What is an organization?

An organization is a body built for a collection of individuals who join together to

achieve some common goals and objectives bounded by legal entities. Organizations are
often referred to as a company, institution, association, government body, etc. They follow
certain legal procedures like business registration, tax identification, and maintaining
corporate book records.

The person or people who start the organization are often called the founders. The founders
are responsible for performing the above legal procedures or hiring someone for the same.

Once an organization is formed, it needs someone to lead and make important decisions. This
person is called the leader or the head of the organization. The leader is responsible for
guiding the group and ensuring everyone is working towards the goal.

Definitions:

“Organizational behaviour is directly concerned with the understanding, prediction,

and control of human behaviour in organizations.” - Fred Luthans

“Organisational behaviour is the study and application of knowledge about how

people act within an organisation. It is a human tool for human benefit. It applies

broadly to the behaviour of people in all types of organisation.” - Newstrom and

Davis

“Organisational behaviour is a field of study that investigates the impact that

individuals, groups and structure have on behaviour within the organisations for the

purpose of applying such knowledge toward improving an organization’s

effectiveness.” - Stephens P. Robbins

Organisational behaviour can then defined as: “The study of human behaviour in organisational
settings, the interface between human behaviour and the organisational context, and the
organisation itself.” The above definition has three facets – the individual behaviour, the organisation
and the interface between the two. Each individual brings to an organisation a unique set of beliefs,
values, attitudes and other personal characteristics and these characteristics of all individuals must
interact with each other in order to create an organisational setting. The organisational behaviour is
specifically concerned with work-related behaviour which takes place in organisations. In addition to
understanding the on-going behavioural processes involved in their own jobs, managers must
understand the basic human element of their work. Organisational behaviour offers three major
ways of understanding this context; people as organisations, people as resources and people as
people. Above all, organisations are people; and without people there would be no organisations.
Thus, if managers are to understand the organisations in which they work, they must first understand
the people who make up the organisations.

Organisational behaviour is concerned with the characteristics and behaviours of employees in

isolation; the characteristics and processes that are part of the organisation itself; and the
characteristics and behaviours directly resulting from people with their individual needs and
motivations working within the structure of the organisation. One cannot understand an individual’s
behaviour completely without learning something about that individual’s organisation. Similarly, he
cannot understand how the organisation operates without studying the people who make it up.
Thus, the organisation influences and is influenced by individuals.

Organisational Behaviour – Nature: A Separate Field of Study and Not a Discipline

Only, An Interdisciplinary Approach, An Applied Science and a Few Others
Organizational behaviour has emerged as a separate field of study.

The nature it has acquired is identified as follows:

1. A Separate Field of Study and Not a Discipline Only:

By definition, a discipline is an accepted science that is based on a

theoretical foundation. But, O.B. has a multi- interdisciplinary
orientation and is, thus, not based on a specific theoretical
background. Therefore, it is better reasonable to call O.B. a separate
field of study rather than a discipline only.

2. An Interdisciplinary Approach:
Organizational behaviour is essentially an interdisciplinary approach
to study human behaviour at work. It tries to integrate the relevant
knowledge drawn from related disciplines like psychology, sociology
and anthropology to make them applicable for studying and analysing
organizational behaviour.

3. An Applied Science:
The very nature of O.B. is applied. What O.B. basically does is the
application of various researches to solve the organizational problems
related to human behaviour. The basic line of difference between pure
science and O.B. is that while the former concentrates of fundamental
researches, the latter concentrates on applied researches. O.B.
involves both applied research and its application in organizational
analysis. Hence, O.B. can be called both science as well as art.
4. A Normative Science:
Organizational Behaviour is a normative science also. While the
positive science discusses only cause effect relationship, O.B.
prescribes how the findings of applied researches can be applied to
socially accepted organizational goals. Thus, O.B. deals with what is
accepted by individuals and society engaged in an organization. Yes, it
is not that O.B. is not normative at all. In fact, O.B. is normative as
well that is well underscored by the proliferation of management
theories.

5. A Humanistic and Optimistic Approach:

Organizational Behaviour applies humanistic approach towards
people working in the organization. It, deals with the thinking and
feeling of human beings. O.B. is based on the belief that people have
an innate desire to be independent, creative and productive. It also
realizes that people working in the organization can and will actualise
these potentials if they are given proper conditions and environment.
Environment affects performance or workers working in an
organization.

6 A Total System Approach:

The system approach is one that integrates all the variables, affecting
organizational functioning. The systems approach has been developed
by the behavioural scientists to analyse human behaviour in view of
his/her socio-psychological framework. Man’s socio- psychological
framework makes man a complex one and the systems approach tries
to study his/her complexity and find solution to it.

Organisational Behaviour – Scope

The scope of the organizational behavior is as under:

Impact of personality on performance

Employee motivation
ADVERTISEMENTS:

Leadership

How to create effective teams and groups

Study of different organizational structures

Individual behavior, attitude and learning

Perception

Design and development of effective organization

Job design

Impact of culture on organizational behavior

Management of change

Management of conflict and stress

Organizational development

Organizational culture

Transactional analysis

Group behavior, power and politics

Job design

Study of emotions

The field of the organizational behavior does not depend upon

deductions based on gut feelings but attempts to gather
information regarding an issue in a scientific manner under
controlled conditions. It uses information and interprets the
findings so that the behavior of an individual and group can be
canalized as desired.

Large number of psychologists, social scientists and academicians

has carried out research on various issues related to organization
behavior. Employee performance and job satisfaction are
determinants of accomplishment of individual and organizational
goals.:

Organizations have been set up to fulfill needs of the people. In

today’s competitive world, the organizations have to be growth-
oriented. This is possible when productivity is ensured with
respect to quantity of product to be produced with zero error
quality. Employee absenteeism and turnover has a negative
impact on productivity.

Employee who absents frequently cannot contribute towards

productivity and growth of the organization. In the same manner,
employee turnover causes increased cost of production. Job
satisfaction is a major factor to analyze performance of an
individual towards his work. Satisfied workers are productive
workers who contribute towards building an appropriate work
culture in an organization.

Organizations are composed of number of individuals working

independently or collectively in teams, and number of such teams
makes a department and number of such departments makes an
organization. It is a formal structure and all departments have to
function in a coordinated manner to achieve the organizational
objective.

It is therefore important for all employees to possess a positive

attitude towards work. They need to function in congenial
atmosphere and accomplish assigned goals. It is also important
for managers to develop an appropriate work culture. Use of
authority, delegation of certain powers to subordinates, division
of labor, efficient communication.

Benchmarking, re-engineering, job re-design and empowerment

are some of the important factors so that an organization can
function as well-oiled machine. This is not only applicable to
manufacturing organizations but also to service and social
organizations.

Importance of Organizational Behavior:

1. It builds better relationship by achieving people’s, organizational,
and social objectives.
2. It covers a wide array of human resource like behavior, training
and development, change management, leadership, teams etc.
3. It brings coordination which is the essence of management.
4. It improves goodwill of the organization.
5. It helps to achieve objectives quickly.
6. It makes optimum utilization of resources.
7. It facilitates motivation.
8. It leads to higher efficiency.
 9. It improves relations in the organization.
10.It is multidisciplinary, in the sense that applies different
techniques, methods, and theories to evaluate the performances.

Limitations of Organizational Behavior:

1. Behavioral bias: It further causes dependence, dis-contentment,
indiscipline, and irresponsibility.
2. Law of diminishing returns: It says that beyond a certain point,
there is a decline in output even after each additional good or
positive factor.
3. Unethical practices and manipulation of people: Knowledge of
motivation and communication acquired can be used to exploit
subordinates in an Organization by the manipulative managers.

 Approaches to Organisational Behaviour There are mainly four approaches to organisational

behaviour. They are: • A human resources approach • A contingency approach • A
productivity approach • A systems approach

1. Huan Resources Approach: The human resources approach is concerned with the growth
and development of people towards higher levels of competency, creativity and fulfillment,
because people are the central resource in any organisation. This approach helps employees
become better, more responsible and then it tries to create a climate in which they may
contribute to the limits of their improved abilities. This approach is also known as ‘supportive
approach’ because the manager’s primary role changes from control of employees to active
support of their growth and performance.
2. A Contingency Approach: A contingency approach to organisational behaviour implies that
different situations require different behavioural practices for effectiveness instead of the
traditional approach to one best way for all situations. Each situation must be analyzed
carefully to determine the significant variables that exist in order to establish the kinds of
practices that will be more effective. The strength of this approach is that it encourages
analysis of each situation prior to action. Thus it helps to use in the most appropriate manner
all the current knowledge about people in organisation.

3. Productivity Approach: Productivity is a ratio that compares units of output with units of
input. It is often measured in terms of economic inputs and outputs. If more outputs can be
produced from the same amount of inputs, productivity is improved. But besides economic
inputs and outputs, human and social inputs and outputs also are important.

4. Systems Approach: A system is an interrelated part that interact with one another and
functions as a whole. Within the organisation ‘people’ employ ‘technology’ in performing the
‘taks’ that they are responsible for, while the ‘structure’ of the organisation serves as a basis
for co-ordinating all their different activities. The system view emphasizes the
interdependence of each of these elements within the organisation, if the organisation as a
whole is to function effectively. The other key aspect of the systems view of organisations is
 its emphasis on the interaction between the organisation and its broader environment which
consists of social, economic, cultural and political within which they operate.

Organisations are dependent upon their environment in two main ways: First, the
organisation requires ‘inputs’ from the environment in the form of raw material, people,
money, ideas and so on. The organisation itself can be thought of as performing certain
‘transformation processes; on its inputs in order to create outputs in the form of products or
services. Secondly, the organisation depends on environment i.e., public to accept its output
i.e., products/services.
The systems view of organisation, thus emphasizes the key interdependencies that
organisations must manage. Within themselves the organisations must trade off the
interdependencies among people, tasks, technology and structure in order to perform their
transformation processes effectively and efficiently. Organisations must also recognise their
interdependence with the broader environments within which they exist.
5. Interdisciplinary Approach: Organisational behaviour is basically an interdisciplinary
approach. Organisational behaviour draws heavily from other disciplines like psychology,
sociology and anthropology. Besides, it also takes relevant things from economics, political
science, law and history. Organisational behaviour integrates the relevant contents of these
disciplines to make them applicable for organisational analysis. For example, it addresses
issues such as the following which may be relevant to the case: • What facilitates accurate
perception and attribution? • What influences individual, group and organisational learning
and the development of individual attitudes toward work? • How do individual differences in
personality, personal development, and career development affect individual’s behaviours
and attitudes? • What motivates people to work, and how does the organisation’s reward
system influence worker behaviour and attitudes? • How do managers build effective teams?

Models:
Organisations differ in the quality of organisational behaviour that they develop. These
differences are substantially caused by different models of organisational behaviour that
dominate management’s thought in each organisation. The model that a manager holds
usually begins with certain assumptions about people and leads to certain interpretations of
events. The following four models of organisational behaviour are discussed here: 1.
Autocratic model 2. Custodial model 3. Supportive model; and 4. Collegial model

Autocratic Model: In the autocratic model, the manager must have the power to command
the workers to do a specific job. Management believes that it knows what is best and the
employee’s obligation is to follow/obey orders. The psychological result for employees is
dependence on their boss. It does get results, but usually only moderate results. Its main
weakness is its high human cost.

Custodial Model: This model focuses better employee satisfaction and security. The
organisations satisfy the security and welfare needs of employees. Hence it is known as
custodian model. This model leads to employee dependence on the organisation rather than
the boss. As a result of economic rewards and benefits, employees are happy and contented
but they are not strongly motivated.

Supportive Model: The supportive model depends on ‘leadership’ instead of power or

money. Through leadership, management provides a climate to help employees grow and
accomplish in the interests of the organisation. This model assumes that employees will take
responsibility, develop a drive to contribute and improve themselves if management will give
them a chance. Management orientation, therefore is, to ‘support’ the employee’s job
performance rather than simply supporting employee benefit payments as in the custodial
approach. Since management supports employees in their work, the psychological result is a
feeling of participation and task involvement in the organisation.

Collegial Model: The term ‘collegial’ relates to a body of persons having a common purpose.
It is a team concept. Management is the coach that builds a better team. The management is
seen as joint contributor rather than as boss. The employee response to this situation is
responsibility. The psychological result of the collegial approach for the employee is ‘self-
discipline’. In this kind of environment employees normally feel some degree of fulfillment,
worthwhile contribution and self-actualisation. This self-actualisation will lead to moderate
enthusiasm in performance.

The primary challenge for management is to identify the model it is actually using and then
assess its current effectiveness. The selection of model by a manager is determined by a
number of factors. The prevailing philosophy, vision and goals of manager affect their
organisational behaviour model. In addition, environmental conditions help determine which
model will be most effective. The current turbulent conditions in some industries, for
example, may drive firms toward the more collegial models, since rapid decision-making and
flexibility are needed. This suggests that one’s model should not be static and changing, but
adapted across time.

Multidisciplinary Nature of OB
There are some important disciplines in the organizational behaviour field which
developed it extensively.

Due to an increase in organizational complexity, various types of knowledge are

required and help OB in many ways.

Six contributing Disciplines to the Organization Behaviour Field are:

1. Psychology
2. Sociology
3. Social Psychology
4. Economics
5. Anthropology
6. Political Sciences

Multidisciplinary Nature of OB

1. Psychology: Psychology deals with studying human behaviour that seeks to

explain and sometimes change the behaviour of humans and other animals.
Psychologists are primarily interested in predicting the behaviour of individuals to
a great extent by observing the dynamics of personal factors.
 2. Sociology: The major focus of sociologists is on studying the social systems in
which individuals fill their roles. The focus is on group dynamics.
Sociological concepts, theories, models, and techniques help significantly to
understand better the group dynamics, organizational culture, formal organization
theory and structure, corporate technology, bureaucracy, communications, power,
conflict, and intergroup behaviour.

3. Social Psychology: It has been defined as the scientific investigation of how the
thoughts, feelings, and behaviour of individuals are influenced by the actual,
imagined or implied presence of others.
It deals with how people are affected by other individuals who are physically
present or who are imagined to be present or even whose presence is implied.
The most important topics relevant to the organizational behaviour field are
behavioural change, attitude change, communication, group process and group
decision making.

4. Anthropology: The main aim of anthropology is to acquire a better understanding

of the relationship between the human being and the environment. The manner in
which people view their surroundings is a part of the culture.
Culture includes those ideas shared by groups of individuals and languages by
which these ideas are communicated. In essence, culture is a system of learned
behaviour.
Anthropologists contribute to study some aspects of organizational settings like
similar values, comparative attitudes, cross-cultural analysis between or among the
employees.
5. Political Sciences: Political scientists study the behaviour of individuals and
groups within a political environment.
They contribute to understanding the dynamics of power centres, structuring of
conflict and conflict resolutions tactics, allocation of power and how people
manipulate power for individual self-interest.

6. Economics: Economics contributes organizational behaviour to a great extent in

designing the organizational structure. Transaction cost economics influence the
organization and its structure.
Transaction costs economics implies costs components to make an exchange on
the market. Costs of transactions include both costs of market transactions and
internal coordination.

Challenges and Opportunities of Organizational Behavior

Organizational behavior can be understood as the study of people’s behavior in

the organizational environment. Organizational behavior aims to explore and
explain why people behave the way they do in the workplace and how these
behaviors impact the overall effectiveness and success of the organization.
In today’s workplaces, managers are dealing with various behavioral problems
and difficulties. Dealing with challenges such as meeting changing employee
expectations, addressing declining loyalty, and managing a diverse workforce.
Successfully navigating these issues requires adaptability, effective
communication, and creating an inclusive workplace culture.

There are several challenges and opportunities of organizational behavior. Some

of them are;

Globalization

Globalization refers to the integration of economies, societies, and cultures on a

global scale. It is caused due to advancements in technology, communication,
transportation, and trade, enabling the flow of goods, services, capital,
information, and ideas across national boundaries.

The challenges caused by globalization are organizations face intensified

competition globally making it harder to stand out and maintain market share.
Globalization exposes organizations to economic fluctuations in different
countries and it also makes it difficult in managing diverse cultural contexts,
supply chains across multiple countries, international norms, values, and
cultures, regulatory framework, advancement of technology, etc.

Globalization allows organizations to access large no. of customers worldwide.

It provides opportunities for organizations to expand into new markets, have
diverse talent, collaborate with international partners, and benefit from
economies of scale.

Workforce Diversity

The term diversity refers to the differences among people. It includes employees
having different characteristics, such as gender, race, age, ethnicity, religion,
culture, and abilities, working together in a supportive and inclusive
environment.

While managing the workforce conflicts may arise due to differences in cultural
backgrounds, perspectives, and communication styles. Diverse perspectives can
lead to conflicts or disagreements within teams. Organizations must ensure that
diverse employees feel valued, included, and have equal opportunities for
growth.
Workforce diversity also provides opportunities like innovation and creative
problem-solving, leading to fresh ideas and competitive advantages. If it is not
managed properly it can result in increased interpersonal conflict and ineffective
communication.

Also Read: Levels of Organizational Behavior

Improving People Skills

Improving people skills refers to enhancing the abilities and qualities that
enable individuals to interact effectively with others.

As competition has grown and people have become more aware of the
importance of quality, there is a greater need for individuals to possess
advanced skills and knowledge. For this providing training and re-educating the
less skilled employees may become a challenge for the manager.

A skilled employee who is fully trained, developed, and motivated can be a

useful asset to the organization. Improving people skills requires practice, self-
reflection, and a genuine desire to connect with others.

Quality and Productivity

Quality and productivity influence the success of businesses and organizations

across various industries as they are interconnected and impact each other.

Maintaining the quality of the product and meeting the expectations of the
consumer might be a significant challenge for the manager. Due to
globalization, Customers have high standards and demand products or services
that are defect-free, reliable, and of superior quality.

But increasing quality and productivity helps to acquire more customers even
with fewer resources, leading to increased efficiency and cost savings. It also
helps in building a strong brand reputation and leads to innovation and product
development.

Empowerment of Employees

Employee empowerment is the process of providing employees with the

authority, autonomy, resources, and support necessary to make the right
decisions at the right time.
Managers are putting employees in charge of what they do as a result they have
to learn how to take responsibility for their work and make appropriate
decisions. Empowering employees often involves delegating decision-making
authority and granting autonomy. But employees lacking the necessary skills,
knowledge, or experience may fear taking on additional responsibilities or
uncertainties about their new roles.

Empowered employees have the freedom to generate ideas, experiment, and

take calculated risks. When employees have a sense of empowerment, they feel
valued, trusted, and motivated to contribute to the organization’s success.

Managing Organizational Change

The organizational environment is dynamic. So managers must be prepared to

introduce organizational change.

In today’s organization change is necessary to have progress. Many employees

are still resistant to change, they are more concerned about job security, new
roles, and responsibilities, or a shift in the organizational culture. Applying
many different programs like the reorganization of departments, disposal of
poor-performing units, downsizing in the structure, and employee outsourcing
might be a significant challenge.

Along with challenges change also brings opportunities. The study of OB helps
managers to understand the continual change in a better way. They can learn
new skills, expand their knowledge, and adapt to changing market demands.

Use of Technology

This is the era of technology. It has highly influenced the field of management
and organizational behavior.

The use of technology is gradually increasing and with that challenges like
maintaining the privacy of the employees, information overload, high demand
for training and learning, etc. Rapid technological advancement also needs
organizations to constantly adapt and upgrade their systems, which can be
costly and time-consuming.

But if the technology is used properly it can help to increase efficiency and
productivity, saves time, enhance customer experiences, and innovation, and
there is competitive advantage for organizations.
Technology enables organizations to connect with customers and employees
worldwide, enabling remote work and expanding market reach. Embracing
technology develops innovation, and provides a competitive edge, empowering
organizations to succeed in a globalized and interconnected business area.

Managing Temporary Employees

Due to globalization, competition among organizations is also increasing. For

seasonal jobs, occasional jobs, and less important jobs managers hire temporary
employees to cut the cost and long-term burden.

Long-term benefits like provident fund, pension, paid leave, bonus, etc are not
available for temporary employees so they might show low motivation and job
satisfaction. Providing training and fitting them into the organization’s culture
might be a challenge for managers.

Hiring temporary employees can be more cost-effective. So managers need to

keep them motivated by providing rewards. As temporary employees can bring
external expertise and knowledge from different industries or companies, which
can benefit the organization and its permanent staff.

Improving Ethical Behavior

Ethical behavior is to behave according to the moral standards set by the society
which we live in. It is a belief regarding what is right and wrong or good and
bad.

The main challenge for a manager is to maintain the rules and regulations
acceptable to the employees. If employees are not positively aligned with the
guidelines, it is important for managers to identify the causes and develop rules
that benefit both employees’ ethics and the organization’s ethics.

Managers should offer seminars, workshops, and similar training programs to

improve the ethical behavior of the employees as it helps to improve an
individual’s or organization’s reputation.

Organisational Behaviour – Future Organisational behaviour exists as long as human factor

works in organisations. Behavioural pattern may change in accordance with the needs of the
organisations. If we observe the growth path of management thought since the days of
Henry Fayol and F.W. Taylor to this day, we understand that human force at work has
behaved according to the needs of the day and for the growth and success of the
organisations. Behavioural aspect is influenced by human psychology and the environment in
which human factor lives and works. OB may be relatively a new field of study. But lived with
organisations ever since the organisations started functioning for serving business objectives.
Behaviour moves with any living object and more so with human factor. Only recently
behavioural aspects in organisations are identified considering cognitive aspects and social
systems in which organisations function. Today, OB has systems in which organisations
function, and it has been considered as a strong factor for organisational success. In the
process of giving prime place for OB, “Human Resources Management” (HRM) is playing key
role in organisational development (OD). Technology is replacing human force at work in
organisations. Information technology and other highly advanced technology may be
adopted in organisations. Rabots developed with faultless technology, may function
lessening the burden for human factor at work. But brain behind this technology is human
brain and only human factor should operate this technology. Thus, in future, human factor at
work may be minimised, but behavioural aspect continues. Behavioural aspects are
unpredictable. Availing the assistance of various disciplines (such as psychology, sociology,
anthropology, etc.), behavioural aspects are understood and accordingly methods and
procedures are developed and adapted. The behavioural pattern changes. In nontechnical
organisations, human factor works more. As more and more technology is introduced,
behavioural aspects of human factor also changes. But OB aspects are eternal.

FOUNDATIONS OF INDIVIDUAL BEHAVIOUR Human behaviour, a complex phenomenon as it

is, is most difficult to define in absolute terms. It is primarily a combination of responses to
external and internal stimuli. These responses would reflect psychological structure of the
person and may be a result of combination of biological and psychological processes,
interprets them, responds to them in an appropriate manner and learns from the result of
these responses. Psychologist Kurt Levin has conducted considerable research into the
human behaviour and its causes. He believes that people are influenced by a number of
diversified factors, both genetic and environmental, and the influence of these factors
determines the pattern of behaviour. Whenever people buy something, for example, a car,
both the buyer and the seller sign a contract that specifies the terms of the sales agreement.
Similarly, most people, when they begin a working relationship with an organisation
formulate a psychological contract with their employer. A psychological contract is the overall
set of expectations that an individual holds with respect to his/her contributions to the
organisation and the organisation’s response to those contributions. A psychological contract
is not written down like a legal contract. The individual makes a variety of contributions to
the organisation - effort, skills, ability, time, loyalty and so forth. These contributions
presumably satisfy various needs and requirements of the organisation. In return for
contributions, the organisation provides inducements such as pay, promotion, job security,
etc. to the individual. Just as the contributions available from the individual must satisfy the
organisation’s needs, the inducements must serve the individual’s needs. If both the
individual and the organisation consider the psychological contract fair and equitable, they
will be satisfied with the relationship and will likely to continue it. If either party perceives an
imbalance or inequity in the contract, it may initiate a change.

If the organisation can take complete advantage of those behaviours and abilities and exactly
fulfill the employee’s needs, it will have achieved a perfect person-job fit. Of course, such a
precise level of person-job fit is seldom achieved due to various reasons such as imperfect
selection procedures, differences in individual skills, constant change in the needs and
requirements of people and organisation, etc. Thus, the behaviour of individuals in
organisation is the primary concern of management and it is essential that managers have an
 understanding of the factors influencing the behaviour of the individuals they manage. The
following figure identifies five sets of factors that have an impact upon individual behaviour
in organisation.

1.8.1 The Nature of Individual Differences Individual differences are personal attributes
that vary from one person to another. Individual differences may be physical and
psychological.
Psychological Differences • Personality • Attitudes • Perception • Motivation •
Learning Physical Differences • Height • Weight • Body shape • Appearance •
Complexion

Whenever an organisation attempts to assess for individual differences among its employees, it must
consider the situation in which behaviour occurs. Individuals who are satisfied in one context may
prove to be dissatisfied in another context. Assessing both individual differences and contributions in
relation to inducements and contexts, then, is a major challenge for organisations as they attempt to
establish effective psychological contracts with their employees and achieve optimal fits between
people and jobs. Individual differences make the manager’s job endlessly, challenging.

In fact, according to recent research, “variability among workers is substantial at all levels but
increases dramatically with job complexity. Due to these reasons, growing work force diversity
compels managers to view individual differences in a fresh way. Leaders now talk frequently about
“valuing differences” and learning to “manage diversity”. So rather than limiting diversity, as in the
past, today’s managers need to better understand and accommodate employee diversity and
individual differences

attitude:

An attitude is a positive, negative, or mixed evaluation of an object

expressed at some level of intensity. It is an expression of a

favorable or unfavorable evaluation of a person, place, thing, or

event. These are fundamental determinants of our perceptions of

and actions toward all aspects of our social environment. Attitudes

involve a complex organization of evaluative beliefs, feelings, and

tendencies toward certain actions.

How much we like or dislike something that determines our

behavior towards that thing.

We tend to approach, seek out, or be associated with things we like;

we avoid, shun, or reject things we do not like.

Some examples of attitudes are- he has a positive attitude about

the changes, she is friendly and has a good attitude, he was

showing some attitude during practice today, so the coach benched

him, I like my friends that means I am expressing my attitudes

towards my friends, etc.

Definition of Attitude

Attitude is the manner, disposition, feeling, and position about a

person or thing, tendency, or orientation, especially in the mind.

According to Gordon Allport, “An attitude is a mental and neural

state of readiness, organized through experience, exerting a

directive or dynamic influence upon the individual’s response to all

objects and situations with which it is related.”

Frank Freeman said, “An attitude is a dispositional readiness to

respond to certain institutions, persons or objects in a consistent

manner which has been learned and has become one’s typical mode

of response.”

Thurstone said, “An attitude denotes the total of man’s inclinations

and feelings, prejudice or bias, preconceived notions, ideas, fears,

threats, and other any specific topic.

Anastasi defined attitude as “A tendency to react favorably or

unfavorably towards a designated class of stimuli, such as a

national or racial group, a custom or an institution.”

According to N.L. Munn, “Attitudes are learned predispositions

towards aspects of our environment. They may be positively or

negatively directed towards certain people, services, or

institutions.”

IMPORTANCE OF ATTITUDE-  Improves Productivity-Positive attitude always gives the

boost to everyone in the organization which results into the good productivity.
 Changes in the perception of employees-Because of good attitude employees
perception(Way of thinking) changes in a positive way towards work.
 Creates positive work envoirment- Positive attitudes among few employees make others
job easy.
 For reducing stress- Negative attitude always gives you more stress while positive attitude
will help you to reduced the stress.
 Improves quality of life- Good attitudes in worker helps to org. in completing their desired
goals, after completing that goals it automatically makes impact on workers life style.
 Builds customer loyalty- The caring attitude while dealing with customer makes the
loyalty of the org.

3 Components of Attitudes: Cognitive, Affective, Behavioral

Attitudes are simply expressions of much we like or dislike various

things. Attitudes represent our evaluations, preferences, or

rejections based on the information we receive.

It is a generalized tendency to think or act in a certain way in

respect of some object or situation, often accompanied by feelings.

It is a learned predisposition to respond consistently concerning a

given object.

This can include evaluations of people, issues, objects, or events.

Such evaluations are often positive or negative, but they can also

be uncertain at times. These are the way of thinking and shape how

we relate to the world both in work and Outside of work.

Researchers also suggest that there are several different

components that makeup attitudes. One can see this by looking at

the three components of an attitude: cognition, affect, and behavior.

3 components of attitude are;

1. Cognitive Component

2. Affective Component

3. Behavioral Component

Cognitive Component

The cognitive component of attitudes refers to the beliefs, thoughts,

and attributes that we would associate with an object. It is the

opinion or belief segment of an attitude. It refers to that part of the

attitude that is related to the general knowledge of a person.

Typically these come to light in generalities or stereotypes, such as

‘all babies are cute’, ‘smoking is harmful to health, etc.

Affective Component

The affective component is the emotional or feeling segment of an

attitude.

It is related to the statement which affects another person.

It deals with feelings or emotions that are brought to the surface

about something, such as fear or hate. Using the above example,

someone might have the attitude that they love all babies because

they are cute or that they hate smoking because it harms health.
Behavioral Component

The behavior component of an attitude consists of a person’s

tendencies to behave in a particular way toward an object. It refers

to that part of attitude that reflects the intention of a person in the

short-run or long run.

Using the above example, the behavioral attitude may be ‘I cannot

wait to kiss the baby,’ or ‘we better keep those smokers out of the

library, etc.

Conclusion

Attitude is composed of three components: a cognitive component,

an effective or emotional component, and a behavioral component.

The cognitive component is based on information or knowledge,

whereas the affective component is based on feelings.

The behavioral component reflects how attitude affects the way

we act or behave. It is helpful in understanding their complexity and

the potential relationship between attitudes and behavior.

But for clarity’s sake, keep in mind that the term attitude essentially

refers to the affected part of the three components.

In an organization, attitudes are important for their goal or

objective of succeed. Each one of these components is very

different from the other, and they can build upon one another to

form our attitudes and, therefore, affect how we relate to the world.

Job Satisfaction : Job satisfaction is an attitude that reflects the extent to which an individual

is gratified by or fulfilled in his or her work. Extensive research conducted on job satisfaction
has indicated that personal factors such as an individual’s needs and aspirations determine

this attitude, along with group and organisational factors such as relationships with co-

workers and supervisors and working conditions, work policies and compensation. A

satisfied employee also tends to be absent less often, to make positive contributions, and to

stay with the organisation. In contrast, a dissatisfied employee may be absent more often,

may experience stress that disrupts co-workers, and may be continually looking for another

job. Organisational factors that influence employee satisfaction include pay, promotion,

policies and procedures of the organisations and working conditions. Group factors involving

relationship with co-workers and supervisors also influence job satisfaction. Similarly,

satisfaction depends on individual factors like individual’s needs and aspirations. If

employees are satisfied with their job, it may lead to low employee turnover and less

absenteeism and vice-versa.

1.11 ORGANISATIONAL COMMITMENT AND INVOLVEMENT : Two other important

work-related attitudes are organisational commitment and involvement. Organisational

commitment is the individual’s feeling of identification with and attachment to an

organisation. Involvement refers to a person’s willingness to be a team member and work

beyond the usual standards of the job. An employee with little involvement is motivated by
extrinsic motivational factor and an employee with strong involvement is motivated by

intrinsic motivational factors. A number of factors lead to commitment and involvement.

Both may increase with an employee’s age and years with the organisation, sense of job

security and participation in decisionmaking. If the organisation treats its employees fairly

and provides reasonable rewards and job security, employees are more likely to be satisfied

and committed. Involving employees in decision-making can also help to increase

commitments. In particular, designing jobs which are interesting and stimulating can enhance

job involvement.
Definition of personality

Personality means how a person affects others and how he understands and views

himself as well as the pattern of inner and outer measurable traits and the person-

situation interactions (Fred Luthans). According to Stephen P. Robbins, personality is

the sum total ways in which an individual reacts and interacts with others. It may be

defined as those inner psychological characteristics that both determine and reflect

how a person responds to his environment.

Personality can be defined as those inner psychological characteristics that both

determine and reflect how a person responds to the environment.

The word personality is derived from a Greek word “persona” which means “to speak

through.” Personality is the combination of characteristics or qualities that forms a

person’s unique identity. It signifies the role which a person plays in public. Every

individual has a unique, personal and major determinant of his behavior that defines

his/her personality.

IMPORTANCE OF PERSONALITY FOR PERFORMANCE

 Increased Employee Engagement- Engagement goes up as organization recognize

the uniqueness that each person brings based on their own thinking & behavioral

tendencies. after recognizing the personality the appropriate work will be allocated to

them according to their preferences.

 Increased Productivity- Personality is one of the major element which will help to

improve performance and productivity.

 Job Placement- if job requires specific characteristic and personality type, then a

personality test can be used for placement purpose.

 Helpful for identification of suitable candidate- personality test will help you to

identify the appropriate candidate for particular job.

 Useful for group interaction- it is on of the effective tool as a group interaction.

(after the personality test.)

The Basics of Myers & Briggs' Personality Theory

The Myers-Briggs system describes a person’s personality through four opposing personality
functions, variously known as dichotomies, preferences or scales. The first three preferences
are based on the writings of Jung; Katherine Cook Briggs added the final preference, Judging
versus Perceiving, based on her own observations.

 Extraversion vs. Introversion: How do you gain energy? Extraverts like to be with
others and gain energy from people and the environment. Introverts gain energy from
alone-time and need periods of quiet reflection throughout the day.
 Sensing vs. Intuition: How do you collect information? Sensors gather facts from
their immediate environment and rely on the things they can see, feel and hear.
Intuitives look more at the overall context and think about patterns, meaning, and
connections.
 Thinking vs. Feeling: How do you make decisions? Thinkers look for the logically
correct solution, whereas Feelers make decisions based on their emotions, values, and
the needs of others.
 Judging vs. Perceiving: How do you organize your environment? Judgers prefer
structure and like things to be clearly regulated, whereas Perceivers like things to be
open and flexible and are reluctant to commit themselves.

The choice of preference is either/or—in Myers and Briggs' system, you’re either an Introvert
or an Extravert, a Judger or a Perceiver.
Once you have decided which style you prefer on each of the four dichotomies, you use these
four preferences to create a four letter code which sums up your personality type. For
example, someone with a preference for Introversion, Intuition, Feeling and Judging would
have the code “INFJ" (an Intuition preference is signified with an N to avoid confusion with
Introversion). There are 16 possible combination, or personality types.
Many people find their type by taking a personality test, however it is also possible to
discover your personality type simply by studying the preferences and your own behavior.
The Myers-Briggs Type Indicator (MBTI)is the most
widely used instrument in the world, it is based on

Carl Jung's work.

 The MBTI uses a series of forced questions in which

the individual has to choose only one or two possible

answers to each question.

 It is often used as a tool for discovering and

understanding different normal human personalities.

 Myers deduced (clearer) that there were four

dichotomies(parts) which made people differ from

one another and refer to them as ‘type preferences.’

The Big 5 Personality Traits

It is important to note that each of the five primary personality traits represents a range
between two extremes. For example, extraversion represents a continuum between extreme
extraversion and extreme introversion. In the real world, most people lie somewhere in
between.

While there is a significant body of literature supporting these primary personality traits,
researchers don't always agree on the exact labels for each dimension. That said, these five
traits are usually described as follows.

Openness
Openness (also referred to as openness to experience) emphasizes imagination and insight the
most out of all five personality traits.1 People who are high in openness tend to have a broad
range of interests. They are curious about the world and other people and are eager to learn
new things and enjoy new experiences.

People who are high in this personality trait also tend to be more adventurous and creative.
Conversely, people low in this personality trait are often much more traditional and may
struggle with abstract thinking.
High

 Very creative
 Open to trying new things
 Focused on tackling new challenges
 Happy to think about abstract concepts

Low

 Dislikes change
 Does not enjoy new things
  Resists new ideas
 Not very imaginative
 Dislikes abstract or theoretical concepts
Conscientiousness
Among each of the personality traits, conscientiousness is one defined by high levels of
thoughtfulness, good impulse control, and goal-directed behaviors.1 Highly conscientious
people tend to be organized and mindful of details. They plan ahead, think about how their
behavior affects others, and are mindful of deadlines.

Someone scoring lower in this primary personality trait is less structured and less organized.
They may procrastinate to get things done, sometimes missing deadlines completely.

High

 Spends time preparing

 Finishes important tasks right away
 Pays attention to detail
 Enjoys having a set schedule
Low

 Dislikes structure and schedules

 Makes messes and doesn't take care of things
 Fails to return things or put them back where they belong
 Procrastinates important tasks
 Fails to complete necessary or assigned tasks
Extraversion
Extraversion (or extroversion) is a personality trait characterized by excitability, sociability,
talkativeness, assertiveness, and high amounts of emotional expressiveness.1 People high in
extraversion are outgoing and tend to gain energy in social situations. Being around others
helps them feel energized and excited.

People who are low in this personality trait or introverted tend to be more reserved. They
have less energy to expend in social settings and social events can feel draining. Introverts
often require a period of solitude and quiet in order to "recharge."

High

 Enjoys being the center of attention

 Likes to start conversations
 Enjoys meeting new people
 Has a wide social circle of friends and acquaintances
 Finds it easy to make new friends
 Feels energized when around other people
 Say things before thinking about them
Low

 Prefers solitude
 Feels exhausted when having to socialize a lot
 Finds it difficult to start conversations
  Dislikes making small talk
 Carefully thinks things through before speaking
 Dislikes being the center of attention
Agreeableness
This personality trait includes attributes such as trust, altruism, kindness, affection, and
other prosocial behaviors.1 People who are high in agreeableness tend to be more cooperative
while those low in this personality trait tend to be more competitive and sometimes even
manipulative.
High

 Has a great deal of interest in other people

 Cares about others
 Feels empathy and concern for other people
 Enjoys helping and contributing to the happiness of other people
 Assists others who are in need of help
Low

 Takes little interest in others

 Doesn't care about how other people feel
 Has little interest in other people's problems
 Insults and belittles others
 Manipulates others to get what they want
Neuroticism
Neuroticism is a personality trait characterized by sadness, moodiness, and emotional
instability. ndividuals who are high in neuroticism tend to experience mood swings, anxiety,
irritability, and sadness. Those low in this personality trait tend to be more stable and
emotionally resilient.

High

 Experiences a lot of stress

 Worries about many different things
 Gets upset easily
 Experiences dramatic shifts in mood
 Feels anxious
 Struggles to bounce back after stressful events
Low

 Emotionally stable
 Deals well with stress
 Rarely feels sad or depressed
 Doesn't worry much
 Is very relaxed

Perception
 Perception is an important mediating cognitive process. Through this complex process, persons
make interpretations of the stimulus or situation they are faced with. Both selectivity and
organisation go into perceptual interpretations. Externally, selectivity is affected by intensity, size,
contrast, repetition, motion and novelty and familiarity. Internally, perceptual selectivity is influenced
by the individual’s motivation, learning and personality. After the stimulus situation is filtered by the
selective process, the incoming information is organised into a meaningful whole. Individual
differences and uniqueness are largely the result of the cognitive processes.

Although there are a number of cognitive processes, it is generally recognised that the perceptual
process is a very important one that takes place between the situation and the behaviour and is most
relevant to the study of organisational behaviour. For example, the observation that a department
head and a subordinate may react quite differently to the same top management directive can be
better understood and explained by the perceptual process. In the process of perception, people
receive many different kinds of information through all five senses, assimilate them and then
interpret them. Different people used to perceive the same information differently. Perception plays
a key role in determining individual behaviour in organisations.

Organisations send messages in variety of forms to their members regarding what they are expected
to do and not to do. In spite of organisations sending clear messages, those messages are subject to
distortion in the process of being perceived by organisation members. Hence managers need to have
a general understanding of basic perceptual process.

What Are The Factors Influencing Perception?

Our ideas, opinions and actions are usually responses to something else. It may be
a person or a situation that makes us think a certain way. Perception may even be
negative, which can have adverse effects in the workplace.

One’s attitudes, motivations, expectations, behavior and interests are some of

the factors affecting perception. Let’s explore these factors with examples to
understand the importance of perception in a professional setting.

Individual Differences
Every person is unique and brings different attitudes to a team. You may work
well when collaborating with others while your coworker prefers to work in
isolation. Each of these differences affects your perception of your team and
organization. You’ll behave differently when you’re working with your colleague
as opposed to someone else. Your perception of your coworker shapes the
way you work as well. In the workplace, it’s necessary to respect these
differences and work with others to create harmony.

2. Motivations
Say you want to work for a few years and gain enough experience to get into
business school for an MBA. Your motivations will impact your perception of
your work. You’re more likely to make just enough effort to work well, get
positive feedback and fulfill your requirements. So, our motivations affect the
way we approach a situation. When it comes to teamwork, each member’s
motivations will be different. But to achieve collective goals, management has
to bring everyone on the same page and communicate their expectations.
 3. Organizational Behavior
For Priyanka, her informal organization transformed into a traditional
hierarchical office. Her behavior as a professional had to change to
accommodate her external environment. When you’re working with others and
aiming to accomplish long-term goals, you have to meet them halfway. An
organization’s values, mission and beliefs are important factors influencing
perception.

4. Past Experiences
Our past experiences shape us into who we are today. We can’t separate
ourselves from them. Past experiences are also significant factors influencing
perception. They shape our personal biases and opinions as well as our
expectations from others and ourselves. It’s important to be open to changing
our perceptions when situations change. For instance, the Earth wasn’t always
considered to be round.

5. External Factors
Perception isn’t only affected by internal or personal factors. External factors
affecting perception can include what people think of us, others’ expectations
and cultural norms such as taboos or rules followed by society.

The importance of perception is that it helps us define who we are, where we’re
headed and what we can do to be better. If you can learn to change your perception
of others by understanding them, you’ll build meaningful relationships at work.

Selective Perception: Selective perception is the process of screening out information that we
are uncomfortable with or that contradicts our beliefs. For example, a manager has a very
positive attitude about a particular worker and one day he notices that the worker seems to be
goofing off. Selective perception may make the manager to quickly disregard what he
observed. Suppose another manager has formed a very negative attitude about a particular
worker and when he happens to observe a high performance from the worker, he too
disregard it. In one sense, selective perception is beneficial because it allows us to disregard
minor bits of information. If selective perception causes managers to ignore important
information, it can become quite detrimental.

hat is attribution theory?

Attribution theory is how we attribute feelings and intentions to people to
understand their behaviour. For example, we may unconsciously apply this
theory when we see someone shouting on public transport. You may blame
their character, assuming they are an angry person. Alternatively, you might
blame the situation they are in, such as, if the train is busy, it might make them
nervous and more likely to act out. These two explanations relate to the main
types of theories, dispositional and situational attribution.
Dispositional attribution
Dispositional attribution puts the cause of someone's behaviour down to
internal traits. These might include personality, core beliefs, and motivations.
By attempting to explain intentional behaviour, we tend to look internally and
analyse the personality of an individual. By overstating the internal causes of
someone's behaviour and ignoring the external causes, we commit something
called a fundamental attribution error. That's when we assume people's actions
relate to the type of person they are and nothing else. Some further examples
of dispositional attribution are:

 Your colleague receives a promotion, and you attribute this to their

dedication to the role.
 A person studies at medical school, and you attribute this to their
caregiving personality.
 A person is glaring at you on the bus, and you attribute this to them
having a hostile personality.

Situational attribution
Situational attribution looks less towards personality and more towards
situations and events. We can think of this as a more external attribution type.
This type of attribution is more common when explaining our behaviour. We
look outwards and blame circumstances outside of ourselves. This is because it
is often easier than self-analysing. Some examples of situational attribution
include:

 Being late for work and blaming the weather or public transport.
 Failing an exam and blaming your teacher for not preparing you.
 Spilling a drink on the carpet and attributing it to the unevenness of
the carpet.

Attribution theory examples

Psychologists have come up with a variety of theories to explain the attribution
process. The two most accredited theories are Kelley's covariation model and
the correspondent inference theory. Read below to learn more about the
theories:
Kelley's Covariation Model

This is one of the most well-known examples. It decides whether situational or

dispositional factors explain certain actions. Kelley suggests people observe
three different pieces of evidence to uncover the cause of certain behaviour:

 Consensus: How other people behave in a similar situation.

 Distinctiveness: The extent to which the person behaves the
same in similar situations.
 Consistency: How often the person shows this behaviour every
time the situation occurs.

To illustrate this theory, we can apply it to drinking alcohol in a restaurant. If it's

high in consensus, then other people are also doing it. If someone only drinks
in restaurants, the behaviour is high in distinctiveness. If they drink all the time,
then it's low. Finally, if the person drinks in a restaurant every time, then
consistency is high.

Related: How to describe your personality in a job interview

Correspondent Inference Theory

First put forward by Edward Jones and Keith Davis in 1965, the two introduced
this theory to explain how we make internal attributions. It suggests people are
more likely to judge voluntary behaviour instead of accidental behaviour.
During the attribution process, we see a clear correspondence between
personality and behaviour to make an internal attribution, for example, when
we see a link between something behaving unkindly and being an unkind
person. Jones Davis claimed we can base correspondence inference on five
factors:

 Choice: If the behaviour is voluntary, then it is likely internal.

 Accidental or intentional behaviour: In this case, accidental is
situational and intentional is personality-based.
 Social desirability: We are more sensitive to making inferences
based on socially unacceptable behaviours.
 Hedonistic relevance: Whether the behaviour is likely to benefit
or harm us.
 Personalism: If we see the behaviour as directly affecting us,
then it is personal and not part of the situation.
Attribution theory: Biases and errors
Sometimes, the process of attribution is our own attempt to explain certain
behaviour. It is often prone to natural biases. These can vary depending on
whether they involve ourselves or other people, or whether the behaviour is
dispositional or situational. Realising these biases is the first step to combat
them in our daily and professional lives and ensure our relationship with
colleagues improves. Below are three of the most common biases.

The fundamental attribution error

When we are attributing causes to other people, it is common to attribute

causes to internal factors. Although situational factors may be present, people
often ignore these for perceived personality defects in the person. A good
example of this bias is blaming an employee for being late for a meeting and
attributing this to a personality flaw, such as laziness or habitual lateness. The
next day, we may also make the same mistake, but it's unlikely we hold
ourselves to the same standards. Instead, we are much more likely to attribute
the lateness to situational factors like traffic problems.

The actor-observer bias

Actor bias relates to how we attribute our behaviour. Instead of blaming

dispositional factors, we often look externally. We may look at situational
factors for our behaviour because we are more informed about our own
situation than others, while when we are the observer of other people, we lack
the knowledge of variables to analyse the situation with confidence. In this way,
we blame dispositional factors. The more acquainted you are with a person, the
less likely you are to fall into the observer bias as you can empathise better.

Self-serving bias

The self-serving bias acts as a kind of defensive mechanism to protect our self-
esteem. For example, if you receive a promotion at work, then you are likely to
attribute your achievement to dispositional factors, such as your intelligence or
diligent work attitude. In contrast, if your boss fires you, then you are more
likely to blame situational factors. These might be your colleagues being
unhelpful or your boss disliking you. By varying how we attribute certain
situations, we protect our professional competency at work and mental well-
being while ignoring self-reflection.

Examples of biases and errors in the workplace

The biases and errors of a characteristic theory can create a culture of blaming
and irresponsibility within the workplace. To combat this, a good employee
needs to be aware of their tendency towards self-preservation and biases
towards observing other people. Below are some common workplace
attribution biases and ways in which you can counterbalance them:

 Being scolded by your manager for losing an important

contract. In this situation, it is natural to want to blame other
people, but you benefit from balancing self-reflection and
genuine external factors that you can adjust for next time.
 A new employee doesn't speak to you when you greet
them. You may attribute this to their disposition and say they are
just a rude person. It's a good idea to consider external factors
that may influence their behaviour, such as nerves in a new office
or maybe the fact you weren't speaking clearly.
 Constantly firing people for making mistakes. As a manager,
over punishment for mistakes can create an atmosphere of
blaming within the workplace as people work to save themselves.
Instead, you can look at empathising with your employees and
encouraging them to self-reflect and admit their mistakes, giving
them an opportunity for improvement.
 Situational attribution towards a colleague's
promotion. Attributing a colleague's promotion to favouritism or
luck is not conducive to the support network you want to create
within the office and maybe traits or behaviour they have you
can shadow. Putting your biases aside and discussing their
success with them is a great opportunity to create a friendlier
office environment and help you in your career.

LEARNING: Learning is another important psychological process determining human

behaviour. Learning can be defined as “relatively permanent change in behaviour that occurs
as a result of experience or reinforced practice”. There are four important points in the
definition of learning: 1. Learning involves a change in behaviour, though this change is not
necessarily an improvement over previous behaviour. Learning generally has the connotation
of improved behaviour, but bad habits, prejudices, stereotypes, and work restrictions are also
learned. 2. The behavioural change must be relatively permanent. Any temporary change in
behaviour is not a part of learning. 3. The behavioural change must be based on some form of
practice or experience. 4. The practice or experience must be reinforced in order for learning
to occur.
Learning Theories

1. Positive Reinforcement: Positive reinforcement strengthens and increases behaviour by the

presentation of a desirable consequence (reward). In other words, a positive reinforcer is a
reward that follows behaviour and is capable of increasing the frequency of that behaviour.
There are two types of positive reinforces: primary and secondary. Primary reinforcers such
as food, water and sex are of biological importance and have effects which are independent of
past experiences. For instance, a primary reinforcer like food satisfies hunger need and
reinforced food-producing behaviour. Secondary reinforcers like job advancement,
recognition, praise and esteem result from previous association with a primary reinforcer.
Primary reinforcers must be learned. In order to apply reinforcement procedures successfully,
management must select reinforcers that are sufficiently powerful and durable.

2. Negative Reinforcement: The threat of punishment is known as negative reinforcement.

Negative reinforcers also serve to strengthen desired behaviour responses leading to their
removal or termination.

3. Extinction: Extinction is an effective method of controlling undesirable behaviour. It refers

to nonreinforcement. It is based on the principle that if a response is not reinforced, it will
eventually disappear. Extinction is a behavioural strategy that does not promote desirable
behaviours but can reduce undesirable behaviours.

4. Punishment: Punishment is a control device employed in organisations to discourage and

reduce annoying behaviours of employees. Observational Learning Observational learning
results in as a result of watching the behaviour of another person and appraising the
consequences of that behaviour. It does not require an overt response. When Mr. X observes
that Y is rewarded for superior performance, X learns the positive relationship between
performance and rewards without actually obtaining the reward himself. Observational
learning plays a crucial role in altering behaviours in organisations. Cognitive Learning Here
the primary emphasis is on knowing how events and objects are related to each other. Most of
the learning that takes place in the class room is cognitive learning. Cognitive learning is
important because it increases the change that the learner will do the right thing first time,
without going through a lengthy operant conditioning process.

1.12.3 Learning Theory and Organisation Behaviour The relevance of the learning theories
for explaining and predicting of organisational behaviour is marginal. This does not mean
that learning theories are totally irrelevant. Learning concepts provide a basis for changing
behaviours that are unacceptable and maintaining those that are acceptable. When individuals
engage in various types of dysfunctional behaviour (late for work, disobeying orders, poor
performance), the manager will attempt to educate more functional behaviours. Learning
theory can also provide certain guidelines for conditioning organisational behaviour.
Managers know that individuals capable of turning out superior performance must be given
more reinforces than those with average or low performance. Managers can successfully use
the operant conditioning process to control and influence the behaviour of employees by
manipulating its reward system

MOTIVATION

The word motivation is derived from the word ‘motive’ which is defined as an active form of a desire,
craving or need which must be satisfied. Motivation is the key to organisational effectiveness. The
manager in general has to get the work done through others. These ‘others’ are human assets or
resources. They are to be motivated to work to attain the organisational objectives. Definition
Motivation is defined as, “the set of forces that cause people to choose certain behaviours from
among the many alternatives open to them”.

“Motivation is the desire within an individual that stimulates him or her to action” – George R. Terry.
“The complex of forces starting and keeping a person at work in an organisation” – Robert Dubin.
Viteles defines motivation as, “an unsatisfied need which creates a state of tension or disequilibrium,
causing the individual to move in a goal directed pattern towards restoring a state of equilibrium, by
satisfying the need”.

“Motivation refers to the degree of readiness of an organism to pursue some designated goals and
implies the determination of the nature and locus of force inducing degree of readiness” –
Encyclopaedia of Management

. On the basis of above definitions, the following observations can be made regarding motivation:

• Motivation is an inner psychological force which activates and compels the person to behave in a
particular manner.

• Motivation process is influenced by personality traits learning abilities, perception and competence
of an individual.

• Highly motivated employee works more efficiently and his level of production tends to be higher
than others.

• Motivation originates from the needs and wants of an individual. It is a tension of lacking
something in his mind which forces him to work more efficiently.

Maslow’s Hierarchy of Needs: Maslow Abraham proposed his theory in 1940s. Maslow’s hierarchy of
needs assumes that people are motivated to satisfy five levels of needs: physiological, security,
belongingness, esteem and self-actualisation needs. According to Maslow’s hierarchy physiological
needs for food, sex, water and air which represent basic issues of survival. In organisational settings,
most physiological needs are satisfied by adequate wages and by the work environment itself, which
provides employees with rest rooms, adequate lighting, comfortable temperatures and ventilation.

Next are security or safety needs - the requirements for a secure physical and emotional
environment. Examples include the desire for adequate housing and clothing, the need to be free
from worry about money and job security, and the desire for safe working conditions. Security needs
are satisfied for people in the work place by job continuity, a grievance redressal system and an
adequate insurance and retirement benefit package. Belonging needs are related to the social aspect
of human life. They include the need for love and affection and the need to be accepted by one’s
peers. For most people these needs are satisfied by a combination of family and community
relationships outside of work and friendships on the job. Managers can help ensure the satisfaction
of these important needs by allowing social interaction and by making employees feel like part of a
team or work group. Esteem needs actually comprise of two different sets of needs: the need for a
positive selfimage and self-respect and the need for recognition and respect from others.

Organisations can help address esteem needs by providing a variety of extrinsic symbols of
accomplishment such as job titles, spacious offices and similar rewards as appropriate. At a more
intrinsic level, organisations can also help satisfy esteem needs by providing employees with
challenging job assignments that carry with them a sense of accomplishment. At the top of the
hierarchy are what Maslow calls the self-actualisation needs. These involve realising one’s potential
for continued growth and individual development. Because they are highly individualised and
personal, self-actualisation needs are perhaps the most difficult for managers to address. In fact, it
can be argued that individuals must meet these needs entirely by themselves. Organisations, can
help, however, by creating a climate wherein self-actualisation is possible.

For instance, an organisation can promote the fulfillment of these needs by providing employees
with a chance to participate in making decisions about their work and with the opportunity to learn
new things about their jobs and the organisation.

The process of contributing to actual organisational performance (through decision-making) and

learning more about the organisation are likely to help people experience the personal growth and
development associated with self-actualising. Maslow suggests that the five levels of needs are
arranged in order of importance, starting at the bottom of the hierarchy (refer figure). An individual
is motivated first and foremost to satisfy physiological needs. As long as these needs remain
unsatisfied, the individual is motivated to fulfill only them. When those needs are satisfied, the
individual is motivated and he ‘moves up’ the hierarchy and becomes concerned with security needs.
This ‘moving up’ process continues until the individual reaches the self-actualisation level.

Maslow’s concept of the need hierarchy has a certain intuitive logic and has been accepted by many
managers. But research has revealed several short-comings of the theory. For example, some
research has found that five levels of needs are not always present and that the order of the levels is
not always the same as postulated by Maslow. Moreover, it is difficult for organisations to use the
need hierarchy to enhance employee motivation.

Theory X and Theory Y

In 1960, Douglas McGregor formulated Theory X and Theory Y suggesting two aspects of
human behaviour at work, or in other words, two different views of individuals (employees):

1. one of which is negative, called as Theory X and

2. the other is positive, so called as Theory Y

According to McGregor, the perception of managers on the nature of individuals is based on

various assumptions.

Assumptions of Theory X

 An average employee intrinsically does not like work and tries to escape it whenever
possible.
 Since the employee does not want to work, he must be persuaded, compelled, or
warned with punishment so as to achieve organizational goals. A close supervision is
required on part of managers. The managers adopt a more dictatorial style.
 Many employees rank job security on top, and they have little or no aspiration/
ambition.
 Employees generally dislike responsibilities.
 Employees resist change.
 An average employee needs formal direction.
Assumptions of Theory Y

 Employees can perceive their job as relaxing and normal. They exercise their physical
and mental efforts in an inherent manner in their jobs.
 Employees may not require only threat, external control and coercion to work, but
they can use self-direction and self-control if they are dedicated and sincere to
achieve the organizational objectives.
 If the job is rewarding and satisfying, then it will result in employees’ loyalty and
commitment to organization.
 An average employee can learn to admit and recognize the responsibility. In fact, he
can even learn to obtain responsibility.
 The employees have skills and capabilities. Their logical capabilities should be fully
utilized.

In other words, the creativity, resourcefulness and innovative potentiality of the

employees can be utilized to solve organizational problems.

Thus, we can say that Theory X presents a pessimistic view of employees’ nature and
behaviour at work, while Theory Y presents an optimistic view of the employees’ nature and
behaviour at work.

If we correlate it with Maslow’s theory, we can say that Theory X is based on the assumption
that the employees emphasize on the physiological needs and the safety needs; while
Theory X is based on the assumption that the social needs, esteem needs and the self-
actualization needs dominate the employees.

McGregor views Theory Y to be more valid and reasonable than Theory X. Thus, he
encouraged cordial team relations, responsible and stimulating jobs, and participation of all
in decision-making process.

Implications of Theory X and Theory Y

 Quite a few organizations use Theory X today. Theory X encourages use of tight
control and supervision. It implies that employees are reluctant to organizational
changes. Thus, it does not encourage innovation.
 Many organizations are using Theory Y techniques. Theory Y implies that the
managers should create and encourage a work environment which provides
opportunities to employees to take initiative and self-direction. Employees should be
given opportunities to contribute to organizational well-being.

Theory Y encourages decentralization of authority, teamwork and participative

decision making in an organization.

Theory Y searches and discovers the ways in which an employee can make
significant contributions in an organization. It harmonizes and matches employees’
needs and aspirations with organizational needs and aspirations.
Herzberg’s Two-Factor Theory of
Motivation
In 1959, Frederick Herzberg, a behavioural scientist proposed a two-factor theory or the
motivator-hygiene theory. According to Herzberg, there are some job factors that result in
satisfaction while there are other job factors that prevent dissatisfaction. According to
Herzberg, the opposite of “Satisfaction” is “No satisfaction” and the opposite of
“Dissatisfaction” is “No Dissatisfaction”.

FIGURE: Herzberg’s view of satisfaction and dissatisfaction

Herzberg classified these job factors into two categories-

1. Hygiene factors- Hygiene factors are those job factors which are essential for
existence of motivation at workplace. These do not lead to positive satisfaction for
long-term. But if these factors are absent/if these factors are non-existant at
workplace, then they lead to dissatisfaction.

In other words, hygiene factors are those factors which when adequate/reasonable
in a job, pacify the employees and do not make them dissatisfied. These factors are
extrinsic to work.

Hygiene factors are also called as dissatisfiers or maintenance factors as they are
required to avoid dissatisfaction. These factors describe the job
environment/scenario. The hygiene factors symbolized the physiological needs
which the individuals wanted and expected to be fulfilled. Hygiene factors include:

 Pay: The pay or salary structure should be appropriate and reasonable. It

must be equal and competitive to those in the same industry in the same
domain.
 Company Policies and administrative policies: The company policies
should not be too rigid. They should be fair and clear. It should include
flexible working hours, dress code, breaks, vacation, etc.
  Fringe benefits: The employees should be offered health care plans
(mediclaim), benefits for the family members, employee help programmes,
etc.
 Physical Working conditions: The working conditions should be safe, clean
and hygienic. The work equipments should be updated and well-maintained.
 Status: The employees’ status within the organization should be familiar and
retained.
 Interpersonal relations: The relationship of the employees with his peers,
superiors and subordinates should be appropriate and acceptable. There
should be no conflict or humiliation element present.
 Job Security: The organization must provide job security to the employees.
2. Motivational factors- According to Herzberg, the hygiene factors cannot be
regarded as motivators. The motivational factors yield positive satisfaction. These
factors are inherent to work. These factors motivate the employees for a superior
performance.

These factors are called satisfiers. These are factors involved in performing the
job. Employees find these factors intrinsically rewarding. The motivators symbolized
the psychological needs that were perceived as an additional benefit. Motivational
factors include:

 Recognition: The employees should be praised and recognized for their

accomplishments by the managers.
 Sense of achievement: The employees must have a sense of achievement.
This depends on the job. There must be a fruit of some sort in the job.
 Growth and promotional opportunities: There must be growth and
advancement opportunities in an organization to motivate the employees to
perform well.
 Responsibility: The employees must hold themselves responsible for the
work. The managers should give them ownership of the work. They should
minimize control but retain accountability.
 Meaningfulness of the work: The work itself should be meaningful,
interesting and challenging for the employee to perform and to get
motivated.

Limitations of Two-Factor Theory

The two factor theory is not free from limitations:

1. The two-factor theory overlooks situational variables.

2. Herzberg assumed a correlation between satisfaction and productivity. But the
research conducted by Herzberg stressed upon satisfaction and ignored productivity.
3. The theory’s reliability is uncertain. Analysis has to be made by the raters. The raters
may spoil the findings by analyzing same response in different manner.
4. No comprehensive measure of satisfaction was used. An employee may find his job
acceptable despite the fact that he may hate/object part of his job.
5. The two factor theory is not free from bias as it is based on the natural reaction of
employees when they are enquired the sources of satisfaction and dissatisfaction at
 work. They will blame dissatisfaction on the external factors such as salary structure,
company policies and peer relationship. Also, the employees will give credit to
themselves for the satisfaction factor at work.
6. The theory ignores blue-collar workers.

Despite these limitations, Herzberg’s Two-Factor theory is acceptable broadly.

Implications of Two-Factor Theory

The Two-Factor theory implies that the managers must stress upon guaranteeing the
adequacy of the hygiene factors to avoid employee dissatisfaction. Also, the managers must
make sure that the work is stimulating and rewarding so that the employees are motivated
to work and perform harder and better.

This theory emphasize upon job-enrichment so as to motivate the employees. The job
must utilize the employee’s skills and competencies to the maximum. Focusing on the
motivational factors can improve work-quality.

Victor Vroom’s expectancy theory of

motivation
The Expectancy theory states that an employee’s motivation is an outcome of what proportion a
private wants a gift, the assessment of the likelihood that the trouble will cause expected
performance and therefore the belief that the commission will be rewarding.

Thus, the expectation theory concentrates on the subsequent three relationships:

 Effort-performance relationship: what’s the likelihood that the individual’s effort is

recognised in his achievement assessment?

 Assessment-reward relationship: It talks about the extent to which the worker believes
that getting a direct performance appraisal results in organisational rewards.

 Rewards-individual goals relationship: it’s all about the attractiveness or appeal of the
potential reward to the individual.

 Vroom believed that employees consciously decide whether to perform or not at work.
This decision solely trusted the employee’s motivation level, which depends on
expectancy, validity, and instrumentality.

Conclusion

According to Victor Vroom, behaviour results from a conscious choice from alternatives.
Employees prefer getting the possible joy from their work with little effort.
Individual factors play a significant role within the goals that need to be achieved and, therefore,
the behaviour of employees. As an example, consider an employee’s personality, knowledge and
skills, and expectations of his abilities.

Together, these form an exciting force that creates the worker to act in a certain way. Individual
effort, interpretation and motivation are consistently interconnected. To properly motivate
employees, Vroom argues that it’s essential that there’s a direct correlation between effort and
performance.

What is the equity theory of motivation?

The equity theory of motivation is the idea that what an individual receives for
their work has a direct effect on their motivation. When applied to the
workplace, it means an individual will generally aim to create a balance between
what they give to the organization compared to what they get in return.

Understanding the role of equity theory in professional environments can be

helpful when you want to ensure that your team feels properly motivated and
appreciated for their work. When you offer fair compensation for your team’s
contributions, they may maintain higher levels of motivation. This can have a
positive effect on factors such as teamwork, job commitment and
communication.

Components of the equity theory of motivation

The equity theory contains two primary components: inputs and outcomes. It is
a team member’s perception of these two factors that can influence their
motivation levels.

Inputs

An input is a contribution one makes to receive a reward. Different inputs can

include time commitments, daily job responsibilities, loyalty to an organization
and enthusiasm for one’s work.

An employee will often distinguish between inputs they consider controllable

and not controllable. Examples of controllable inputs include communication
and attendance, while uncontrollable inputs could be job training and seniority.

Outcomes

An outcome, or output, is the compensation that an individual receives as a

direct result of the input they provide.
Outcomes can include hard factors such as:

 Salary and pay raises

 Job security
 Benefits like healthcare or vacation time

There are also less tangible outcomes:

 Praise from coworkers

 Improved reputation
 Pride in one’s work

The value of the outcome should ideally result from the importance placed on
the input. For example, a college graduate may believe that their degree should
return better job opportunities.

What is Group?
We define a group has two or more individuals, interacting and interdependent, who
have come together to achieve particular common objectives. A group can range in
size from two members to thousands of members.

Very small collectives, such as dyads (two members) and triads (three members) are
groups, but so are very large collections of people, such as mobs, crowds, and
congregations.

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In an organisational setting, groups are a common organisational component and the
study of groups and group dynamics is an important area of study in organisational
behaviour. Group dynamics refers to the attitudinal and behavioural characteristics of
a group. Group dynamics concern how groups form, their structure and process, and
how they function.

There are several theories as to why groups develop. The most common framework
for examining the “how” of group formation was developed by Bruce Tuckman
(1965). In essence, the steps in group formation imply that groups do not usually
perform at maximum effectiveness when they are first established.

They encounter several stages of development during the course of development and
then become productive and effective. Most groups experience the same
developmental stages with similar conflicts and resolutions.
Definition of Group
Everyone knows what a group is in general. When two persons or more come together
and interact at one place it may be called a group. The group may be defined in
various ways. Given below are a few important definitions of a group and each of
these definitions emphasises one or the other important features of the group.

R.M. Williams (1951) “A social group is a given aggregate of people playing inter-
related roles and recognised by themselves or others as a unit of interaction.” Here it
can be said the group is an aggregate of some people. The roles of the group members
are interrelated. The group is considered a unit.
R.M. MacIver (1953) “By group we mean any collection of social beings who enter
into distinctive social relationships with one another.” It is clear that there must be
social relationships between the individual members of a group.
David (1968) “ A social psychological group is an organised system of two or more
individuals who are interrelated so that the system performs some functions, has a
standard set of the role relationship among its members and has a set of norms that
regulate the function of the group and each of its members.”

Features of Group
The important features of the group are:

 One or more individuals come together and influence each other.

 There are social interactions and relationships amongst the individual

members of a group.

 There exists some common motives, drives, interests, emotions etc. amongst
group members.

 There is communication among group members, both verbal and or non-

verbal.

 The group members have some common object of attention and group
members stimulate each other.

 They have common loyalty and participate in similar activities.

 There exits feeling of unity in the group. Group members treat each other
with respect and regard and has a sense of comradiere that develops among
them.

 The action of the members is controlled by the group.

  There are some customs, norms and procedures which are acceptable to
everyone but if exception happens, then the particular member will be
ostracised from the group.

Stages of Group Development

According to Tuckman’s theory, there are five stages of group development: forming,
storming, norming, performing, and adjourning. During these stages group, members
must address several issues and the way in which these issues are resolved determines
whether the group will succeed in accomplishing its tasks.

The five-stage group-development model are:

 Forming
 Storming
 Norming
 Performing
 Adjourning
Forming
The first stage, Forming stage, faces a great amount of uncertainty about the group’s
purpose, structure, and leadership amongst the members of the group. Members “test
the waters” to determine what types of behaviours are acceptable. This stage is
complete when members have begun to think of themselves as part of a group.

Storming
The Storming stage is one of intra-group conflict. Members accept the existence of the
group but resist the constraints it imposes on individuality. There is conflict over who
will control the group. When this stage is complete, there will be a relatively clear
hierarchy of leadership within the group.

Conflict can be for numerous reasons, such as members having different working
styles or members vying for a position. Whatever the reason, it’s important for the
team leader to coach the team and individuals through this stage and how to
manage their issues. When resolving conflict, it's important to create rules of
engagement or ways of working that everyone in the team feels good about

Norming
In the third stage Norming, close relationships evolve and the group develops
cohesiveness. There is now a strong sense of group identity and camaraderie. This
Norming stage is complete when the group structure solidifies and the group has
assimilated a common set of expectations of what defines the correct behaviour of
members.

nce the team has settled down into their roles and the conflict has been resolved, the
magic begins to happen. Members have learned more about each other and started
working well together. There is more collaboration and constructive feedback.

At this point, the role of the team leader will most likely be cemented and respected.
There should be less need for hands-on guidance, with simple facilitation
occurring. Though, of course, HR should be on hand to help. It’s possible (if not
probable) for the Storming and Norming phases to overlap as new projects bring
fresh challenges to different team members. HR assistance should help to smooth
this out.

Performing
The fourth stage is Performing. The structure at this point is fully functional and
accepted. Group energy has moved from getting to know and understand each other to
perform the task at hand. For permanent workgroups, performing is the last stage in
development.

nce the team has settled down into their roles and the conflict has been resolved, the
magic begins to happen. Members have learned more about each other and started
working well together. There is more collaboration and constructive feedback.

At this point, the role of the team leader will most likely be cemented and respected.
There should be less need for hands-on guidance, with simple facilitation
occurring. Though, of course, HR should be on hand to help. It’s possible (if not
probable) for the Storming and Norming phases to overlap as new projects bring
fresh challenges to different team members. HR assistance should help to smooth
this out.

Adjourning
However, for temporary committees, teams, task forces, and similar groups that have a
limited task to perform, the Adjourning stage is for wrapping up activities and preparing to
disband. Some group members are upbeat, basking in the group’s accomplishments.

Others may be depressed over the loss of camaraderie and friendships gained during the work
group’s life.

Many interpreters of the five-stage model have assumed a group becomes more effective as it
progresses through the first four stages. Although this may be generally true, what makes a
group effective is actually more complex.

First, groups proceed through the stages of group development at different rates. Those with a
strong sense of purpose and strategy rapidly achieve high performance and improve over
time, whereas those with less sense of purpose actually see their performance worsen over
time.
Similarly, groups that begin with a positive social focus appear to achieve the “performing”
stage more rapidly. Nor do groups always proceed clearly from one stage to the next.
Storming and performing can occur simultaneously, and groups can even regress to previous
stages.

Key Differences Between Group and Team

The difference between group and team in the workplace can be drawn clearly on the
following grounds:

1. There is only one head in a group. A team can have more than one head.
2. The group members do not share responsibility, but team members share the
responsibility.
3. The group focuses on achieving the individual goals. Conversely, the team members
focus on achieving the team goals.
4. The group produces individual work products. As opposed to, the team who produces
collective work products.
5. The process of a group is to discuss the problem, then decide and finally delegate the
tasks to individual members. On the other hand, a team discusses the problem, then
decide the way of solving it and finally do it collectively.
6. The group members are independent. Unlike a group, the team members are
interdependent.
7. Formal Groups can be :
8. (i) Permanent Formal Groups [Command groups and permanent
committees]
9. (ii) Temporary Formal Groups [Task forces and project groups]
10. (i) Permanent formal groups are formally represented on the organisation
chart. They are also known as command groups and have both managers and
subordinates. functional or product departments are the command groups.
11. (ii) Temporary formal groups deal with specific problems. They dissolve
once the problem is solved. Task groups, project groups or ad hoc committees
are temporary formal groups. They are created to respond to the changing
environment and include people from different command groups.
12. Types of Committees : Committees (formal groups) can be of the following
types :
13. (i) Line and Staff Committees : The basis of forming line and staff
committees is authority. committee which has authority to make decisions is
line committee and committee which does not make decisions but only assists,
advices and counsels the superiors is staff committee. It helps line managers to
perform the managerial functions
14. (ii) Ad hoc and Standing Committee : The basis for forming ad hoc and
standing committees is time frame. Committees which are formed for a
specific purpose and dissolve once the purpose is achieved are ad hoc or
 temporary committees. For example, if company wants to conduct market
survey for a new product, committee shall be formed for this purpose which
shall function till the survey is completed. Once done and the product
launched, the committee gets dissolved. committee which lasts for long
duration is standing or permanent committee. These committees provide
advisory functions to the chief executives.
15. (iii) Formal and Informal Committees : The basis of forming formal and
informal committees is their position on the organisation chart. Committees
formed according to formal procedures and assigned duties, power and
authority to discharge those duties are formal committees. They are formally
shown on organisation charts and are permanent committees.
16. Informal committees are groups of individuals which are not officially set up
by the organisation. They work for a given purpose without officially defined
rules or guidelines.
17. (iv) Plural Executive Committee and Advisory Committee : committee
which carries out managerial functions (planning through controlling), makes
and implements decisions is a plural executive committee. The most common
example of this committee is the board of directors which takes important
managerial decisions and orders for their implementation. The advisory
committee does not make decisions but only performs advisory or
recommendatory functions.
18. Informal Groups
19. Meaning : These groups are not created by managers but spontaneously grow
out of interaction amongst members of formal groups. They are created by
choice for promoting the group goals. members even subordinate individual
goals to group goals. These groups may oppose or support the formal
objectives. They are informal committees not shown on the organisation chart.
They form out of common thinking of people. They are temporary and assist
top executives on specific matters.
20. Types of Informal Groups : These are also called ‘overlays’. They are
classified into five categories by Pfiffner and Sherwood.
21. (i) Social overlays : These groups form because of social needs of people, that
is, need to interact.
22. (ii) Functional overlays : People of one department assist people of other
departments. Workers of production department can go to supervisors of sales
department for help. groups formed through inter-departmental interactions are
called functional overlays.
 23. (iii) Decision overlays : Some people excel in decision-making because of
their ability to judge, analyse and scan the information. People often approach
them from different departments for consultation. This forms decision
overlays.
24. (iv) Power overlays : Power is different from authority. While authority
is authority of position, power is the authority of individual. Managers can
acquire power through experience, education, and factors like religion,
politics, nationality etc. Interaction based on such factors forms power
overlays.
25. (v) Communication overlays : People using common equipments and
machines, recreational halls, canteens, club facilities etc. interact informally
and form communication overlays.
26. Functions of Informal Groups : Major functions of informal groups are as
follows:
27. (i) Group values and life-style : Within formal structure of organisation,
informal groups arise on the basis of social values and life-styles of
individuals. However, as these groups strengthen, they develop tendency to
resist change.
28. (ii) Social satisfaction : Interaction at the work place, sharing common
thoughts, sitting and eating together satisfy employees’ social needs.
29. (iii) Operate communication systems : Informal system of communication
operates along the formal channel of communication and works even faster
than the formal communication channel. Messages are transmitted at much
faster speed though rumours may also spread along with formal messages.
30. (iv) Maintain social control : Informal groups influence behaviour of people
inside and outside the group. Influencing behaviour inside the group is called
internal control and of those outside the groups is called external control. A
particular kind of behaviour not acceptable to group serves as internal control.
External control is exercised on people outside the group such as, trade unions.
31. Merits of Informal Groups : These are similar to merits of informal
organisation.
32. Limitations of Informal Groups : These are similar to limitations of informal
organisation.

What is Leadership?
Leadership is the creation of positive, non-incremental change through meticulous planning,
vision, and strategy. Workforce empowerment and adaptive decision-making also add up to
the crucial attributes of leadership. Most often, people relate leadership with one’s position in
an organization. But leadership has nothing to do with titles, management, or one’s personal
agendas. It’s also not restricted to personality traits such as better vision or charismatic
personality.

It is more like a process of social influence, which maximizes the efforts of others toward the
achievement of a common goal. It stems from social influence and requires human resources
to achieve the intended outcomes. A leader is someone who always takes the initiative and
invests a great effort to accomplish the company’s vision. That is the only reason why people
around them start following them

It is more like a process of social influence, which maximizes the efforts of others toward the
achievement of a common goal. It stems from social influence and requires human resources
to achieve the intended outcomes. A leader is someone who always takes the initiative and
invests a great effort to accomplish the company’s vision. That is the only reason why people
around them start following them

Why It’s Important to Know Your Leadership Style

Knowing your leadership style helps you provide adequate guidance and feedback to
employees, and better understand your thoughts, how you make decisions and
strategies you can consider implementing when making business decisions.

It can also help you understand how your direct reports see you and why they may
give you specific feedback. For example, if employees feel stifled at work and don’t
have many opportunities to speak their minds, they may be telling you that you’re an
autocratic leader who can benefit from changing their style.

Knowing your leadership styles may help you improve with limited feedback. Each
leadership style has its pitfalls, allowing you to proactively address areas of
improvement. This is critical because some employees might hesitate to speak up,
even in an anonymous survey.

Types of Leadership Styles

1. Democratic Leadership
2. Autocratic Leadership
3. Laissez-Faire Leadership
4. Strategic Leadership
5. Transformational Leadership
 6. Transactional Leadership
7. Coaching Leadership
8. Bureaucratic Leadership
9. Visionary Leadership
10. Pacesetting Leadership
11. Situational Leadership

1. Democratic Leadership
Also called: Participative or Facilitative Leadership

Democratic leadership is exactly what it sounds like — the leader makes decisions
based on each team member‘s input. Although a leader makes the final call, each
employee has an equal say in a project’s direction.

Democratic leaders often have the following characteristics:

 Inclusive
 Collaborative
 Effective communicator
 Empowering
 Supportive and empathetic
 Trust-building
 Emotionally intelligent

Why this leadership style works for businesses:

This leadership style resembles how leaders often make decisions in company board
meetings.

For example, a democratic leader might give the team a few decision-related options
in a company board meeting. They could then open a discussion about each option.
After a discussion, this leader might consider the board's thoughts and feedback, or
they might open this decision up to a vote.

2. Autocratic Leadership
Also called: Authoritarian, Coercive, or Commanding Leadership

Autocratic leadership is the inverse of democratic leadership. In this leadership style,

the leader makes decisions without taking input from anyone who reports to them.

Autocratic leadership is typically characterized by:

 Centralized decision-making
 Direct and top-down communication
 Minimal delegation
 Limited autonomy for team members
 Emphasis on hierarchy and status
 Resistant to feedback or criticism
This style is most useful when a business needs to control specific situations, not as
a standalone leadership style. For instance, it can be effective in emergency or crisis
situations where quick and decisive action is necessary.

Potential challenges for leaders with an Autocratic style:

Most organizations can’t sustain such a hegemonic culture without losing

employees, which can significantly lower morale and creative problem-solving.

An example of authoritative leadership gone bad could be when a manager changes

the hours of work shifts for employees without consulting anyone.

Other challenges with autocratic leaders include:

 Intimidation
 Micromanagement
 Over-reliance on a single leader

3. Laissez-Faire Leadership
Also called: Delegative or Hands-off Leadership

If you remember your high-school French, you'll accurately assume that laissez-faire
leadership is the least intrusive form of leadership. The French term “laissez-faire”
literally translates to “let them do.”

Leaders who embrace it give nearly all authority to their employees and don’t often
interject unless the situation calls for it.

Some key characteristics of laissez-faire leadership include:

 Limited guidance, direction, and feedback

 Minimal interference and control
 High autonomy and freedom
 Empowerment and trust

Potential challenges for leaders with a Laissez-Faire style:

Although laissez-faire leadership can empower employees by trusting them to work

however they'd like, there are downsides. It can limit team development and pose a
challenge for new or inexperienced employees who would benefit from guidance as
they get ramped up. Roles and responsibilities can also become unclear, and it can
build a culture of working in silos where people might work autonomously rather than
as a cohesive group.

This style can lead to overlooking critical company growth and learning opportunities,
so keeping this leadership style in check is important.
4. Strategic Leadership

Strategic leaders sit between a company's primary operations and its growth
opportunities. This form of leadership requires vision, competitive awareness, and
adaptability.

These leaders accept the burden of executive interests but also ensure that working
conditions are stable for everyone else.

Strategic leaders aim to guide their organization toward its long-term goals. By
utilizing this leadership style, you can create a forward-thinking, agile, and adaptable
organization that can thrive in today's dynamic business landscape.

Why this leadership style works for businesses:

Strategic leaders tie plans for growth and strategy to how they manage a team. They
ask questions, develop and execute strategies, and consider future growth. This
approach supports popular business goals like:

 Accountability
 Productivity
 Collaboration
 Transparency

 Developing leadership skills

5. Transformational Leadership

Transformational leaders gain the trust and confidence of their teams, encourage
team members, and lead employees toward meeting company goals.

Transformational leadership also always improves upon the company’s conventions

and motivates employees to grow and further develop their skills.

Ultimately, the goal of a transformational leader is to create a lasting positive impact,

uplift their team to achieve their full potential, and drive success for the organization.

Why this leadership style works for businesses:

Transformational leaders can inspire their teams to think in new ways. This can help
companies update business processes to improve productivity and profitability. It can
also help with employee satisfaction, morale, and motivation.

Potential challenges for leaders with a Transformational style:

Transformational leaders can lose sight of everyone’s individual learning curves in

place of the company's goals. Employee burnout can also become an issue, so it’s
important to work with your team to update benchmarks.
6. Transactional Leadership

Transactional leadership is based on reward and punishment to motivate and direct

the behavior. These managers set specific rules and standards, and they closely
monitor their employees’ performance. They tell employees they can expect rewards
if a goal is met. However, they may require more 1:1s or check-ins if people aren’t
meeting goals.

This leadership style is concerned with maintaining the status quo and ensuring that
predetermined goals and standards are met. It also assumes that teams need
structure and monitoring to meet business goals and that they are reward-motivated.

Why this leadership style works for businesses:

This style is popular in enterprise companies as it focuses on results, existing

structures, and set systems of rewards or penalties. This leadership style also
recognizes and rewards commitment.

7. Coaching Leadership
Also called: Conscious Leadership

A coaching leader focuses on identifying and nurturing the individual strengths of

each member of the team and developing strategies that will enable teams to work
better together.

This style is similar to strategic and democratic leadership, but it emphasizes

individual employees' success.

A manager with this leadership style might help employees improve on their
strengths by:

 Giving them new tasks to try

 Offering guidance
 Meeting to discuss constructive feedback

They might also encourage one or more team members to expand on their strengths
by learning new skills from other teammates.

Coaching leaders focus on building trust and establishing strong relationships with
their team members. They foster an environment of open communication and
psychological safety that encourages individuals to share ideas, seek feedback, and
work together toward common objectives.

Why this leadership style works for businesses:

Coaching leaders actively support skill development and independent problem-

solving. They meet ambitious business goals by creating a strong company culture
and add to a business's long-term vision as valuable mentors, often even after
leaving a company.
Potential challenges for leaders with a coaching style:

It can take a lot of time to develop employees with a coaching style, but mentoring
isn’t effective for every employee.

8. Bureaucratic Leadership

Bureaucratic leaders follow the rules. Unlike autocratic leadership, they might listen
and consider the input of employees, but they might reject input that doesn’t align
with company policy or past practices.

Some key features of bureaucratic leadership include:

 Centralized decision-making
 Strict adherence to rules and procedures
 Clear chain of command
 Limited autonomy

Why this leadership style works for businesses:

This style works best for larger, older, or traditional companies that are successful in
their current processes. This leadership style works for these businesses because
they want to maintain existing business models and processes because their current
strategies are successful, and trying something new that doesn't work could waste
time and resources.

9. Visionary Leadership
Also called: Affiliative Leadership

Visionary leadership focuses on future and long-term goals. They aim to inspire and
guide their team towards the achievement of a shared vision.

This type of leader encourages collaboration, emotional intelligence, and teamwork.

They also foster a culture of innovation and change, encouraging individuals to
embrace new ideas and approaches.

Why this leadership style works for businesses:

Visionary leaders can create a clear plan for employees to follow and execute. They
are powerful and

Key Leadership Theories

1. Great Man Theory

According to the Great Man Theory (which should perhaps be called the
Great Person Theory), leaders are born with just the right traits and
abilities for leading – charisma, intellect, confidence, communication
skills, and social skills.
The theory suggests that the ability to lead is inherent – that the best
leaders are born, not made. It defines leaders as valiant, mythic, and
ordained to rise to leadership when the situation arises. The term
“Great Man” was adopted at the time because leadership was reserved
for males, particularly in military leadership.

2. Trait Theory

The Trait Theory is very similar to the Great Man Theory. It is founded
on the characteristics of different leaders – both the successful and
unsuccessful ones. The theory is used to predict effective leadership.
Usually, the identified characteristics are compared to those of
potential leaders to determine their likelihood of leading effectively.

Scholars researching the trait theory try to identify leadership

characteristics from different perspectives. They focus on the
physiological attributes such as appearance, weight, and height;
demographics such as age, education, and familial background; and
intelligence, which encompasses decisiveness, judgment, and
knowledge.

3. Contingency Theory

The Contingency Theory emphasizes different variables in a specific

setting that determine the style of leadership best suited for the said
situation. It is founded on the principle that no one leadership style is
applicable to all situations.

Renowned leadership researchers Hodgson and White believe that the

best form of leadership is one that finds the perfect balance between
behaviors, needs, and context. Good leaders not only possess the right
qualities but they’re also able to evaluate the needs of their followers
and the situation at hand. In summary, the contingency theory suggests
that great leadership is a combination of many key variables.

4. Situational Theory

The Situational Theory is similar to the Contingency Theory as it also

proposes that no one leadership style supersedes others. As its name
suggests, the theory implies that leadership depends on the situation at
hand. Put simply, leaders should always correspond their leadership to
the respective situation by assessing certain variables such as the type
of task, nature of followers, and more.

As proposed by US professor Paul Hersey and leadership guru Ken

Blanchard, the situational theory blends two key elements: the
leadership style and the followers’ maturity levels. Hersey and
Blanchard classified maturity into four different degrees:

 M1 – Team members do not possess the motivation or tactical

skills to complete necessary jobs.
 M2 – Team members are willing and ambitious to achieve
something, but they lack the necessary ability.
 M3 – Team members possess the skills and capacity to
accomplish tasks, but they’re not willing to take accountability.
 M4 – Team members possess all the right talents and are
motivated to complete projects.

According to situational theory, a leader exercises a particular form of

leadership based on the maturity level of his or her team.

5. Behavioral Theory

In Behavioral Theory, the focus is on the specific behaviors and actions

of leaders rather than their traits or characteristics. The theory suggests
that effective leadership is the result of many learned skills.

Individuals need three primary skills to lead their followers – technical,

human, and conceptual skills. Technical skills refer to a leader’s
knowledge of the process or technique; human skills means that one is
able to interact with other individuals; while conceptual skills enable the
leader to come up with ideas for running the organization or society
smoothly.
Applying Leadership Theories at the Workplace

To a great extent, leadership theories have helped form and shape the
kind of governance that exists today. Many aspects of these theories
can be applied to help one improve his or her leadership skills.

1. Maximize Your Strengths

As proposed by the Trait Theory, effective leadership depends on the

traits that one possesses. Leaders should strive to focus on their
strengths rather than their weaknesses. The strengths vary from one
leader to another and may include:

 A strong will is crucial to staying resilient and seeing leaders

through difficult times. No matter how challenging the situation
may be, a strong-willed leader is able to find inner strength and
carry on until he or she overcomes all challenges.
 A decisive nature is another strength that some leaders possess.
Decisiveness means that when others may be perplexed, a leader
can calmly assess the situation and choose one action to unite
everyone. But, since they may not always make the right
decisions, they must also be willing to learn from their mistakes.
2. Be Inclusive Leaders

Some of the more complex situational theories emphasize focusing on

people. It means that they acknowledge individual people to be their
greatest assets and not just mere numbers in their workforce. Being an
inclusive leader requires that one constantly involves other people in
their leadership, whether it is by always welcoming the feedback of
others or delegating more responsibility to others than other forms of
leadership.

Key Takeaways

There are numerous ways of defining leadership. Some leadership

theories attempt to explain what differentiates a leader, while some
explain how great leaders come to be. The Great Man Theory believes
that the inherent traits that one is born with contribute to great
leadership. Situational Theory recommends leaders to adopt a
leadership style depending on the situation at hand, while the
Behavioral Theory is all about the learning the skills necessary to
become a good leader.

Leadership theories don’t only exist in history. They are concepts with
actionable advice that can be adopted by many, from executive
managers to community leaders and government officials.

Definition of power
Power is the ability to influence other people. It refers to the capacity to affect the
behaviour of the subordinate with the control of resources. It is an exchange
relationship that occurs in transactions between an agent and a target. The agent is
the person who uses the power and target is the receipt of the attempt to use power.

Distinction between Power, Authority and Influence

Power is the ability to influence someone else. Influence is the process of affecting
the thoughts, behaviour and feelings of another person. Authority is the right to
influence another person. Authority is a legitimate right to influence others.

(1) Authority is right to influence others but power is ability to influence people.

(2) Authority is legitimate while power is not.

(3) Authority confers legitimacy to power but power itself need not be legitimate.

Sources (Base) of Power

According to French and Raven, a manager drives power from five sources :
Reward, Coercive, Legitimate, Referent and Expert power.

Reward Power

It is based on the agent's/manager's ability to control rewards the target/employee

wants. The common, e.g., of it are managers control rewards of salary increases,
bonuses and promotions. This power is based on old saying that 'wealth is power'.

Coercive Power

It is opposite of reward power. It is based on a manager's ability to cause an

unpleasant experience for its people. In organizational situation, it may be in the
form of action for or threat for dismissal, suspension, or demotion, for the people
working in organization.
Legitimate Power

It is based on position and mutual agreement. Both the agent and target agree that
the agent has the right to influence the employees. It is in the form of authority
which is delegated to the positions of organizational members.

Referent Power

It is an elusive power that is based on interpersonal attraction. Charismatic

individuals are often thought to have referent power. Here, people take somebody
as ideal and behave accordingly upto a certain stage.

Expert Power

It exists when the agent has information or knowledge that the target needs. It is
based on the proverb, "knowledge in power". Three conditions to be fulfilled are :

(1) The target must trust that the information given by the agent is accurate and
correct.

(2) The information should be relevant and useful to the target.

(3) The target must consider the agent as an expert. (See p. 477, 478)

Meaning of Organizational Politics

It means the use of power and influences in organizations. Actions not officially
sanctioned or acceptable by an organization that are taken to influence others in
order to meet personal goals refer to politics.

Reasons for Organizational Politics

There are many reasons that contribute to political behaviour in organizations.

Some of them are :

1. Clear Goals : Organizations are human groups work for achieving certain goals.
The more unclear and complex the goals are, the more politics will be.

2. Discretionary Authority : Organizations provide position with discretionary

authority that is used based on individual judgement.

3. Autocratic Decisions : The leader dictates the decisions or orders and the
subordinates have no right to disobey. This leads to low employee morale and
doubts about what the manger-leader decides. Therefore, in order to safeguard their
interests, workers involve in politics by forming coalitions and associations.
4. Power Politics : Power is also a limited in supply. Hence, there is a competition
among mangers/executives to acquire more and more power. They try to acquire
more power and resources than their competitors. Managers' such behaviour
becomes quite dysfunctional.

5. Saturation in Promotion : Some people reach maximum level of promotion.

They feel dissatisfaction and resort to the organizational politics. Some people may
like work performance more than positional achievement and therefore, may not
resort to politics.

6. Biased Performance Appraisal : When the job performance of a personnel

cannot be measured quantitatively, performance appraisal is made on the basis of
the judgement of the superior. As such the performance appraisal is likely to be
subjective and biased. This may force the subordinates into dysfunctional political
behaviour.

Characteristics (Symbols) of Power and Powerlessness (Negative aspects)

Kanter has identified several symbols of power or characteristics of powerful

people in organization. These are :

1. Ability to intercede for someone in trouble : An individual who can pull

someone of a jam has power.

2. Ability to get placement for favoured employees : Arranging and getting a

key promotion for an employee is a sign of power.

3. Exceeding budget limits : A manager who can go beyond and above budget
limits without being reprimanded has power.

4. Procuring above-average raises for employees : A manager who can pull

incentives above average for his/her employee has power.

5. Getting items done on own terms at meetings.

6. Access to early information : Having access to information before anyone else

is an indication of power.

7. Top managers seeking out opinion : Top managers may seek advice from their
lower-level managers. These lower-level managers have power.

Unlike Katner, Michael Korda has identified three symbols of power. (1) Office
furnishing, (2) Time power and (3) Standing by.

Office Furnishing : Office furniture is a message about power one has. Size of the
manager's table conveys the amount of power the manger has.
Time Power : The powerful executives value time much. A full calendar of the
day is a proof of manager's power.

Standing by : People are obliged to stay close to their phones so that the
executives can have access to them. The idea is that the more you can impose your
schedule on your people, the more power you have.

Symbols of Powerlessness (Lack of Power)

The first-line supervisors often display three symptoms of powerlessness. These

are : (i) Overly close supervision; (ii) inflexible adherence to rules; and (iii) a
tendency to do the jobs themselves rather than educating and training their
subordinates to do these.

When staff professionals (accountants and lawyers) feel powerless, they resist
change and try to protect their turf. The key to overcome powerlessness is to share
power, i.e., empowerment and delegate tasks to subordinates.

Empowerment

Empowerment is the sharing of power in such a way that individuals learn to

believe in their ability to do the job. Empowerment has four dimensions:

1. Meaning: A fit between the work role and the employees values and beliefs.

2. Competence: A belief that one has the ability to do the job well.

3. Self-determination: Having control over the way one does one's work.

4. Impact: The belief that one's job makes a difference within the organization.

As a manager, you can use these guidelines for empowering your employees.
Express confidence in employees, set high performance expectations, create
opportunities for participative decision making, remove constraints that slow
autonomy and set inspirational and meaningful goals.

POLITICAL PERSPECTIVE OF ORGANISATIONS If everyone in an organisation agree

all the time, there will be no politics. In other words, the potential for political activity arises
wherever disagreement exists. One factor which can prompt disagreement is diversity. Some
units in an organisation are more powerful than others and each may have different goals. For
example, software engineers may want to provide the organisation with a highly sophisticated
and technologically advanced IT system. On the other hand, line managers may simply want
a design which enables them to communicate with one another. Scarcity can prompt political
activity if there are competing claims upon resources.
For example, the scope for conflict exists where department A requires twenty additional
items and department B the same number, but the budget is allocated only for twenty. A
central feature of politics is the notion of interest. Interests are defined as positions which
people wish to protect or goals they seek to achieve (Miller 1962). If no one cares whether
company A is awarded a contract for supplies in preference to company B, then there is no
disagreement about the matter and potentiality, no politics. Even in such a matter like
celebration of a festival, politics plays its role in its choosing, fixing the date, time and place.
Interests may be classified into (a) task interests, (b) external interests, and (c) career
interests.

Organisational Power and Politics Task interests concern an individual’ s work in the
organisation. For instance, a hospital manager’s interest would be to discharge patients as
quickly as possible. On the contrary, a medical consultant’s interest would be to continue to
allow the patients to remain in hospital. External interests include domestic pressures,
obligations to professional associations and trade unions, and relationships with
subcontractors, suppliers and customers. For instance, obligations to a trade union may
compel an employer to recruit people from a particular locality or language. Career interests
can prompt to resist change or to support decisions which are against an organisation’s best
interests. For instance, managers may appoint mediocre candidates to subordinate positions in
order to protect themselves from challenge.

Employee Empowerment – Meaning

Empowerment is the process of giving employees in the organisation the power,
authority, responsibility, resources, freedom to take decisions and solve work related
problems. In order to take such initiatives and decisions, they are given adequate
authority and resources.

This allocation of authority is not based on the concept of “delegation” based

relationship. In empowerment it is a “trust based relationship”, which is established
between management and employees. It is a continuous process.

The empowered employee becomes “self-directed” and “self-controlled”. Empowerment

focuses on employees to make use of their full potential. On the other hand,
empowerment means giving up control on employees and letting every employee make
decisions, set goals, accomplish results and receive rewards. It means making a person
able to manage by himself. It is a process for helping right person at the right levels to
makes the right decision for the right reasons.

Empowerment is the process of shifting authority and responsibility to other in the

organizational setting. Empowerment takes place when higher management transfers the
power, authority, and responsibility to lower level employees. Shifting of authority and
responsibility to the workers is made to take over the charge of the work they do.

The concept of shifting of power, authority is very simple in the sense that the person
who has been doing some job for years together develops thorough idea, knowledge,
competence over the job and keeps everything under his grip. Now, if such person is
given overall charge of the work he does, with adequate authority and responsibility he
can take decision on his own for accomplishment of the job.

He performs quality work and at the same time he gets motivated and develops a sense
of commitment and a ‘feeling to reciprocate in consideration of the power shifted.’ It
generally occurs that most human beings desire recognition, power, status, authority, and
responsibility and when they achieve they exert drives to utilize their full energy,
abilities, and competencies to excel their performance.

Such people prepare their mind set to achieve, to perform, to win, to succeed and to
strive their best to go ahead in that direction as projected. Empowerment is such a
mechanism that helps to achieve individual goals, team goals and organizational goals
through handing over the charge of the job to the jobbers to perform the job with
authority to take decision on their own

Participation is the mental and emotional involvement of persons in group situations that
encourage them to contribute to group goals and share responsibility for them (Newstrom and
Davis, 1993). Managers who adopt participation as a strategy encourage involvement of their
subordinates in problem solving and decision making process. Though the manager still
retains the ultimate responsibility, this strategy promotes job involvement amongst the
employees. Three most important elements of participation are (i) involvement, (ii)
contribution and (iii) responsibility. i) Involvement: The employee while participating in
problem solving or decision making or achievement of a particular goal should feel involved
at both mental and emotional levels. Thus participation does not merely mean task
involvement, but ego involvement of the employee is also necessary. Participation without
ego involvement of the employee is termed as ‘Pseudoparticipation’.

The managers should thus be careful to ensure that the whole self of the employee is involved
and just not his/her skills in performing the task. ii) Contribution: Participation encourages
people to contribute their skills and resources to the successful completion of tasks. It
provides the employee with empowerment to be creative and innovative while achieving the
goals assigned to them. Participation does not mean consenting to a particular decision or
problem solving strategy. In consenting, the manager has already come up with a decision or
a strategy and merely seeks approval of the employees. But in participation the employees are
involved and contribute to the whole process of decision making or problem solving right
from the start. iii) Responsibility: Participation provides an opportunity to the employees to
take responsibilities. This not only enhances self involvement but also increases self efficacy
of the employees.

Feeling of responsibility in turn will encourage the employees to be further involved and
contribute to the achievement of the organisational goal. Thus the above three elements of
participation are interrelated at the same time extremely important for participation to be
effectively implemented in an organisation. Participation is especially effective when the
superiors or managers do not possess enough information to solve a problem alone to make
an important decision. In this case he/she can benefit from the expertise of the subordinates.
It can also be used when the nature of the problem is unclear or vague. It can be beneficial in
situations where the acceptance of the decision by the subordinates is critical to its effective
implementation and is relevant to them and when subordinates are willing to exercise their
own judgment and express their point of view. However participation is possible only when
there is no urgency involved in decision making and problem solving

The Process of Participation

Depending on the situation, whether, it demands problem solving, decision making or

achievement of a particular task the participation programme can be launched. Once this
programme is launched, it is important to ensure that the employees feel involved, both
mentally and emotionally, have adequate scope and freedom to contribute and feel
responsible towards the outcome of the activity. This in turn will ensure higher output, better
quality and creative suggestions, acceptance of change and a conflict and stress free
environment.

Techniques for Empowerment There are quite a few effective techniques for empowering
employees and these are presented below:

Open Book Management This technique not only results in empowerment of the employee
but also leads to financial benefits to the organisation. The technique focuses on developing
an understanding about financial aspects about the organisation amongst its employees so as
to help them understand the organisational performance. The employees are then encouraged
to set high performance standards in order to achieve high profitability thus providing the
employee an opportunity to directly contribute to the achievement of the organisational goal
and success. This also leads to effective participation.

Job Rotation, Job Enlargement and Job Enrichment These three techniques can be effectively
used to empower the employees. Job rotation involves time to time assignment of a
completely new task and job activity, different from the actual work activity carried out by
the employee on regular basis. In job enlargement an employee is given wider variety of
duties and tasks to perform so as to reduce his/ her monotony and make the work activity
more interesting. And under job enrichment, the focus is on the depth of the job. That is, the
employee is given more control, responsibility and discretion over the work activities that he/
she carries out. This ensures complete job involvement on part of the employee. Participation
and Empowerment Assumption, Beliefs and Values in Organisational Development
1 4 Self Managing and Cross Functional Teams These two types of team have already been
discussed under the unit on team. They can be used effectively in order to develop
empowerment in employees. Self managing teams provide the employees with an opportunity
function at his/ her own terms and take responsibility for the task performed. Where as, cross
functional teams provides a chance to interact with team members who possess diverse skills
and expertise which provides the employees with opportunity to learn.

Delegation Empowerment in an employee can also be developed with the help of effective
delegation. However, care needs to be taken to delegate work according to the potentialities
of the employee. A systematic delegation should be applied here where the complexity of the
work assigned to employee increases progressively. The delegator should also ensure the
completion of work by regularly monitoring the progress, though care needs to be taken to
avoid interference so as to provide the employee with a chance to take responsibility and
work with his/ her full potential. Involvement in Policy Making Empowerment can also be
developed by involving the employees in policy- making process of the organisation. This
will provide the employees with sense of respect and he/ she will feel valued. This in turn
will enhance the self esteem of the employee.

Conflict is a theme that has occupied the thinking of man more than any other with the
exception of God and love. Conflict has always been widespread in society but it is only
recently that it has generated a lot of interest and has been the focus of research and stud We
are living in the age of conflict. Everyday the choices available to us regarding any decision
are increasing in number. You may have wanted to become a manager, an entrepreneur or a
computer scientist.

On the other hand, your father might have wanted you to become a doctor, a lawyer or a
chartered accountant. Thus you faced a conflict not only at an intrapersonal level, in terms of
the various choices confronting you, but also at an interpersonal level-your choice vs. your
father's choice of a career for you. Conflict is not confined at the individual level alone but is
manifesting itself more and more in organisations. Employees have become more vociferous
in their demands for a better deal. Various departments in an organisation face a situation full
of conflicts due to a number of reasons like goal diversity, scarcity of resources or task
interdependence etc.
Management today is faced with the awesome responsibility of ensuring optimum levels of
growth and productivity in an environment that is full of conflicting situations. A survey
suggests that the modern manager spends over 20% of his time 21 handling one form of
conflict or the other. Top and middle level managers in the same survey have pointed out the
importance of conflict management skills. We hope that the knowledge you will gain from
this Unit will equip you better to manage conflict situations more deftly at your workplace.
Organisational Climate and Change 22

10.2 TYPES OF CONFLICT

Conflict within an Individual You can locate conflict at various levels. There could be
conflict within oneself-the intrapersonal conflict. Basically, there are three types of such
conflicts. You may have an excellent job offer in a city you are not willing to go to. In such a
case, you are attracted to and repelled by the same object-an approach-avoidance conflict.
Similarly you may be attracted to two equally appealing alternatives like seeing a movie or
going for a picnic-an approach-approach conflict. You may also be repelled by two equally
unpleasant alternatives like the threat of being dismissed if you fail to report against a
friendly colleague who is guilty of breaking the organisation's rulesan avoidance-avoidance
conflict.

Conflict between Individuals Conflict can also take an interpersonal form. Conflict between
individuals takes place owing to several factors, but most common are personal dislikes or
personality differences. When there are only differences of opinion between individuals about
task-related matters, it can be construed as technical conflict rather than interpersonal
conflict. Of course, technical and interpersonal conflicts may influence each other due to
role-related pressures. The sales manager may put the blame for low sales volume on the
production manager not meeting his production schedule and may start disliking the
production manager as an incompetent person. It is often very difficult to establish whether a
conflict between two parties is due to manifest rational factors, or it emanates from hidden
personal factors.

Conflict between an Individual and a Group These types of intragroup conflicts arise
frequently due to an individual's inability to conform to the group norms. For example, most
groups have an idea of a "fair day's work" and may pressurise an individual if he exceeds or
falls short of the group's productivity norms. If the individual resents any such pressure or
punishment, he - could come into conflict with other group members. Usually, it is very
difficult for an individual to remain a group-member and at the same time, substantially
deviate from the group norm. So, in most cases, either he conforms to the group norm or quits
(or is rejected by) the group. Of course, before taking any such extreme step, he or the other
group members try to influence each other through several mechanisms leading to different
episodes of conflict (much to the delight of the researchers in this field called Group
Dynamics).

Conflict between Groups within an Organisation Intergroup conflicts are one of the most
important types of conflict to understand, as typically, an organisation is structured in the
form of several interdependent taskgroups. Some of the usually chronic conflicts in most of
the organisations are found at this level, e.g., Union vs. Management, one Union vs. another
Union; one functional area like production vs. another functional area like maintenance;
direct recruits vs. promotees, etc. The newly emerging field of Organisational Politics has
started systematically investigating such types of conflict and in a later section on the effects
of conflict we shall give examples of what happens to groups when their conflicts are not
solved.

Conflict between Organisations Conflict between organisations is considered desirable if

limited to the economic context only. The laissez-faire economy is based on this concept.

SOURCES OF CONFLICT In the earlier sections, you have seen that it would be naive to
think that conflicts in an organisation take place simply due to lack of understanding between
people. A large number of potential sources of conflict exist in organisational life as
antecedent conditions and realistic basis for some conflicts. In this section, we shall quickly
review some such sources.

Competition for Limited Resources Any group exists for the purpose of attaining some goals
with the help of available resources. These resources may be tangible like men, materials, and
money or intangible like power, status or the manager' s time. No organisation is capable of
providing all the resources demanded by various units. Resources are limited and different
groups have to compete for these scarce resources and many conflicts arise from this source.

Diversity of Goals Groups in organisation have different functions to perform and as such
they develop their own norms and goals. Theoretically the achievement of these goals should
achieve overall organisational goals but, often, in real life the reverse is true. Goals of one
group are incompatible to the goals of another group. Take, for example, a company which
manufactures electric fans that has a seasonal demand. Three departments marketing,
production and finance-are involved. Since the demand for the product is seasonal, the
marketing manager would like to have sufficient stock during the season. The production
department has to gear up its capacity during the season but because of a tight labour market
finds it difficult to hire labour temporarily and resorts to employ people on a permanent basis.
This creates another problem.

. Task Interdependence Groups in an organisation do not function independent of one

another. They have to interact with one another in order to accomplish their tasks. The sales
department will have nothing to sell unless the production people produce goods and goods
can not be produced unless the financial department comes up with the money to buy raw
materials. Thus smooth interaction between various groups is essential for the efficient
functioning of the organisation. Three types of interdependence can cause intergroup conflict-
pooled, sequential and reciprocal. Pooled interdependence exists when two work groups may
not directly interact with each other but are affected by each other's actions.

. Sequential interdependence occurs when one group's performance depends on another

group's prior performance. In a construction project, for example, the excavating team must
prepare the foundation before the masons can work on the building structure. Since the
masons depend on the excavators, conflict between the groups can occur when the
excavators' work is delayed.

Reciprocal interdependence occurs when two or more groups are mutually interdependent in
accomplishing their tasks.

Differences in Values and Perception >A lot of conflict is generated within organisations
because various groups within the organisation hold `conflicting' values and perceive
situations in a narrow, individualistic manner. An example that comes readily to mind is that
of the managment-labour conflict. Labour feels that management is exploiting it because in
spite of making a profit, management does nothing for the economic welfare of labour. On
the other hand, management feels that the profits should go to cash reserves so as to make the
company an attractive proposition for investors.
Organisational Ambiguities As implied, conflict may emerge when two organisational units
compete over new responsibility. Intergroup conflict stemming from disagreement about who
has responsibility for ongoing tasks is an even more frequent problem. Newcomers to
organisations are often struck by the ambiguity that exists about job responsibilities.

Introduction of Change Change can breed intergroup conflict. Acquisitions and mergers, for
example, encourage intergroup conflict, competition, and stress. When one organisation is
merged into another, a power struggle often exists between the acquiring and acquired
company. An attempt is usually made to minimise conflict by laying out plans for power
sharing before the acquisition or merger is consummated. Frequently, the acquired company
is given representation on the board of directors of the acquiring company. Nevertheless,
power struggles are difficult to avoid.

Nature of Communication One of the major fallacies abounding about conflict is that poor
communication is the cause of all conflicts. A typical statement is: "If we could just
communicate with each other, we could eliminate our differences". Such a conclusion is not
surprising considering the little time most of us have at our disposal communicating with one
another. At the same time, evidence does suggest that problems in the communication
channel such as noise, distortion, omission and overload do affect the process of
collaboration and lead to misunderstanding. The potential for conflict increases when either
too little or too much communication takes place. Apparently, an increase in communication
is functional upto a point, whereafter it is possible to overcommunicate with a resultant
increase in potential for conflict. Too much information as well as too little information can
lay the foundation for a conflict;

Aggressive Nature of People Another factor that has a large potential for generating conflict
within an organisation is personality characteristics that account for individual idiosyncrasies
and differences. Evidence suggests that certain personality types-for example, individuals
who are highly authoritarian, arrogant, autocratic and dogmatic-lead to potential conflict.
People have a natural need to find an outlet for their aggressive tendencies.

THE PROCESS OF CONFLICT

The nature of intrapersonal conflict is of very high significance and the knowledge of
mechanisms available to resolve it is immensely important in improving personal
effectiveness. For a conflict to exist it must be perceived by the parties to it. If no one ' is
aware of a conflict then it is generally agreed that no conflict exists. Still, does, a mere
awareness of opposing goals, or differences of option, or antagonistic feelings imply that
there is a conflict? It would be easier for you, to understand conflict, if you view it as a
dynamic process which includes antecedent conditions, cognitive states, affective states and
conflicting behaviour..

Potential Antagonism The first stage is the presence of antecedent conditions that create
opportunities for conflict to arise. They need not necessarily lead to conflict and may be
present in the absence-of conflict as well. You may refer to this stage as the source of conflict
and in a later section we shall have a fuller discussion on these antecedent conditions which
might prepare the ground for the onset of the second stage. Some of these antecedent
conditions which we shall discuss refer to scarcity of resources, heterogeneity of members
and diversity of goals, values, perception; degree of dependence between groups; insufficient
exchange of information, etc.

Cognition and Personalisation The antecedent conditions may or may not lead to conflict.
They must be perceived as threatening if conflict is to develop. The situation may be ignored
if it is seen as minimally threatening. Moreover, if a conflict is perceived, it does not mean
that it is personalised ("felt conflict"). However, if feelings are generated, they tend to
influence perception of the conflict. It is at the felt level, when individuals become
emotionally involved and parties experience feelings of threat, hostility, fear or mistrust.

Conflictive and Conflict-management Behaviour Manifest behaviour is the action resulting

from perceived and/or felt conflict. At this stage, a conscious attempt is made by one party to
block the goal achievement of the other party. Such behaviour may range from subtle,
indirect and highly controlled forms of interference to more open forms of aggressive
behaviour like strikes, riots and war. Most conflict-handling behaviours are displayed in
several forms like resignation and withdrawal, appeasement and compromise, confrontation
and collaboration, etc. These behaviours are often referred to as conflict management styles
and stem from .the strategies of conflict stimulation or conflict resolution. In a later section,
we shall discuss in greater detail some of these modes of conflict management.

Aftermath The interplay between different forms of overt conflict behaviour and conflict
handling strategies of stimulation or resolution influence the consequences. These
consequences (in terms of perforntace. of the group, the level of satisfaction and Management
of Organisational Conflicts 25 quality of relationship in the involved parties, change of
structure and policies etc.) in turn influence the antecedent conditions and probability of
future conflict. Sometimes, the aftermath sows the seeds of yet another conflict episode in
which case the entire process is repeated.

The four-stage conflict-process model is a very useful framework to understand the episode
of any conflict. On the basis of such a framework you can now define conflict as the process
which begins when A, as one party perceives that B, as the other party, is making some
conscious efforts to frustrate A in pursuing his interest. Party A and/or B may he an
individual and/or group(s).

conflict resolution strategies

Different people use different methods to resolve conflict, depending on their personalities
and preferences. The five most common strategies, known as the (Kenneth) Thomas-(Ralph)
Kilmann model, used to resolve conflicts in the workplace include

1. Avoiding

This method involves simply ignoring that there may be a conflict. People tend to avoid
conflict when they don’t want to engage in it. Avoiding allows them to ignore that there is a
problem.

There are situations when avoiding conflict can be an appropriate response, such as when
there is no clear solution or a frustrated party needs time to calm down before confrontation.
However, avoidance can require more effort than merely facing the problem and can cause
friction between the disagreeing parties. When confict is avoided, nothing is resolved.

2. Competing

Competing is an uncooperative, overly assertive method used by people who insist on

winning the dispute at all costs. It’s known as a win-lose strategy. This method is not often
identified as bringing satisfactory resolutions, as it doesn’t allow for collaborative problem-
solving.

3. Accommodating

This strategy, also known as smoothing, involves one party acquiescing, giving the opposing
party exactly what it needs to resolve the problem. This method allows you to resolve a
problem in the short-term while working toward a long-term solution.

In some cases, accommodating can be an appropriate resolution to a conflict. For example, if

your opinion on the matter is not very strong, it is often easier to comply.
4. Collaborating

Like the compromising method, collaboration involves working with the other party to find a
mutually agreeable solution to a problem. It’s known as a win-win strategy. For example, a
salesperson and client may work together to negotiate contract terms until both parties find it
agreeable.5. Compromising

This strategy, also known as reconciling, seeks a mutual agreement to settle a dispute. It’s
known as a lose-lose strategy since both parties willingly forfeit some of their needs in the
interest of reaching an agreement. This can be a quick way to resolve a conflict without it
becoming a bigger issue. Compromise can also be used as a temporary method to avoid
conflict until the parties involved can implement a more permanent solution.

It is appropriate to compromise when it would not be possible to make both sides completely
happy while still moving forward.

What Is Negotiation?
The term negotiation refers to a strategic discussion intended to resolve an issue in a way
that both parties find acceptable. Negotiations involve give and take, which means one or
both parties will usually need to make some concessions.

Negotiation can take place between buyers and sellers, employers and prospective
employees, two or more governments, and other parties. Here is how negotiation works and
advice for negotiating successfully.

KEY TAKEAWAYS

 Negotiation is a strategic discussion between two parties to resolve an issue in a way

that both find acceptable.
 Negotiations can take place between buyers and sellers, employers and prospective
employees, or the governments of two or more countries, among others.
 Successful negotiation usually involves compromises on the part of one or all parties.

How Negotiations Work

Negotiations involve two or more parties who come together to reach some end goal that is
agreeable to all those involved. One party will put its position forward, while the other will
either accept the conditions presented or counter with its own position. The process
continues until both parties agree to a resolution or negotiations break off without one.

Experienced negotiators will often try to learn as much as possible about the other party's
position before a negotiation begins, including what the strengths and weaknesses of that
position are, how to prepare to defend their positions, and any counter-arguments the other
party will likely make.

The length of time it takes for negotiations to conclude depends on the circumstances.
Negotiation can take as little as a few minutes, or, in more complex cases, much longer. For
example, a buyer and seller may negotiate for minutes or hours for the sale of a car. But the
governments of two or more countries may take months or years to negotiate the terms of a
major trade deal.

Negotiation approaches

Each type of negotiation falls into one of two categories. Below is a description of each
negotiation approach and tips for making the most of each approach:

Distributive negotiation

Distributive negotiation, sometimes called zero-sum negotiation or win-lose negotiation, is a

bargaining approach in which one person succeeds only if another person loses. A
distributive negotiation usually involves a discussion of a single issue.

For example, a sales business wants to enter a contract with a vendor for IT services. The
business wants the most IT services for the lowest price possible, while the IT vendor intends
to provide the lowest number of resources for the highest price. Each party's desire to get a
better deal represents a distributive negotiation approach.

Below is a list of tips for success in a distributive negotiation:

 Be persistent. When you're taking a distributive approach to negotiation, persistence

and polite assertiveness can help you fulfill your interests.
 Make the first offer. In a distributive negotiation, you can make the first offer to
begin the bargaining in your favor.
 Don't communicate your minimum favorable outcome. It's important to aim high
in distributive negotiations to ensure successful bargaining. You can withhold any
information on the minimum you're willing to accept from bargaining for the best
results.

Integrative negotiation

Integrative negotiation, sometimes called win-win or collaborative negotiation, is a

bargaining approach where negotiating parties attempt to reach a mutually beneficial
solution. Unlike distributive negotiations, integrative negotiations can involve multiple
issues.

For example, an established fashion company and a cosmetics startup company agree to
collaborate on a product geared toward their shared target market. They negotiate a contract
that allows the cosmetics startup to gain greater exposure and the fashion company to reach
its financial and marketing goals.

Here are a few tips you can use in an integrative negotiation:

 Take a principled approach. You can discuss your principles during an integrative
negotiation to build trust with the other party.
 Discuss your needs and interests openly. Communicating your goals in an
integrative negotiation can promote transparency and a positive relationship.
  Use bargaining to solve problems. In integrative negotiation, both parties can use
negotiations as an opportunity for collaborative problem-solving.

Related: Integrative Negotiation: Definition, Tips and Examples

4 types of negotiation

Below is a list of negotiation types:

1. Principled negotiation

Principled negotiation is a type of bargaining that uses the parties' principles and interests to
reach an agreement. This type of negotiation often focuses on conflict resolution. This type of
bargaining uses an integrative negotiation approach to serve the interests of both parties.
There are four elements to a principled negotiation:

 Mutual gain: The integrative approach to a principled negotiation invites parties to

focus on finding mutually beneficial outcomes through bargaining.
 Focus on interests: Negotiators can identify and communicate their motivations,
interests and needs in principled negotiation.
 Separate emotions from issues: In principled negotiation, parties can reduce
emotional responses and personality conflicts by focusing on the issues rather than
how the problems make them feel.
 Objectivity: Parties in a principled negotiation can agree to using objective criteria as
a baseline for negotiations. Examples of objective criteria in negotiations include
market rates, expert opinions, laws and industry standards.

For example, the leaders of two departments for a large company often argue over the
resources for each department. The two leaders enter a principled negotiation to discuss
solutions. They listen to each other's positions and decide to base resource allocation on the
percentage of revenue each department generates for the company. The department leader
who receives more resources agrees to support the other department's functions, and the two
leaders reach a compromise.

2. Team negotiation

In a team negotiation, multiple people bargain toward an agreement on each side of the
negotiation. Team negotiations are common with large business deals. There are several
personality roles on a negotiation team. In some cases, one person may perform more than
one role. Here are some common roles on negotiation teams:

 Leader: Members of each team in a negotiation usually appoint a leader to make the
final decisions during negotiations.
 Observer: The observer pays attention to the other party's team during a negotiation,
discussing their observations with the leader.
 Relater: A relater on a negotiation team works on building relationships with the
other team members during bargaining.
 Recorder: A recorder on a negotiating team can take notes on the discussions of a
negotiation meeting.
  Critic: While this may sound like a negative role, having a critic on the team during
negotiations can help you understand an agreement's concessions and other negative
results.
 Builder: A builder on a negotiation team creates the deal or package for a bargaining
team. They can perform financial functions during negotiations, calculating the cost
of an agreement.

3. Multiparty negotiation

A multiparty negotiation is a type of bargaining where more than two parties negotiate
toward an agreement. An example of a multiparty negotiation is bargaining between multiple
department leaders in a large company. Here are a few of the challenges of multiparty
negotiations:

 Fluctuating BATNAs: BATNA stands for best alternative to a negotiated agreement.

With multiple parties in a negotiation, each party's BATNA is more likely to change,
making it harder for parties to agree. Each party can evaluate its BATNA at each
negotiation stage to understand the results of a proposed agreement.
 Coalition formation: Another challenge of multiparty negotiations is the possibility
for different parties to form coalitions or alliances. These alliances can add to the
complexity of bargaining. Coalitions can agree to a specific set of terms to help all
parties reach an agreement.
 Process-management issues: Managing the negotiation process between multiple
parties can lead to a lack of governance and miscommunications. People in multiparty
negotiations can avoid these issues by choosing a leader willing to collaborate with
others toward an agreement.

4. Adversarial negotiation

An adversarial negotiation is a distributive approach in which the most aggressive party in a

negotiation achieves an agreement that serves their interests. Here are a few examples of
adversarial negotiation tactics:

 Hard bargaining: Hard bargaining is a strategy in which one party refuses to

compromise in an agreement.
 Future promise: A person using this tactic can promise the other party a future
benefit in exchange for current concessions. You can counteract this tactic by asking
for the future promise in writing.
 Loss of interest: Another adversarial negotiation tactic is loss of interest, in which
one party pretends they've lost interest in pursuing an agreement.

Why Do Organizations Change?

Organizational change is the movement of an organization from one state of affairs to
another. Organizational change can take many forms. It may involve a change in a company’s
structure, strategy, policies, procedures, technology, or culture. The change may be planned
years in advance or may be forced upon an organization because of a shift in the
environment. Organizational change can be radical and alter the way an organization
operates, or it may be incremental and slowly change the way things are done. In any case,
regardless of the type, change involves letting go of the old ways in which work is done and
adjusting to the new ways. Therefore, fundamentally, it is a process that involves effective
people management.

Resistance to Change
Changing an organization is often essential for a company to remain competitive. Failure to
change may influence the ability of a company to survive. Yet, employees do not always
welcome changes in methods. According to a 2007 survey conducted by the Society for
Human Resource Management (SHRM), resistance to change is one of the top two reasons
why change efforts fail. In fact, reactions to organizational change may range from resistance
to compliance to being an enthusiastic supporter of the change, with the latter being the
exception rather than the norm

Active resistance is the most negative reaction to a proposed change attempt. Those who
engage in active resistance may sabotage the change effort and be outspoken objectors to the
new procedures. In contrast, passive resistance involves being disturbed by changes without
necessarily voicing these opinions. Instead, passive resisters may quietly dislike the change,
feel stressed and unhappy, and even look for an alternative job without necessarily bringing
their point to the attention of decision makers. Compliance, on the other hand, involves going
along with proposed changes with little enthusiasm. Finally, those who show enthusiastic
support are defenders of the new way and actually encourage others around them to give
support to the change effort as well.

Any change attempt will have to overcome the resistance on the part of people to be
successful. Otherwise, the result will be loss of time and energy as well as an inability on the
part of the organization to adapt to the changes in the environment and make its operations
more efficient. Resistance to change also has negative consequences for the people in
question. Research shows that when people negatively react to organizational change, they
experience negative emotions, use sick time more often, and are more likely to voluntarily
leave the company

Why Do People Resist Change?

Disrupted Habits

People often resist change for the simple reason that change disrupts our habits. You will
have to reconfigure your body movements and practice shifting until you become good at it.
You may find that for this simple reason, people sometimes are surprisingly outspoken when
confronted with simple changes such as updating to a newer version of a particular software
or a change in their voice mail system.

Personality
Some people are more resistant to change than others. Research shows that people who have
a positive self-concept are better at coping with change, probably because those who have
high self-esteem may feel that whatever the changes are, they are likely to adjust to it well
and be successful in the new system. People with a more positive self-concept and those who
are more optimistic may also view change as an opportunity to shine as opposed to a threat
that is overwhelming.

Feelings of Uncertainty

Change inevitably brings feelings of uncertainty. You have just heard that your company is
merging with another. What would be your reaction? Such change is often turbulent, and it is
often unclear what is going to happen to each individual. Some positions may be eliminated.
Some people may see a change in their job duties. Things can get better—or they may get
worse. The feeling that the future is unclear is enough to create stress for people, because it
leads to a sense of lost control (Ashford, Lee, & Bobko, 1989; Fugate, Kinicki, & Prussia,
2008).

Fear of Failure

People also resist change when they feel that their performance may be affected under the
new system. People who are experts in their jobs may be less than welcoming of the changes,
because they may be unsure whether their success would last under the new system. Studies
show that people who feel that they can perform well under the new system are more likely to
be committed to the proposed change, while those who have lower confidence in their ability
to perform after changes are less committed (Herold, Fedor, & Caldwell, 2007).

Personal Impact of Change

It would be too simplistic to argue that people resist all change, regardless of its form. In fact,
people tend to be more welcoming of change that is favorable to them on a personal level
(such as giving them more power over others, or change that improves quality of life such as
bigger and nicer offices). Research also shows that commitment to change is highest when
proposed changes affect the work unit with a low impact on how individual jobs are
performed

Prevalence of Change

Any change effort should be considered within the context of all the other changes that are
introduced in a company. Does the company have a history of making short-lived changes? If the
company structure went from functional to product-based to geographic to matrix within the past 5
years, and the top management is in the process of going back to a functional structure again, a
certain level of resistance is to be expected because people are likely to be fatigued as a result of the
constant changes. Moreover, the lack of a history of successful changes may cause people to feel
skeptical toward the newly planned changes. Therefore, considering the history of changes in the
company is important to understanding why people resist.
Perceived Loss of Power

One other reason why people may resist change is that change may affect their power and influence
in the organization. Imagine that your company moved to a more team-based structure, turning
supervisors into team leaders. In the old structure, supervisors were in charge of hiring and firing all
those reporting to them. Under the new system, this power is given to the team itself. Instead of
monitoring the progress the team is making toward goals, the job of a team leader is to provide
support and mentoring to the team in general and ensure that the team has access to all resources
to be effective.

In summary, there are many reasons individuals resist change, which may prevent an organization
from making important changes.

Planning and Executing Change Effectively

Unfreezing Prior to Change

Many change efforts fail because people are insufficiently prepared for change. When employees are
not prepared, they are more likely to resist the change effort and less likely to effectively function
under the new system. What can organizations do prior to change to prepare employees? There are
a number of things that are important at this stage.

Create a Vision for Change

In successful change efforts, the leader has an overall vision for the change (Herold et al., 2008).
When this vision is exciting and paints a picture of a future that employees would be proud to be a
part of, people are likely to be more committed to change. For example, Toyota is a master of kaizen,
or continuous improvement. They also follow the philosophy of kakushin, or revolutionary change,
as needed. Regardless of the nature of the particular change, there is an overall vision for the
company that justifies and explains why change is necessary “to build the dream car of the future”
(Stewart & Raman, 2007).

Communicating a Plan for Change

Do people know what the change entails, or are they hearing about the planned changes through
the grapevine or office gossip? When employees know what is going to happen, and when and why,
they may conquer their discomfort with change. Research shows that those who have more
complete information about upcoming changes are more committed to a change effort (Wanberg &
Banas, 2000).

Ensuring that top management communicates with employees about the upcoming changes also has
symbolic value (In any organization, many changes are done on a daily basis, with some taking root
and some disappearing after a short while. When top management and the company CEO discuss
the importance of the changes in meetings, employees are provided with a reason to trust that this
change is a strategic initiative

Develop a Sense of Urgency

People are more likely to accept change if they feel that there is a need for it. If employees feel their
company is doing well, the perceived need for change will be smaller. Those who plan the change will
need to make the case that there is an external or internal threat to the organization’s
competitiveness, reputation, or sometimes even its survival, and failure to act will have dire
consequences. For example, Lou Gerstner, the former CEO of IBM, executed a successful
transformation of the company.

Building a Coalition

In order to convince people that change is needed, the change leader does not necessarily have to
convince every person individually. In fact, people’s opinions toward change are affected by opinion
leaders, or those people who have a strong influence over the behaviors and attitudes of others
(Burkhardt, 1994; Kotter, 1995). Instead of trying to get everyone on board at the same time, it may
be more useful to convince and prepare the opinion leaders. Once these individuals agree that
change is needed and will be useful, they will become helpful allies in ensuring that the rest of the
organization is ready for change

Provide Support

Employees should feel that their needs are not ignored. Therefore, management may prepare
employees for change by providing emotional and instrumental support. Emotional support may be
in the form of frequently discussing the changes, encouraging employees to voice their concerns,
and simply expressing confidence in employees’ ability to perform effectively under the new system.
Instrumental support may be in the form of providing a training program to employees so they know
how to function under the new system.

Allow Employees to Participate

Studies show that employees who participate in planning change efforts tend to have more positive
opinions about the change. Why? They will have the opportunity to voice their concerns. They can
shape the change effort so that their concerns are addressed. They will be more knowledgeable
about the reasons for change, alternatives to the proposed changes, and why the chosen alternative
was better than the others. Finally, they will feel a sense of ownership of the planned change and are
more likely to be on board (Wanberg & Banas, 2000). Participation may be more useful if it starts at
earlier stages, preferably while the problem is still being diagnosed.

Executing Change

The second stage of Lewin’s three-step change model is executing change. At this stage, the
organization implements the planned changes on technology, structure, culture, or procedures. The
specifics of how change should be executed will depend on the type of change. However, there are
some tips that may facilitate the success of a change effort.

Continue to Provide Support

As the change is underway, employees may experience high amounts of stress. They may make
mistakes more often or experience uncertainty about their new responsibilities or job descriptions.
Management has an important role in helping employees cope with this stress by displaying support,
patience, and continuing to provide support to employees even after the change is complete.

Create Small Wins

During a change effort, if the organization can create a history of small wins, change acceptance will
be more likely If the change is large in scope and the payoff is a long time away, employees may not
realize change is occurring during the transformation period. On the other hand, if people see
changes, improvements, and successes along the way, they will be inspired and motivated to
continue the change effort

Eliminate Obstacles

When the change effort is in place, many obstacles may crop up along the way. There may be key
people who publicly support the change effort while silently undermining the planned changes.
There may be obstacles rooted in a company’s structure, existing processes, or culture. It is the
management’s job to identify, understand, and remove these obstacles

First, an organizational structure is a system for

accomplishing and connecting the activities that occur within a
work organization. People rely on structures to know what work
they should do, how their work supports or relies on other
employees, and how these work activities fulfill the purpose of the
organization itself.

Second, organizational design is the process of setting up

organizational structures to address the needs of an organization
and account for the complexity involved in accomplishing business
objectives.

Next, organizational change refers to the constant shifts that

occur within an organizational system—for example, as people enter
or leave the organization, market conditions shift, supply sources
change, or adaptations are introduced in the processes for
accomplishing work. Through managed change, leaders in an
organization can intentionally shape how these shifts occur over
time.

Finally, organizational development (OD) is the label for a field that

specializes in change management. OD specialists draw on social
science to guide change processes that simultaneously help a
business achieve its objectives while generating well-being for
employees and sustainable benefits for society. An understanding of
OD practices is essential for leaders who want to maximize the
potential of their organizations over a long period of time.

Together, an understanding of these concepts can help managers

know how to create and direct organizations that are positioned to
successfully accomplish strategic goals and objectives.1

To understand the role of organizational structure, consider the

experience of Justin, a young manager who worked for a logistics
and transportation company. Their success at leading change in the
United States gave their leaders the confidence that Justin could
handle a challenging assignment: organize a new supply chain and
distribution system for a company in Northern Europe. Almost
overnight, Justin was responsible for hiring competent people,
forming them into a coherent organization, training them, and
establishing the needed infrastructure for sustained success in this
new market.

If you were given this assignment, what would you do? How would
you organize your employees? How would you help them understand
the challenge of setting up a new organization and system? These
are the kinds of questions that require an understanding of
organizational structure, organizational design, organizational
change, and organizational development.

One of the first issues Justin will need to address deals with how
they will organize the system. “The decisions about the structure of
an organization are all related to the concept of organizational
design. There are two fundamental forms of structure to remember
when designing an organization.

To address these questions, we need to be familiar with two

fundamental ways of building an organization.The formal
organization is an officially defined set of relationships,
responsibilities, and connections that exist across an organization.

The informal organization is sometimes referred to as the invisible

network of interpersonal relationships that shape how people
actually connect with one another to carry out their activities. The
informal organization is emergent, meaning that it is formed through
the common conversations and relationships that often naturally
occur as people interact with one another in their day-to-day
relationships. It is usually complex, impossible to control, and has
the potential to significantly influence an organization’s success.

What Is Organisational Culture?

Every organisation has a unique personality, just like individuals. This unique personality of
an organisation is the culture. Organisational culture is either built and maintained by
founders to grow their organisation in a particular direction or develops over time from the
interactions of people working in the organisation. Organisational culture is essential for
developing the traits necessary for success. It defines how individuals behave and function
when working together. The main goal of companies is to foster a productive, healthy and
positive culture.

In this article, we will discuss what organisational culture is, its importance, characteristics
and types of organisational cultures.

What Is Organisational Culture?

Organisational culture is a system of values, shared beliefs, practices and attitudes that
govern every employee's action. It is a company's personality and the collection of traits that
define a company's foundational values. Every organisation has a unique culture and
encompasses both written and unwritten rules developed over time. It is the culture that gives
a company a sense of direction.

Why Is Organisational Culture Important?

A strong and positive culture appeals to the top talent and helps companies recruit the best
individuals. Learning more about the culture helps you understand whether the company
shares the same core values as you or not. It is the culture that governs a healthy working
environment and motivates you to perform to your best potential. Here are a few significant
reasons why learning about organisational culture is important when seeking a new job:

 Ensures effective onboarding: Companies with strong culture give preference to

effective onboarding for training new employees. From workplace training and
orientation to performance management, onboarding helps new employees excel at
work. It also helps employees understand the company's core values.
 Creates a healthy team environment: Communicating the core values helps
organise the workflows and motivates team members to work together.
 Recognises top performers: Everyone loves working in a healthy environment.
Employees leave companies where they feel their talent does not receive recognition
and their efforts go unappreciated.
 Increases productivity: Culture governs a company's structure and brings together
team members with similar skill sets. When such people work together, they are more
likely to overcome the difficulties of complex projects. This increases workplace
productivity and performance.
 Decreases attrition: When culture aligns with core values and mission statements,
employees are less likely to resign. Employees who feel valued, recognised and
respected will put in their best efforts.
Organisational Development is a planned, managed and systematic process to change the
culture, systems and behaviour of an organisation in order to solve its problems and achieve
its objectives. While OD frequently includes structural and technological changes, its primary
focus is on changing people and the nature and quality of their working relationships. Thus,
OD is the modern approach to management of change for human resources development. It
concentrates on people dimensions like norms, values, attitudes, relationships, organisational
culture etc.

Dale S. Beach defined OD as a complex educational strategy designed to increase

organisational effectiveness and wealth through planned intervention by a consultant using
theory and techniques of applied behavioural service. According to French and Bell, O.D.
refers to a long range effort to improve an organisation’s problem solving capabilities and its
ability to cope with changes in its external environment with the help of external or internal
behavioural scientists, consultants, or change agents.

OD is intended to create an internal environment of openness, trust, mutual confidence and

collaboration and to help the members of the organisation to interact more effectively in the
pursuit of organisational goals. As a body of concepts, tools and methods Organisation
Development (OD) can be referred as a new discipline. Thus, OD is a top management
supported long term effort to improve an organisation’s problem solving and renewal
processes particularly through a more effective and collaborative diagnosis and management
of organisational culture. It emphasizes on formal work team, temporary team and inter-
group culture.

Organizational development (OD) is a systematic approach aimed at improving

organizational effectiveness and efficiency. It involves planned interventions, strategies, and
processes to bring about positive change within an organization. Here are some benefits and
limitations associated with organizational development:

Benefits:
1. Enhanced Productivity: OD interventions can optimize processes, workflows, and
structures, leading to increased productivity and efficiency within the organization.
2. Improved Communication: OD often focuses on improving communication
channels, fostering transparency, and enhancing collaboration among team members
and across departments.
3. Adaptability to Change: It helps organizations become more adaptable and resilient
in the face of changes, whether it's technological advancements, market shifts, or
internal restructuring.
 4. Employee Engagement: OD initiatives can lead to higher employee morale,
motivation, and engagement by involving them in decision-making processes and
fostering a positive work environment.
5. Conflict Resolution: OD methods address conflicts and help in creating a more
harmonious work culture, reducing interpersonal conflicts and increasing cooperation
among employees.
6. Talent Development: It supports the development of employees' skills, capabilities,
and potential, contributing to their professional growth and the overall strength of the
workforce.
Limitations:
1. Resistance to Change: Employees might resist changes brought about by OD
interventions due to fear of the unknown, leading to implementation challenges.
2. Time and Resources: Implementing OD initiatives can be time-consuming and
require significant financial investment, especially for large organizations.
3. Lack of Immediate Results: Some OD efforts may take time to show tangible
results, and the outcomes might not always be immediately measurable.
4. Cultural Challenges: OD interventions might clash with existing organizational
culture, posing difficulties in implementation and acceptance.
5. Dependency on Leadership: The success of OD heavily relies on leadership
commitment and support. If leadership doesn't fully endorse the changes, it can hinder
the effectiveness of OD efforts.
6. Overlooking Individual Differences: In some cases, OD interventions may not
adequately consider individual differences, potentially leading to uniform solutions
that don’t cater to everyone’s needs.

Understanding these benefits and limitations is crucial for organizations to leverage the
strengths of OD while being aware of the challenges they might face during implementation.

The term Quality of Work Life (QWL) aims at changing the entire organizational climate by
humanizing work, individualizing organizations and changing the structural and managerial
systems. It takes into consideration the socio-psychological needs of the employees. It seeks
to create such a culture of work commitment in the organizations which will ensure higher
productivity and greater job satisfaction for the employees.

Quality of work life refers to the favorableness or unfavorableness of the job environment of
an organization for its employees. It is generic term which covers a person’s feelings about
every dimension of his work e.g. economic incentives and rewards, job security, working
conditions, organizational and interpersonal relationships etc. The term QWL has different
meanings for different people. A few important definitions of Quality of Work Life (QWL)
are as follows:

 According to Harrison: “Quality of Work Life is the degree to which work in an

organization contributes to material and psychological well being of its members.”
 According to D.S.Cohan “Quality of Work Life is a process of joint decision
making, collaborations and building mutual respect between management and
employees.”
  According to the American Society of Training and Development “Quality of Work
Life is a process of work organization which enables its members at all levels to
participate actively and effectively in shaping the organizations’ environment,
methods and outcomes. It is a value based process which is aimed towards meeting
the twin goals of enhanced effectiveness of the organization and improved quality of
life at work for the employees”.

Quality of Work Life influences the productivity of the employees. Researchers have
proved that good QWL leads to psychologically and physically healthier employees with
positive feelings.

Scope of Quality of Work Life

Quality of work life is a multi dimensional aspect. The workers expect the following needs to
be fulfilled by the organizations:

1. Compensation: The reward for work should be above a minimum standard for life
and should also be equitable. There should be a just an equitable balance between the
effort and the reward.
2. Health and Safety: The working environment should be free from all hazards
detrimental to the health and safety of the employees. The main elements of a good
physical environment for work should be reasonable hours of work, cleanliness,
pollution free atmosphere, risk free work etc.
3. Job Security: The organization should offer security of employment. Employees
should not have to work under a constant concern for their future stability of work and
income.
4. Job Design: The design of jobs should be such which is capable of meeting the needs
of the organization for production and the individual for satisfying and interesting
work. Quality of work life can be improved if the job allows sufficient autonomy and
control, provides timely feed back on performance and uses a wide range of skills.
5. Social Integration: The workers should be able to feel a sense of identity with the
organization and develop a feeling of self esteem. This includes the elimination of
discrimination and individualism, whilst encouraging teams and social groups to
form.
6. Social Relevance of Work: Work should not only be a source of material and
psychological satisfaction, but also a means of social welfare. An organization that
has greater concern for social causes can improve the quality of work life.
7. Scope for Better Career Opportunities: The management should provide facilities
to the employees for improving their skills both academic and otherwise. The
management should always think of utilizing human resources for expansion and
development of the organizations.

Socio-technical theory has at its core the idea that the design and performance of any
organisational system can only be understood and improved if both ‘social’ and
‘technical’ aspects are brought together and treated as interdependent parts of a
complex system. Organisational change programmes often fail because they are too
 focused on one aspect of the system, commonly technology, and fail to analyse and
understand the complex interdependencies that exist. This is directly analogous to the
design of a complex engineering product such as a gas turbine engine. Just as any
change to this complex engineering system has to address the knock-on effects
through the rest of the engine, so too does any change within an organisational
system.

Workplace ethics are a dynamic set of values that vary with people and their definition of a
workplace. For some, it is a physical office they go to every day, while others, their home
office.

It doesn’t matter whether you work from home or commute to work everyday, workplace
ethic is required to build a successful career. Organizations are known to embrace ethical
practices and behaviors to increase productivity and uphold integrity—while setting a penalty
for workers who default workplace ethics.

What is Workplace Ethics?

Workplace ethics are the set of values, moral principles, and standards that need to be
followed by both employers and employees in the workplace. It is the set of rules and
regulations that need to be followed by all staff of the workplace.

These ethics are implemented by employers to foster both employee-employee relationship

and employee-customer relationships. An organization may decide to put these ethics into
writing or not—they are however meant to be followed.

There exist some general workplace ethics that do not need to be defined by the employer,
but are common ethical behaviors employees need to exhibit. In the same vein, some
organization-specific ethics may need to be defined in a company handbook.

Definition of unethical workplace behavior

Most experts define unethical workplace behavior as any harmful action at work that violates
the moral norms of the broader community[5] [6] [7].
This definition highlights five important aspects of unethical behavior.
Unethical workplace behavior and illegal behavior are not the same
First, unethical behavior and illegal behavior overlap, but only to a certain extent.
For instance, there are new moral standards that are not yet part of our legal or regulatory
systems. Likewise, we have laws and regulations being enforced that are no longer a
reflection of our current moral standards.
Regulations and unethical behavior, thus, co-evolve over time and are largely a reflection
of the belief system of a community at a given time. More often than not, laws and
regulations tend to follow the evolving moral beliefs of a community, but frequently
with a delay[4].


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Unethical workplace behavior can be intentional and unintentional

Ethics can be defined as going beyond what is legal and doing what is right, even when no
one is looking. So when we talk about unethical behavior in business, we're talking
about actions that don't conform to the acceptable standards of business operations, failing to
do what is right in every situation.

Creating an ethical workforce is pivotal for organizational success and fostering a positive
work environment. Managers play a crucial role in setting the tone and guiding their teams
toward ethical behavior. Here are some guidelines for managers to establish and maintain an
ethical workforce:

Lead by Example:
1. Model Ethical Behavior: Managers should exemplify the behaviors and values they
expect from their teams. Consistently demonstrate honesty, integrity, and fairness in
all actions and decisions.
Communicate and Reinforce Ethical Standards:
2. Establish Clear Ethical Standards: Clearly define and communicate the
organization’s ethical standards, codes of conduct, and policies to all employees.
3. Encourage Open Communication: Create an environment where employees feel
comfortable discussing ethical concerns without fear of retribution. Encourage
reporting of unethical behavior through proper channels.
Provide Ethical Training and Support:
4. Training and Education: Provide regular training sessions and workshops focused
on ethical decision-making, ethical dilemmas, and real-life case studies to help
employees understand the importance of ethical behavior.
5. Support and Guidance: Offer support and guidance to employees facing ethical
dilemmas. Help them navigate complex situations by providing ethical frameworks
and discussing potential solutions.
Foster a Culture of Ethics:
6. Reward Ethical Behavior: Recognize and reward employees who consistently
demonstrate ethical behavior and integrity in their work.
7. Address Ethical Issues Promptly: Take swift action to address any ethical breaches
or concerns. Ensure fairness and consistency in dealing with ethical violations.
Encourage Ethical Decision-Making:
8. Promote Critical Thinking: Encourage employees to think critically and consider
the ethical implications of their actions before making decisions.
 9. Collaborative Decision-Making: Involve employees in decision-making processes,
especially when ethical considerations are involved. This promotes a sense of
ownership and responsibility.
Emphasize Accountability:
10. Hold Everyone Accountable: Hold employees accountable for their actions,
regardless of their position within the organization. Consistent accountability
reinforces the importance of ethical behavior.
11. Learn from Mistakes: Use ethical lapses as learning opportunities. Foster a culture
where mistakes are acknowledged, learned from, and used to improve ethical
practices.
Monitor and Evaluate:
12. Regular Assessments: Continuously assess the ethical climate within the
organization through surveys, feedback mechanisms, and periodic evaluations.

By following these guidelines, managers can help cultivate a culture where ethical behavior is
not just a set of rules but a fundamental aspect of how the organization operates, leading to a
more trustworthy and reputable work environment