of this tension by attainment of goal. Attainment of goals satisfies the individual’s achievement drive and boosts their self esteem. A key factor in goal setting is self efficacy. Self efficacy is an individual’s belief that he or she is capable of performing a task. It is the feeling of competency that an individual has as to how well he can do the job. Employees with high self efficacy set high goals because they believe they are attainable. Besides self efficacy, the following elements are important if goals are to motivate employees:

  1. Specific goals – A specific goal is a clearly defined measurable goal and there is no ambiguity about it. Research has established that giving the employees specific goals is much better than simply telling them to do their best. The goal should be specified in objective, quantitative terms. They should be accompanied by concrete action plans and targets.
  2. Challenging goals – A goal that is difficult but attainable increases the challenge of the job. Research has proved that only challenging job content motivates the employees. Every person brings out the best in him only when a challenge is involved. That challenge is an appeal to the self esteem need of the person. However, if one gives them goals which are too difficult to attain then they won’t serve to motivate the employees.
  3. Owned goals – Goals must not only be specific and challenging but it must be acceptable to the employees as well. In order to make the goals acceptable to the employees certain requirements must be fulfilled:
  4. Participation – The first requirement is to allow the employees to participate in the process of goal setting and decision making.
  5. Psychological contracts – It means to get the employees to make a public comment to the goals. This will motivate them to achieve the goal because their personal prestige is involved.
  6. Supervisory support – The third requirement to make the goal acceptable is supervisory support. That means that once the goals are given, the supervisors must ensure the employees get the necessary support in terms of machinery, materials, working conditions and regulations and guidance.
  7. Rationale – in order to make goals acceptable it is necessary to explain to them logic and rationale behind the goals. It means to convince them that what is good for the organization is also good for them.
  8. Performance monitoring and feedback – This means providing feedback to the employees concerning goal attainment. One cannot expect an individual to do well unless one tells him frequently how he is doing or unless one gives him knowledge of results. Feedback helps the employees work with greater involvement and leads to feelings of satisfaction.


Performance monitoring refers to observing and inspecting the employees work and to indicate them that their work is important, their effort is needed and that the organization values their contribution. It creates greater awareness among employees about the importance of their role.

Explain teamwork. How can one create effective teams?

Teamwork is defined as a group whose individual efforts results in a performance that is greater than the sum of those individual inputs. Through extensive use of teams, organizations create the potential to produce greater outputs without any increase in the inputs. However, it is important to remember that merely calling a group as a team does not automatically make it so.


How to create Effective Teams



The context in which the team has to operate strongly influences its effectiveness. The four major external factors that influence team effectiveness and its performance are:


  1. Adequate resources – A team can perform properly only if it has adequate resources and support available to it. In order to perform well, it is dependent on resources outside the group but within the organization. If a team does not have adequate resources it will not be able to perform its job properly and reach its goals.


  1. Leadership and structure – For a team to be effective, it is very important that the workload is shared by all team members. Team members must have clear and proper understanding about their role in the team as well as that of their team members. Such clarity lets a team member act immediately without waiting for instructions.


Sound leadership plays an important role in ensuring that individual efforts and skills are integrated and fit together with the larger interest of the team. Leadership is especially crucial when there are many teams operating at the same time. The leader must ensure that the different teams are working together towards a common cause rather than working against each other. Teams in which members are empowered by giving them responsibility and leadership is shared are more effective in achieving its objectives.


  1. Climate of trust – Trust among team members and trust in the leader is crucial for a team to be effective. Interpersonal trust among members has several benefits:


  1. It leads to greater cooperation
  2. There is lesser need to monitor the work and behavior of team members
  3. Team members start believing that other members will not take advantage of them.
  4. Members are willing to take greater risk
  5. Members are willing to show their vulnerability if they have faith in their team members.
  6. Performance evaluation and reward system – It is necessary to have a hybrid system that recognizes the individual but also reflects team performance. Such a system rewards the outstanding contribution of individual members but also rewards the entire group for good performance and result. The reward system should be designed to encourage employees to work as team players. Rewards must encourage cooperation rather than competition. Profit sharing, appraisal based on group performance are some of the measures that the management can take to increase commitment to the team and make the team more effective.

Team Composition

Effectiveness of team is severely affected by how it is staffed. Some important factors relating to team composition are:


  1. Ability of team members – The performance of the team is strongly affected by the knowledge, skills and abilities of its members. The ability of a team member plays a vital role in determining what a member can do and how well will he perform. Research has found out that high ability teams perform better than lower ability teams on task that require considerable thinking. Studies have also found out that high ability team adjust better to changing situations and are more effective in applying knowledge to new problem.


  1. Personality of a team member – The effectiveness of a team is affected by the personality characteristics of its team members. The Big Five personality traits are closely related to team effectiveness. Research has found that a team performs better when the team’s average on the traits of conscientiousness and openness to experience is high. This is because conscientiousness people can sense when their team members require help and support.


People who are high on openness make their team more creative and innovative. Teams perform badly when they have one or more members who are low on the trait of agreeableness. That is, performance of the team suffers when it has one or more highly disagreeable members. The performance of the team is better when they have members who are high on personal organization, achievement orientation, endurance and cognitive restructuring.


  1. Diversity of members – team performances are affected by team diversity. Organizational demography plays an important role in this regard. Employee turnover is likely to be higher when the demographic characteristics of some team members are different from those of majority of members in the team. This is because they find it more difficult to communicate and thus conflicts are more likely to take place. People find membership of the team less attractive when conflict increases and are more likely to quit.

Difference in demographic characteristics among members results in power struggle. Those who lose this power struggle either quit voluntarily or are forced to quit. Good leadership can turn diversity into an advantage. Good leaders provide members of a diverse team with an inspirational common goal and focus the members attention on the work tasks to be achieved. Cultural diversity is an asset when the team is working on a task that requires a variety of viewpoints but a liability when working on a problem solving task.


  1. Size of teams – Research has found out that most effective teams have five to nine members. It is opinion of experts that the team should have just the right amount of people to do the task. Unfortunately in most organizations, managers create large teams that are too large. When a team has more members than needed:
  2. There is a decline in cohesiveness
  3. Accountability goes down
  4. There is less communication
  5. There is more trouble and difficulty coordinating the efforts of the team members. The problem of coordination becomes even more acute when the team is working under pressure.
  6. There is an increase in social loafing.

Team Processes

Various processes which take place within the team can affect the effectiveness of the team. Some processes are beneficial to the group while others have a negative effect on the team.

The actual effectiveness of a group may be described by the following equation:

Actual group effectiveness = Potential group effectiveness + process gains – process losses


Some of the processes that affect team effectiveness are as follows:

  1. Common plan and purpose – Effective teams know clearly what has to be done. An effective team analyzes and decides their mission, develop and set goals to achieve that mission and create plans and strategies to achieve that goal. Successful teams spend a lot of time and effort on deciding their common purpose.

    The common purpose should be important both individually and collectively. Members of the team should agree on what is their goal. They should be clear as to whether their goal is to learn and master the task or to just perform the task. Effective teams also possess the quality of reflexivity. In these fast changing times, an effective team must be willing to modify a good plan if the situation demands it. Teams that are high on reflexivity are able to handle better the conflicting ideas and goals of their team members.


  1. Specific goals – Successful teams have specific, measurable and realistic performance goals. It is easier for a team to maintain and focus on achieving their results when goals are well defined and clear cut. It also improves communication within the team. Research has found that team goals should be challenging. Goals that are difficult but achievable improve team performance.


  1. Team efficacy – Effective teams are high on team efficacy. They believe that they can achieve goals that have been set and that they will eventually succeed. When a team succeeds its team efficacy goes up. They feel more confident about future success which in turn motivates the team to work harder.

    Management can increase team efficacy by helping teams achieve small successes which builds up the confidence of team members and by providing their technical and interpersonal skills. When members of the team are high on ability, they will have greater confidence and believe that they will be successful.


  1. Mental models – In effective teams, members of the team share the same mental models. Mental models are the team member’s knowledge and beliefs about how the work gets done by the team. It is very important that team members share similar mental models. When team members have wrong mental models or models that are not similar, then the team performance suffers, this is because team members are more likely to fight and get in conflicts regarding how, when and what should be done.


A number of studies have shown that when team members share the same mental model then there is greater interaction among team members, team members are motivated and have positive attitudes towards their work and the performance is much better

What are the advantages of Group Decision Making over Individual Decisions Making?


  1. Pooling of resources – Bringing people together increases the amount of knowledge and information available to make good decisions. This happens because a group consists of members having varied backgrounds.
  2. Increases diversity of views – In groups different individuals look at the problem from different perspectives thus providing more approaches and alternatives to be considered. Groups bring up new viewpoints, thoughts, ideas etc.
  3. Synergy effect – Presence of other people in the group may stimulate each other’s thinking through mutual interaction. This is known as synergy effect.
  4. Sharing the load – Group members can distribute or divide the problem instead of overburdening a single individual.
  5. Specialization of labor – Experts or specialists in various fields can be included in the group. Thus decisions made will be superior in quality.
  6. Increases acceptance of a solution – Individuals are more likely to accept decisions in which they have been actively involved rather than decisions that are made behind their back. The decision becomes our decision rather than their decision.
  7. Increases legitimacy – decisions made through consultation and discussion among individuals are considered to be democratic and legitimate in nature. Decision by a single individual can arouse a lot of questions but decision by a group is more likely to be acceptable.
  8. Increases belongingness – Group decisions increase fellow feelings among the employees and creates a sense of belongingness to the organization.

Define leadership. Explain the managerial grid of leadership proposed by Blake and Mouton.

Leadership is defined as the ability to influence a group towards the achievement of a vision or a set of goals.

Blake and Mouton’s Managerial Grid

Robert Blake and Jane Mouton developed the managerial grid. It is a useful tool for managers to identify their leadership style. They identified two behavioral dimensions of leadership – concern for people and concern for production. These two dimensions are similar to consideration or employee orientation and initiating structure or task orientation of the Ohio and Michigan studies. Depending on the level of concern managers show for people and production. Blake and Mouton identified five leadership styles:


  1. Authority obedience – This style of leadership is characterized by maximum concern for production and minimum concern for people. Such leaders are autocratic and expect blind obedience. Task accomplishment is the only concern of such managers.


  1. Country club management – This style of leadership is characterized by maximum concern for people and minimum concern for production. Attention is focused primarily on making the subordinates comfortable and promoting good feelings among colleagues. The manager is over concerned with creating a friendly working atmosphere.


  1. Impoverished management – This style of leadership is characterized by minimum concern for both people and production. Such leaders expect their followers to do just the bare minimum work needed for the survival of the organization.


  1. Organization man management – This style of leadership is characterized by moderate concern for people and production. This is also known as middle of the road management. The leader tries to keep his people happy and get work done.


  1. Team management – This style of leadership is characterized by maximum concern for both people and production. Production is achieved through participation, involvement, commitment and conflict solving.


The grid helps managers in identifying their primary leadership style and their backup style. Managers use the backup style when their normal style does not yield desired results. In general managers become autocratic and concerned with production when their primary style fails.

What are the qualities and functions of an effective leader?

Traits of an Effective Leader

  1. Drive – this includes desire for achievement, ambition, high energy, tenacity and initiative.
  2. Intelligence – leaders are generally more intelligent than the followers. It was found that leaders have higher intelligence than the average intelligence of the followers.
  3. Honesty and integrity – leaders are trustworthy, reliable and open.
  4. Leadership motivation – this is the desire to influence and lead others but not to seek power for its own sake. Leaders exercise influence over others to reach shared goals.
  5. Self confidence – they have faith in their own abilities and are emotionally stable. Leaders are matured persons and have a broad social perspective. They do not get upset or excited very easily.
  6. Cognitive ability – leaders have a high ability to integrate and interpret large amounts of information.
  7. Knowledge of the business – leaders are well informed about the industry and other relevant technical matters.
  8. Creativity – Leaders have original and innovative ideas.


  1. He has to lay down specific policies and objectives and inspire subordinates to work towards the attainment of the goal.
  2. The leader has to frame policies and plans to achieve the objectives and ensure proper implementation of plans.
  3. He must encourage innovative ideas to run the organization.
  4. The leader must be independent and should be able to take decisions on all vital aspects of administration.
  5. He should encourage team spirit and develop his group into a cohesive unit.
  6. The leader must represent his followers and his organization.
  7. The leader must treat his followers in a fair and impartial manner.
  8. The leader should solve disputes and conflicts among his followers.
  9. He should be able to delegate responsibilities to his subordinates.
  10.  The leader should be able to adapt his style of leadership to requirements of the situation and according to the needs of his followers.

The goals or the objectives of Organizational Behavior.

John Newstrom and Keith Davis define organized behavior as the study and application of knowledge about how people as individuals and as groups act within the organization.

There are some goals of organizational behavior which are as follows:


  1. Describe behavior: The first goal of organizational behavior is to gather information that helps us to describe human behavior accurately and completely. Organizational behavior describes how people behave under different conditions. Knowledge of organizational behavior helps managers to describe and communicate various aspects of human behavior in a common and consistent language.
  2. Understand behavior: Mere description of human behavior is of little use. An important goal of organizational behavior is to understand and explain the cause of people’s behavior. It tries to find the reasons behind human actions. Organizational behavior tries to understand why people behave as they do.
  3. Predict behavior: A better understanding of the causes of behavior helps in predicting the future behavior of employees. Knowledge of OB helps managers to identify productive and unproductive employees. It gives them the capacity to predict which employees are likely to be disruptive and which ones are likely to be sincere and dedicated. Thus managers can take appropriate actions to increase effective behaviors and eliminate ineffective actions.
  4. Control behavior: The final objective of organizational behavior is to control or influence behavior in ways that is beneficial to everyone in the organization. It suggests way s by which we can motivate employees, reduce stress in the workplace, and improve team effort and so on.

Workforce Diversity and Boundaryless organization.

Workforce Diversity

Workforce diversity is a function of the similarities and differences among employees in such characteristics as age, gender, ethnic heritage, physical or mental ability or disability, race, and sexual orientation. Managers of diverse work groups need to understand how their members’ social conditioning affects their beliefs about work and must have the communication skills to develop confidence and self-esteem in their employees.


Stereotypes can lead to prejudice toward others; prejudice consists of judgments concerning the superiority or inferiority of others that can lead to exaggerating the worth of one group while disparaging the worth of others. Management systems built on stereotypes and prejudices are inappropriate for a diverse workforce.


International Business has rapidly become an important part of almost every manager’s life and is likely to become even more important in the future. Managers need to recognize that employees from different backgrounds are similar in some respects and different in others.  


A multicultural organization is one in which employees of different backgrounds, experiences, and cultures can contribute and achieve their fullest potential for the benefit of both themselves and the organization. Developing a multicultural organization is a significant step in managing a diverse workforce and may be crucial to sustaining a competitive advantage in the marketplace. A multicultural organization has six characteristics: pluralism, full structural integration, full integration of informal networks, an absence of prejudice and discrimination, equal identification with organizational goals among employees from both majority and minority groups, and low levels of intergroup conflict.


Boundaryless Organization

The boundaryless organization attempts to eliminate vertical and horizontal boundaries and breakdown external barriers. Boundaryless organizations are often referred to as barrier-free organizations as they attempt to do away with both external and internal barriers.


The horizontal boundaries created by functional department are reduced by establishing cross-functional team, lateral transfers and by rotating people in and out of different functional areas. The benefit of the breakdown in horizontal boundaries is that it turns specialists into generalists.


External barriers are overcome through strategic alliances, supplier-organization linkages, globalization and telecommuting. Despite the obvious benefits associated with having boundaryless organizations, some of the difficulties encountered in creating such organizations are:

  1. There must be a high level of trust between all parties concerned.
  2. Boundaryless organizations require that everyone involved have high level of skills so that they can operate without much managerial guidance.
  3. The elimination of boundaries leads to weakening of managerial powers and authority. Some managers find it hard to digest, thus leading to political behavior.

Traditional v/s Modern Organizations.


Rapid societal, economic, global and technological changes have created an environment in which successful organization have to embrace new ways of getting work done. This is how organizations of today differ from traditional organization.


Traditional Organization

Modern Organization

Stable Dynamic
Inflexible Flexible
Job-focused Skills-focused
Work is defined by job positions Work is defined in terms of task to be done
Individual-oriented Team-oriented
Permanent job Temporary jobs
Command-oriented Involvement-oriented
Managers always make decision Employees participate in decision making
Rule oriented Customer oriented
Homogeneous workforce Diverse workforce
Workdays are defined as to 9 to 5 Workdays have no time boundaries
Hierarchical relationship Lateral and networked relationship
Work at organization Work anywhere; anytime

Types of Organizational Culture.

The presence of organizational culture is usually uniform across the organization. However, this does not mean that there will not be subcultures within any given culture. Most large organizations have a dominant and sub culture operating within them.

Although organizations may have their own unique cultures, they may be classified into four main categories:


  1. Academy: Organizations with this kind of culture hire new college graduates and train them in a wide variety of jobs. Such an organized culture provides the employees with opportunities to master different jobs. In such culture, employees are highly skilled and tend to remain for long in the organization, while working their way up the ranks. The organization provides a stable environment in which the employees can develop and exercise their skills.
  2. Club: Organizations that are highly concerned with getting people to fit in and be loyal are referred to as a club. In such organizations, one’s age and experience are highly valued. The organization promotes from within and highly values seniority.
  3. Baseball team: In such cultures, employees tend to be entrepreneurs who are willing to take risks and are handsomely rewarded for their success.  Such cultures usually have star employees who are very talented and highly paid but are willing to leave the organization if they are offered a better deal. Employees in such organization are in high demand and can easily get jobs elsewhere. This type of culture exists in fast-paced, high-risk organizations, such as, investment banking, advertising, etc.
  4. Fortress: the fortress type of culture exists in an organization that is facing a hard time and fighting for their survival. Employees don’t know whether they’ll be laid off or not. These organizations often undergo massive reorganization. Employees who enjoy the challenge of fighting with their backs against the wall and do not mind the lack of job security enjoy working in this kind of a culture.

Transmission of Organisational culture.

Organizations transmit their culture to their employees through different mechanisms. Some of the powerful means of transmitting organizational culture are as follows:



Stories that highlight and organization’s culture and introduce or reaffirm the organization’s values is a popular way of transmitting organizational culture. These stories revolve around critical incidents or events in the company’s history. A good example is that of Dhirubhai Ambani’s famous battle with a group of stockholders from Calcutta who were hammering the share price of Reliance and how he trapped them. This story highlights how Reliance Industries has always appreciated and cared for the ordinary investor.



Symbols are an important tool of communicating organizational culture. These symbols are often material objects but they convey meanings that go beyond its face value. Some such symbols are corporate buildings; cars used by the company executives, size of the office, dress attire etc. these different symbols project different images of organizational culture.



As organizations grow bigger and older, they develop a unique language to describe their work. This language and terms used in it are often strange to newcomer. They plan an important role on bringing together individuals belonging to a corporate culture.


Ceremonies and Rituals

Ceremonies and rituals are celebrations of an organization’s basic values and assumptions. These ceremonies express and reinforce the key values of the organization, what goals and which people are the most important.


Statements and Principles of Values

A very direct way of communicating organizational culture is through statements of principles and values. This statement clearly conveys what the company believes in and stands for. For example, the BBC’s functioning is driven by six core values – trust, audience, quality, creativity, respect and working together.


3 Stage Socialization process.

Employee orientation and induction is also called employee socialization process. In today’s world, socialization is a continuous process due to the fact that the organizations have become dynamic.

For the new employees, Decenzo and Robbins (1999) identified that the socialization process involves three distinct stages as follows:

  1. Pre-Arrival Stage – This stage includes all the learning that occurs before a new employee joins the organization. It refers to the values, attitudes and expectations every individual brings with him.
  2. Encounter Stage – In this stage, the employee sees what the organization is really like. There is a possibility that there is a gap between what the employee expected and reality. In such a case, the new employee must undergo socialization where he has to give up the previous wrong assumptions and expectations and replace them with those that are accepted in the organization.
  3. Metamorphosis Stage – In this stage the new employee successfully learns the skills required for his job and adjusts in to his work group’s values and norms.
    The socialization process is said to be complete when the new member becomes comfortable with his job and the organization, accepts the organization’s work group’s norms is accepted an trusted by his peers.

Maslow’s Need Hierarchy theory.

In 1943 A. Maslow gave a theory of human needs called the Need Hierarchy Theory. He talks of five levels of needs in hierarchy:


  1. Physiological Needs – the physiological needs are at the base of the pyramid of needs. It is on the satisfaction of physiological needs that the survival of the human being depends. Physiological needs are hunger, thirst, and sleep, avoidance of pain, sex and maternal instinct. Organization attempts to satisfy the physiological needs of the employee by providing an adequate salary.


  1. Safety Needs – the safety needs are activated once the physiological needs are satisfied. Safety needs refer to the need for a secure environment – physical as well as psychological. It is the need for freedom and safety from fear or threat. Organizations attempts to satisfy the safety needs of the employees by providing them with good working conditions, safety equipments, health and life insurance etc.


  1. Social Needs – these needs are also known as ‘love needs’ or ‘belongingness needs’. It refers to the need to have friends, to be loved and accepted by other people. People do not work only for money, but also for companionship. Everyone wants to be socially accepted. It is the need for good relations with other individuals and the need to develop attachment to another person or group. Organization attempts to satisfy the social needs of the employees by organizing games, get-togethers, picnics, outings etc.


  1. Esteem Needs – these needs are also referred to as ego needs. It is the need to be values and respected by others. It also includes the desire to achieve success, recognition and have prestige within and outside the organization. Organization attempts to satisfy esteem needs of the employees by organizing special felicitation functions for top performances in the organization, highlighting the achievements of the employee, giving trophies to outstanding performers and so on.


  1. Self-Actualization Needs – the need for self-actualization is at the top of Maslow’s hierarchy of needs. This need means to become all that is possible for a person to become. It is the need to fulfill one’s potential i.e. to develop one’s capacity and express them. It is the need for personal growth and development. Self actualized people are contented, happy people.

The Stages of Group Development.

  1. Forming – In this stage, the members get acquainted with each other. They share personal information and try to know more about the task to be performed. Members are extremely courteous and cautious as they interact with each other. This stage is marked with great deal of uncertainty and confusion as members are not aware how they should act in a group and what behaviors are acceptable.
  2. Storming – This stage of group development is characterized by intragroup conflict. The hostility and fighting is over who controls the group and the course of action or the direction the group should take. This is a period of high emotionality and tension among group members. The storming stage is completed when the intragroup conflicts are resolved and the group’s leadership is accepted.
  3. Norming – It is in the norming stage that the group really begins to come together as a coordinated unit. Members start cooperating with each other and place their competing interests in the background. In this stage, the group becomes very cohesive and there is a strong sense of group identity and cooperation among the members.
  4. Performing – During this stage, the group members work effectively and efficiently towards achieving the group objectives. The performing stage is marked by the emergence of a mature, organized and well functioning group. The group is now able to deal with complex tasks and handle internal disagreements in creative ways.
  5. Adjourning – In this stage, the group prepares for disbandment. The group’s focus is now on wrapping up activities rather than achieving high task performance. Group members experience mixed emotions. On one hand, they are thrilled with the achievements of the group and on the other hand, there is sadness about the separation and loss of friendship.


Group Norms and Group Cohesiveness.

Norms are acceptable standards of behavior within a group that are shared by the group members. They are the rules within a group regarding how its members should or should not behave. Every group has certain norms and they may differ from group to group. It tells the members what they can and cannot do. They are set of informal rules, shared beliefs, and values that guide member behavior. Norms differ from organizational rules in that they are not formal and written.


The norms could be about almost anything from what kind of clothes to wear to the kind of language to be used. Although the norms of every work groups are unique, there are certain common norms that appear in most groups. The most common ones are –

  1. Performance norms – These norms pertain to how hard group members should work, how they should get a job done, their levels of outputs and so on. An individual’s performance at work is greatly influenced by group norms.
  2. Appearance norms – These norms are about the appropriate ways of dressing, demonstration of loyalty, when to look busy, when one can take it easy etc.
  3. Social arrangement norms – These norms are regarding social interaction. These norms regulate behavior such as with whom the group member can eat lunch, maintain friendships both on and off the job and so on,
  4. Allocation of resources norms – These norms relate to things like pay, assignment of difficult jobs and distribution of new tools and equipment.

Group Cohesiveness

Cohesiveness is the degree to which members are attracted to each other and are motivated to stay in the group. It is the strength of group members’ desire to remain in the group. Group cohesiveness reflects the extent to which group members perceive themselves as “we” rather than “I”


Cohesiveness in groups is important for organizations because it has a direct impact on productivity. Cohesiveness in a group may be due to several reasons.

  1. Members of the group having spent a great deal of time with each other.
  2. Small group size that leads to greater interaction among members and builds cohesiveness.
  3. External threats that brings group members closer to each other.

Productivity depends on cohesiveness and performance norms of the group regarding quality, output and cooperation.

Transformational Leadership and Transactional Leadership.

Two types of leadership that complement each other are transformational leadership and transactional leadership. Transactional leaders are defined as the leaders who guide or motivate their followers in the direction of established goal by clarifying role and task requirement. Some important characteristics of transactional leaders are:

  1. Contingent rewards – Transactional leaders get work done from their followers by promising and giving rewards for good performance. They give recognition to the achievement of their followers.
  2. Management by exception (active) – transactional leaders will actively intervene in their followers work only when they deviate from established rules and standards.
  3. Management by exception (passive) – Sometimes transactional leaders step only if the standards are not met.
  4. Laissez-faire – Transactional leaders avoid making decisions and are unwilling to assume responsibility.

In contrast, transformational leaders are defined as leaders who inspire followers to transcend their own self interests and who are capable of having a profound and extraordinary effect on followers.


These leaders bring this change by paying attention to the needs and concerns of their followers, by creating awareness among their followers and by making them look at old problems in a new way. Transformational leaders are successful in inspiring their followers who in turn are willing to put extra efforts in order to achieve organizational goals.


Transformational leaders have four characteristics that helps them to obtain superior results from their subordinate:


  1. Idealized influence – Transformational leaders instill pride in their followers by providing them with a vision that creates a sense of mission. Transformational leaders are able to win the respect and trust of their followers.


  1. Inspirational motivation – transformational leaders communicates the important purposes of the organization in a very simple and easy to understand way. They motivate their followers by expressing their high expectations and through the use of symbols.


  1. Intellectual stimulation – transformational leaders encourage their followers to think intelligently, rationally and adopt a careful approach to problem solving.


  1. Individual consideration – transformational leaders serve as a coach or a mentor to their subordinates. They pay careful attention to each individual follower’s need for growth and advancement. They provide individual coaching and advice to their follower.

It is these four characteristics that make a transactional leader in to a transformational leader. It is these qualities that enable the leaders to extract the best out of their followers.

Charismatic leadership.

Robert House was the first researcher to study charismatic leadership from the OB perspective. According to House’s charismatic leadership theory, “followers attribute heroic or extraordinary leadership abilities when they observe certain behaviors”.

Conger and Kanungo identified four key characteristics of a charismatic leader:


  1. Vision and articulation – Charismatic leaders build follower commitment by creating an appealing and attractive vision. They define their vision as an idealized goal. They paint a picture of a future that promises a better and more meaningful life to their followers. They communicate this message in a language which is easily understood by their followers.
  2. Personal risk – Charismatic leader are willing to make personal sacrifices, take high risk and pay a high cost in order to achieve the vision.
  3. Sensitivity to follower needs – Charismatic leaders understand and respond to the needs and feelings of their followers.
  4. Unconventional behavior – Charismatic leaders engage in innovative behaviors which go against established norms.


Studies have found that the charismatic leaders follow a four step process in influencing their followers:

  1. Appealing vision – charismatic leaders present a very appealing vision of the future to their followers. They also present a long term strategy for attaining a goal that will lead to be a better future for the followers in the organization. The vision creates a feeling among the followers that their organization is unique and special.


  1. Vision statement – Charismatic leader communicate their vision to the followers through a vision statement that clearly states the mission or vision of the organization. The vision statement is repeated at every occasion to get the followers commitment to the goal and purpose of the organization. The leaders boost the self esteem of their followers by showing immense confidence and faith in their followers.


  1. New set of values – Through their words and actions, charismatic leaders convey to their followers a new set of values for them to follow. The followers thus start identifying with their leaders and are willing to comply and do whatever their leaders wish.


  1. Unconventional behavior – Charismatic leaders engage in unconventional behaviors that are high on emotions to show the followers how courageous they are. They thus demonstrate their complete conviction and faith in the vision. The emotions soon spread like and epidemic among the followers.

A number of studies have shown that organizations benefit when they have charismatic leaders.

The Effects of Stress.

Stress affects one’s mind, body and behavior. At the physical level, high level of stress is accompanied by hypertension and high cholesterol in the blood. They lead to heart ailments, ulcers, arthritis, paralysis etc. All these things are terrible not only for individual but also for the organization because people having such problems become unavailable to the organization either temporarily or permanently.


Since the mind and body are closely associated, stress affects at the psychological level in the form of anxiety, tension, boredom, dissatisfaction, depression etc. Stress leads to frequent mood changes, loss of self esteem, inability to concentrate on work, inability to make decisions etc. The psychological problems due to stress are as serious as the physical problems.


Research has proved that workers who are under high level of stress take to drinking. Because of excessive drinking, they are not able to perform their duties properly. They become irregular and they are fired from the job or they quit on their own. Prolonged exposure to stress leads to a condition that has been described as burnout. Employees suffering from burnout become less energetic and less interested in their jobs. They are emotionally exhausted, apathetic, depressed, irritable and bored. A person suffers from emotional, physical and mental exhaustion in a burnout. A burned out employee has an impact on the emotional health and efficiency of co-workers and subordinates.


Women managers show more frequent and intense effects of emotional exhaustion than do men managers. Single and divorced persons have been found more than married persons to experience emotional exhaustion. Emotional exhaustion has also been related to lack of opportunity for promotion.


Research findings indicate that with appropriate help, victims of burnout can recover. If ongoing stress is reduced, if the person suffering from burnout receives the support of friends and co-workers, develops hobbies and new interests then burnout victims can recover and return to a more productive life.

Define Organisational Behaviour.

Explain various challenges faced by the Managers and Exhibit How the study of OB has helped them to cope up to solve them.


Organisations are as old as the human race. As time passed, the people realised that they could collectively satisfy their wants in a much effective manner. Thus, they got together to satisfy their needs and wants. Individuals who feel that they have skills, talents and knowledge form groups to produce the goods and services. Organisation is a group of people who work together to achieve some purpose. The people working together expect each other to complete certain tasks in an organised way.


John Newstrom and Keith Davis define organisational behaviour as “the study and application of knowledge about how people as individuals and as groups act within organisations.”


Stephen Robins defines organisational behaviour as “a field of study that investigates the impact that individuals, groups, and structure have on behaviour  within organisations for the purpose of applying such knowledge toward improving an organization’s effectiveness.”


In simple words, organizational behaviour is concerned with the study of what people do in an organisation and how that behaviour affects the performance of the organisations. The word organization refers to all types of organizations such as businesses, government, educational institutions etc.


Managers face people issues of the kind that they have never faced before. The need to understand the behaviour of people in organizations has become more important than ever before.fortunately, OB has risen to this challenge and provided managers with meaningful insights that will help them solve this problem.


Organizational behavior (OB) is the study of human behavior in organizational settings, how human behavior interacts with the organization, and the organization itself. Although we can focus on any one of these three areas independently, we must remember that all three are ultimately connected and necessary for a comprehensive understanding of organizational behavior.


For example, we can study individual behavior (such as the behavior of a company’s CEO or of one of its employees) without explicitly considering the organization. But because the organization influences and is influenced by the individual, we cannot fully understand the individual’s behavior without knowing something about the organization. Similarly, we can study an organization without focusing specifically on each individual within it. But again, we are looking at only one piece of the puzzle. Eventually, we must consider the other pieces to understand the whole.


Challenges faced by the Managers

The Changing Social and Cultural Environment

Forces in the social and cultural environment are those that are due to changes in the way people live and work changes in values, attitudes, and beliefs brought about by changes in a nation’s culture and the characteristics of its people. National culture is the set of values or beliefs that a society considers important and the norms of behavior that are approved or sanctioned in that society. Organizations must be responsive to the changes that take place in a society for this affects all aspects of their operations.


The Evolving Global Environment

Managers must understand how cultural differences influence organizational behavior in different countries. Management functions become more complex as the organization’s activities expand globally, and coordination of decision-making and organizational issues becomes a necessity. Managers must understand the requirements of foreign markets and how cultural differences impact organizational issues such as compensation packages, evaluation, and promotion policies. Two important challenges facing global organizations are to appreciate the differences between countries and then to benefit from this knowledge to improve an organization’s behaviors and procedures.


Advancing Information Technology

One kind of technology that is posing a major challenge for organizations today is information technology. Information technology (IT) consists of the many different kinds of computer and communications hardware and software, and the skills designers, programmers, managers, and technicians bring to them. IT is used to acquire, define, input, arrange, organize, manipulate, store, and transmit facts, data, and information to create knowledge and promote organizational learning.


Organizational learning occurs when members can manage information and knowledge to achieve a better fit between the organization and its environment. Two important effects include (a) those behaviors that increase effectiveness by helping an organization improve the quality of its products and lower its costs; (b) those behaviors that increase effectiveness by promoting creativity and organizational learning and innovation.


The Challenge of Globalization

Organizations no longer operate within national borders. They operate all over the world. For example, software companies like Infosys and TCS earn a chunk of their revenues from the US and European markets. The world has become a global village. Globalisation is having a tremendous impact on the way people are managed and businesses are run. The manager’s job has changed significantly.


The Challenge of not Managing a Diversified Workforce

The employees of a modern organization are very different from those in the past. They come from diverse backgrounds. The concern of globalisation is on differences between people from different countries whereas workforce diversity is concerned with difference among people from the same country.


The morning walk posters becoming increasingly diverse and heterogeneous. They differ from each other with regards to gender, age, education, race, ability, race, ethnicity, sexual orientation, lifestyle and values.


The Challenge of Improving Quality and Productivity

There is fierce competition among organizations to gain a larger share of the market. To face this competition manager have reduced cost on one hand and improve the productivity and quality of products and services on the other. OB provides useful insights to managers in bringing about these changes.


The Challenge of improving Customer Service

Top quality customer service has become vital for organization’s continuous survival. Friendly and efficient customer service could make all the difference between acquiring or retaining or losing a customer or client. Organizations need to create a customer-responsive culture.


The Challenge of Improving People Skills

Excellent customer service is possible only if the employees possess good people skills. Hence a challenge before today’s manager is to improve the people skills of his employees. He can do so by improving the employees’ listing skill, building a sense of belongingness and team spirit, designing jobs in a way that motivate them to work harder and so on knowledge of OB helps managers in doing so.


The Challenge of Stimulating Innovation and Change

The only thing that is constant in this world is Change. It is only organizations which are able to adapt and master the challenges presented by the changes are able to survive. To do so, organizations must display a high level of flexibility, continuously improve the quality of their products and services.

Knowledge of OB provides managers with ideas and tools for introducing change and Innovation in the organizational.


The Challenge of Coping with Temporariness

Temporariness means that everything in the organization is transient or temporary; nothing is constant or permanent. Temporariness may be at the job level or at the organizational level.

Job temporariness may take different forms such as changing employee’s job description, the appointment of temporary workers and tasks being done by flexible teams rather than individuals


The Challenge Of Working In Networked Organizations

The communication revolution in the form of computers and internet has completely changed the way people work. The manager’s job managing people in a networked organization is quite different than when employees were physically present before him. Managers face the challenge of developing new methods of motivating, leading and resolving conflicts. Knowledge of OB helps them in this difficult task.


The Challenge Of Striking Work-life Balance

People have Both work and non-work lives. Employees in the past worked 8 to 8 hrs for 5 days in a week. This is no longer the case with modern workers. The line dividing work and non-work time has become blurred and has almost disappeared. Today a 24/7 job has become common. This has resulted in employees experiencing high levels of stress and personal conflicts. Employees are becoming increasingly dissatisfied with this work-life imbalance.


The Challenge Of Creating A Positive Work Environment

Managers have realised that putting additional pressure on employees to cope with fierce competition will not work.Rather creation of a positive work environment will be more beneficial and advantages in the long run.OB helps managers in Focusing more on positive organizational citizenship or positive organizational behaviour.


Role of Organisational Behaviour in Management of Business

Organisational behaviour provides solution as well as insight towards solution to many challenges which are faced by the organisations. Some of the important roles performed by organisational behaviour in management of business are as follows:-


1. Globalisation

Due to globalisation, organisations are no longer confined to one particular country. The Manager’s job is changing with the expansion of the organisations across the national borders. Example, Volkswagen builds its cars in Mexico, Mercedes and BMW in South Africa. Due to globalisation, the management has to deal with the problems of unfamiliar languages, laws, work ethics, management styles etc. The functions of hiring, training, etc must acquire a global perspective. Organisational Behaviour helps the management to become flexible, and proactive and enables it to execute the organisation on a global scale.


2. Managing WorkForce Diversity

Organisations are a heterogeneous mix of people in terms of age, gender, race etc. Managing the workforce diversity has become a global concern. Managers have to deal with individuals and groups belonging to different ethnic cultures. They have to exercise control and channelize behaviour in the desired direction. Organisational behaviour help the managers to effectively deal with workforce diversity by promoting its awareness, increasing diversity skills, encouraging culture and gender diversity.


3. Improving Quality and Productivity-

Industries are facing the problem of excess supply. This has increased competition to a large extent. Almost every Manager is confronting the same problem of improving the productivity, quality of the goods and services their organisation is providing. Programmes such as business process reengineering, and total Quality Management are being implemented to achieve these ends. Organisational Behaviour helps the Managers to empower their employees, as they are the major forces for implementing this change.


4. Improving customer service

Most of the employees work in service sector. The jobs in the service sector, is very demanding. It requires continuous interaction with the organisations clients i.e. the customers. Management has to ensure that the employees do everything to satisfy the customers of the organisation. The attitude and behaviour of an employee affects the customer satisfaction. Organisational Behaviour helps the managers to improve customer service and organisational performance.


5. Improving people skills

Organisational Behaviour helps in better management of business as it helps in improving the skills of the people. It provides insight into the skills that the employees can use on the job such as designing jobs and creating effective teams.


6. Innovation and Change

Organisational Behaviour helps in stimulating innovation and change. Employees can either be a hurdle or an instrument of change. It is organisational behaviour which fosters ideas and techniques to promote innovation and change by improving employees creativity.


7. Work Life Balance

Organisations that do not help employees to achieve work life balance will not be able to retain their most talented employees. Organisational behaviour helps i designing flexible jobs which can help employees deal with work life balance issues.


8. Promoting Ethical Behaviour

Sometimes the organisations are in a situation of ethical dilemma where they have to define right and wrong. It is Organisational Behaviour which helps an important role by helping the management to create such a work environment which is ethically healthy and increases work productivity, job satisfaction and organisational citizenship behaviour.


9. Creating a Positive Work Environment-

Organisational behaviour helps in creating a positive work environment in today’s where competitive pressures are stronger than before. OB helps to develop resilience, human strength, and it fosters vitality.

Describe OB with the Different Approaches in OB.

Organizational Behavior relates to the relationship between employees and the employer in an organization.


Both are working towards the realization of the goals and objectives of any organization, and a close and fruitful coordination between the two is one of the major factors towards this realization. Organizational behaviour approaches are a result of the research done by experts in this field.


These experts studied and attempted to quantify research done about actions and reactions of employees, with regard to their work environments. It is a field that has begun developing only recently and new approaches and results are being expounded every day.


1. Human Resources Approach:

This approach recognizes that human resources in an organisation are the central force. Their development will contribute to the success of the organisation. Human resources approach provides for the changes in the managerial role. It requires that the managers, instead of controlling the employees, should provide active support to them by treating them as part of the group.


The superiors and managers should practice a style where workers are given the opportunities and encouragement to perform under loose supervision. By treating individuals as mature adults, organisations can increase productivity and at the same time meet the needs of individuals for independence and growth.


2. Contingency Approach:

The approach stresses that there is no single way to manage effectively under all circumstances. The methods of behaviours which work effectively in one situation may fail in another. The organisational structure and the processes of management are governed by the external environment and several aspects of the internal environment. Effective management processes will vary in different situations depending on the individuals and groups in the organisation, the nature of the job and technology, the environment facing the organisation and its structure.


The manager’s task therefore, is to identify which method will, in a particular situation, under particular circumstances and at a particular time, best contribute to the attainment of organization’s goals. Thus, the manager will have to analyze each situation prior to action and different managerial practices and styles are needed for effective management.


3. Productivity Approach:

Productivity means the numerical value of the ratio of output to input. Higher the value of this ratio, greater is the efficiency and effectiveness of the management. The traditional concept of productivity was concerned with economic inputs and output only. But nowadays human and social inputs and outputs are equally important. Productivity, a significant part of organisational behaviour decisions, is recognized and discussed extensively. These decisions relate to human, social and economic issues. For example if better organisational behaviour can reduce worker’s turnover or the number of absentees, a human output or benefit occurs.


4. System Approach

The systems approach is of the view that an organisation is a powerful system with several subsystems which are highly and closely interconnected. Any action taken to solve the problems in one subsystem will have its effect on the other subsystems as well; since all the parts of the organisation are closely connected. Thus, this approach gives the managers a way of looking at the organisation as a whole, whole group, and the whole social system. Systems approach has become an integral part of modern organisational theory. Organisations are termed as complex systems comprising of interrelated and interlocking systems.


According to this approach, an organisation receives several inputs from its environment such as material, human and financial. These inputs are then processed so as to produce the final output in terms of products or services.


What is an organizational design? Which are the most common organizational designs? Explain.


Organization design involves the creation of roles, processes and structures to ensure that the organization’s goals can be realized. Some people associate organization design with the mechanical arrangement of positions and reporting lines on the organization chart. It is certainly true that organizational designers also need to define the vertical structure, including reporting lines.


However, organization design is much more than boxology.


Organization design problems are often some of the hardest problems that leaders face. Finding the right design often requires inventing a new solution to resolve a dilemma.  And decisions made with regard to formal structure, roles and processes directly impact the jobs and careers of employees and the ability of the firm to realize its strategic objectives.


Greenberg and Baron refer to organizational design as the process of coordinating the structural elements of organizations in most appropriate manner.


The three most common organizational design found in use are:


The Simple Structure      

A simple structure organization is usually a small informal organization in which there is a single individual with unlimited power. The retail store in our neighbourhood, newly started entrepreneurial, venture, are examples of organisations that usually have a simple structure. Some of the important characteristics simple organisation structure are:

  • It has low degree of departmentalization
  • Authority is centralised in a single individual
  • It is a ‘flat’ organisation with only two or three vertical levels
  • There is very little specialization or formalization

There are certain advantages as well as disadvantages of having a simple organisational structure. The strength of simple structure organisations is that they are fast and flexible. They are able to respond quickly to change in the environment. For example, the owner of small Udupi Restaurant will be able to change the menu to suit the changing taste of customer without consulting anyone.


The drawbacks of simple structure organisation are

  • They are risky organisations as Everything depends on one person. The success of the organisation depends on the wisdom and health of a single individual.
  • As the organization grows, it leads to information overload on a single individual. This is due to the low level of formalization and high level of centralisation.
  • With the increase in the size of Organisation; decision Ahmad very slowly as a single person has to make all the decisions.


In an organization redesign process one may consider elements at different levels:  

  • The overall organizational architecture (e.g., the corporate level, the role of the headquarters versus business areas in a large firm, etc.)
  • The design of business areas and business units within a larger firm
  • The design of departments and other sub-units within a business unit
  • The design of individual roles

The Bureaucracy

Bureaucratic organisations were very popular during the 1950 and 1960. Today however bureaucracy is looked upon as a dirty word but it still continues to exist in most organisations the characteristics of a Bureaucracy are:

  • Employees perform highly routine tasks
  • There is a very high level of specialisation and employees are grouped into functional departments
  • There are many formalized rules and regulations.
  • Authority is centralised.
  • The span of control is narrow.
  • Decision making follows a chain of command. That is files have to move through a several tables before a decision is made.


The Strength of Bureaucracy are:

  • Due to a high level of standardization activities are performed in highly efficient manner.
  • Bureaucracy can be managed by less talented and less costly managers
  • The high level of specialisation results in ‘economies of scale’. production cost are reduced.


The Weakness of Bureaucracy are:

  • The high level of specialisation leads to conflict between the different functional units
  • In bureaucratic organisations there is an obsessive concern for rules. Everything must be done within rules; there is no scope for modification


The Matrix Structure

An organisation with a matrix structure combines two forms of departmentalization: functional and product. This kind of an organisation design is commonly found in a hospital, management consulting firms, universities and so on. The Matrix structure attempts to gain from the strength of functional and product departmentalization while avoiding their weakness.


In matrix designs, there are three major roles:

Two-Boss Managers: these are employees who have to managers or Bosses. In other words, they have dual authority. They must report to both the product and functional managers and attempt to maintain a balance between them.


Matrix Bosses: they are the people who head the functional departments or specific products. Did not have complete authority and control over their subordinates and must work together to ensure what their efforts are fruitful.


Top Leader: the top leader has control over both the functional manager and the product manager. The top leader’s task is to ensure coordination between the functional manager and product managers. Yash to also maintain and balance of power between them.


The Matrix approach is usually adopted by organisations that have several product lines but do not have sufficient resources to established fully self-contained operating units.

Like The organisational designs, The Matrix structure has sound advantages as well as disadvantages.


The Advantages Of Matrix Organisation Are:

  • Facilities Coordination: The greatest strength of matrix is that its facilities coordination between Complex but interdependent activities of the organisation
  • Flexibility: The Matrix permits flexibility in the use of the organisation’s human resources. Individuals within functional departments can be assigned to specific products or projects as the need arises and then return to their regular duties when the task is completed.
  • Better Communication: The Matrix increases communication between the matrix bosses as they are forced to discuss and agree on matters.


Latest Disadvantages Of The Matrix Structure Are:

  • Power Struggle: There is every possibility of a power struggle between the matrix Bosses. They try to gain control over their subordinates as it is not very clear about who reports to whom.
  • Ambiguity: Reporting to more than one boss gives rise to unclear Expectations and results in role ambiguity. It can also cause a role conflict.
  • Frustration and Stress: Role conflict and ambiguity creates ago climate that causes stress and frustration among the employees.


Here are few additional ones


Functional Organisational Structure


  • A functional organization is a common type of organizational structure in which the organization is divided into smaller groups based on specialized functional areas, such as IT, finance, or marketing.
  • Functional departmentalization arguably allows for greater operational efficiency because employees with shared skills and knowledge are grouped together by function.
  • A disadvantage of this type of structure is that the different functional groups may not communicate with one another, potentially decreasing flexibility and innovation. A recent trend aimed at combating this disadvantage is the use of teams that cross traditional departmental lines.


2. Linear OS

Linear organizational structure is one of the types of the formal organizational structure. Each superior has clearly assigned subordinates and each subordinate has clearly assigned superior.


3. Matrix OS

The term Matrix organizational structure (also project structure) denotes one type of the formal organizational structure. The basis of the organizational structure is a classic vertical linear structure, which is combined with a horizontal structure showing ad-hoc generated teams dedicated to special projects. The matrix organizational structure is necessary in project-oriented organizations.


The matrix structure combines functional specialization with the focus of divisional structure (see Figure 3). This structure uses permanent cross‐functional teams to integrate functional expertise with a divisional focus.


Employees in a matrix structure belong to at least two formal groups at the same time—a functional group and a product, program, or project team. They also report to two bosses one within the functional group and the other within the team.


This structure not only increases employee motivation, but it also allows technical and general management training across functional areas as well. Potential advantages include

  • Better cooperation and problem solving.
  • Increased flexibility.
  • Better customer service.
  • Better performance accountability.
  • Improved strategic management.


Predictably, the matrix structure also has potential disadvantages. Here are a few of this structure’s drawbacks:

  • The two‐boss system is susceptible to power struggles, as functional supervisors and team leaders vie with one another to exercise authority.
  • Members of the matrix may suffer task confusion when taking orders from more than one boss.
  • Teams may develop strong team loyalties that cause a loss of focus on larger organization goals.
  • Adding the team leaders, a crucial component, to a matrix structure can result in increased costs.


For different projects different project teams are created with different managers and different roles for the individual workers nominated into individual teams.


4. Staff & Line OS

Staff & Line organizational structure is one of the types of the formal organizational structure. It is based on the arrangement of linear organizational structure extended by the staff departments that provide support for management activities for different hierarchical levels and areas of the operation of the organization.


A person outside the company is hired to provide certain service to the managers and share same position but however do not have same powers and authority just as the managers.

5. Virtual Organisational Structure

This new form of organisation, i.e., ‘virtual organisation’ emerged in 1990 and is also known as digital organisation, network organisation or modular organisation. Simply speaking, a virtual organisation is a network of cooperation made possible by, what is called ICT, i.e. Information and Communication Technology, which is flexible and comes to meet the dynamics of the market.


Alterna¬tively speaking, the virtual organisation is a social network in which all the horizontal and vertical boundaries are removed. In this sense, it is a boundary less organisation. It consists of individual’s working out of physically dispersed work places, or even individuals working from mobile devices and not tied to any particular workspace. The ICT is the backbone of virtual organisation.


It is the ICT that coordinates the activities, combines the workers’ skills and resources with an objective to achieve the common goal set by a virtual organisation. Managers in these organisations coordinate and control external relations with the help of computer network links. The virtual form of organisation is increasing in India also. Nike, Reebok, Puma, Dell Computers, HLL, etc., are the prominent companies working virtually.


While considering the issue of flexibility, organisations may have several options like flexi-time, part-time work, job-sharing, and home-based working. Here, one of the most important issues in¬volved is attaining flexibility to respond to changes – both internal and external – is determining the extent of control or the amount of autonomy the virtual organisations will impose on their members.


This is because of the paradox of flexibility itself. That is: while an organisation must possess some procedures that enhance its flexibility to avoid the state of rigidity, on the one hand, and simultaneously also have some stability to avoid chaos, on the other.




A virtual organisation has the following characteristics:

  1. Flat organisation
  2. Dynamic
  3. Informal communication
  4. Power flexibility
  5. Multi-disciplinary (virtual) teams
  6. Vague organisational boundaries
  7. Goal orientation
  8. Customer orientation
  9. Home-work
  10. Absence of apparent structure
  11. Sharing of information
  12. Staffed by knowledge workers.


6. Boundaryless OS

A boundaryless organization is one in which its design is not defined by, or limited to, the horizontal, vertical, or external boundaries imposed by a predefined structure. In other words it is an unstructured design. This structure is much more flexible because there is no boundaries to deal with such as chain of command, departmentalization, and organizational hierarchy. Instead of having departments, companies have used the team approach. In order to eliminate boundaries managers may use virtual, modular, or network organizational structures. In a virtual organization work is outsourced when necessary.


There are a small number of permanent employees, however specialists are hired when a situation arises. Examples of this would be subcontractors or freelancers. A modular organization is one in which manufacturing is the business. This type of organization has work done outside of the company from different suppliers. Each supplier produces a specific piece of the final product. When all the pieces are done, the organization then assembles the final product. A network organization is one in which companies outsource their major business functions in order to focus more on what they are in business to do.

Explain Matrix Organisational Structure with its strengths and weaknesses.


Organizations with hierarchical structures are easily graphed and defined. Often described as “tree structures,” they are unambiguous and relatively permanent (or stable) organizational models, in which each element in the organization reports to a higher element and concludes with the CEO or Board of Directors at the top. A well-known feature of this model is that everyone in the organization reports to a single boss. On the other hand, a matrix organizational structure is everything that a hierarchical structure is not.


Matrix structures evolved in response to the rise of large-scale projects in contemporary organizations. These projects required rapid infusions of technological know-how and efficient processing of very large amounts of information. Older organizational structures proved to be ill-equipped to deal with these very projects within the necessary time limits. What these large projects called for was an organizational structure that could respond quickly to interdisciplinary needs without disrupting existing functional organizational structures.


Some of the most striking differences are:

  • Employees are generally accountable to more than one boss
  • There are usually two separate chains of command
  • The matrix structure is designed to be partially impermanent
  • There are two kinds of managers: functional managers and project managers
  • managerial roles are fluid, not fixed
  • The balance of power between functional and project managers isn’t organizationally defined


Matrix Structures

The matrix organizational structure provided solutions to these large scale project problems by allowing for impermanent project structures that coexisted with relatively permanent functional structures. For a given project, a team might be assembled from several departments in the functional structure, which was often some form of hierarchical structure.


Instead of disassembling the functional structure to create this temporary project structure, the matrix structure retains the functional structure and superimposes on it a temporary project structure. Team members continue to report to functional managers, but also report to project managers. Effectively, every team member now has two bosses.


Two-Boss Managers: these are employees who have to managers or Bosses. In other words, they have dual authority. They must report to both the product and functional managers and attempt to maintain a balance between them.


Matrix Bosses; they are the people who head the functional departments or specific products. Did not have complete authority and control over their subordinates and must work together to ensure what their efforts are fruitful.


Top Leader: the top leader has control over both the functional manager and the product manager. The top leader’s task is to ensure coordination between the functional manager and product managers. He also has to maintain an appropriate balance of power between them.

Advantages of Matrix Structures

Because matrix structures retain an organization’s functional structure, they allow for the rapid creation of efficient large-scale, project structures that employ many members of the organization’s functional structure but without disrupting or destroying the structure in the process.


Because the two organizations have different timelines – one relatively permanent, the other designed to expire with the completion of the project – the kinds of managerial discontent that can arise when a sub-unit in an organization “steals” employees to work on a project is muted. In ideal matrix structures, the two structures share resources equally without territorial struggles, because as each functional manager knows, the project structure will eventually dissolve. Other advantages of matrix structures noted in one of the seminal academic studies of these structures are:

  • Clear articulation of project objectives
  • Workable way of integrating project objectives with functional objectives
  • Efficient use of limited human resources
  • Rapid (often interdisciplinary) information flow through the project
  • Retention of expert teams through the life of the project
  • Rapid dispersion of team members back into the functional organization upon project completion without organizational disruption
  • Project management trains managers to become leaders in the functional organization
  • Project structures develop team spirit and high morale
  • Possibility of conflicts arising during the project carrying over to functional management
  • The greatest strength of matrix is that its facilities coordination between Complex but interdependent activities of the organisation
  • The Matrix permits flexibility in the use of the organisation’s human resources. Individuals within functional departments can be assigned to specific products or projects as the need arises and then return to their regular duties when the task is completed.
  • The Matrix increases communication between the matrix bosses as they are forced to discuss and agree on matters.

Disadvantages of Matrix Structures

The same seminal study of matrix organizations also notes their disadvantages:

  • Two-boss problems, leaving project members caught in the middle 
  • Project members playing bosses against one another
  • Increases organizational complexity
  • Requirement for high degree of cooperation between functional and project management
  • Potential for conflicting management directives
  • Difficulty of establishing priorities suiting both functional and project management
  • Possible slowdowns in management reaction to events when two structures required for solution 
  • Possible structural collapse in “crunch time”
  • Increase in management overhead costs 
  • There is every possibility of a power struggle between the matrix Bosses. They try to gain control over their subordinates as it is not very clear about who reports to whom.
  • Reporting to more than one boss gives rise to unclear Expectations and results in role ambiguity. It can also cause a role conflict.
  • Role conflict and ambiguity creates ago climate that causes stress and frustration among the employees.

Define Organizational Culture. How can one create and maintain and change a culture of an organisation?

Organisational Culture is the personality of an organisation culture is comprised of the assumption, values, norms and tangible signs of organisation members and their behaviours. Understanding organisational culture is very important if one wants to understand an organisation.


John Newstrom and Keith Davis define organisational culture as “the set of assumptions, belief, values and norms that are shared by an organisation’s members.”


Changes in the external world often compel organisation’s to either change or modify their culture. Changes in government policies market conditions new technology are some of the factors that could accept the state by nature of organisational culture and result in it changes.


The Culture of an Organization may be created due to the following reasons:

An Organization’s culture does not develop overnight. A number of factors contribute to the emergence of an organizational culture. Some of these factors are


Company Founders

The founders of an organization have a major impact on the organizations early culture. The founders usually possess dynamic personalities, strong values and have a vision of what the organization should be. They are not bothered by existing customs and ideologies. For example, the various projects of Reliance Industries have always been mega projects. This was due to Dhirubhai Ambani’s Vision of doing everything “world class” and on “world scale”


The founders play a key role in hiring their initial employees and transmit their attitudes and values to them. The views of the founders become the accepted norms in the organization and persist even when the founders are no more on the scene.


Organizational Experience

An organization’s experience with the external environment plays a vital role in shaping its culture. As the organization tries to establish itself in the marketplace, it finds that some values and practices work better than others. The organization embraces these values and practices even more deeply thus becoming a part of its culture


Internal Interaction

Interaction between groups of individuals within an organization is an important factor in the development of organizational culture. Repeated interaction between members of the organization affects how they view and interpret events in external world.


Research has found that people who interact with each other on regular basis view and interpret events in a similar manner. These interactions also play an important role in the development of subcultures


The Culture Of An Organisation May Change Due To The Following Reasons:


Change in the Composition of the Workforce: us people with different backgrounds and values enter the workforce, changes in the organisational culture follow. This is because the new employees may hold different views about various aspects of behaviour at work. For example, software giant Oracle has started offering Indian food in its canteen due to a large number of software engineers from India who work for them


Mergers and Acquisitions: Dramatic changes can occur in organizational culture when one organization is purchased or absorbed by another. This can also result in cultural clashes. Often the larger organisation tries to dominate and impose its culture on the smaller one resulting in serious problems. Hence it is advised that mergers and acquisitions among organisations should take place with due to sensitive to their cultural difference


Planned Organizational Change: organisations sometimes make conscious and deliberate decisions to change their structure and ways of working. For example, the organisation main focus on goals different from those in the past or there might be changes in the recruitment policies. Set changes result in new norms of behaviour, attitude and values emerging. Test the organisational culture undergoes a change.


The Culture Of An Organisation can be Maintained with the following tools:

Three forces play a particularly important part in sustaining a culture: selection practices, the actions of top management, and socialization methods.



The explicit goal of the selection process is to identify and hire individuals who have the knowledge, skills, and abilities to perform the jobs within the organization successfully. The final decision as to who is hired will be significantly influenced by the decision maker’s judgment of how well the candidates will fit into the organization. This results in the hiring of people who have values consistent with those of the organization. Additionally, the selection process provides information to applicants about the organization. Selection, therefore, becomes a two-way street.


Example: applicants for entry-level positions in brand management at Procter & Gamble (P&G). Each encounter seeks corroborating evidence of the traits that the firm believes correlate highly with what counts for success at P&G


Top Management

The actions of top management, what they say and how they behave, establish norms that filter down through the organization as to:

  1. Risk taking.
  2. How much freedom managers should give their employees.
  3. What is appropriate dress.
  4. What actions will pay off in terms of pay raises, promotions, and other rewards.



New employees are not fully indoctrinated in the organization’s culture. They are unfamiliar with the organization’s culture and are potentially likely to disturb the beliefs and customs that are in place. Socialization is the organization helping new employees adapt to its culture.



Symbols: Objects That Say More Than Meets the Eye.

First, organizations often rely on symbols – material objects that connote meanings that extend beyond their intrinsic content. For example, some companies use impressive buildings to convey their organization’s strength and significance, signifying that it is a large, stable place. Other companies rely on slogans to symbolize their values, including such classic examples as GE’s “Imagination at Work,” or Lexus “Pursuing Perfection.” Corporate cars (or even jets!) also are used to convey information about certain aspects of an organization’s culture, such as who wields power. These findings suggest that material symbols are potent tools for sending messages about organizational culture.


Stories: “In the Old Days, We Used to…”

Organizations also transmit information about culture by virtue of the stories that are told in them, both formally and informally. Stories illustrate key aspects of an organization’s culture, and telling them can effectively introduce or reaffirm those values to employees. It is important to note that stories need not involve some great event, such as someone who saved the company with a single wise decision, but may be small tales that become legends because they so effectively communicate a message.


Jargon: The Special Language That Defines a Culture.

Even without telling stories, the everyday language used in companies helps sustain culture. For example, the slang or jargon that is used in a company helps its members define their identities as members of an organization (see Chapter 6).


For example, for many years employees at IBM referred to disk drives as “hard files” and circuit boards as “planar boards,” terms that defined the insulated nature of IBM’s corporate culture. Someone who works in a human resources department may be found talking about the ERISA (the Employee Retirement Income Security Act), BFOQs (bona fide occupational qualifications), RMs (elections to vote out a union), and other acronyms that sound odd to the unaffiliated.


Over time, as organizations or departments within them develop unique language to describe their work, their terms, although strange to newcomers, serves as a common factor that brings together individuals belonging to a corporate culture or subculture.


Ceremonies: Special Events That Commemorate Corporate Values.

Organizations also do a great deal to sustain their cultures by conducting various types of ceremonies. Indeed, ceremonies may be seen as celebrations of an organization’s basic values and assumptions. Just as a wedding ceremony symbolizes a couple’s mutual commitment and a presidential inauguration ceremony marks the beginning of a new presidential term, various organizational ceremonies also celebrate some important accomplishment. For example, one accounting firm celebrated its move to much better facilities by throwing a party, a celebration signifying that it “has arrived,” or “made it to the big time.” Such ceremonies convey meaning to people inside and outside the organization. Ceremonies are to the culture what the movie is to the script.


Statements of Principle: Defining Culture in Writing.

A fifth way in which culture is transmitted is via the direct statements of principle. Some organizations have explicitly written their principles for all to see. For example, Forrest Mars, the founder of the candy company Mars, developed his “Five Principles of Mars” which still guide his company today: quality (everyone is responsible for maintaining quality), responsibility (all employees are responsible for their own actions and decisions), mutuality (creating a situation in which everyone can win), efficiency (most of the company’s 41 factories operate continuously), and freedom (giving employees opportunities to shape their futures).

Why and How Does Organizational Culture Change?

The world in which all organizations operate is constantly changing. External events such as shifts in market conditions, new technology, altered government policies, and many other factors change over time, necessitating changes in an organization’s mode of doing business and hence, in its culture.


When a woman took over as head designer of the previously all-male design team at Ford, she instituted changes in the culture that led to cars being designed with greater attention to the needs of women drivers


Composition of the Workforce.

Over time, the people entering an organization may differ in important ways from those already in it, and these differences may impinge on the existing culture of the organization. For example, people from different ethnic or cultural backgrounds may have contrasting views about various aspects of behavior at work.


For instance, they may hold dissimilar views about style of dress, the importance of being on time (or even what constitutes “on time” behavior), the level of deference one should show to higher status people, and even what foods should be served in the company cafeteria. In other words, as people with different backgrounds and values enter the workplace, changes in organizational culture may be expected to follow .


Mergers and Acquisitions.

Other, more dramatic, sources of cultural change are mergers and acquisitions, events in which one organization purchases or otherwise absorbs another. When this occurs, there is likely to be a careful analysis of the financial and material assets of the acquired organization. However, it is rare that any consideration is given to the acquired organization’s culture. This is unfortunate, as there have been several cases in which the merger of two organizations with incompatible cultures leads to serious problems, referred to as culture clashes.


In many cases, the larger, more powerful, acquiring company attempts to dominate the smaller, acquired company, based on the mistaken belief that it knows best. In such instances, clashes can result when the two merging organizations have certain combinations of cultures. For example, when each is heavily autocratic, neither group will be interested in giving up its ways, resulting in considerable conflict. Similarly, when the dominant culture is highly autocratic and the culture of the acquired organization is highly person-oriented, neither side may see the wisdom of the other’s approach.


Planned Organizational Change.

Even if an organization doesn’t change by acquiring another, cultural change still may result from other planned changes, such as conscious decisions to alter the internal structure or the basic operations of an organization. Once such decisions are reached, many practices in the company that both reflect and contribute to its culture may change. For example, the company may adopt different criteria for recruiting newcomers or promoting current employees. Similarly, managers may be directed to focus their attention on different goals from those in the past. As these shifts take place, new norms governing preferred or acceptable behavior emerge, and attitudes and values supporting these norms may take shape. The result may be a considerable shift in existing culture.


To conclude, it is clear that although organizational culture is generally stable, it is not immutable. In fact, culture often evolves in response to outside forces (e.g., changes in workforce composition) as well as deliberate attempts to change the design of organizations (e.g., through mergers, and corporate restructuring). An important aspect of culture that organizations frequently strive toward is the degree to which it approaches problems in creative and innovative ways. With this in mind, we will now turn attention to the topics of creativity and innovation in organizations.


What is motivation? Discuss McClelland’s Need/Drive theory. And two other Motivation theories.

Motivation is one of the forces that lead to performance. Motivation is defined as the desire to achieve a goal or a certain performance level, leading to goal-directed behavior. When we refer to someone as being motivated, we mean that the person is trying hard to accomplish a certain task.


Motivation is an internal feeling, that is, it defines the psychological state of a person. It is a continuous process and we should make sure that it is not disturbed. A person should be encouraged completely.


We can distinguish between content and process motivation theories. Content theories focus on WHAT, while process theories focus on HOW human behaviour is motivated. Content theories are the earliest theories of motivation. Within the work environment they have had the greatest impact on management practice and policy, whilst within academic circles they are the least accepted.


Content theories are also called needs theories: they try to identify what our needs are and relate motivation to the fulfilling of these needs. The content theories cannot entirely explain what motivate or demotivate us. Process theories are concerned with “how” motivation occurs, and what kind of process can influence our motivation.


The main content theories are: Maslow’s needs hierarchy, Alderfer’s ERG theory, McClelland’s achievement motivation and Herzberg’s two-factor theory.


The main process theories are: Skinner’s reinforcement theory, Victor Vroom’s expectancy theory, Adam’s equity theory and Locke’s goal setting theory (Figure 1).


No single motivation theory explains all aspects of people’s motives or lack of motives. Each theoretical explanation can serve as the basis for the development of techniques for motivating.


In the early 1960s McClelland – built on Maslow’s work – described three human motivators. McClelland (Arnold et al., 2005) claimed that humans acquire, learn their motivators over time that is the reason why this theory is sometimes called the ‘Learned Needs Theory’. He affirms that we all have three motivating drivers, and it does not depend on our gender or age. One of these drives or needs will be dominant in our behaviour.


McClelland’s theory differs from Maslow’s and Alderfer’s, which focus on satisfying existing needs rather than creating or developing needs. This dominant motivator depends on our culture and life experiences, of course (but the three motivators are permanent). The three motivators are:

  • achievement: a need to accomplish and demonstrate competence or mastery
  • affiliation: a need for love, belonging and relatedness
  • power: a need for control over one’s own work or the work of others


Achievement Motivation a need to accomplish and demonstrate competence or mastery.

It pertains to a person’s need for significant success, mastering of skills, control or high standards. It is associated with a range of actions. Individual seek achievement, attainment of challenging (and also realistic) goals, and advancement in the school or job.


This need is influenced by internal drivers for action (intrinsic motivation), and the pressure used by the prospects of others (extrinsic motivation). Low need for achievement could mean that individuals want to minimise risk of failure, and for this reason people may choose very easy or too difficult tasks, when they cannot avoid failure. In contrast, high need for achievement means that humans try to choose optimal, sufficiently difficult tasks, because they want to get the chance to reach their goals, but they have to work for it, they need to develop themselves.


Individuals with high need for achievement like to receive regular feedback on their progress and achievements; and often like to work alone; seek challenges and like high degree of independence.


Sources of high need for achievement can be: praise for success, goal setting skills, one’s own competence and effort to achieve something, and it does not depend only on luck; of course positive feelings and also independence in childhood. McClelland said that training, teaching can increase an individual’s need for achievement. For this reason, some have argued that need for achievement is not a need but a value.


Affiliation Motivation need for love, belonging and relatedness

These people have a strong need for friendships and want to belong within a social group, need to be liked and held in popular regard. They are team players, and they may be less effective in leadership positions. High-need-for-affiliation persons have support from those with whom they have regular contact and mostly are involved in warm interpersonal relationships. After or during stressful situation individuals need much more affiliation. In these situations people come together and find security in one another. There are times when individuals want to be with others and at other times to be alone – affiliation motivation can become increased or decreased. Individuals do not like high risk or uncertainty.


Authority/Power Motivation  a need to control over one’s own work or the work of others.

These persons are authority motivated. There is a strong need to lead and to succeed in their ideas. It is also needed to increase personal status and prestige. This person would like to control and influence others. McClelland studied male managers with high need for power and high need for affiliation and found that managers with a high need for power tended to run more productive departments in a sales organization than did managers with a high need for affiliation.


It is important to speak about gender differences in need for power. It is said that men with high need for power mostly have higher aggression, drink more, act in sexually exploitative manner, and participate in competitive sports, and also political unrests. At the same time women with higher need for power show more socially acceptable and responsible manner, are more concerned and caring. These types of people prefer to work in big, multinational organisations, businesses and other influential professions.


McClelland argues that strong need for achievement people can become the best leaders – as we wrote it above. But at the same time there can be a tendency to request too much of their employees, because they think that these people are also highly achievement-focused and results-driven, as they are. Think about your teachers and professors! I am sure they all want the best for you, they would like to develop you, but I do not think you feel the same every time. McClelland said that most people have and show a combination of these characteristics.


Maslow – Hierarchy of Needs

This is the earliest and most widely known theory of motivation, developed by Abraham Maslow (1943) in the 1940s and 1950s.


Maslow’s hierarchy of needs is often shown in the shape of a pyramid: basic needs at the bottom and the most complex need (need for self-actualization) at the top. Maslow himself has never drawn a pyramid to describe these levels of our needs; but the pyramid has become the most known way to represent his hierarchy.


1. Physiological needs (e.g. food, water, shelter, sleep)

It includes the most basic needs for humans to survive, such as air, water and food. Maslow emphasized, our body and mind cannot function well if these requirements are not fulfilled.


These physiological needs are the most dominant of all needs. So if someone is missing everything in his/her life, probably the major motivation would be to fulfil his/her physiological needs rather than any others. A person who is lacking food, safety, love (also sex) and esteem, would most probably hunger for food (and also for money, salary to buy food) than for anything else.


If all the needs are unsatisfied, and the organism is then overruled by the physiological needs, all other needs may turn into the background. All capacities are put into the attendance of satisfying hunger. Any other things are forgotten or got secondary importance.


2. Safety and security (secure income, a place to live, health, well-being)

If the physiological needs are relatively well contented, new needs will appear, the so called safety needs. Safety needs refer to a person’s desire for security or protection. Basically everything looks less important than safety and protection (the physiological needs even sometimes). The healthy and fortunate adults in our culture are largely satisfied in their safety needs. The peaceful, sure, safety and unwavering society makes us feel in safety enough from criminal assaults, murder, unbelievable natural catastrophes, and so on. In that case people no longer have any safety needs as first-line motivators.


Meeting with safety needs demonstrated as a preference for insurance policies, saving accounts or job security, etc., we think about the lack of economic safety. Children have a greater need to feel safe. That is the reason why this level is more important for children.


Safety and security needs include: Personal security; Financial security; Health and well-being; Safety mesh against accidents, illnesses and their adverse impacts.

To tell the truth, in real dangers and traumas – like war, murder, natural catastrophes, criminal assault, etc. -, the needs for safety become an active, first-line and dominant mobilizer of human beings.


3. Belongingness and love (integration into social groups, feel part of a community or a group; affectionate relationships)

If both the physiological and the safety needs are fulfilled, the affection, love and belongingness needs come into prominence. Maslow claimed people need to belong and accepted among their social groups. Group size does not mean anything: social groups can be large or small. People need to love and be loved – both sexually and non-sexually – by others. Depending on the power and pressure of the peer group, this need for belonging may overbear the physiological and security needs.


Love needs involve giving and receiving affections (love is not synonymous with sex – sex is a physiological need). When they are unsatisfied, a person will immediately eliminate the lack of friends, peers and partner. Many people suffer from social nervousness, loneliness, social isolation and also clinical depression because of the lack of this love or belongingness factor.


4. Esteem (respect for a person as a useful, honourable human being)

In our society most people long for a stable and high valuation of themselves, for the esteem of others and for self-respect or self-esteem.


Esteem means being valued, respected and appreciated by others. Humans need to feel to be valued, such as being useful and necessary in the world. People with low self-esteem often need respect from others. Maslow divided two types of esteem needs: a ‘lower’ version and a ‘higher’ version. The ‘lower’ version of esteem is the need for respect from others: for example attention, prestige, status and loving their opinion. The ‘higher’ version is the need for self-respect: for example, the person may need independence, and freedom or self-confidence.


The most stable and therefore the healthiest self-esteem is based on respect from others. External fame or celebrity and unwarranted adulation won’t cause self-esteem, although you feel better for a while.


5. Self-actualization (individual’s desire to grow and develop to his or her fullest potential)

‘What humans can be, they must be.’ (Maslow, 1954)


Self-actualization reflects an individual’s desire to grow and develop to his/her fullest potential. People like opportunities, choosing his/her own versions, challenging positions or creative tasks. Maslow described this level as the ‘need to accomplish everything that one can, to become the most that one can be’. Maslow believed that people must overcome their other needs – described above -, not only achieve them. At this level, individual differences are the largest.


As each level is adequately satisfied, we are then motivated to satisfy the next level in the hierarchy, always new and higher needs are coming. This is what we mean, when the basic human needs are drawn like a pyramid, a hierarchy. Life experiences, including divorce and loss of job, may cause an individual to fluctuate between levels of the hierarchy. These five different levels were further sub-categorised into two main groups: deficiency and growth needs.


Deficiency Needs – The very basic needs for survival and security.


These needs include:

  • physiological needs
  • safety and security needs
  • social needs – belongingness and love
  • esteem needs


It may not cause a physical indication if these ‘deficiency needs’ are not fulfilled, but the individual will feel anxious and tense. So the most basic level of needs must be fulfilled before a person wants to focus on the secondary or higher level needs.


Growth Needs – Personal growth and fulfilment of personal potential.


These needs include:

  • self-actualisation needs


This hierarchy is not as rigid as we may have implied. For example, there are some humans for whom self-esteem or self-actualization seems to be more important than love or belonging. The popularity of this theory of motivation rooted in its simplicity and logic.

Alderfer – ERG Theory: Existence Needs, Relatedness Needs and Growth Needs

Alderfer (Furnham, 2008) distinguished three steps or classes of needs: existence, relatedness and growth. Maslow’s physiological and safety needs belong together to existence needs. Relatedness can be harmonised to belongingness and esteem of others. Growth is the same as Maslow’s self-esteem plus self-actualization. Both Maslow and Alderfer tried to describe how these needs, these stages of needs become more or less important to individuals.


  • Existence Needs: These include needs for basic material necessities. In short, it includes an individual’s physiological and physical safety needs.
  • Relatedness Needs: Individuals need significant relationships (be with family, peers or superiors), love and belongingness, they strive toward reaching public fame and recognition. This class of needs contain Maslow’s social needs and external component of esteem needs.
  • Growth needs: Need for self-development, personal growth and advancement form together this class of need. This class of needs contain Maslow’s self-actualization needs and intrinsic component of esteem needs.


Alderfer agreed with Maslow that unsatisfied needs motivate individuals. Alderfer also agreed that individuals generally move up the hierarchy in satisfying their needs; that is, they satisfy lower-order before higher-order needs. As lower-order needs are satisfied, they become less important, but Alderfer also said: as higher-order needs are satisfied they become more important. And it is also said that under some circumstances individuals might return to a lower need. Alderfer thought that individuals multiply the efforts invested in a lower category need when higher categorized needs are not consequent.


For example there is a student, who has excellent grades, friends, and high standard of living, maybe also work at the university. What happens if this individual finds that he or she is frustrated in attempts to get more autonomy and responsibility at the university, maybe also more scholarship that generally encourage individuals’ growth? Frustration in satisfying a higher (growth) need has resulted in a regression to a lower level of (relatedness) needs (‘I need just my friends, some good wine, I do not want to go to the university anymore.’).


This event is known and called as the frustration-regression process. This is a more realistic approach as it recognises that, because when a need is met, it does not mean it will always remain met. ERG theory of motivation is very flexible: it explains needs as a range rather than as a hierarchy. Implication of this theory: Managers must understand that an employee has various needs that must be satisfied at the same time. ERG theory says, if the manager concentrates only on one need at a time, he or she won’t be able to motivate the employee effectively and efficiently. Prioritization and sequence of these three categories, classes can be different for each individual.

Frederick Herzberg’s Two-Factor Theory of Hygiene and motivation has opened up new vistas of human behaviour. Discuss.


The two-factor theory (also known as Herzberg’s motivation-hygiene theory and dual-factor theory) states that there are certain factors in the workplace that cause job satisfaction, while a separate set of factors cause dissatisfaction. It was developed by psychologist Frederick Herzberg, who theorized that job satisfaction and job dissatisfaction act independently of each other.


Herzberg’s Two-factor Theory of Job Satisfaction.

There is no more direct way to find out what causes people’s satisfaction and dissatisfaction with their jobs than to ask them. Over 30 years ago Frederick Herzberg did just this. He assembled a group of accountants and engineers and asked them to recall incidents that made them feel especially satisfied and especially dissatisfied with their jobs. His results were surprising: Different factors accounted for satisfaction and dissatisfaction. Rather than finding that the presence of certain variables made people feel satisfied and that their absence made them feel dissatisfied, as you might expect, Herzberg found that satisfaction and dissatisfaction stemmed from two different sources. For this reason, his approach is widely referred to as the two factor theory of job satisfaction.


What are the two factors? In general, people were satisfied with aspects of their jobs that had to do with the work itself or to outcomes directly resulting from it. These included things such as chances for promotion, opportunities for personal growth, recognition, responsibility, and achievement. Because these variables were associated with high levels of satisfaction, Herzberg referred to them as motivators. However, dissatisfaction was associated with conditions surrounding the job, such as working conditions, pay, security, relations with others, and so on, rather than the work itself. Because these variables prevent dissatisfaction when present, they are referred to as hygiene factors (or maintenance factors).


Rather than a conceiving of job satisfaction as falling along a single continuum anchored at one end by satisfaction and at the other by dissatisfaction, Herzberg conceived of satisfaction and dissatisfaction as separate variables. Motivators, when present at high levels, contribute to job satisfaction, but when absent, do not lead to job dissatisfaction just less satisfaction. Likewise, hygiene factors only contribute to dissatisfaction when present, but not to satisfaction when absent.


This theory has important implications for managing organizations. Specifically, managers would be well advised to focus their attention on factors known to promote job satisfaction, such as opportunities for personal growth. Indeed, several of todays companies have realized that satisfaction within their workforces is enhanced when they provide opportunities for their employees to develop their repertoire of professional skills on the job. For example, front-line service workers at Marriott Hotels, known as guest services associates, are hired to perform a variety of tasks, including checking guests in and out, carrying their bags, and so on. Instead of doing just one job, this approach enables Marriott employees to call upon and develop many of their talents, thereby adding to their level of job satisfaction.


Two-factor theory also implies that steps should be taken to create conditions that help avoid dissatisfaction and, it specifies the kinds of variables required to do so (i.e., hygiene factors). For example, creating pleasant working conditions may be quite helpful in getting people to avoid being dissatisfied with their jobs. Specifically, research has shown that dissatisfaction is great under conditions that are highly overcrowded, dark, noisy, have extreme temperatures, and poor air quality. These factors, associated with the conditions under which work is performed, but not directly linked to the work itself, contribute much to the levels of job dissatisfaction people experience.


Value Theory. Another approach to job satisfaction, known as value theory, takes a broader look at the question of what makes people satisfied. This theory argues that almost any factor can be a source of job satisfaction so long as it is something that people value. The less people have of some aspect of the job (e.g., pay, learning opportunities) relative to the amount they want, the more dissatisfied they will be especially for those facets of the job that are highly valued. Thus, value theory focuses on discrepancies between what people have and what they want: the greater those discrepancies, the more dissatisfied they will be.


Herzberg’s Two-Factor Theory

According to Herzberg’s two-factor theory, job satisfaction and dissatisfaction are not opposite ends of the same continuum but independent dimensions. Some examples of hygiene factors, which lead to 41 dissatisfaction, and motivators, which lead to satisfaction, are presented here.


This approach to job satisfaction implies that an effective way to satisfy workers is to find out what they want and, to the extent possible, give it to them. Believe it or not, this is sometimes easier said than done. In fact, organizations sometimes go through great pains to find out how to satisfy their employees. With this in mind, a growing number of companies, particularly big ones, have been systematically surveying their employees.


Consequences of Job Dissatisfaction

Thus far, we have been alluding to the negative effects of job dissatisfaction, but without specifying exactly what these are. In other words, what consequences may be expected among workers who are dissatisfied with their jobs? Several effects have been well documented.


Employee Withdrawal

Voluntary Turnover and Absenteeism. As you might expect, people who are dissatisfied with their jobs want little to do with them that is, they withdraw. An extreme form of employee withdrawal is quitting, formally referred to as voluntary turnover. Withdrawal also may take the form of absenteeism.


Organizations are highly concerned about these behaviors as they are very costly. The expenses involved in selecting and training employees to replace those who have resigned can be considerable. Even unscheduled absences can be expensive. Although voluntary turnover is permanent, whereas absenteeism is a short-term reaction, both are effective ways of withdrawing from dissatisfying jobs. Research has shown that the more dissatisfied people are with their jobs, the more likely they are to be absent and to resign. However, we also know that these relationships are not especially strong. In other words, job satisfaction is only modestly correlated with voluntary turnover and absenteeism. The reason for this is simple: Job dissatisfaction is likely to be only one of many factors responsible for someone’s decision to resign or to stay off the job. For example, a dissatisfied employee may show up for work despite feeling dissatisfied if she believes that it is critical for her to perform certain tasks. However, still others may care so little that they would not bother to show up anyway. Thus, job satisfaction is not a particularly strong predictor of absenteeism.


The same may be said with respect to turnover. Whether or not people will quit their jobs is likely to depend on several factors. Among them is likely to be the availability of other jobs. So, if conditions are such that alternative positions are available, people may be expected to resign in response to dissatisfaction. However, when such options are limited, voluntary turnover may be a less viable option. Hence, knowing that one is dissatisfied with his or her job does not automatically suggest that he or she will be inclined to quit. Indeed, many people stay on jobs that they dislike.


Job Performance:

Are Dissatisfied Employees Poor Workers? How about those dissatisfied employees who remain on their jobs? Does their performance suffer? As in the case of withdrawal behaviors, the link between job performance and satisfaction is also quite modest. One key reason for this is that performance on some jobs is so carefully regulated (e.g., by the machinery required to do 42 the work) that people may have little leeway to raise or lower their performance even if they wanted to. The weak negative association between job satisfaction and employee withdrawal, and the weak positive association between job satisfaction and performance, are good examples of the point made earlier  that attitudes are not perfect predictors of behavior. Indeed, the important work-related attitude, job satisfaction, has been found to be only modestly related, at best, to important aspects of job behavior.


The weak association between job satisfaction and performance appears to hold for most standard measures of performance, such as quantity or quality of work. However, when it comes to completely voluntary forms of work behavior, such as helping one’s co-workers or tolerating temporary inconveniences without complaint, the connection to job satisfaction is much stronger. Such activities, which enhance social relationships and cooperation with the organization but go beyond the formal job requirements, are referred to as organizational citizenship behaviors. These forms of behavior, although not reflected in standard performance measures (e.g., sales figures), contribute greatly to the smooth functioning of organizations. Workers who feel satisfied with their jobs may be willing to help the organization and others who have contributed to those good feelings by engaging in acts of good organizational citizenship. In fact, research has shown that the more people are satisfied with their jobs, the greater the good citizenship contributions they tend to make.



To review, it is clear that dissatisfaction is linked to such key organizational variables as voluntary turnover, absenteeism, and poor performance, although, these relationships are not strong. This is in large part due to the fact that many factors are responsible for these behaviors. However, when it comes to the more highly controllable, voluntary behavior, organizational citizenship, the connection to dissatisfaction is much stronger.

Describe The Techniques Of Group Decision Making.

Employees often work in groups and make decisions that affect the whole company. Moreover, sometimes the complexity of a problem calls for pooling expertise and opinions to make a sound decision. Also, participation improves employee commitment to decisions. Decision-making in groups is not easy; for example, the group may polarize and refuse to reach consensus or it may form a group think and stick to a familiar mutually acceptable decision without considering better alternatives. Knowledge of group decision-making techniques can help managers effectively steer group decision-making processes.



Brainstorming is a popular group decision-making technique that is used for generating ideas. In brainstorming, the leader of the session presents a problem or question, clarifies the rules of the session and then the group offers ideas in a round-robin format. Ideas are written down so that every member can see them. Brainstorming does not solve the problem but helps generate creative ideas. As a result, quantity of ideas counts and members do not criticize ideas. To be successful, the leader of a brainstorming session must understand the problem and be able to create a relaxed and creative air.


If a large number of ideas can be generated, then it is likely that there will be a unique and creative idea among them. All these ideas are written on the black board with a piece of chalk so that everybody can see every idea and try to improve upon such ideas.


Brainstorming technique is very effective when the problem is comparatively specific and can be simply defined. A complex problem can be broken up into parts and each part can be taken separately at a time.


Nominal Group Technique

This group decision-making technique is used to identify problems or to evaluate alternatives. In this technique, members of the group spend five to 10 minutes writing their ideas without discussion. Then, they report their ideas individually. Ideas are written on a flip chart, and individuals try to add to the ideas. In the next phase, group members vote or rank the ideas privately. With private voting, strong members of the group can not affect the results. After voting, the group discusses results and generates more ideas. The idea generation, voting and discussion cycle can continue until a satisfactory decision is reached.

Nominal group technique is similar to brainstorming except that the approach is more structured. Members form the group in name only and operate independently, generating ideas for solving the problem on their own, in silence and in writing. Members do not interact with each other so that strong personality domination is avoided. It encourages individual creativity.


The group coordinator either collects these written ideas or writes then on a large blackboard for everyone to see or he asks each member to speak out and then he writes it on the black board as he receives it.


These ideas are then discussed one by one in turn and each participant is encouraged to comment on these ideas for the purpose of clarification and improvement. After all ideas are discussed, they are evaluated for their merits and drawbacks and each participating member is required to vote on each idea and assign it a rank on the basis of priority of each alternative solution. The idea with the highest aggregate ranking is selected as the final solution to the problem.


Delphi Method

The Delphi method helps the group reach consensus without the influence of strong members of the group and the tendency to rush for a decision at the end of a meeting. It is a structured variant of the traditional expert polls and is usually used in forecasting. In this method, a questionnaire is mailed to a group of experts; administrators aggregate the results and send a second questionnaire with the results of the first round. Several rounds of questionnaires and feedbacks help respondents reach consensus on the debated issue. The administrators of the Delphi method make a decision based on the results of the rounds.


The steps in the Delphi technique are:

  1. The problem is identified and a sample of experts is selected. These experts are asked to provide potential solutions through a series of carefully designed questionnaires.
  2. Each expert completes and returns the initial questionnaire.
  3. The results of the questionnaire are compiled at a central location and the central coordinator prepares a second questionnaire based on the previous answers.
  4. Each member receives a copy of the results along with the second questionnaire.
  5. Members are asked to review the results and respond to the second questionnaire. The results typically trigger new solutions or cause changes in the original position.


Dialectical Inquiry

The dialectical inquiry ensures that decision-makers consider all alternatives and opposing views in decision-making. Groups of people debate their opposing views in the presence of the decision-maker. The devil’s advocate method is a related approach in which a member of the group deliberately criticizes the favored decision. This helps managers make an informed decision.


This technique is applicable only in certain situations, but is an excellent method when such a situation exists. The type of problem should be such that it results in a yes-no solution. For example, the decision may be to buy or not to buy, to merge or not to merge, to expand or not to expand and so on. Such a decision requires an extensive and exhaustive discussion and investigation since a wrong decision can have serious consequences.


Since, in such a situation, there must be advantages as well as disadvantages of either of the two alternatives, the group required to make the decision is split into two subgroups, one favouring the go decision and the other favouring the no go decision.

Define the term ‘Stress’. What are the causes/sources of stress and the strategies to overcome organisational stress?

Every time the word stress is mentioned, AIB will make a joke about old series/movie, by adding a very recent caption. #PrequelMeme

Yo Stress, whats up?

It is really past the limit, and you are not sure what to do. You are definitely going to fail because you did not study shit for the exam and you are rushing as bad as you can.


This is an example of acute stress. They’re short term, they won’t last longer than your workday, and they may actually benefit your health in some ways. However, if your life feels like this every day of the week, you may be experiencing long-term or chronic stress. This type of stress can be dangerous to your health if you don’t work to overcome it or cope with its effects.


Big stressors include money troubles, job issues, relationship conflicts, and major life changes, such as the loss of a loved one. Smaller stressors, such as long daily commutes and rushed mornings, can also add up over time. Learning how to recognize sources of stress in your life is the first step in managing them.


Stress could be of various types. Stress could be related to organization or job of a person; factors in the external environment; the norms, work style, methods or targets laid by teams or groups of which an individual is a member; or due to individual’s personality traits.


Stress affects one’s mind, body and behavior. At the physical level, high level of stress is accompanied by hypertension and high cholesterol in the blood. They lead to heart ailments, ulcers, arthritis, paralysis etc. All these things are terrible not only for individual but also for the organization because people having such problems become unavailable to the organization either temporarily or permanently.


Research has proved that workers who are under high level of stress take to drinking. Because of excessive drinking, they are not able to perform their duties properly. They become irregular and they are fired from the job or they quit on their own. Prolonged exposure to stress leads to a condition that has been described as burnout. Employees suffering from burnout become less energetic and less interested in their jobs. They are emotionally exhausted, apathetic, depressed, irritable and bored. A person suffers from emotional, physical and mental exhaustion in a burnout. A burned out employee has an impact on the emotional health and efficiency of co-workers and subordinates.


Women managers show more frequent and intense effects of emotional exhaustion than do men managers. Single and divorced persons have been found more than married persons to experience emotional exhaustion. Emotional exhaustion has also been related to lack of opportunity for promotion.


Research findings indicate that with appropriate help, victims of burnout can recover. If ongoing stress is reduced, if the person suffering from burnout receives the support of friends and co-workers, develops hobbies and new interests then burnout victims can recover and return to a more productive life.


Types of Stress

Organizational Stress

Stressors within the organization have the most negative effect on the stress level of an employee. The factors leading to organizational stress could be responsibility without authority, no role in the decision making, authoritative leadership, job insecurity, favoritism, bad working conditions and many more. The recent trend of downsizing or restructuring [throwing people, making a company smaller] has increased the threat for employees to remain in the job. It becomes very stressful for the employees to handle the pressure of downsizing as their livelihood is at stake. If by luck the employee survives the current downsizing, the pressure of remaining in the job and how to escape future downsizing continuously increases pressure on the employees, making their lives stressful with decreased quality of performance at the workplace.


Extra-Organizational Stress[ghar, baccha, biwi, zeemarati, etc.]

Work stress in not always associated with events happening within the organization. Extra Organizational stressors are the external forces such as globalization, technological or societal change, family problems, financial crises, personal health, etc., that can increase stress for an employee. Studies have shown that things happening outside the workplace negatively affect the job performance. The modern living style has increased the stress level and decreased the personal health of people. The routine life of the people is becoming so fast day by day with urbanization that the chances of increased stress and the impact of negative stress on work, have expanded.


Family plays a big role in a person’s life. Therefore, any crises in the family, like, tensed relationship with parents or spouse, illness of a close relative, have a huge negative effect on the stress level of the employee. The output of an employee deteriorates in such crises as his concentration and focus shifts from his workplace to home during the working hours. Also, increased working hours and increased workload making the employee work at home, puts pressure on the work-family relationships. An employee is not able to maintain a balance between the responsibilities of work and home thereby creating issues in official and personal relationships and hence increasing stress.


Group Stress

In every organization, an employee has to work as a team or in a group. Differences in opinion of individuals in the group, individual interests, politics within the group, acceptance or rejection by the group etc., leads to stress for an individual. Employees need social support so that they can share views, joys or sorrows with the other members while working in a group. If such social support is lacking in the group, the employee’s stress level rises as he is not able to share his feelings with anyone during his working hours. This can lead to dissatisfaction and irritation which can cause health issues. The group leader should keep in mind the togetherness of the group as it plays the most important role in order to achieve the desired goals.


Individual Stress

All the types of stress discussed above (extra organizational, organizational and group) ultimately affect an individual’s stress level. Individual stress is the one that differs depending upon the personality traits of a person like, tolerance, rigidity, supportiveness, anxiety, dedication, commitment to work, etc. A situation may become a threat for one individual and an opportunity for another individual depending upon his perception, personality, experience and social support.  


Sources / Causes of Stress

Every organisation is a part of the external environment it affects the environment. Therefore stress is not confined only to the organisation and doesn’t happen only during the working period. Ivancevich and Matteson talk about a number of extra organizational stressors. They are social and technological changes, the economic situation, family situation, the race, religion and sex of a person, civic amenities such as transport, the area of residence, noise and air pollution and such other matters.


Social and technological changes have always taken place but never at the rate at which they are taking place today. It is the speed of change that is causing stress. Medical Science has improved the average span of life but the quality of the life has deteriorated. In cities like Bombay, it is the place of life that is Stressors. People get caught up in the rush-rush, competitive, mobile, on-the-go, crowded life. All these factors affect the person’s state of well-being.


The final conditions of a person’s life can become a stress. The person has to do additional work or the wife has to take a job. This reduces the time for domestic family life and reduces the feelings well being and increases the potential For stress.


The family situation is another potential stressors. Family stresses maybe passing quarrel between the spouses or the temporary illness of a member of the family. It can also be something more serious such as the strained relationship between the spouses or between the parents and the children. Another serial Star Minister Shah could be a handicapped, child mental retarded children etc.


An individual’s race, religion, community, sex can be a stressor. For example, religious minorities have greater stress than the majorities. Women have more stress than men because the world is dominated by men. Working women have more stress than women who are at home. Civic amenities such as the area in which one lives water, supply, transport, noise, pollution, air pollution – all these extra organisational stressors.


Organizational Stressors


Occupation Demands

Stress level before as a function of occupation. Some jobs are more stressful than others. For example, the job of the Firefighter, personal manager and airline pilot are more stressful than the job of a clerk, librarian and janitor.


In general, clerical and blue-collar workers experience more stress than managerial and professional employees, largely because they have less opportunity to make decisions about their work and less control over working condition.


Personal vs Organizational life:

There are times when family and personal needs interfere with organisational demands, for example, a manager is promoted and given a very prestigious posting abroad. He is asked to resume duty immediately but finds that his wife is very sick and that she needs him at home. This conflict between the personal life and the organisational demands will result in the manager undergoing a great deal of stress.


Career Concern

Unfulfilled career expectations are a major source of stress. If an employee feels that he is very much behind in the corporate ladder, then he may experience severe stress. Also if an employee feels that there are no opportunity for self-growth, he might feel stagnant and experience stress.


Role Conflict

Conflict of expectations can lead to stress. For example, the supervisor is generally the victim of role conflict. He is the link between the management and the workers. If he supports the management on certain issues, then the workers will label him as a management stooge or ‘chamcha’. At the same time if he is seen supporting the workers then the management will resent it. Multiple bosses can also lead to stress.


Work overload and under load

Generally, it is believed that work overload, that is excessive work is primarily responsible for stress. But even work under load leads to stress. If an employee does not have adequate work then he has to create the impression that he is busy with work. Making a show of being busy is more stressful than actually been busy. Work under load leads to boredom or monotony. Besides more work means a greater status in society. However excessive workload can put a person under tremendous pressure and lead to stress.


Responsibility for Others

Research findings indicate that in general, individuals who are responsible for other people — who must motivate them, reward or punish them, communicate with them — experience higher levels of stress than individuals who handle for the organisational functions. For example, taking responsibility for subordinate is a stressor for some managers and supervisors.


Organizational Processes

Walking communication inadequate feedback, office politics, competition, general lack of information can cause stress. The organisational stressors become very active when the organisation grows bigger and more complex.


Organizational Policies

Inflexible rules pay inequities, frequent transfers, rotating work shifts, unfair and arbitrary performance appraisals etc. Can lead to employees experiencing stress. Lack of employee participation in decision making can also cause stress.


Working conditions

Successive heat or cold, poor lighting, unpleasant smell, excessive humidity, distracting noise, the presence of toxic elements and radiation, inadequate safety measures — conditions such as these affect the employees and lead to stress. Rotating shifts requires adjustment. It affects family and social life and results in severe stress.


Group Stressors

The behaviour of a person is affected by the group of which the person is a member. In a group, the behaviour is not the same as at the individual level. There are three types of groups Stressors.


Lack of cohesiveness (togetherness)

Members of a cohesive group or of the well-knit group enjoy the feeling of togetherness. If this is not available it becomes a stressor for the individual members.


Lack of social support

There is a definite relationship between stress and social support. Employees who share with one another their problems and sorrows are psychological is better off. This kind of social support might not be able to some employees because other members of the group shut out a particular employee causing stress. When individuals believe that they have the friendship and support of the others at work, the ability to resist the adverse effect or stress increases.


Interpersonal, interpersonal and intergroup conflict

The conflict may be between oneself — such as the conflict between principles and ambitions. The conflict may be between two persons such as to colleagues, the husband and wife and so on. The conflict could be between two groups or two departments of a company. All these types of conflict become source of the stressor.


In many situations, stress can indeed interfere with performance. However, its precise effects depend on several different factors (e.g., complexity of the task being performed, personal characteristics of the individuals involved, their previous experience with this task.) In view of such complexities, generalizations about the impact of stress on task performance should be made with considerable caution.


Most jobs involve some degree of stress. Yet, somehow, the people performing them manage to cope; they continue to function despite their daily encounters with various stressors. Some individuals, though, are not so fortunate. Over time, they seem to be worn down by repeated exposure to stress. Such people are often described as suffering from burnout—a syndrome of emotional, physical, and mental exhaustion coupled with feelings of low self-esteem or low self-efficacy, resulting from prolonged exposure to intense stress. Specifically, people suffering from burnout demonstrate several distinct characteristics.


  1. Physical exhaustion. Victims of burnout have low energy and feel tired much of the time. In addition, they report many symptoms of physical strain such as frequent headaches, nausea, poor sleep, and changes in eating habits (e.g., loss of appetite).


  1. Emotional exhaustion. Depression, feelings of helplessness, and feelings of being trapped in one’s job are all part of burnout.


  1. Depersonalization. People suffering from burnout often demonstrate a pattern of attitudinal exhaustion known as depersonalization. Specifically, they become cynical about others, tend to treat them as objects rather than as people, and hold negative attitudes toward them. In addition, they tend to derogate themselves, their jobs, their organizations, and even life in general. To put it simply, they come to view the world around them through stormy rather than rose-colored glasses.


  1. Feelings of low personal accomplishment. People suffering from burnout conclude that they haven’t been able to accomplish much in the past, and assume that they probably won’t succeed in the future, either.


Stress and Health: The Silent Killer. How strong is the link between stress and personal health? The answer, according to medical experts, is “very strong, indeed.” In other words, physiological 109 strain reactions can be quite severe. In fact, some authorities estimate that stress plays a role in anywhere from 50 to 70 percent of all forms of physical illness. Moreover, these figures include some of the most serious and life-threatening ailments known to medical science.


Managing Stress: Some Effective Techniques Stress stems from so many different factors and conditions that to eliminate it entirely from our lives is impossible. What both individuals and organizations can do, however, is take steps to reduce its intensity and to minimize its harmful effects when they occur.


Fortunately, strategies for attaining these goals exist. What steps can people take to protect themselves against the adverse effects of stress? Several good approaches have been identified.


1) Eat a healthy diet. Growing evidence indicates that reducing intake of salt and saturated fats, and increasing consumption of fiber rich fruits and vegetables, are steps that can greatly increase the body’s ability to cope with the physiological effects of stress.


2) Be physically fit. People who exercise regularly obtain many benefits closely related to resistance of the adverse effects of stress. For example, fitness reduces both the incidence of cardiovascular illness and the death rate from such diseases. Similarly, physical fitness lowers blood pressure, an important factor in many aspects of personal health.


3) Relax and meditate. When you think of successful executives at work, what picture comes to mind? Most of us probably would conjure up an image of someone on three phones at once, surrounded by important papers in a whirlwind of activity. Probably the farthest thing from your mind would be the image of someone resting calmly in a serene setting. Yet, for a growing number of today’s employees, this picture is quite common. What’s going on in these companies has been designed to help people become more productive, not in the traditional, stress-inducing way, but by helping them cope more effectively with stress. One technique used in this regard is meditation, the process of learning to clear one’s mind of external thoughts, often by repeating a single syllable (known as a mantra) over and over again.


4) Avoid inappropriate self-talk. This involves telling ourselves over and over how horrible and unbearable it will be if we fail, if we are not perfect, or if everyone we meet does not like us. Such thoughts seem ludicrous when spelled out in the pages of a book, but considerable evidence indicates that most people entertain them at least occasionally. Unfortunately, such thoughts can add to personal levels of stress, as individuals awfulize or catastrophize in their own minds the horrors of not being successful, perfect, or loved. Fortunately, such thinking can be modified readily. For many people, merely recognizing that they have implicitly accepted such irrational and self-defeating beliefs is sufficient to produce beneficial change and increased resistance to stress.


5) Learn to react differently. When faced with stressful events, people often protect themselves from the rising tide of anxiety by adopting actions that are incompatible with such feelings. For example, instead of allowing our speech to become increasingly rapid and intense as we become upset, we can consciously modulate this aspect of our behavior. A reduction in arousal and tension may result. People who practice this skill report great success.


6) Take a time-out. When confronted with rising tension, people may find it useful to consciously choose to insert a brief period of delay known as time-out. This can involve taking a short break, going to the nearest restroom to splash cold water on one’s face, or any other action that yields a few moments of breathing space. Such actions interrupt the cycle of ever-rising tension that accompanies stress, and can help to restore equilibrium and the feeling of being at least partly in control of ongoing events.


7) Enroll in a stress management program. A growing number of companies have introduced programs known as stress management programs that are designed to help employees reduce and/or prevent stress. Typically, these involve systematically training employees in many of the 110 techniques we described earlier (e.g., meditation, relaxation, lifestyle management) as well as others.

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